Kyl is actually admitting, to a persistent and very focused question, that tax cuts which add to the deficit are somehow like calories from a chocolate bar when you're on a diet -- they "don't count," in other words, in some unspecified way.
This is an enormous opening for Democrats to paint the Republicans as fiscally unserious. Republicans have spent a lot of time and effort convincing the media that the number one issue on most voters' minds right now is the deficit and the debt (that this is just not true has largely escaped most "journalists" who have been faithfully parroting this talking point for months now, but that's beside the point).
But this blade cuts both ways. If Republicans are going to stop a bill to extend unemployment which costs less than $40 billion, then how can they turn around and advocate extending the Bush tax cuts on the rich which would cost almost seven hundred billion dollars and still say with a straight face that they're some sort of "deficit hawks"?
Wallace, interestingly enough, did his homework on the question, and asked specifically about the tax cuts on people making over $200,000 -- a question I simply have not heard yet from any non-Fox "liberal media" member so far, I should point out. This cuts the knees out from the typical Republican response (which Kyl attempted), which is to talk about all the "middle-class tax cuts" which are also going to expire (actually, Democrats will likely extend these tax cuts while letting the "bonanza for the wealthy" part expire, but this matters little to Republicans making this argument, so I only mention it in passing).
Democrats have a wonderful opportunity here to hoist Republicans on their own petard. Any time a Republican starts talking about tax cuts, the first thing out of a Democrats' mouth in response should be: "Well, how are you going to pay for these tax cuts so they don't hike the deficit?" Republicans are already on the record opposing a relatively modest unemployment benefit extension, for the sole reason that "it adds to the deficit." So they've laid down the rules they're supposed to be standing up for. Meaning it is entirely fair game to ask them "How will you pay for your proposed tax cuts?" Since they never have an answer to this question -- other than the widely-discredited and thoroughly-debunked "tax cuts pay for themselves" nonsense -- this immediately leads to framing the issue as: "You're OK with adding seven hundred billion dollars to our debt to give wealthy taxpayers an enormous Christmas present in the form of tax cuts -- without even pretending to pay for it -- but you howl when we try to keep millions of out-of-work Americans from financial ruin for a fraction of the same price?"
http://www.huffingtonpost.com/chris-weigant/how-democrats-should-resp_b_643762.html