BREAK IN TRANSCRIPT
RYAN: Good to be back.
WALLACE: Let's start with the president's State of the Union's speech this week, and a central argument the Democrats are looking out for the middle class while Republicans want to protect the rich. Take a look.
(BEGIN VIDEO CLIP)
PRESIDENT BARACK OBAMA: We can either settle for a country where a shrinking number of people do really well while a growing number of Americans barely get by. Or we can restore an economy where everyone gets a fair shot and everyone does their fair share and everyone plays by the same set of rules.
(END VIDEO CLIP)
WALLACE: Isn't that a strong, at least a strong political message?
RYAN: The irony of this is the president's policies do the exact opposite. What we got -- I was there. So, I heard the speech a couple of times now.
We basically got this: the president can't run on his record. It's a miserable record. He's not going to change his tune and moderate like, say, Bill Clinton did in 1996, because he's really stuck with his ideology. So, he has no choice but to divide.
And so, he is going to run a very divisive campaign for political gain, and he has this concept of fairness and equality where he uses the kind of rhetoric we use, but the policies he's producing will result in crony capitalism, will result in giving more power to the government to supervise our lives, to give us a stagnant economy, where the rich and the powerful are the ones who are picking.
So, I'm trying to say is, he is giving us a future of debt, doubt and decline. He barely even mentioned the budget, the deficit, or the fact that that was the day which marked 1,000 days since the Senate bothered to even passing a budget. It's record they can't run on.
So, the president is going to use this divisive rhetoric and the outcome of these policies is to consolidate power in Washington where you have crony capitalism, which his rhetoric tries to decry.
WALLACE: All right. Let me pursue this. The president is proposing the Buffett Rule, the idea that if you're making at least $1 million a year, that you should pay at least 30 percent tax rate, and he's proposing this just as we find out that Mitt Romney, who's a multimillionaire, was paying a 15 percent tax rate.
Again, isn't that, on just the simplest basis, fair?
RYAN: If you over-simplify, you can probably make that case. I can get into the text, I can get into the fact that the effective tax rates people pay at the higher are still higher than everybody else. But let's just look at the math. All these tax increasing that the president is talking about, they only cover 8 percent of his proposed spending increases. The other 92 percent of the president's spending increases are borrowed money.
So, even if -- it doesn't even add up. It doesn't even go to the deficit. More to the point, instead of raising taxes, which unfortunately hits small businesses -- you got to remember, eight out of 10 businesses in America file their taxes as individuals.
So, the president saying bringing their top tax rate to 45 percent, which is the current schedule, is not high enough. I want to go higher than that. That would simply crush job creators, crush job creation.
RYAN: I have a better idea -- instead of raising taxes on producers and small businesses, why do we stop subsidizing the wealthy? Stop the crony capitalism. Stop the corporate welfare, income tax or entitlements. We get far more saving in the budget without choking off economic growth.
WALLACE: What do you make of the fact that the White House has basically said that the Buffett Rule, this idea of a 30 percent minimum tax rate is not going to be in the president's new budget and they have no idea what it would mean in terms of the deficit?
RYAN: What we have learned with the president time and again is he is going to put some kind of poll-tested line in the State of the Union address and have no follow up whatsoever. We have learned already that the president who's had three years to try and propose real solutions to fix our fiscal crisis is ducking it. He hasn't put a plan on the table yet. He formed commissions and super committees, so he sort of outsourced the leadership only to decry their results.
So, we are not getting the kind of leadership we need from the outside. At the time when America needs it the most, we have a debt crisis on our horizon. The Senate hasn't budgeted for 1,005 days now. The president is not even proposing to tackle this fiscal crisis.
And so, what we need is a new president and a new Senate, and we need to give the country a very specific plan, a set of ideas of how we're going to solve these problems and let the country choose in November what they want America to become. And we're going to do that.
WALLACE: The president, as you pointed rightly, did not even mention deficit reduction until more than
RYAN: Not at all.
WALLACE: -- well, he did at all, but it was more than halfway to his speech, and then it was only a passing reference. Let's take a look.
(BEGIN VIDEO CLIP)
OBAMA: When it comes to the deficit, we've already agreed to more than $2 trillion in cuts and savings. But we need to do more. And that means making choices.
(END VIDEO CLIP)
WALLACE: But no mention at all of entitlement reform. He talked about using the savings from the wars that we are not fight any longer, at least in part, for more spending on infrastructure, which raises the question -- is reducing our debt in a serious way, is not just off the table for 2012?
RYAN: It appears to because if the Senate is not going to pass the budget, like they had for 1,005 days, then nothing happens. That's the process works. The House has to pass a budget, according to the law, by April 15th.
WALLACE: Let me pick up on that, because the Democrats say that this argument, you said it several, times about 1,000 days, is bogus argument. They say, we passed the Budget Control Act as part of the debt ceiling -- I don't want to get too much to the weeds here -- but as part of the debt ceiling agreement in August and, in fact, that that act had even more, was a budget and had even more teeth than a regular budget.
RYAN: If that's our solution to our fiscal crisis, then heaven help us. It doesn't come close to fixing the problem.
The reason I say not all with the president, all these war savings, it's mythical money. It's all borrowed money. It's basically saying, we're not going to spend all this extra money in Afghanistan and Iraq in the future, and therefore we're going to take that money we would have otherwise borrowed and spend it on all these other programs.
The president isn't leading. The president isn't being truthful with the American people about what kind of fiscal train wreck is coming we are going to be. And we're going to pass budgets to show the country exactly how we purpose to fix this problem.
And you know the thing that's frustrating about this, Chris, is there an emerging bipartisan consensus on how to fix these big problems. There are Democrats who agree with us on how to do tax reform -- get the loopholes out, lower the rates.
We're getting a bipartisan consensus on Medicare reform. The problem is the president and his party leaders are out on the left standing in the sidelines looking in.
So, what we clearly need is a new White House and a new Senate and then we can realize this emerging bipartisan consensus on how to fix these problems.
WALLACE: OK. Let's talk about the Republican agenda. The House passed your budget plan last year. It didn't go anywhere in the Senate, so obviously didn't become law.
But let's look at what you guys passed last year -- $5.8 trillion in spending cuts by 2021, eliminate $800 billion in tax increases by repealing Obamacare. Tax reform, eliminate deductions while setting a top tax rate both for individuals and businesses of 25 percent. And major entitlement reforms. I know that you are a couple of weeks away from putting out your budget. And you've said to me here in the green room that you haven't even written it yet, but will it be the same plan or will there be something new?
RYAN: We're going to be working off it. We're not going backwards, we're going forward. We're not backing off of any of our ideas, any of our solutions. But we simply haven't written it yet because -- not to get technical -- we haven't got the base line from the Congressional Budget Office.
So, I and my members of the Budget Committee will write this budget in March and then we're going to bring it to the floor. We think we owe the country actual solutions based upon our founding principles to get this country on the right track.
The president has dodged, his entire presidency. And the Senate hasn't budgeted for 1,000 days. And the BCA is hardly a budget.
WALLACE: Budget Control Act.
RYAN: The Budget Control Act, that's hardly a budget. It's really devolving and delegating to others to lead.
We're going to lead. We're going to pass a budget. And we're going to build upon the kinds of reforms we proposed last time.
WALLACE: Well, let's talk about that, because there are some political problems, if not some substantive problems.
Democrats are now saying that they're going to go after anyone who voted for your budget, the Republican budget.
RYAN: -- a Republican.
WALLACE: OK. Who voted for it last year because it would shift Medicare from a guarantee for seniors, into -- some would say, you call it premium support, they call it a voucher -- but would give seniors money that they could use to buy a private plan and a Congressional Budget Office says over time that this premium support is going to mean that seniors will have to pay $6,000 more a year for health care.
RYAN: The Congressional Budget Office also says Medicare is going bankrupt in 2021. The trustees at Medicare say that there's $37 trillion unfunded liability.
If you take a look at our reforms, which don't change any Medicare benefits for a person 55 or above, and says for people 54 and below, when they'll retire, they'll have a list of guaranteed coverage options over by Medicare just like we do it in Congress and federal employees have, and we're not going to subsidize the wealthy as much as everybody else. And we're going to subsidize the poor even more. That saves Medicare. That fixes Medicare. Put that in comparison to the president's health care law. This year, he appoints 15 unelected, unaccountable bureaucrats to a board called the IPAD, Independent Payment Advisory Board, and their job is to put price controls and therefore rationing on Medicare for current seniors.
So, the president's law takes half a trillion dollars out of Medicare to spend on Obamacare and now he's putting this new rationing board in place, which will lead to denied care to current seniors.
So, if you want to compare plans, our plan to save and shrink the program, not change benefits for anybody 55 and above, and the president's plan to start rationing current seniors while still allowing the program going to bankruptcy, I'm happy to take that debate.
WALLACE: But, briefly, the Democrats think that if they play --
RYAN: They do.
WALLACE: -- you guys are going to kill Medicare, or you're going to endanger Medicare and you're going to make it more expensive for seniors, even if it's 10 years now, that's a political winner for them and a loser for you.
RYAN: They think so. But I would simply say, there's an emerging bipartisan consensus that we're on the right track. And the point is, we should be offering solutions to our problems in our country. We shouldn't just be demagoguing other people and offering no solution.
And, unfortunately, that's what the president and his party leaders are doing.
WALLACE: All right. I want to talk about demagoguing. You are not endorsing any candidate in the presidential race. But I want to ask you about the tenor of the campaign.
You've got Republicans attacking other Republicans now for how they made money, how they have invested their money, how much they are paying nothing taxes -- is that the right conversation for Republicans to be having when they are running for president? Especially --
RYAN: No, go ahead.
WALLACE: No, go ahead.
RYAN: I don't think so. Actually, I don't think so. I'm chairman of the presidential trust at the RNC. So, therefore, I had to be neutral. But we need to defend the morality of the free enterprise system and upward mobility. We need to defend the morality of a system in America that says you are free to take risk, to make money, to create jobs, and to do it however you want to so long as it's legal. That's something we should be proud of.
We should be proud of people being successful because we want people who've never seen success to become successful.
So, it does bother me when some candidates -- and there's more than one -- go after each other based on their success in the free enterprise system.
That's not who we are. That's what Barack Obama is doing to us. And we shouldn't be doing to ourselves.
WALLACE: So, are -- and let's be specific -- are Newt Gingrich and Mitt Romney playing into Barack Obama's hands?
RYAN: I think, at the end of the day, this is going to be -- the dust is going to settle. What matters to me more --
WALLACE: But right now, are they doing it?
RYAN: Right now, they're going after each other in a heated debate. You know, look, Rick Perry was saying this stuff about Mitt Romney. But I think when the dust settles, what I care about is, are we giving the country a real affirming choice?
We don't want to win an election by default. We don't want to simply run against the president and his stewardship of the economy, which is abysmal. We want to give the country a clear choice of two futures, do you want the opportunity society with a safety net, or the president's path of debt and doubt and decline, the welfare state? That's what we think we're going to be able to do.
And if we give the country that legitimate choice of two futures, and we win that election, then we have the moral authority and the obligation to save this country.
WALLACE: When you see the tenor of this campaign and what they are talking about. Any second thoughts about not getting --
RYAN: I'm not like that. Look, don't underscore the importance of Congress. And I feel I have a very important role to play in Congress. And Congress is going to have a huge say so in the next few years. We really only have a small window of opportunity to save this country from a debt crisis and I'm in the middle of that, and I feel like I have a great chance to play a big role that in Congress.
So, I don't have those kinds of regrets. I don't think like that anyway.
WALLACE: Do you think anybody new could get into this race?
RYAN: Look, I'm not one of these pundits. I guess your panel will probably get into this. I doubt it. I think, you know, deadlines are passed. I think there are very few states you even could get in anymore.
So, I think the field is set. I think it's going to work itself out. And yet, it's the heat of battle and they are saying things they probably shouldn't be saying about each other.
But what matters in the end of the day here is: we are running against Barack Obama and not against each other. But we're not running necessarily against somebody. We're running for reclaiming the American idea at a time when it's threatened more than it ever has before in this country.
WALLACE: Congressman, we want to thank you so much for coming in. We also want to note that it's your birthday.
RYAN: That's right.
WALLACE: Your 42nd birthday. And we have --
RYAN: You go to be kidding me. Oh, my God, where did you get this?
WALLACE: We actually -- I was up all night making it. You want to cut into that sucker.
RYAN: I don't eat sweets.
WALLACE: It is the federal dollar. Don't you want to...
RYAN: Yeah, I see that. Well, we need to make more of these for people in this country. Not cakes, dollars.
WALLACE: All right, do me a favor. Cut into it.
RYAN: All right.
WALLACE: You don't have to eat it. I'm not going to -- you don't eat sweets, really?
RYAN: I gave up sweets a long time ago.
WALLACE: Up to now I very much enjoyed your acquaintance, sir.
BREAK IN TRANSCRIPT