Transcript:

Erin Burnett, CNN: Our second story OutFront pay and punt. Really a bad combination of things, isn't it? Well, a bipartisan group of senators, known as the "Gang of Eight," are trying to hammer out a deal to avoid the $1.2 trillion in sequester money and to extend the Bush tax cuts for as many as possible. But it's really a stall, and they admit it. I think they do. You'll hear in a second if they're going to take issue with me on it, but they're really trying to just delay the tax increases and sequester for six months to buy time to make a grand bargain. Now if you're confused because you thought the whole idea of the sequester was to give Congress 17 months to make a grand bargain and now that they failed another six months ain't worth a hill of beans, you're not alone. So let's find out if this "Gang of Eight" adds up. Democratic Senator Kent Conrad, member of the "Gang of Eight," chairman of the Senate Budget Committee is OutFront -- good to see you, sir.

Chairman Conrad: Good to see you.

Burnett: OK, so am I being fair here? You guys are trying to stall this six months because you don't think you can get it done this year.

Conrad: No. You know, I think this all flows from a story that really mixed two different initiatives. One that Senator McCain and Senator Levin are working on to delay the sequester; another effort, separate and apart from that, that is the group of eight, four Democrats, four Republicans, that were asked about a year-and-a-half ago by 30 of our colleagues to see if we couldn't come up with a plan that would be the grand bargain, that would follow pretty closely what the Bowles-Simpson Commission came up with. So I think there's some confusion here as to what the group of eight is trying to do and what McCain/Levin are trying to accomplish.

(crosstalk)

Burnett: If you succeed then are we going to get a grand bargain that prevents the sequester? And we're going to get the grand bargain now, not six months from now?

Conrad: Yes. Look, I can't say what the group of eight will conclude, because we're still negotiating. I can tell you -- I would be happy to tell you what I am pushing for, which is to in the lame duck session, after the election, reach the grand bargain, and that that would be a framework that the committees of jurisdiction would then have six months to meet. In other words, they would be given instructions, how much to cut, from what programs, how to reform the entitlements, how to reform the tax system, how much money to raise. All of that would be agreed upon right after the election. The committees of jurisdiction would fill in the details, how those goals were to be met, and there would also be a down payment that is hundreds of billions of dollars of cuts and revenue agreed to in the lame duck that would take immediate effect. And on top of the framework, there would be penalties if the committees of jurisdiction did not meet their assignments. So that's what we're working on.

Burnett: OK, now I think that makes sense, although here's the thing. These penalties, right, we're supposed to be facing these penalties with the sequester now, but nobody likes the sequester, so if you all get what you want, the sequester gets put off or whatever you're going to call if then for another six months in case they fail and we still don't have anything happen. I mean it just is a frustration. I'm sure you share it, right --

Conrad: Yes. 

Burnett: -- that we can't actually get something done, signed and it's going to happen.

Conrad: Well that wouldn't be my intention. I'm really not interested in anymore kicking the can down the road. Look, I started on this effort five years ago with Judd Gregg, the ranking Republican on the Budget Committee, first of all to have a commission that would be totally enforceable in law and we got 53 votes in the Senate for that proposition. Seven of our original Republican co-sponsors, original co-sponsors, voted no against their own proposal. So then we had no choice but to go to a presidentially ordered commission that did not have the force and effect of law. That put us in a weaker negotiating position with less leverage. But, look, we still have an opportunity here to do what needs to be done for the country -- 

Burnett: Right.

Conrad: -- which is to agree on a plan that will save at least $4 trillion off deficits and debt over the next 10 years. I'm actually pushing for five trillion, because I'd like to actually balance the budget.

Burnett: All right. Well, Senator, thank you very much. We appreciate your taking the time and look, we're rooting for you to get this done and get it done right. He just ended there with a key number. He wants to cut $4 trillion. That's the same as Simpson/Bowles.

John Avlon, CNN: Yes.

Burnett: Simpson/Bowles came around last time, didn't pass, debt ceiling crisis, sequester. 

Avlon: Four trillion --

Burnett: It feels like they're kicking the can. I know they don't want -- he doesn't want it to be, but that's --

Avlon: No he doesn't and look, I mean God bless, he's at least trying to do the hard work –

Burnett: He's trying, yes --

Avlon: -- and you know he's someone who is going to be -- he's been fighting this fight for a long time. And sure, there are going to be people who say, look, this will buy us a little bit of time. We can move the fiscal cliff just a little bit. But Kent Conrad really has been a leader, but he is leaving, and so that adds to part of the problem here.

Burnett: Right.

Avlon: So he can do all the good work there, but at least he's focused on the lame duck. There are too many members of Congress that you and I have spoken to are in totally denial about the fiscal cliff --

Burnett: Who are in total denial. And of course my thing is, all right if you get this passed and I hope you do, I know it takes time to implement it, but I see this, hey in six months, guess what, we don't like all the cuts that you said we had to make. We want to do it again.

Avlon: That's right.

Burnett: And it's just frustrating. OK, all right, well at least he is fighting the good fight. And that brings me to our third story....

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