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Debate On How To Close the Economic Gap

Aired December 04, 2013 - 18:28   ET



ANNOUNCER: Tonight on CROSSFIRE, how do we close the gap between the super-rich and everyone else?

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Just last week, the pope himself spoke about this eloquently.

ANNOUNCER: But who has the best plan for shrinking the gap and growing the middle class?

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: The Senate, the president continue to stand in the way of the people's priorities.

ANNOUNCER: On the left, Stephanie Cutter. On the right, Newt Gingrich. In the CROSSFIRE, Representative Barbara Lee, a California Democrat, and Representative Jason Chaffetz, a Utah Republican.

When it comes to shrinking the income gap, who's helping and who's hurting? Tonight on CROSSFIRE.


STEPHANIE CUTTER, CO-HOST: Welcome to CROSSFIRE. I'm Stephanie Cutter on the left.

NEWT GINGRICH, CO-HOST: I'm Newt Gingrich on the right.

In the CROSSFIRE tonight, members of Congress who have very different answers for increasing our incomes. You know, I can't take it seriously when the president plants a new flag on a new promise to grow the middle class. This is a president who's presided over the worst economic recovery since the Great Depression. Who's undid everything that Bill Clinton and I did in the 1990s to end child poverty through welfare reform. Who's suing Louisiana to prevent better schools for the poor, and whose energy policies ignore everything we've learned in North Dakota, where new oil technology is dramatically increasing incomes.

The first answer to having a good, healthy middle class is having a good healthy economy. And that's the sad fact.

CUTTER: Well, there's so much that I disagree with in that statement. I'm just going to pick a couple of things.

First of all, there was no new flag planted in the ground today. The president has been talking about rebuilding the middle class since the moment he took office; actually, since he ran for president in 2008.

Unfortunately, he hasn't had any willing participants across the aisle to make the core investments that are needed to grow the middle class, to balance the budgets in a responsible way, reduce the deficit in a responsible way, to make sure that everybody's paying their fair share. Those are precisely the things that Bill Clinton stood for and accomplished, so I'm pleased to know that you agree with those policies.

GINGRICH: The difference -- the difference, quite simply, is that after five years, President Obama still has not learned how to reach across the aisle. President Clinton, to his credit, was willing to sit down and work, no matter how tough the press conferences in the morning.

CUTTER: Newt, I've said this--

GINGRICH: By the evening, we were working together.

CUTTER: I've said this before, and I guess this is a tribute to you. You were a different kind of speaker. You were able to bring your caucus along, and work across the aisle, and get things done. There is very little interest on the other side right now in getting anything done. And we'll talk about that in this show.

So in the CROSSFIRE tonight, Democratic Congresswoman Barbara Lee and Republican Congressman Jason Chaffetz.

Congressman, I'm sure you have a lot to respond to in what our opening was.

REP. JASON CHAFFETZ (R), UTAH: Yes, I do. Yes, I do.

CUTTER: I want to ask a very specific question. So there's been lots of discussion about income inequality. The president talked about it today. He's been talking about it for a long time. The pope talked about it last week. Do you agree that income inequality is a problem?

CHAFFETZ: Yes, it's getting worse under President Obama. You know, the Democrats, you would think they didn't -- weren't in power. The fact of the matter is the Democrats had the House, the Senate and the presidency the first two years. And they decided to invest in government not in growing the economy.

They did a $787 billion stimulus plan. They did the Cash for Clunkers, all of these things that didn't actually grow the economy. They exacerbated the problem.

We have literally more than 66,000 federal workers on the federal payroll than when we started. The deficit has just exploded. I mean, there is no economic indicator that you look to. And then the president says, "Well, we have no willing participants." They controlled all the branches of government when they -- when they started.

CUTTER: Well, for two years, and we actually did get some things done. And the stimulus plan is credited with preventing us from going into a depression.

CHAFFETZ: I totally disagree with that.

CUTTER: But back on the pope for a second. The pope actually blamed income and equality, in part on trickle-down economics. And Rush Limbaugh quickly denounced the pope, saying, quote, "This is just pure Marxism coming out of the mouth of the pope." Who's right?

CHAFFETZ: Well, you've got to look to the state of Utah. We have one of the lowest unemployment rates in the nation. I don't know what it is in California. I think it's 8.7 percent or so, but we're 4.6 percent in Utah.

And you look at what we're doing: we have a responsible government. We have a predictable regulatory environment. We have some of the best health care in the nation. In fact, President Obama, in one of his State of the Unions, pointed to Utah. He pointed to Inter Mountain Health Care and what they're doing. We do a good job of educating our kids. We've put all of these factors together. We have a good tax rate. We're doing all the things the federal government could do.

CUTTER: It sounds like you're agreeing with the pope, then?

CHAFFETZ: I'm agreeing that Utah has got a great, smart way to do it.

CUTTER: You're good.

CHAFFETZ: You look at the result, we have less disparity in the income than most any other state.

GINGRICH: It's fair to say the pope would be happier in Utah than in--

CHAFFETZ: We would love to have the pope. He can come to Provo anytime.

GINGRICH: Let me ask you, Congresswoman Lee, because you -- you have a deep and personal passion about helping the poor, and I suspect you resonated deeply with Pope Francis's comments last week, which were very powerful and very compelling in many ways, but I'm really puzzled, intellectually, because twice in the last 30 years we've had dramatic economic growth.

I was very fortunate I was there, both with Reagan and with Clinton. In the case of the Clinton administration, when we worked with them, from 1993 to 2000, one of every four people in poverty left poverty, a huge economic growth.

Under Reagan, you had a very similar pattern. About 3 1/2, 4 million people in Reagan's first term went to work. About a million and a half people under President Obama's first term lost their jobs.

Why is it so hard to look at the things that have worked and adopt them and try to find a way to go back and look at the last 30 years and say, which of these pieces really worked? And, as Congressman Chaffetz said, look at states where things are really working, like Utah, and find out what are their patterns and how can we replicate it in the poorest parts of America?

REP. BARBARA LEE (D), CALIFORNIA: Well, first of all, I'm really happy to see you. Do you remember you swore me in?


LEE: In 1998, and I'll tell you, we got a lot done during that period. Maybe you ought to come back and do some in-service training.

CUTTER: I agree. Some parts.

LEE: But you know, I remember those days. However, I remember and know exactly what works. And what works really has a lot to do with what's being cut, first of all, out of the Ryan budget. You look at the earned income tax credit. You look at Head Start. You look at the expansion of Medicaid. You look at the safety net which the president, to his credit, talked about today.

But also -- and I remember very clearly that there was a surplus when President Clinton left. When President Bush came in, the two wars, and you talk about the Bush economic policies and the tax cuts for the wealthy. That surplus went down, down, down.

When President Obama was elected, thank God he put forth the recovery plan, the American Recovery and Investment Act. Not one single Republican voted for it, but believe you me, it turned the economy around. And the president wanted Republican support. He compromised; he worked with Republicans. I wanted more into that recovery, and it worked.

GINGRICH: Let me ask you one specific -- let me ask you one specific idea, which I'll confess up front. I have a personal interest in this. Just as an idea.

We have spent $500 billion in the last five years on unemployment compensation. I would love to see that tied directly to training and learning programs, so that we're willing to say to people, "Look, we'll help you for 99 weeks if needed, but we expect at a minimum, you're going to get an associate's degree, you're going to get job training." You're going to -- this will become the largest workforce training program in the world. We spent $500 billion.

What would your reaction to be to the idea of trying to turn unemployment compensation into a work training program?

LEE: Well, let me just say -- and Jason knows this -- if we don't do a budget by the end of the year there are going to be over a million people without unemployment compensation. I think 1.4 million. So we have to do something before the end of this year.

But let me just say this. I think that unemployment compensation should be looked at, not in terms of any contingent kind of requirement. But we need to look at work force training and investing in education. And then investing in people who are unemployed so that they acquire the requisite skills and can qualify for the new jobs that hopefully we will create, even though the private sector right now is creating hundreds of thousands of jobs every month.

And so yes, we need to not make it contingent upon these requirements, but I think we need to invest in education and work force training and skills training so people can get jobs and insurance.

CHAFFETZ: What this -- what this president doesn't understand is every time he talks about new regulations, every time we can't get Obama care right, every time he wants to do all these other things, he's creating uncertainty, and capital is resistant to making investments to hire new people unless they have that certainty in the marketplace.

LEE: But Jason, he's not creating uncertainty. We have--

CHAFFETZ: Yes, he is.

LEE: -- an obstructionist House of Representatives that will not allow any proposal that the president's presented to create jobs--


LEE: -- and economic growth--

CHAFFETZ: I totally disagree.

LEE: -- to get to the floor.

CHAFFETZ: I have -- I have passed bills that pass out of the House of Representatives by overwhelming majorities that are sitting in the United States Senate. We have 150 bills that we pass in the House of Representatives that have gone over to the Senate and never gotten a vote. That is just fundamentally, totally wrong.

LEE: I've not seen one of the president's bills -- one of the president's bills come to the floor of the House that's got any Republican support--

CHAFFETZ: The first four years -- the first four years--

LEE: That passed for jobs and economic growth, Jason.

CHAFFETZ: The first four years that the president of the United States submitted a budget, there is not a single person, Democrat or Republican, House member or Senate member, that ever voted in favor of the president's budget. And when it came to a budget this year, he didn't submit it on time. He waited until after he went through the process.

CUTTER: We're going to -- we're going to continue this conversation, and I want to bring it to -- on the same topic, I want to ask Congressman Chaffetz whether the Republican House is wasting your time, your tax dollars and all the wrong priorities. Like another government shutdown, for instance--

CHAFFETZ: We're not doing another government shutdown.

CUTTER: So we'll -- well, you just made some news there.

LEE: And for that, we lost 24 billion in economic growth. As a result of that.


CUTTER: Welcome back. In the CROSSFIRE tonight, representatives Barbara Lee and Jason Chaffetz.

This country's top 1 percent doesn't need any help from Congress. I think that's pretty clear. But lawmakers can do plenty of things to rebuild the middle class. So what are Republicans doing? They're actually holding the middle class back, voting 47 times to take away people's health insurance, allowing across-the-board cuts that will cost 800,000 jobs, shutting down the government to the tune of $24 billion, and nearly defaulting on our debt.

And just yesterday, instead of extending unemployment insurance for those looking for work, they held useless hearings to look for any excuse, no matter how flimsy, to impeach the president.

So, Congressman, we touched on this before we went to break, but I want to come back to it. What exactly -- where are the priorities of House Republicans? I talked about the hearing that took place yesterday about impeaching the president. We have a few days left in this year that we need to resolve a budget crisis. We need to avoid another government shutdown. We need to make sure that unemployment insurance is extended, particularly over the holiday season.

But here's what Congress has managed to accomplish in the last couple of months. You've changed the specs for Hall of Fame coins. You shut down the government. You increased taxes for seasonal flu vaccines.

Speaker Boehner controls the agenda in the House of Representatives. It's a pretty important body of government in our democracy.

Where are the priorities? You're setting the agenda.

CHAFFETZ: We have and we've passed more than 150 bills that the United States Senate has never taken up. I disagree --

CUTTER: Just name some.

CHAFFETZ: Well, and I disagree with just about everything that you said there. That is not -- as a conservative, taking the metric of how many bills you passed is not exactly how make sure you grow the economy.

CUTTER: I'm hearing (ph) what you passed, not how many. Exactly the substance. Where are your priorities? What at are the priorities bills?

CHAFFETZ: No doubt. When the president goes and starts talking about minimum wage, and hear you all these sad stories, you got to look at what the president is actually doing, because he's exacerbating the problem. He's not making the problem better.

CUTTER: Calling for an increase in the minimum is exacerbating the problem?

CHAFFETZ: Well, yes, I do. I do really think about. I look at the youth. I look at when I grew up. I got a job when I was 14 years old. My dad said I had to get out there and get a job.

I worked as a gardener in Arizona, and then I worked at -- and then I realized I was a white collar person, so I decided to get a job at the general cinema corporation, wearing my short sleeve, white short, my bowtie and my powder blue coat. And I realized I wasn't even making minimum wage because I work at a movie theater.

Guess what? I was exempt from the minimum wage, but you know, I was a kid. I didn't care. I learned how to work. I learned the value of a dollar. And every time the president decides that he wants to just raise the minimum wage, you're going to take this whole group of youth and prevent them from getting an opportunity, because employers are going to look at that and say if it's going to cost more for labor, I'm going to hire less people. And that's the cruel reality.

CUTTER: Can I do just one follow up? That's never proven to be true. An increase in minimum wage actually increases employment because you're investing in your workforce. And many, many CEOs, most people on minimum wage work for large businesses, not small businesses. Many of those CEOs agree with it, going all the way back to Henry Ford.

CHAFFETTZ: And if they want to retain good quality employees, they're going to make sure they've got a good competitive market.

Now, in North Dakota, where the energy sector is cutting loose and doing great things, they don't have a minimum wage issue there. We've got to make sure we are investing in education and getting training.

CUTTER: I absolutely agree with you. We should talk about that, too.

GINGRICH: Let me ask you. I want to try to expand how we think about these things. And recently, I have a book called "Breakout", and part of what I talk about in there is the explosion of new opportunities online that are totally free. Next week, for example, a project was originally launched by Google and Microsoft.

Anyone in America who wants to, can go online for free and look at computers and computer access and learned about computing. It's a whole process. Similarly, there's a site called Duolingo, which I use myself, which has seven different languages that are free. You can take as many hours as you want for free.

The Khan Academy, which is in your state, 3,000 hours of lectures of now, and learning systems. Ten million people a month. This is part of why I asked earlier about unemployment compensation leading into education, but at the same time, I guess what I'm asking you, is wouldn't it make sense to try to figure out a way to get every American learning as rapidly as possible to get us, so we can compete with China and India, and to get it so that the poorest children in the poor neighborhoods could break out and actually dramatic increases in their learning capability? And all these stuff is now available for free.

LEE: Sure. You remember, there is a digital divide in America. Many people don't have access to computers because of their economic status. And so, yes, it would be wonderful if everyone -- and I just have to digress for a minute and say I really think it's very terrible to see employers say you can only apply for a job online, period. There's no other vehicle to apply for many, many jobs now.

Well, I have to just say, once we have a country that is fully computerized, and that everyone has access to computers, then maybe.

GINGRICH: So, let me built on that. In 1995, I was surprised I ridiculed even by some Republicans because I testified at Ways and Means that we should give a laptop to every student. And, in fact, Governor King of Maine did that for seventh and eight graders.

Nowadays, you can do that on a smartphone. And my guess is that in your district, even in the poorest parts of Oakland, there's a shocking number of smartphones and smartphones essentially are a laptop computer from five years ago.

So, if we can find a way, that's the problem. We have an entire FCC program that spends lots of money. We ought to find -- I'm happy to work with you to find a way to get the kids on smartphones if you think it makes sense for both them and for their parents who might be unemployed to actually figure out a way to access all of this free learning in a way that changes the whole game.

LEE: Sure. I think we have to make sure our children are prepared for the 21st century. And for the world as it exists. And that is making sure that they can compete with children and adults around the world.

But we have to remember, we have to invest in public education. I mean, that's the bottom line, also in early childhood education and in preschool. By the time a young person from a house that has a very low income, a poor family, by the time they get into kindergarten, first grade, they're way, way, way behind. So, we have to start.

CHAFFETZ: I need you to help work with me then because the Obama administration is starting more economic aid projects in Afghanistan than in the history of Afghanistan. On the one hand, he says we're pulling out. We got $30 billion sitting over there. I cannot get this administration to pay attention to that.

LEE: Jason, you and I agreed that -- this is one thing we do agree on, that we need to bring our young men and women home and end this war in Afghanistan. We're wasting --

CHAFFETZ: But they're starting, they're starting more projects than they ever have, $30 billion. You want money to go to the states to help educate kids. Pull back that money, Mr. President, and help us get there. You have a bigger megaphone over at the White House than I do. LEE: Well, we have to nation-build here and invest in education here at home.

CHAFFETZ: And stop waste, and we spent --


LEE: We should begin to start bringing our troops home and end this war. There is no military solution. We need to get out of Afghanistan.

CHAFFETZ: Well, we're going to give $555 million in petroleum oil and lubricants to Afghanistan. The administration is increasing. I can't get anybody's attention on it.


If I may, everyone stay right here. This is fascinating and I think different than maybe some of our audience thought.

Next, the final question for both our guests.

We also want you at home to weigh in on our "Fireback" question. Do you think the minimum wage should be increased? Tweet yes or no using #crossfire. We'll have the results after the break.


GINGRICH: We're back with Representatives Barbara Lee and Jason Chaffetz.

Now, it's time for the final question and let me, I had (INAUDIBLE), Congresswoman Lee. You favor a higher minimum wage than the president.

LEE: I favor it.

GINGRICH: Did you explain what you favor?

LEE: Sure. Let me just say, first of all, $7.25 an hour. Can anyone live off that?

Secondly, I just have to say, 60 percent of people on food assistance are working. They're part of the working poor. We need a living wage, a living wage based on regional differences and yes, we need to raise the minimum wage to $10. But we need a living wage where people can live and take care of their families and live the American dream.

It would cost us less on the back end if all we care about are the economics of it.

CHAFFETZ: Sure, but --

LEE: When you look at people who are working, needing Medicaid and needing food assistance, that's wrong. CHAFFETZ: But I worry about the effect of the youth. Of the 100 percent of our workforce that's out there, only about 3 percent fall into the minimum wage category. And of them 2/3 are part time. We're talking about 16-year-olds and 17-year-olds that we're excluding from the opportunity to learn how to work and the value of the dollar. You got to be very, very careful with that.

I found it ironic that just last week the president was in California, in Hollywood, touting that one of the economic engines is our entertainment industry. Well, guess what? They're exempt from a lot of this stuff.

So, don't tell us that that's -- you know, you can't have it both ways. It's the economic driver and they're exempt from it.

LEE: No, Jason, we can have it both ways. This is America and those are our values. We should have it both ways.

CHAFFETZ: We're going to get them educated and talented so they can fill out an application.

LEE: And their families need --

CHAFFETZ: If can fill out an application --


LEE: -- that their families can get off of food assistance.

CHAFFETZ: Get talent, get the skill, contribute to the economy and move up the economic ladder. That's what we need them to do. That's not going to mean government doing all that.

LEE: We have to invest in their public education to do that.

CHAFFETZ: Government doesn't create jobs.

LEE: Well, we're not --

CHAFFETZ: It's the private sector that creates jobs.

LEE: Government does provide support, subsidies for oil companies, agri, business subsidies. Government subsidizing a heck of a lot.

CHAFFETZ: We have to invest in education. We agree on that.


LEE: We should invest in education. The government should do that.

CHAFFETZ: Yes, absolutely. But at the state level, let the money follow the kids. Right now, it doesn't. We don't need more big government here in Washington, D.C. We need that money following those kids.

CUTTER: OK. Well, I wish we had more time because this is an important topic and there was so much that I wanted to ask and I'm sure our viewers want to learn so much more about how we can close that income and equality gap.

I want to thank Representatives Barbara Lee and Jason Chaffetz.

Got to Facebook or Twitter to weigh in on our "Fireback" question. Do you think the minimum wage should be increased? Right now, 63 percent of you say yes, 37 percent say no.

Another time when I would wish we could talk about the "Fireback" question.


CUTTER: The debate continues online at as well as on Facebook and Twitter.

From the left, I'm Stephanie Cutter.

GINGRICH: From the right, I'm Newt Gingrich.

Join us tomorrow for another edition of CROSSFIRE.

"ERIN BURNETT OUTFRONT" starts right now.