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Senator Paul is joining us from Capitol Hill.
So you agree, Senator, with the president that right now, given the crisis that's unfolding, involving the national debt, there's no time for members of Congress to be leaving Washington, going on break, going on vacation?
SEN. RAND PAUL, (R-KY): Absolutely. We finally find common ground with the president. Bipartisan support for actually doing some work up here. You know, I've been disappointed. I've been here six months. Not one minute has been spent on the floor, or in committee, discussing the debt ceiling. We haven't passed a budget. We haven't passed any appropriations bills. I really think the American people deserve better.
BLITZER: I know you've agreed with many of your Republican colleagues in the Senate to challenge the Democratic leadership, Harry Reid. What response are you getting from them right now?
PAUL: Well, Senator Ron Johnson, from Wisconsin, went to the floor yesterday. And he said he had had enough. You know, he is a successful businessman, who says I want to see results. I want to at least see you working on the problem. He, and I, and several of the other freshmen, were just disappointed that we don't appear to be addressing the problems. And so we said, look, you know, we don't think we should be taking a week off in that we have not yet even started discussing the debt ceiling. The American public elected us because they were concerned and worried about the future of the country and worried about this looming debt crisis. Yet the discussions are in secret, between a few people. We want them in the open, before committees, before the world. How will we fix this problem?
BLITZER: I know you don't support any increase in the tax rates, but what about when the president says eliminate some of the loopholes, some of the subsidies for billionaires out there, for huge oil companies who make billions in profits, pay relatively modest amounts of tax. Are you at least open to reviewing, to having some tax reform that would eliminate some of those loopholes, some of those tax break subsidies?
PAUL: Well, I voted to get rid of the ethanol credit. My preference, though, is to get rid of special tax breaks as part of tax reform where we lower overall rates, simplify the tax code, and then get rid of some of these special bonuses they give to people.
But just doing it on its own or saying we're going to take away depreciation from one industry, like oil industry, would be a big mistake. We need more oil production in this country, not less. So, we need to be careful about how we go about it.
Do I think the rich can absorb more of the punishment of what -- or the austerity that will need to come about? Yes, but let's do it by reducing their government benefits, not by taxing the economy. Almost all economists will tell you that if we raise taxes in a recession, it's not good for the economy.
BLITZER: But if reduce some of those overall rates in order to get that kind of tax reform, to eliminate, let's say, some of the subsidies, the tax loopholes, for corporate jet owners, or whatever, doesn't that become revenue neutral as they say? You're not going to get the kind of savings that you really need to deal with the nation's enormous debt?
PAUL: Right. But I don't you're going to -- the revenue that you would get is you would unleash economic growth. During Reagan's term, when they lowered overall rates, they had a couple of years where they had over 6 percent growth. You know, that does enormous things for the economy.
Right now, we're looking at an anemic 2 percent and it could well get worse because of all these new regulations they're heaping on the economy.
So, if you want growth, you have to have less regulation, lower rates and you can close some loopholes, but you can't isolate and close loopholes without raising rates. If it's not revenue neutral, you won't get any Republican votes for it.
But if you lower rates, you will unleash economic growth and you will end up getting more revenue.
BLITZER: As you know, Senator, a lot of Americans, when they hear that a huge company like General Electric makes $14 billion in profit worldwide in 2010, $5 billion of which profit in the United States, and they wind up paying zero in federal tax, federal income tax, that causes a lot of outrage out there. Is that fair?
PAUL: I think Americans are rightly annoyed. I'm annoyed by it. The thing is, what we need is lower rates and less deductions and less tax credits. But you can't just isolate and take away the credit. G.E. is probably an exception.
But what I don't want is to take away, like, an oil depreciation allowance, and, all of a sudden, the oil companies are paying higher taxes and drilling for less oil, and then gasoline goes up. Gasoline has already doubled in price under this president. So, I don't think we want to raise the gas price higher than it is now. That would be devastating to the middle class.
But there are ways of doing it. We could means test benefits that we send out. The wealthy would absorb more of the austerity there. We can cut spending, we need to. Spending has gone up dramatically the last two years.
So, there are ways to do it. There are ways we could come across the aisle and do it. We will come forward. If we're here next week, which we're going to try to force, we will have a plan by the end of the week that will raise the debt ceiling, contingent upon a balanced budget amendment, contingent upon cuts and contingent upon statutory caps, like pay-as-you-go.
We're going to produce a proposal because the other side won't. We need something on the table to be debated in public, in full view.
BLITZER: All right.
PAUL: And that debate needs to happen soon.
BLITZER: And we're out of time. But very quickly, if you get those three conditions, you, Senator Rand Paul of Kentucky, will, in fact, vote to raise the debt ceiling, is that what I'm hearing?
PAUL: Yes. Ironic as it sounds, I will be proposing with other senators, hopefully next week, a raise in the debt ceiling contingent upon a balanced budget amendment passing, significant cuts passing and statutory caps. I understand we may have to borrow some money, but we can't just borrow more money without reforming what's going on up here.
They're acting irresponsibly and the people who elected me will say, gosh, you can't vote to raise the debt ceiling unless you fix the process. So, we want to fix the process, allow it to go up some and then start going towards a balanced budget.
BLITZER: OK, Senator Paul, thanks very much for joining us. Good luck.
PAUL: Thank you, Wolf.
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