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BLITZER: No.

All right, Jack, stand by.

All week, as part of our Broken Government series, we've been looking at the gridlock here in Washington and talking about how to fix it, if possible.

I'm joined now by a father and son who say they want to be part of the solution.

Republican Congressman Ron Paul has served in Congress for more than two decades. He ran for president twice.

And now his son, Rand Paul, is running for the U.S. Senate from Kentucky.

Thanks to both of you very much for coming in.

I assume both of you agree that the government is broken.

Congressman, do you agree the government is broken? REP. RON PAUL (R), TEXAS: Oh, it certainly is. I might define it a little bit differently. I think the mechanism is broken because the government is broke. And that's a big difference. When you have a lot of money, you can be inefficient and you can do things and everybody gets what they want. But once a government becomes broke and the people are really broke, too, because there's not enough people working to feed the cow, then there's this inefficiency.

And by that time, by the time you go broke, the government is too big. It's already very inefficient. And that is the reason we actually met this bankruptcy.

I don't think we can solve this until we admit that bankruptcy can do something about it, which means you cut way back...

BLITZER: Wait a minute.

RON PAUL: -- on spending.

BLITZER: Wait a minute. Congressman, you want to see the U.S. Government -- the American taxpayer, in effect, go bankrupt?

RON PAUL: Well, you have to admit you can't pay the bills. Once the government gets as much debt as we have, the liquidation of that always happens. You can't avoid it. It's just a matter of questioning. No, I'm not advising that we don't -- that we renege on paying on the -- on the Treasury bills and sending out Social Security. But what is going to happen, though, the debt will be liquidated by paying back money that doesn't have as much value.

All you have to have is a 10 percent inflation rate and you've wiped off a trillion dollars of debt.

BLITZER: Well, that would be a nightmare...

RON PAUL: So, not to...

BLITZER: That's -- that would be unacceptable...

RON PAUL: Well, then...

BLITZER: -- because most people's life savings would be lost in that kind of a situation...

RON PAUL: That's not...

BLITZER: -- within a -- a few years.

Let me...

RON PAUL: That's why we have...

BLITZER: Let me get your son...

RON PAUL: -- to avoid it.

BLITZER: Right.

RON PAUL: That's why we must avoid it.

BLITZER: Let me just get your son into this conversation.

Rand, do you agree the government is broken?

RAND PAUL (R), KENTUCKY SENATE CANDIDATE: Yes. And I think that if you talk to voters in Kentucky, they'll ask, how are we going to spend a trillion dollars on health care and yet it's not going to add anything to the debt?

Nobody here believes that. I don't think many people in the country believe that...

BLITZER: But that's what the Congressional Budget Office...

RAND PAUL: -- a trillion dollar program...

BLITZER: -- the Congressional Budget Office came up with that assessment, that they -- there are certain ways you can cut some of the growth, in Medicare, for example, among other things, and that way you'll have basically no increase in the debt.

You don't believe in the CBO...

RAND PAUL: Well, the argument is...

BLITZER: You don't believe in the CBO numbers?

RAND PAUL: Well, the argument is that they're going to get a lot of money out of waste and fraud.

But my question to them is show me the government program that's ever come in under budget. Look at the Medicare prescription drug plan. CBO predicted that it would cost $400 billion. Within a year, they revised their estimates to say it was going to cost a trillion.

So I think notoriously, government underestimates the cost of programs. And when something is free, people tend to over use it and it costs a lot more than they projected.

BLITZER: Congressman, do you trust the CBO?

RON PAUL: Well, I trust them that they're trying to do their best. But I don't think anybody can project the future, because you don't know what the revenues will be, you don't know what the interest rates are going to be, you don't know how much abuse there's going to be and who -- who lines up at the trough.

So, no, nobody is -- nobody can do that. And that's why government always fails once they get involved in doing these things and the market works, because the market irons these things out. The people who are inefficient get shoved aside or they have to declare their bankruptcy or they have to revamp...

BLITZER: All right...

RON PAUL: But when government does it, they have nobody to report to and all they do is go back and tax the people even more and that's why it fails.

BLITZER: So if you were in the Senate right now -- and you want to be the Republican candidate from Kentucky, Rand Paul, in the United States Senate. You want to get that Republican nomination.

You would reject the president's effort to come up with some sort of health care solution, is that what you're saying?

RAND PAUL: Well, what I would say is I would reject what the president is proposing. But I would also say that we, as Republicans, need to articulate a vision for what we would do. I personally am worried about the expense. And people come up to me everyday and are worried about the expense. I'm worried about pre-existing conditions. I'm worried about if Wolf Blitzer grills me on these questions and I have a heart attack today but I survive that my rates could triple.

So I'm concerned about the price. But my question is, is it that we need more government involvement or less?

Over half of what I do as a physician is already paid for by government. And the problem is, is that when government sets the price for health care, the patient quits caring about the price and there is no price competition.

BLITZER: All right.

RAND PAUL: You need to have price competition to make health care work.

BLITZER: I think on this issue, of health care, I think the two -- the father and the son basically agree. I do think that there is an area of disagreement on national security issues.

Congressman, first to you. You would basically want to see the U.S. Pull of Iraq, Afghanistan, shut down GITMO, is that right?

RON PAUL: Well, I don't think we disagree on national security.

Who would be against national security?

There might be...

BLITZER: Well, on some (INAUDIBLE) of national security.

RON PAUL: Yes, there might be some disagreement, but -- but we agree that we shouldn't be fighting wars that we don't declare and we get ourselves into too much trouble. And now we're in a mess because we didn't follow the rules and we didn't follow the Constitution. Somebody might have a strategy slightly different than mine, but -- but still, not many American people enjoy war and want the presidents to go to war endlessly and carelessly. Yes, my proposal is that it's not in our best interests, it's not in our national security interests and the sooner we end this, the better...

BLITZER: All right...

RON PAUL: -- because it's participating in our bankruptcy and it's part of our economic crisis that we're facing.

BLITZER: You would agree or disagree with your dad, Rand?

RAND PAUL: I would say that the most important thing that the federal government does is take care of our national security, bar none. It's the most important enumerated power of our government, is national defense. It's something we can't privatize. It's something that we need the national government to do.

I also would say that when we go to war, it's the most important vote that any congressman or senator will ever take. And I will treat that seriously. I will make them debate over whether we declare war or not. We have not done that since World War II, and I think that's an important debate and there are a lot of details on that debate on when our national security is threatened. It's not enough just to say our national security is threatened, we need to have a full scale debate over when our national security is threatened and that's an important debate that our country should have.

BLITZER: But having said all of that, right now, given the situation in Iraq and Afghanistan, we -- are you with your dad, you know, basically get out quickly or would you let the -- the generals and the -- the sort of the time line that's in place work its way?

RAND PAUL: Right. I think that the actual decisions on troop deployment is the prerogative of the commander-in-chief and not necessarily of Congress. And I don't think that Congress, if they vote to increase troops by 100,000 or reduce troops by 100,000, I don't think that's actually going to be declared Constitutional. I think the president has to declare where the troops are, in consultation with the generals.

Now, of the overall picture, we have to ask some important questions. For example, it troubles me and many veterans I talk to that we're paying the Taliban. We have a works program for the Taliban. We'll pay them $8,000 per fighter not to fight. We pay the Taliban to take their weapons back from them. And I had a Marine recently here in Kentucky tell me, look -- he says, look, I'm a Marine. I'm trained to take weapons from our enemies. I'm not trained to pay for them.

BLITZER: Well, the same...

RAND PAUL: And there...

BLITZER: They used the same strategy...

RAND PAUL: -- is some disagreement... BLITZER: By the way, they used the same strategy in -- in the al-Anbar Province. They paid some of the Sunni insurgents not to fight. It seems to have worked, at least for the time being. We'll see how long that -- that strategy works.

Unfortunately, we're all out of time.

And I hope I'm not going to give you a heart attack, Rand Paul.

I -- I assume the questioning was not that tough. You'll -- you'll survive. If you can survive this, you'll survive.

RAND PAUL: All right.

BLITZER: You proud -- are you proud of your son, Congressman?

RON PAUL: Yes. He's doing good work. I'll soon retire...

BLITZER: Did he...

RON PAUL: He's doing such a...

BLITZER: -- did he do a good job?

RON PAUL: He's doing such a good job I think I'll just sort of fade away.

BLITZER: No you won't.

Ron Paul and Rand Paul, a good father-son combo.

Guys, thanks very much for coming in.

RON PAUL: Thank you, Wolf.

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