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COSTELLO: Welcome back to AMERICAN MORNING. Ron Paul has a plan. If he becomes president, he claims he will balance the federal budget in his first year in office, and he will do that by cutting $1 trillion in government spending while eliminating five cabinet level departments or government, that includes the Department of Energy, HUD, Commerce, Interior, and the Department of Education, and also the TSA. He also wants to eliminate all foreign aid and all war spending.
Presidential candidate and Texas Congressman Ron Paul joins us live here in Las Vegas. Thank you so much for getting up early.
RON PAUL, (R) PRESIDENTIAL CANDIDATE: Nice to be with you.
COSTELLO: You have amazing energy. How do you do it?
PAUL: Well, sometimes I think I'm lucky and blessed and other times I work on it by trying to follow some good health habits. I exercise every day.
COSTELLO: That's good. You should talk to Ali Velshi.
PAUL: Except when I have to be on TV early in the morning.
COSTELLO: I know, but I appreciate that.
Herman Cain is riding this wave of popularity right now. People are really into his nine-nine-nine plan. What will be your strategy during tonight's debate as far as Herman Cain is concerned?
PAUL: I'm going to do exactly what I have been doing for as long as I can remember, trying to get people to understand how we got into this mess, what we have to do, why free markets are better than government managed markets, why sound money is better than printing press money, and why we need to change our foreign policy so I can concentrate on policy, economic and foreign policy and monetary policy. And that is what I talk about.
COSTELLO: But sometimes you can't get a word in edge wise unless you attack the candidate who is popular at the moment because everybody is going to be concentrating on him.
PAUL: Yes. And I have had some advisors tell me that, go after him, attack him. But that's my least favorite thing to do. I will when I'm pressed and I'm challenged, or when they challenge my supporters. Then I get annoyed and I feel offended when they do that. So I take that personally.
COSTELLO: Yes, and your supporters are very passionate and I'm sure they appreciate that.
Herman Cain's nine-nine-nine plan. What do you think about it?
PAUL: I don't think it's a good plan. I think it's a dangerous plan.
COSTELLO: Why? PAUL: For years and years we had this debate in Washington the flat tax versus the sales tax. And just like what we do in Washington, liberals want to spend, conservatives want to spend, and they're bipartisan. They come together and they spend both.
And what nine-nine-nine does is it compromises in the worst way. It issues a sales tax and a flat tax and opens up the door to a value added tax. I think it's very, very dangerous.
And the way I see it, I don't think it's going to tax those who have bigger incomes. It's going to tax -- it's a regressive tax. People who are going to get a nine percent sales tax and they don't even have jobs right now? So I think because it's so regressive that it's going to, if we ever came close to it, it would be very, very unpopular. And, as matter of fact, I think the more people know about it, the more questions will be asked.
COSTELLO: Is Herman Cain qualified to be president?
PAUL: Oh, sure. I think everybody on the stage is qualified. The big question is, what do they believe in? What are they going to do as president? Qualifications have a lot of variations to it.
COSTELLO: I ask you that because Herman Cain has no government experience. When you look at his economic plan, I mean, the guy who helped him come up with this is a financial guy. So he hasn't taken the usual road. And on foreign policy, he says, you know, I haven't really thought about it quite yet.
PAUL: Well, but you would say that, you know, you could charge me with not having a lot of high-paid economists tell me what to do, but I figured I've read about economics for 30 years so I don't have to go out and depend on a key adviser.
So that in itself doesn't bother me as much as what does he believe in? I mean, if he believes in a value added tax and sales tax and flat tax and all these things, that, to me, is very important. But the fact that he hasn't had this experience isn't necessarily negative. What worries me is he's had a lot of political experience because he's in the Federal Reserve system. And you can't do that without being very political. They haven't invited me to become part of the Federal Reserve system. So he's part of that banking establishment, and no wonder, because he defended the bailouts and TARP funds and all this. So he's part of that system.
COSTELLO: And he did embrace Alan Greenspan in the last debate, and I know you had an issue with that.
Let's talk about your economic plan. You say that in your first year as president you will cut $1 trillion in federal spending. How?
PAUL: Of course, you have to get support. People have to know what you're doing. They have to know why they're doing it. Congress has to give its support. But if elected president, you have to have support of the people and support of the Congress to do it. But, you could do a lot on overseas spending. That's where my number one attack is. Where -- because of all the overseas spending in the last ten years, our national debt went up $4 trillion. That's a big hunk.
So, I want to bring the troops home and have them spend their money here at home and change our foreign policy.
COSTELLO: Well, part of your plan would be to eliminate all foreign aid, but foreign aid is really a tiny teeny part -- it's less than one percent of the federal budget and it does build good will. After all, if we hadn't helped out Japan after World War II, if we hadn't helped out Japan during the tsunami and earthquake there, that wouldn't have built the good will that we need to have with countries like Japan.
PAUL: Yes, I'm working on good will with the American people. And people hate it and besides all those programs after World War II, (INAUDIBLE) they were never what they were played up to be. There were a lot of shortcomings, everybody says it's magic. But no, recovery came from the markets being recovered.
So no overseas spending is more than foreign aid. I'm talking about all the -- as money and the DOD department spent and going in Uganda and Libya and all these places without even congressional approval. That kind of stuff has to quit. If we don't, we're not going to solve our problem.
COSTELLO: Just -- I have to ask you one more question about this plan. Is the plan cuts out five cabinet departments and the TSA, but you don't mention anything about Social Security or Medicare. And those are the two big things that people are concerned about right now.
COSTELLO: It's really busting our federal budget.
PAUL: On the campaign, I've always said we have enough places to cut, we don't need to attack the elderly. We have made promises that was a contract. Even though it's not the best program in the world, I would work real hard and this is what my program does; cuts elsewhere in order to take care of the people who have become dependent.
But I do deal with Social Security because I let the young people opt out and that's a big deal. And but I think if we cut elsewhere, we don't have to put people out on the streets. So, I have no regrets about cutting all this money overseas and protecting the people who are dependent, the Social Security beneficiaries.
COSTELLO: Ok, I have to say that, that if you get Congress to agree with you, I would be amazed and you would be one heck of a politician.
PAUL: But you've to get the people on your side and they influence Congress because Congress really just are political people. If they think they can stay in office only by supporting cuts, how can we solve the problem of debt? By increasing debt. It doesn't make any sense. And I think the American people understand that.
COSTELLO: We'll hear much more in the debate tonight. Thank you so much for joining us so early. We appreciate that.
PAUL: You're welcome.
COSTELLO: I hope you can take a nap in between, thanks.
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