Is simply fed up with the white house. There is a stalemate. Lets not kid ourselves. The white house stance three weeks trying to devlop a proposal and they send one of pier that calls for over one half trillion in new taxes, calls for not even 400 billion in cuts and this extra spenng that is greater than the amount theyre willing to get. But not a serious proposal. Lou Senate Minority leader writing a little easier in the midst of what is at best a process. He burst into laughter when treasury secretary presented the president s plan. The president , meanwhile, showing no sign of interest initiation, giving no sign he is ready to makeany significant step toward resolving the impasse. President obama cast himself as santa claus i a Campaign Style rally. His comfort zone, while blasting republicans and reminding them, he will not forget who stood in his late on tax increases. Of course santa delivers everywhere. I have been keeping my ow money and nice list for washington. Visiting towns like this. President obama got his wish rather than negotiating with republicans he was simmering them back on the Campaign Tail at a factory in pennsylvania that makes angry brds toys. Its not acceptable to me, and i dont think its acceptable to you for and full of republicans in Congress Told middleclass tax cuts hostage simply because they dont want tax rates on upper income folks too up. Within minutes the speaker fired back that the talks are now on life support. There is a stalemate. Lets not kid ourselves. Replan the president for sending treasury secretary to capitol hill with a proposal that led Senate Republican leader to literally bur out laughing. The white house took three weeks to respond with any kind of a proposal. Much to my disappointment it was not a serious one. The president campaigns on 800 800 billion in tax increases by ending the bush ta cuts for the wealthy, but is now proposing. Adding tax hikes on dividends and capital gains. The white house wants 50 billion in new spending next year alone in a longterm deal that is supposed to be about cutting spending. Not even 400 billion in cuts and they want to have this extra spending that is actually greater than the amount theye willing to cut. It was not a serious proposal. The president may have the upper hand because the fiscal cliff tops allow him to back the opposition into a corner by framing this as republicans raising taxes. If congress does nothing, every family in america will see their income taxes automatically go up on january 1st. That is sort of like a lump of coal you get for christmas. Congressional democrats operating like they dont have to compromise on spending or taxes. Elections have consequences. The president campaigned, made it very clear. Made very clear thathe was supporting tax cuts for the middleclass, that he wanted the expiration of the tax cuts for the high end. Very little progress among the inside player so far, the president plans to keep pressuring republicans from the outside. Meeting with the nations governors on tuesday and then addressing the Business Roundtable on wednesday. Lou thank you. Ed henry, fox news chief white house correspondent. Joining me now, a pulitzer prizenning journalist, campaign strategists, former reagan political director of, veteran democrac campaign strategists. We thank you all for being here. Lets tun, if i may, to you. This is an impasse, a stal im going to be the one who raises taxes, but youre going to be the ones to cut medicare. If u want cuts in entitlements, but the mob. Im not going to do bothfor you. Lou here is a thought. That is, the Obama White House has made a rare mistake, miscalculation. They have incentivized republicans to say, you know, the heck with it. If youre not going to come to the table, we are not going to advance it. You have chosen and we have reached an agreement as to parties for sequestration. We will go along with e tax cuts. Thats your decision. Sequestration was part we are partners on that deal. Let her rip. Theyre going to get twice as much in the way of spending cuts as an increase in taxes that way its the best deal, and its also oriented toward the republicans favored. The damage it will do to the economy. I don think the president has a bigger role as he thinks he is. The house will be held by republicans for the foreseeable future, not just two years. Midterm elections, six years, sterile for the president. The end of theday he wants a legacy. Its going to be the highest unemployment in history for two terms it is not careful. He will take us back into recession. If he wants serious negotiations that wl sit dowand come to some kd of an agreement. We have been down this road before where republicans of given on the taxes. Was the white house with reagan. They promised dollars in cuts. They didnt give us anything. Bush went through the same drill when he broke his tax pledge, busch sr. We have had this history before. Basically, tell us what youre going to do. There will be a stimus by fixing the northeast from the storm. Add another 50 billion out there on top of the package. And then the audacity of saying, im going to raise the debt ceiling whenever i want to. Give me permission to do that. Its absolutely absurd. Lou the president s reached exceeding his grasp . We will see. He clearly thinks that he is in a stng position orou would not be trying this. Think he thinks that the optics work for him. But it was ms. Mccalls idea in 2011 to give the president the power to raise the debt ceiling by himself. This was not some deocratic idea. It came from its mcconnell. On top of that, the probem lou using the president is not an original thinker . Well, my point is that it was a bipartisan idea, a lot more bipartisan. Lo you dont suppose that was a one of proposition on the part of senator mcconnell. It may well have been, but the further point is, i agree with a lot of what he said. The problem is going to be not just the fiscal cliff, but also if it goes down th way and was talking about were going to have a middleclass taxes go up in sequestration as well. Disco cliff . If congress does nothing every family in america will see their income taxes automatically go up on janua 1st. Every family. Everybody here will see taxes go up. Im assuming that doesnt sound too good toyou. Its sort of like a lump of coal you get for christmas. The scrooge christmas. Lou most people dont even know where the real tax hikes will be coming from. We will fix that in tonights chalk talk. Massive Defense Budget cuts not even part of the discussion so far about the fiscal cliff. Those cuts are set to go into affect in three weeks. Admiral james lyons joins us in just moments. [ male announcer ] with over 50 delicious choices of green giant vegetables its easy to eat like a giant. And feel like a green giant. Ho ho ho green giant you know how painful heartburn can be. For fast, long lasting relief, use doctor recommended gaviscon®. Only gaviscon® forms a protective barrier that helps blo stomach acid from splashing up relieving the pain quickly. Try fast, long lasting gaviscon®. Lou welcome back. We are talking about the disco cliff. We are going to turn to advance inhe middle east and the United Nations this week. Judy miller, joe trip be, and rollins. I wanted just go back to the fiscal cliff just for a second. That is, the republican messaging, if you will. They have an opportunity here, it seems to me, as well as a problem, but i dont hear creative, imaginative, if you will, rhetoric or language or positioning or messaging. We have been for about three years now. So i think theres no reason for it to start now. What House Republicans have to understand is they are the Republican Party for the next four years and have to have messaging and basically tell the American Public what theyre doing and why theyre doing it. They cant be for tax cuts, for spending cuts. They have to articulate how it fits in the big picture. There are some skilled people that need to step forward. Lou would i be too cynical to say that perhaps the president has an additional advantage in this little carrousel of nonsense around the fiscal clef in that it also deflects and distracts from that half trillion dollars in new taxes that will be hitting the middle class in this country as a result of obamacare beginning january 1 with or without a fiscal cliff . Wel we can get into a lo of that is penalties, taxing cadillac plans. Lou how much you want to take it down . But my point still would be, i tink it is right. Completely right. You know, they have the house, and theyre going to have it for another term or two just because of the weight reapportionment happened regardless of anything else. And the problem, i think he has on the republican side, the house caucus cannot agree on how to take the president on. You have people who think they should cave on the tax increases, the 2 . Others who dont, dont want to do a penny of any revenue. The problem is, its not just a messaging problem. It is a corralling he house caucus. Lou we should point out. He has made it clear he is not go along with the president s idea, the death tax. By the way, 800 billion in increased revenue, a 51 vote. Theyre not going to get that. So both sides have plenty of those, if you will, divisive mechanics and dynamics at work within their party. Thats true. Lou your thoughts . Its true, but if youre playing defense as the House Republicans are, you really need a message, a consensus message, and they dont have one. The president is going to get a lot more intense face time from the medium then max baucus. His argume will be heard, but not the republicans if theyre at one anothers throats, which i think is part of the democratic strategy. 218 votes, 45 years. So youre not going to get whatever the debate in our caucus, a very respected member went out and got clobbed when he basically said, im going to try and be a leaderhere as he had been significantly. Some licenses in the we will basically come up to the conclusion. If the president does not want to sit down and negotiate the prestige of the country will pay a price. Lou i told grover norquist, he must like tom cole lot because all he would say in response was interesting tactic. Thanks for being with us. In the moneyline tonight, a stalemate in washington d. C. Wall streets back today. The balance squeaking out of four. Gain. S p up less than a point, nasdaq slipping lower on the day. Volume on the big board slightly heavier than usual. All the major indexes finished higher for the month. Down 71 points. S p and nasdaq both ended high. The three biggest winners for the month, Cisco Systems up to nine 1 4 . Home depot, bank of america, both of just above 6 . Aaa now urging the Environmentl Protection Agency to halt the sales of gas with directional concentrations arguing the fuel blend known as e 15 with an additional 5 ehanol cause engine damage but that is not covered by most car warranties. The epa says cars made after the 2000s one mall can handle that fuel brand. Triple late shows 95 percent of cars made before 2012 will not up next, president Obama Meeting with everyone about the fiscal cliff, everyone except for the leaders in washington d. C. For the Republican Party. We will share our list of people that the president might also want to think about sitting down with. It might have just about as much affect as president obama plane taxman. How much higher . We will show you what some suspect about the math in d. C. In the chalk talk next. Lou we have a National Debt net of 16 trillion. We want to do a Little Something in that chalk talk tonight to bring some simple math home, primarily for the benefit of those we elected to represent us in washington d. C. And if cbo, a Congressional Budget Office projections are right, that 16 will be a trillion dollars higher next year. If the fiscal cliff is avoided, the federal government is expected to spend, lets do it this way, over threed a half trillion dollars. Ats a lot of money, especially since they are only collecting to onehalf in revenue and taxes. That leaves us with the deficit of one. That is the deficit. Sizable it is. This will be the president s fourth for which he is personally responsible, fourth deficit excess of a trillion dollars. President obama wants to plug that trillion dollars hole by raising taxes on household incomes, as we all know that have income over 250,000. The top 2 . That would bring in 802 million, 82 billion. Thats about 8 of tha deficit. So does that suggest we have a tax problem or, perhaps, a spending problem . Think about this. Taxpayers making morethan 250,000 representing the top 2 paid morehan 46 of all texas. That would seem like a pretty fair deal to most of us, but the president says it is not fair. We dont know what that number is. How much should it be . And contrary to what the president would have you believe as he campaigns untack sites all around the country and ainst the wealthy, hes doing a lot of that. The bush tax rates are not the root of our problems. In fact, individual tax payments rose, get this, 2,303,000,000,000 or 26 . Over the past two years. Under those very low unshared bush tax rates with the difficult slope but a growing economy we still added 233 billion to the federal revenue. Here is what happens if obama drives us off the cliff. That 82 billion in higher taxes with the top 2 percent, add to that, we dont want to leave anybody of of this deal, 223 billion. Now, do you suppose there is a reason that president obama likes to all the talk about those tax hikes, the top 2 . I wonder why. Could it be that he wants to draw attention away from the 400 lets do that right here, 400 4 billion projected by the Congressional Budget Office, 494 billion of obamacare taxes that will hit not the 2 , not the 98 , but the middleclass, and they start hitting on january 1st, and it does not matter whether we go over the cliff for not. If you have not heard about those tax hikes, perhaps it is because the mainstream liberal media for some strange reason es not want to tak about the inconvenience impact of obama taxes on our middleclass. The bill is passed. Lou the house passes the stem emigration bill. Some democrats call it racist and pandering. How is that . And republicans also introduced the achieve act. Other republicans taking the lead on emigration reforms . I am joined. Forget the tech bubble, housing bubble, the student that bubble. The rush to a College Education is crushing economic futures. The fiscal cliff now 31 days away, still no mention of sequestration cuts. Cuts in the pentagon budget with deadly consequences . Can this congress and this president figure out how to do the right thing . Admiral james lyons joins us next. [ engine revs ] [ male announcer ] the mercedesbenz winter event is back, with the perfect vehicle thats just right for you, no matter which list youre on. [ santa ] ho, ho, ho, ho [ male announcer ] lease a 2013 c250 for 349 a month at your local mercedesbenz dealer. Olaf gets great rewards for his Small Business pizza [ garth ] olafs small busins earns 2 cash back on every purchase, ery day helium delivery. Put it on my spark card [ pop ] [ garth ] why settle for less . Great businesses deserve great rewards awesome [ male announcer ] the spark Business Card from capital one. Choose unlimited rewards with 2 cash back or double miles on every purchase, every day whats in your wallet . Lou 31 days unl the fiscal clef, the threat of sequestration largely being ignored. Automatic spending cuts to the tune of 1 trillion over ten years, half coming from our Defense Budget. Joining me now to discuss the impact on our military, nestle security, we are joined by hammer and admiral james lyons. They to have you back with us your thoughts on the impact of sequestration is, indeed, it goes into affect year. In the words of the secretary of defense, leon panetta, this will be a disaster. What the Obama Administration is doing is unilaterally reducing the military capability of our forces. This is at a time when we have china with its Massive Force expansion, building a world capable force projecon capability. We have the russians modernizing the russian forces. We still have the iranian problem totally unresolved, north korea always aflashpoint. Look at the middle east. Anything far from being settled there. And let me take that navy as an example, which will be illustrative of the other forces and what it will do to the navy. It will take the navy and drive it down to the smallest force it has had since prior to world war one. Not world war ii, lou. World war one. Lou you know, im sorry, admiral. When governor romney said that, pointed that out to president obama in the debate, he was we had horses and bayonets, too. He seemed to make light of that. How important is it . Can you give us a sense of the impact . I think the president s comment is showing his inexperience in military matters. In this particular case we are going down to 220 ships. To put that number in perspective, i had 2505 ships under my command in the pacific flees. 20 percent of those 220 ships will be the literal combat ships which basically have no offensive or defensive capability. We are going to be challenged where we show weakness. And let me give you an example. Just today china announced effective january 1 they have authorized their paramilitary naval forces and their police to stop all vessels in the South China Sea that they consider to be there illegally if they have not requested permission. This must be rejected in the most strongest terms. This hits at the core capability of International Maritime law, freedom of transit, freedom of navigation rights. Lou we have not heard from the state department or the white house on that challenge. I do want to turn to one statement by you mentioned defense secretary leon panetta. He said the United States should have what he called an enduring presence in afghanistan to pursue the counterterrorism effort, the long war that has become the fashion of the