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WALLACE: And hello again from Fox News in Washington.
As we observe this Memorial Day weekend, we promise some 4th of July fireworks as we discuss some of the nation's most pressing problems two of the newer voices on Capitol Hill, Republican Allen West Florida, a Tea Party favorite, and Democrat Donna Edwards of Maryland, a member of the Progressive Caucus.
And we welcome both of you to "Fox News Sunday."
REP. DONNA EDWARDS, D-MD.: Thank you.
REP. ALLEN WEST, R-FLA.: Good morning. Thanks for having us.
WALLACE: Let's start with Medicare. And Paul Ryan's plan to turn it from a fee-for-service plan into a voucher system -- Congressman West, even though this wouldn't start until 2022, you've got some push-back at one of your town hall meetings recently. Let's watch.
(BEGIN VIDEO CLIP)
PROTESTER: Hands off Medicare! Hands off Medicare!
WEST: I will take my hands off Medicare, and when there is no Medicare, then I will come and see you, sir!
(END VIDEO CLIP)
WALLACE: Congressman West, as we saw in the special election up in New York state this week, where the Democrat beat the Republican and Medicare was a big issue, as we see in the national polls a lot of people, especially seniors, don't want to see Medicare changed this way.
WEST: Well, I think when you look at Paul Ryan's plan, first of all, there is no change for anyone who is a senior 55 years and above. But as I sit here right now, I'm 50 years of age. And we already know that the board of trustee has said, you got 13 years and something very bad is going to happen with Medicare. So, what is going to be there for myself when I get 63 to 65?
So, I think the thing that we see is at least there's a plan out there to try to have some type of reform.
And there was a great article by Mr. Stanley Druckenmiller in The Wall Street Journal back in the 15th of May that talked about the fact that the financial markets, a lot of these, you know, bond markets are looking to see: are we going to have some type of long- term viable solution and plan as we go forward?
WALLACE: But let me pick up on that, Congressman Edwards, because the knock against the Democrats is you don't have a plan, that congressional Democrats didn't pass a budget last year. Senate Democrats aren't offering a budget this year -- President Obama talks having an independent panel of medical experts who are going to find $20 billion of cuts somewhere. At least they've got a plan.
EDWARDS: Well, I think it's not true that we don't have a plan. And, in fact, when we passed the Affordable Care Act last year, we put in some real markers for Medicare that in fact reduced Medicare costs. We invested in preventive care for seniors because we know that the real drivers of Medicare are these long-term costs for chronic care that happens at the -- you know, at the end of life.
You know, Republicans are very interesting because in their budget what they would do is repeal preventive care. Prescription drug coverage -- we also closed the donut hole there, which is costing seniors a boatload of money and is not very efficient on the system.
So, to say that Democrats don't have a plan I think is incorrect. I mean, in fact, the plan is to preserve and protect Medicare for future generations. And Republicans want to dismantle that.
WEST: Yes, but I think as you sit here and look at the two of us, one of us has voted to cut Medicare. When you look at the fact you voted for the Patient Protection and Affordable Care Act, which had $500 million of cuts of Medicare. And we also have this independent payment advisory board, these 15 bureaucrats, that are supposed to control the cost of Medicare. I mean, that's something that really does scare seniors.
What we are talking is something that does not affect any senior, anyone 55 years and above. We're talking about something that does put in some type of viable plan to sustain Medicare for the future, because as we know, it was put out three weeks ago, it won't be there.
EDWARDS: Well, the congressman thinks the seniors are only interested in what's good for them. And what we know about seniors, whether they're in south Florida or in Maryland, is that they actually care about what happens with that next generation. They care about whether we're going to cover preventive care and prescription drug.
WEST: But if you don't have a plan, there is nothing for the next generation.
EDWARDS: And that they are -- and that they are not sent in the private market to negotiate with insurance companies. We know that that would be a failure. And that's exactly what the Republican plan calls for. I can't negotiate on --
WALLACE: Let me move on to another thing, because the biggest difference, it seems to me, looking at your two positions on how to deal with the deficit is over taxes.
Congresswoman Edwards, you have a big plan to increase revenues. And let's put it up on the screen. You would raise tax rates for the wealthy. You would raise the estate tax. You would tax capital gains and dividend as ordinary income and you would end tax subsidies for oil and gas companies.
So, raise taxes in the middle of a weak recovery?
EDWARDS: Well, let's be clear -- raise tax on the wealthiest 2 percent who have run away with the store for the last 10 years and haven't put money back into the economy. I mean, that's a fact, because if that trickle-down theory had worked, our economy would be in good shape right now.
And so, we do -- I do subscribe to a plan that says, you know what? Middle income earners, you've already shared a fair burden of your taxes. But the wealthiest 2 percent have not.
And there's no excuse whatsoever for continuing taxes for people who make over $500,000 a year.
WALLACE: Congressman West, you got something there?
WEST: Yes. I got a very interesting article which was written on the 26th of May by Steven Moore for The Wall Street Journal that talks about -- we are talking about a 62 percent top tax rate and the absolutely abysmal effects that it will have on this economy.
And one of the great things he says here is, in the end, "The Tax Foundation recently noted that in 2009, U.S. collected a higher share of income and payroll taxes, 45 percent, from the richest 10 percent of tax files than any other nation, including some such socialist welfare states."
So, I think that we are already getting a lot of the juice from those top brackets. But go back and look at history, Donna, when we looked at Coolidge and Harding. It took those marginal tax rates down to 29 percent. And the percentage of revenues for GDP grew. But after them came Hoover and Roosevelt who took it from 24 percent up to 83 percent, and the percentage of revenues decreased. Even John F. Kennedy, when he came in and saw a 91 percent marginal tax rate said that was too high. He took it down to 71 percent.
EDWARDS: I'd like to just back to the Reagan tax rates. I mean, if we went back there, we would actually do a lot --
EDWARDS: We're talking about secure the system. And I think that what -- you know, what's happened here is we've got, you know, tax rates at the highest income levels where, you know -- whether it's George Soros or Bill Gates or whichever, you know, billionaire/millionaire doesn't pay the amount of taxes that the secretaries pay. I mean, I think the American public understands that this is not fair. And more --
WALLACE: Wait, wait. I mean, that may be true in some exceptions. But the --
EDWARDS: Well, Chris, more than that --
WALLACE: Wait, wait. There are some statistics that show the vast majority, the people in the higher income brackets pay the vast majority of taxes.
EDWARDS: Well, it needs to be proportion to their income. Income for lower income -- for middle income Americans have remained stagnant --
EDWARDS: Let me finish.
WEST: How can you make it proportionate if they don't even pay, Donna?
EDWARDS: And the fact is if we were to extend these tax rates for the wealthiest 2 percent over this next decade, it would cost the American public a fortune because in your budget, you don't even pay for them. They haven't been paid for the last decade. It's putting an unfair burden on the public.
WEST: Who's producing jobs in the country?
EDWARDS: Well, I would love it if the wealthy people holding on to the tax break put their money back to the economy. The fact is that they haven't.
WEST: Because of the economic uncertainty we have --
WALLACE: -- which brings me to the economy and the question of how you jump-start the economy.
Congressman West, House Republicans offered a plan this week to do exactly that. To get the economy going, to boost jobs. Let's take a look at the plan. Cut the top tax rate even further for individuals and business, 25 percent; less regulation; more patent protection; and pass free trade deals with other countries.
Whether that's good policy or not, the fact is we did see lower taxes, and less regulation under President George W. Bush. We ended up in a recession.
WEST: Well, the important thing is this: with President George W. Bush, he grew government. And he increased the government spending.
So, you cannot have a cut in taxes and also have a gross enlargement of government. That's one of the things that we don't want to see happen.
I got to tell you, you know, here I have been here in Congress for about five months. And I have legislation that passed that will save the American taxpayers $80 million because I found three wasteful Department of Defense programs.
And so, the thing is, while each and every one of us up here in our respective committees or whatever looking for those wasteful programs so we can cult those expenses.
WALLACE: Congresswoman Edwards, what do you think of the GOP plan as I just outlined it?
And I'd also like you to answer this -- and go ahead and talk directly to Congressman West, as you do. The Obama administration pumped $1 trillion in stimulus into the economy. The Federal Reserve has pumped trillions more. We've got 9 percent unemployment. We've got 1.8 percent GDP growth. It isn't working.
EDWARDS: Well, I mean -- I don't know that I agree with that, because, you know, first of all -- let me finish here. I mean, first of all, the trillion dollars for stimulus package -- actually $786 billion -- was absolutely necessary to make sure that this economy didn't go into a freefall. We also know that we had to make sure that we began to stimulate the kind of growth that we need in this country to invest in the future.
I -- you know what? I agree with the congressman here. I think there are actually some things that we could do both in terms of cutting back wasteful spending. But everything has to be the table, from the Defense Department, to every single department.
WEST: And I said Defense Department.
EDWARDS: But your party hasn't.
WEST: Well, I am in the party. So, obviously.
EDWARDS: And so -- your party hasn't. So I want to go back -- I want to make sure that we're really looking at the budget. But we also have to look at revenues. And that is a fact we have to look at revenues in this --
WALLACE: Well, let me ask you about that, Congressman West. Wait, wait. The fact is if you're going to get a bipartisan compromise, you know there's going to have to be some, some revenue increase in addition to spending cuts.
The Debt Commission, the Bowles-Simpson Commission came up with formula $3-to-$1, $3 in spending cuts for every $1 in revenue increase and maybe they didn't even talk about raising rates, they talk about doing away with tax breaks.
Why isn't that acceptable?
WEST: Well, Chris, I have to tell you. I've been wanting to say get rid of loopholes, get rid of subsidies. I talk about corporate business tax rate that comes down to 20 percent to 22 percent, and eliminate subsidies and loopholes. I talked about going through a tax flat which has just only one deduction pretty much for children.
But I think the most important thing that we have to understand -- and I think Donna will agree with me -- until we show we're going to be fiscally responsible here, why should we continue to tax Americans? Why should we continue to take away their most precious resource if we're not going to do the right things up here?
WALLACE: Congresswoman Edwards, answer the congressman.
EDWARDS: You know, Allen, fiscal responsibility did happen when the last Democrat was in office before President Obama. And that was President Clinton.
WEST: And he had a Republican Congress working with him.
EDWARDS: He balanced the budget. We had surpluses.
WEST: And he had a Republican Congress working with him.
EDWARDS: And those were wiped away -- those were wiped away by two wars that were unpaid for by prescription drug plan that was unpaid for, by taxes.
WEST: And we have to fight. And we have to defend our country.
EDWARDS: You know, I thank for your -- I thank you for your service. I mean, I grew up in the military, I feel very strongly about the military.
But the fact is that you cannot have two wars that are on the books that are unpaid for, tax breaks that are unpaid for the wealthiest Americans. And at the same time say that we're going to balance our budget off the backs of the seniors.
WALLACE: I got a couple of minutes left and I just want to get you both on one last subject which is the debt ceiling because we -- the clock is ticking. We're headed towards -- we now hear August 2nd as a date when we're going to run out of money and default on our debt.
What do you do about it? Congresswoman? Well, go ahead.
EDWARDS: Well, first of all, I think we have to pay our bills. And we can argue about how we got to those bills but the United States has an obligation both for ourselves and also for the rest of the world to make sure that we meet our obligations.
We can have a conversation about what cuts need to be. But I think that the Republicans are being disingenuous when all you can do is talk about spending cuts, only a portion of the budget, and then not also talk about revenue increases.
WALLACE: Congressman West?
WEST: I give you two quotes from Mr. Druckenmiller and his Wall Street Journal piece. The grave danger he sees is politicians might give the government authority to borrow beyond the current limit of $14.3 trillion without any controls -- conditions to control spending. He's willing to accept temporary delay in the interest payment he's owed on U.S. treasury bonds if the result is a Washington deal to restrain run-away entitlement cost.
EDWARDS: But you know what? If you get rid of --
WEST: That was Soros funds manager.
EDWARDS: On our debt, on our debt, if you get rid of the spending for two wars that have unpaid for and tax breaks for the wealthy Americans --
WALLACE: You want us to pull -- that's a different issue. You want us to pull out of Iraq and Afghanistan?
EDWARDS: I do, because you would then -- you would then draw our -- you would draw our responsibilities down --
WALLACE: But that's not going to by August 2nd. Even president Obama is against that.
EDWARDS: And so, I think the responsible thing is you that raise the debt limit and we work on the plan that gets us out of Iraq, out of Afghanistan.
WALLACE: Well, I can see Congressman West shaking his head. He's going to say, no way. And you know, the Republican majority in your House has been saying that.
EDWARDS: Well, I don't know. You look at that vote the other day on our spending in Afghanistan. There are a lot of Republicans who don't agree with that.
WEST: We have got to present spending control measures first. We have got to present spending control measures first. And let me tell you something that just happened, on my BlackBerry, I get 12 alerts this week of soldiers that lost their lives in Afghanistan. It's not over in Afghanistan.
WALLACE: All right. We're going to have to leave it there. But to be continued.
Congressman West, Congresswoman Edwards, thank you both so much for sharing part of your holiday weekend with us.
WEST: Happy Memorial.
WALLACE: Please come back.
EDWARDS: Thank you. Happy Memorial Day.
WALLACE: Thank you.
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