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CNN "State of the Union with Candy Crowley" - Transcript

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CROWLEY: In an August Quinnipiac poll, Bachmann ranked third among Republicans with 12 percent, Cain just 5 percent.

Now in a CBS News poll of Republican primary voters she sits between Ron Paul and Rick Santorum with 4 percent. He's tied for first with Mitt Romney.

Herman Cain is big-league now, soaking up the limelight on "The View" and the "Tonight Show" promoting his book "This is Herman Cain."

Still, in the top tier of a universe of 2012 politics getting to the top and staying there are wholly different things.

With me now, presidential contender Herman Cain.

CAIN: Thank you, Candy.

CROWLEY: Thanks for finding time for us between "The View" and the "Tonight Show."

CAIN: It's a pleasure.

CROWLEY: Appreciate it.

Let me talk about a couple of topics that have been in the news and I want to play you something that Pastor Robert Jeffress, who is head of the Southern Baptist Convention and senior pastor at a church in Texas, had to say about -- sort of aimed at Mitt Romney. Take a listen here.

(BEGIN VIDEO CLIP) ROBERT JEFFRESS, SOUTHERN BAPTIST CONVENTION: The Southern Baptist Convention, which is the largest Protestant denomination in the world, has officially labeled Mormonism as a cult. I think Mitt Romney is a good moral man, but I think those of us who are born-again followers of Christ should always prefer a competent Christian to a competent non-Christian like Mitt Romney.

(END VIDEO CLIP)

CROWLEY: Is Mitt Romney a non-Christian?

CAIN: I'm not running for theologian in chief. I'm a lifelong Christian. And that that means is one of my guiding principles for the decisions I make is I start with do the right thing. I'm not getting into that controversy.

CROWLEY: But it still will beg the question that you dodged a direct question which is, is Mitt Romney not a Christian?

CAIN: He's a Mormon. That much I know. I am not going to do an analysis of Mormonism versus Christianity for the sake of answering that. I'm not getting into that. I am a Christian...

CROWLEY: Even knowing, it will look like you're dodging it.

CAIN: If that's what it looks like, I'm dodging it because it is not going to help us boost this economy. And you know that that's my number one priority.

CROWLEY: And on a more general note, is someone's religion a valid campaign issue?

CAIN: I believe it is a valid concern, but I don't think it necessarily should be a big campaign issue. What I believe people want to know, what are your guiding principles and what are your values? Because your guiding principles and your values will impact how you make decisions. That's what I believe it is.

So just focusing in on religion alone is not enough to determine how that person will make decisions.

CROWLEY: And we should add here for folks that have not followed your campaign all along, you have from time to time talked about Muslims and the nature of Islam and have expressed reservations about having a Muslim in your cabinet... CAIN: Extremist, extremist, not peaceful Muslims. You have peaceful Muslims and you have extremists.

I have nothing against peaceful Muslims. Jihadists and extremists are the ones I'm careful not to infiltrate my cabinet when I become president.

CROWLEY: Well, that's a differential you didn't make before.

CAIN: I did not make that differentiation before, but that was the intent of the comment.

CROWLEY: OK.

In your book "This is Herman Cain," you wrote that the Obama White House disconnection with the American people is, quote, "absolutely unbelievable." So I want to ask you about your connection with the American people.

CAIN: Yes.

CROWLEY: The idea of a surtax on millionaires to help pay for a jobs bill you are opposed to to.

CAIN: I am opposed to it, because it is a distraction and it doesn't solve the problem. If they were to put a surtax on everybody making over a million dollars, if they were to double it, it doesn't solve the problem of too much spending and the problem that this economy is not growing. The economy is on life support. So it doesn't solve the problem. All it does is it fans the flame of class warfare.

CROWLEY: Well, I ask -- this isn't something that he's doing sort of in a vacuum. This would be to pay for the jobs bill. And I am assuming that there are things within the jobs bill that you would agree to.

CAIN: Very little. This jobs -- this so-called jobs bill is a sneak a-taxes bill. I went through it, Candy, there are 84 sneak a- taxes that nobody talks about. So the focus on this millionaire surtax is a distraction for people not to look into the body of the bill. It is loaded with sneak a-taxes that will impact everybody.

CROWLEY: Well, as I understand this would be substituting for the president's way of paying for it.

And I guess my point here is that when ABC News and "The Washington Post" asked people do you support or oppose raising taxes on people making over $1 million a year, 75 percent of Americans said raise them. We're in a big deficit situation, separate this from the jobs bill. But you oppose it.

CAIN: I oppose it because number one it doesn't solve the problem.

CROWLEY: Doesn't that make you seriously out of step with the American people? That's my point as you accuse the president of being.

CAIN: No, No. The American people are being deceived with this class warfare stuff. And I'm not going to perpetuate it because that poll says it. The same people that took that survey I challenge them to tell me what's in that jobs bill. I challenge them to tell me what percentage of the taxes are currently being paid by 50% of the taxpayers, 97 percent.

You see, D.C. has a definition of fairness and Webster has a definition of fairness and the president keeps talking about, well, in all fairness -- when he's not sharing with the American people. If the American people knew the facts about how the taxes are being paid I think they might have a different opinion.

And one other thing on this note, here's the other thing, to talk about the millionaire's tax is just fanning class warfare because the people don't have the facts about how the tax structure breaks down in terms of who pays what.

CROWLEY: Well, but you would not dismiss the notion that some people in middle class tax bracket do pay more of a percentage of their income and certainly they pay a larger percentage when it comes to Social Security payroll taxes than do rich people.

CAIN: Yes, I would acknowledge that. Are you absolutely right.

CROWLEY: So this is trying to correct that, in part. It corrects what is seen as an inequity that rich people pay a smaller percentage in some cases in their income than do middle class people.

CAIN: I love you, but it doesn't. And the other thing is...

CROWLEY: I'm sorry, it doesn't?

CAIN: It doesn't make that correction is what I'm saying. If you look at the details of his so-called jobs plan, it simply doesn't. This is what they say it does, but in fact it does not.

Here's the other thing it does not do -- it doesn't do anything to help bring down the national debt or the annual deficit. It does not because it's so minuscule.

CROWLEY: Well, why wouldn't it bring down the debt if you tax people more? It goes into the Treasury...

CAIN: Because this administration continues to spend more. They want to tax more but they are not putting caps on the spending. That's why it won't do any good.

CROWLEY: Let me move you to your plan.

CAIN: Okay.

CROWLEY: 999. I know you love to talk about this. So, this would be -- your plan would be to have everybody pay 9 percent of their gross income and the only thing you could deduct would be charitable contributions.

CAIN: Correct.

CROWLEY: 9 percent corporate tax rate, now at 35 percent just for purposes of comparison. And then a 9 percent sales tax or consumption tax.

CAIN: Yes. CROWLEY: So the criticism of this has been, a, it won't raise enough money as much money as is need, and, b, it is really regressive, because I would pay the same amount for a blouse in taxes as someone making $10,000 a year and that's regressive. It's not fair.

CAIN: Let me start with the first one about how much revenue it will raise. The people who are saying it will not be revenue-neutral? They are absolutely wrong because they did a static analysis. We had this done with the dynamic analysis with an outside independent firm so they are making an erroneous assumption.

Relative to regression. No, it is not. If you take a family of four at $50,000, and $25,000, start with the fact that if they're getting a paycheck, they pay 15.3% in the payroll tax like you pointed out earlier.

CROWLEY: Social Security...

CAIN: Social Security and Medicare. So that 15.3 becomes 9 percent. That's a six percentage point differential.

Now let's take someone making $50,000 a year. We can do it for $25,000 or $50,000. It doesn't matter. You now have -- they will pay in taxes based on standard deductions, and standard exemptions if they're making $50,000 a year, family of four, they're going to pay over $10,000 in total taxes.

Go to the 999 plan. They're going to pay $4,500. So they have a $5,500 gap to apply to the sales tax. If the person applies that to both new and used goods, they will come out just fine.

CROWLEY: Is there any exception, as you see it, in this consumption tax? Would you -- except for clothing perhaps? Except for food? Would food be a consumption?

CAIN: No, you don't have to do that.

CROWLEY: No food, clothing?

CAIN: No. You don't have to do that. No. Because that 6 percentage point difference makes up for a lot of the sales tax that people will have to pay. Here's the thing that people don't talk about...

CROWLEY: I'm sorry, but I think I misunderstood you.

CAIN: OK.

CROWLEY: You would make an exemption for food and clothing?

CAIN: No, no, no.

CROWLEY: No exemptions to the sales tax.

CAIN: No, you don't need those exemptions. No, you don't need those exemptions.

CROWLEY: So a person poor person is paying the same amount of tax on groceries as I am.

CAIN: Right. Now...

CROWLEY: Does that sound fair to you, just in a vacuum?

CAIN: Yes, it does sound fair, because of the other point that I'm about to make. If they need to buy a car or a home or some hard goods that are used, they pay no taxes. So they have an opportunity for them to leverage their income.

The assumption made by the critics is that they're going to spend all of the rest of their money on new goods. No. That's not how my parents did it. They knew how to stretch a dollar. So to say that it is regressive is based upon erroneous assumptions.

CROWLEY: Let me have you hold it right there. We'll be right back with Herman Cain.

Up next, we'll be taking a closer look at what shaped Herman Cain into the kind of candidate he is today.

(COMMERCIAL BREAK)

CROWLEY: To understand politics, you need to know where the politician comes from. In segregated Atlanta, Herman Cain grew up poor, he says, "but I didn't know it." Sometimes he didn't have money for lunch. His father held three jobs, his mother cleaned houses.

Cain graduated second in his high school class, was the first in his family to go to college and later earn a graduate degree. Working at a series of jobs, he eventually took over and turned around the faltering Godfather's pizza chain.

He was asked this week what he thought of anti-Wall Street protesters.

(BEGIN VIDEO CLIP)

CAIN: Don't blame Wall Street. Don't blame the big banks. If you don't have a job and you are not rich, blame yourself.

(END VIDEO CLIP)

CROWLEY: Seventeen years ago as CEO of Godfather's, Cain went to a town hall meeting with President Clinton and told him that the cost of health care known as "Hillary-care" would force Cain and other CEOs to lay off workers.

(BEGIN VIDEO CLIP)

CAIN: First of all, Mr. President, with all due respect, your calculation on what the impact would do, quite honestly, is incorrect.

(END VIDEO CLIP)

CROWLEY: Five years ago, when friends were expecting Herman Cain to move happily into retirement, he was diagnosed with stage four liver and colon cancer and given a 30 percent chance to live. He beat the odds and has a doctor's letter showing he is cancer-free.

(BEGIN VIDEO CLIP)

CAIN: If God gives you an opportunity to stick around here a little longer, it's not to try and improve your golf game.

(END VIDEO CLIP)

CROWLEY: Herman Cain on Herman Cain when we come back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CROWLEY: We are back with Republican presidential candidate Herman Cain. I want to play for our audience something that you said Friday. You were addressing the Values Voter Summit and the subject was racism.

(BEGIN VIDEO CLIP)

CAIN: I have achieved all of my American dreams and then some because of the great nation, the United States of America! What is there to be angry about?

(END VIDEO CLIP)

CROWLEY: And I would say to you, an unemployment rate for blacks that is far higher, almost 6 percent higher -- 7 percent higher than for whites. A percentage of black incarceration in the nation's prison systems that is far greater. A lack of -- and for all of your skills, is there not some luck in that? I want to ask you that.

But, you know, there -- I would tell you that minorities, especially African-Americans, can name a lot of things that speak to a certain amount of racism that they can still complain about.

And so I wonder if you are taking your good fortune and super- imposing it over everyone else when it doesn't really apply?

CAIN: Luck is when preparation meets opportunity. That's what I've done all my career. Secondly, I don't believe racism in this country today holds anybody back in a big way. Is there some -- are there some elements of racism? Yes. It gets back to if we don't grow this economy, there is a ripple effect for every economic level, and because blacks are more disproportionately unemployed, they get hit the worst when economic policies don't work.

That's where it starts. Grow this economy and it's going to help everybody to get jobs and to get back into the work force.

CROWLEY: But at this very moment the black jobless rate is 16 percent. For everyone it is 9.1 percent. The black teen unemployment is 44.2 percent. That can't just be random luck, can it?

CAIN: It is not random luck.

CROWLEY: Or bad luck...

(CROSSTALK)

CAIN: Or bad luck. It's failed economic policy.

CROWLEY: But what accounts for the gap?

CAIN: The gap is due to a number of factors. One is a differential in education. Two is a concentration of a lot of blacks in certain areas like the city of Detroit where the unemployment rate there is 14 percent versus the 9.1 percent we have nationally.

So if you have a city like Detroit where they have lost 25 percent of their population, economically they've done nothing but go down, down, down. If we do not boost this national economy, you're never going to be able to close that gap.

So there are a number of factors that cause that differential but we must start with feeding this economic engine, which is why I have proposed the bold "999" plan.

And, in addition to that, we are developing an empowerment zone feature off of the "999" platform that I will be announcing shortly.

CROWLEY: But, can you be surprised if African-Americans look at you saying, I'm -- you know, became the CEO of Godfather's Pizza, you know, I -- you know didn't have any -- you grew up poor but had a loving family, it sounds like to me.

CAIN: Yes.

CROWLEY: Others are not so lucky and they need help. You've been critical of the entitlement society. Who -- what do you think Americans, black Americans, white Americans, Latino Americans, what are we entitled to as a society?

CAIN: We are all entitled to an opportunity to be able to go after our definition of the American dream. Everybody's definition of the American dream is different. You are owed the opportunity for a level playing field. CROWLEY: And do blacks have a level playing field right now with whites?

CAIN: Many of them do. Many of them do have a level playing field. I absolutely believe that. Because not only because of the businesses that I have run, which has had the combination of whites, blacks, Hispanics -- you know, we had a total diversity. But also because of the corporations whose board I've served on for the last 20 years.

I have seen blacks in middle management move up to top management in some of the biggest corporations in America. They weren't held back because of racism. No. People sometimes hold themselves back, because they want to use racism as an excuse for them not being able to achieve what they want to achieve.

CROWLEY: Let me ask you quickly about your campaign. And read you something comes from CDG (ph) a conservative Iowa radio host who told "The Washington Post" on Friday, "I think he," meaning you, "is at this point not a viable candidate in Iowa. The race appears to be about raising his profile and not running for president. He has not surrounded himself with the best people and he's not serious about running for president."

Also the Crystal Ball comes out of University of Virginia Center for Politics had this to say, "will the Republican Party, especially in light of Chris Christie's decision not to run opt for Cain who has never held public office, who has lost -- and who lost his only prior election in 2004 GOP U.S. senate race primary in Georgia? Almost certainly not. A Cain nomination would be an aberration of historic proportions. American political parties typically don't nominate people without previous office holding experience for president."

You add to that the fact that I'm told you have not been back to Iowa in some time. You're out an a book tour and you don't look like a serious presidential candidate. Convince me.

CAIN: I would say get ready for an aberration of historic proportion, and here's why. I give dozens of speeches a week. I have been speaking, and I've been to Iowa 24 times. The perception that I am not focusing on Iowa is simply a misperception. When I give speeches to rallies, town hall meetings, whatever the audience, no matter how big or small, and I get to my lack of having held public office, I get a spontaneous applause.

I'm saying this, Candy, that people who are criticizing me because I have not held public office, they are out of touch with the voters out there. This is why I won that Florida straw poll. This is why i won another poll that just came out yesterday, the Midwestern Republican leadership poll. That one maybe hasn't hit all the news wires yet.

What I'm saying is the disconnect isn't between me and the voters, the disconnect is between the people who aren't connected to the voters. I'm not concerned at all, because the people are saying they like the fact that I have not held public office and they love my concrete specific ideas about how we need to fix this economy and the other problems.

CROWLEY: Herman Cain, "This is Herman Cain," your book out there. But you will eventually get back to Iowa.

CAIN: I will. It is on the schedule. And I can promote a book and campaign at the same time.

CROWLEY: Thanks so much for your time this morning.

CAIN: Thank you.

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