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SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: I'd like to see a serious effort, bipartisan in nature, led by the White House where we look at extending the age of Social Security retirement. We all know we have to do that. And when it comes to means-testing benefits, that should be on the table.

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BLITZER: Extending the age of Social Security benefits and having means testing. Are you open to those two proposals?

GOOLSBEE: Well, Wolf, let me separate two things. And I really wish that Republicans in Congress could separate them.

The debt limit discussion is about the full faith and credit of the United States. We should not be -- nobody should be playing chicken with that or playing games with that.

We should have an honest discussion about the budget. The president is not against that. He knows we must deal with our long- run fiscal challenges. And when he releases his budget in the a few weeks, I think it is going to be clear that he takes that responsibility seriously, and he's not averse to making tough choices.

Let us have an honest and open discussion about the budget and what we should do, what cuts ought to be made, in what areas. Do not tie the discussion about the budget to a thing that is fundamentally about the trustworthiness of the U.S. fiscal system and the government, which is what the debate about the debt limit is.

BLITZER: And what about the issue of Social Security? Are you ready to discuss that?

GOOLSBEE: Well, the president formed the fiscal commission. He was the one who authorized it over the objections of some of the opponents, and that body put out a report which I think highlights how important the longer-run fiscal circumstances are. And the president has always said, let's not automatically rule everything out before we even begin.

Let's see what plans and various people put forward, and let's deal with that as adults. Let's not try to turn this into a game of chicken where we say, unless you agree to our own specific partisan policy moves, we're going to threaten to default the U.S. government. And I would say, I hope that everyone in Congress can avoid resorting to policies that make the deficit worse while, at the same time, discussing the need for responsibility.

BLITZER: Austan Goolsbee, thanks very much for joining us. Good luck.

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