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GREGORY: That back and forth on the campaign trail just this weekend.
Joining me now governor of Maryland, Martin O'Malley and governor of Virginia Bob McDonnell. Governors, welcome both of you. Hold your fire on Medicare
GOV. BOB MCDONNELL (R-VA, Chair, Republican Governors Association): Thank you.
GREGORY: because we're going to get to some of those specifics in just a minute, but I want to ask more generally, Governor O'Malley. What is the Ryan effect on this race, one week after he was selected?
GOV. MARTIN O'MALLEY (D-MD/Chair, Democratic Governors Association): Well, I think it's still shaking out. But clearly now, if we did not-- if the voters of the country had not already a real stark difference of choices in terms of approach to job creation, like growing the middle class, expanding opportunity, now we see the leader of the Tea Party Republican Congress, their-- their budget chief, actually stepping up and so we have a real clear contrast now when it comes to basic commitment like the commitments we've made to seniors in Medicare. So, I think that as this shakes out you're going to see a very clear contrast between President Obama's vision of an America with more opportunity, and the Romney/Ryan vision of less.
GREGORY: Governor McDonnell for all of the energy and the excitement on the Republican side that you have talked about you do have Republicans talking about risk, risk politically, and the fact that a Ryan budget that a lot of Republicans have been running away from, ever since he first introduced it.
GOV. MCDONNELL: Good morning, David. And good to be on with my friend, Martin. This is a serious election. And it calls for serious candidates that have real solutions. So, we are in debt 16 trillion dollars. We have a horrific economy with the president's policies--8.3 percent unemployment, over eight percent in 42 months. It takes big ideas, and-- and things that are going to take some sacrifice for a lot of people in order to get our country back on track. Paul Ryan has been honest about what it's going to take. Medicaid is in trouble. Medicare is going to go broke in twelve years. And it takes some real changes in the spending habits of the United States of America to get our country back on track. So I think Paul Ryan's a serious candidate with real solutions. Time for rhetoric is over. There's plenty of rhetoric out of this administration. And now we need real answers about how to get America out of debt and back to work. And Paul Ryan's got some good ideas on how to do it.
GREGORY: As you both know, his counterpart, the Vice President of the United States, Joe Biden, created one of the more emotional moments on the campaign trail this week, raised a lot of eyebrows, got a lot of back and forth going. He was talking, Tuesday, in Virginia about Romney/Ryan policies with regard to financial regulation, and this is what he said.
VICE PRESIDENT JOE BIDEN (Danville, VA): Romney wants to let-- he said in the first hundred days he's going to let the big banks once again write their own rules. Unchain Wall Street. He's going to put you all back in chains.
GREGORY: Governor O'Malley, put you all back in chains. What was the Vice President doing there? Was he over the top?
GOV. O'MALLEY: I think it was an indelicate play on the Republican words of shackling the economy with regulations and shackling small businesses, and so it was-- it was certainly an-- an indelicate choice of words.
GREGORY: He wasn't injecting race into the campaign?
GOV. O'MALLEY: There's not a racist bone in Joe Biden's body. I'll tell you the injection of race into this campaign has been coming from the false allegations, allegations that PolitiFact and others have said are totally false on a very racially-- racially imbued issue of welfare reform. The false attacks on the President, I think, are-- are far more out of line than the indelicate choice of words of the Vice President.
GREGORY: Governor McDonnell, your former governor in Virginia Doug Wilder had a different view. He spoke this week and took issue with the Vice President and the President, as well. This is what he said after those remarks.
FMR. GOV. DOUGLAS WILDER (D-VA): When he says they are going to put you all back in the chains, what he means, you were there. I wasn't. And when you go back, I won't be going with you. Biden's remarks brought race into the campaign, and they were not necessary. Cool it. Back up. And there's nothing wrong with saying I was wrong. I had never intended to do this. What I said was inappropriate, it was wrong. You can't defend it.
GREGORY: Now look, the President, the Vice President have said there was no racial connotation here that he meant. This is over scrutinizing what candidates say when there are so many words that are said in this day and age on a campaign trail. How do you see it?
GOV. MCDONNELL: I-- I agree with Governor Wilder. And President Obama and the gov-- Vice President Biden have doubled down on those remarks. Listen, in the last couple of weeks you've had that incendiary and way over the top remark, you've had allegations about Mitt Romney not paying taxes, you've got a super-PAC ad that says that Mitt Romney actually killed somebody's wife. I mean this is way over the top. Honest debates about issues, I would say, whether it's welfare reform or other things that are based on policy, that's fair game. We can disagree on that respectfully. But these character attacks about the other side are just horrific. But I understand it, because if you've got a record where you've got 16 trillion in debt, and no energy plan, and a jobless rate over 40-- 42 months over eight percent, of course you can't run a campaign on the issues and you're going to have to resort to that. I think it's way beneath the dignity of the American people. Very different than the hope and change campaign, very optimistic in 2008. Now it's negative and divisive. And I think the more we focus on serious issues like debt and Medicare reform and these issues, it will be better for the people.
GREGORY: You talk-- you--- you have Governor Romney talking about a campaign of hate on the part of the President of the United States, strong words.
GOV. O'MALLEY: Well, he-- Governor Romney's is a sort of guy, David, that you'd never want to play pickup basketball with. He's always fouling and he's always crying foul. Governor Romney himself has launched a-- a series of attack ads falsely accusing the President of unwinding welfare reform. It's been determined false. Governor McDonnell himself was labeled as false by his own PolitiFact in Virginia for saying that-- that-- that the President's trying to do that. So I think what we've seen telegraphed here on this hyper scrutiny of Vice President Biden's remarks is the intention of the Romney campaign to do everything in their power to rough up the President, to go after him with a huge money advantage and to attack his character, and if necessary, to do it on grounds on an impasse have been fraught with racial tensions
GREGORY: All right.
GOV. O'MALLEY: and racial resentments.
GREGORY: Let's talk about the effort to rough up both sides. This issue of Mitt Romney's taxes came up again this week. The Obama campaign putting pressure on him to release more of his tax returns, even saying this week just release five years and we'll let the-- the issue alone. Mitt Romney, Governor McDonnell, spoke about this on Thursday, an impromptu event where he was talking about Medicare and then he answered a question about his tax returns. Here is what he said.
MR. ROMNEY: I did go back and look at my taxes. And over the past ten years I never paid less than 13 percent. I think the most recent year is 13.6 or something like-- like that. So, I've paid taxes every single year.
GREGORY: Well, a direct question related to that answer, was that 13 percent in federal income tax? Is that what he paid? Why won't he answer more? Should he?
GOV. MCDONNELL: This issue is not about Mitt Romney's tax returns. That's not what Americans care about. They care about their own tax returns and the whopping increases in taxes and regulation that this administration has put on the American people and what they're going to put on. Here's what we know about those tax returns. He's paid his taxes. He's released more documents than he needs to. He's made a lot of money. He's been successful and he's a very generous guy. Now I'd say let's talk about what the American people are going to vote on and that's jobs, debt, spending, energy, and the American dream. Mitt Romney's laid out a five-point plan for the middle class focusing on debt reduction and small business and trade and workforce development. I mean, these are the substantive issues Martin and I think we both agree
GREGORY: All right, well, Governor O'Malley do you think Mitt Romney
GOV. MCDONNELL: that Americans care about. Not tax returns.
GREGORY: Is he lying about his tax returns? Do you think he didn't pay taxes?
GOV. O'MALLEY: I don't know. It's hard to imagine that he would continue to hide and-- and make the big secret of the campaign whether or not he paid taxes. The only thing we know for sure is one year of returns. We know that he had Swiss bank accounts, Cayman Island accounts and we know under Paul Ryan's plan he'd actually pay not 13 percent, but he'd pay less than one percent. So I don't know why Governor Romney won't come out with his fax returns. Certainly when he was reviewing the tax returns of vice presidential hopefuls like Governor McDonnell or indeed Paul Ryan he asked for more than one year tax returns.
GREGORY: But there is no-- is there any evidence to suggest that Mitt Romney did not pay exactly what he should have paid in taxes under the law?
GOV. O'MALLEY: Well, look, this is what we know. We know that he has
GOV. MCDONNELL: No.
GOV. O'MALLEY: that he has been engaged in tax avoidance schemes with offshore accounts, with-- in the Cayman Islands and the Bahamas and the
GREGORY: You're not suggesting anything unlawful.
GOV. O'MALLEY: Swiss bank account
GREGORY: There is no evidence to say anything is unlawful.
GOV. O'MALLEY: Not unlawful, but it is tax avoidance. At a time when our country needs everyone's help to accelerate our nation's recovery he's hiding his money in offshore accounts and betting against the future of the United States. Hardly the credentials of a person that we should elect to lead forward.
GREGORY: Governor McDonnell, quick response on that.
GOV. MCDONNELL: That-- that's just flat wrong, Martin. I mean this is the same reckless and slanderous remarks that Harry Reid said in-- a couple of weeks ago. And that's, you know, this is not what the American people care about. This is below their dignity. This is about how do we get the greatest country on earth out of debt and back to work? And Obama's just flat failed. Nice guy, bad policies. Hasn't got the job done. It's time for a change. And I'd say the Ryan/Romney ticket is positive and optimistic and believes in the American dream and want to get people-- get people back to having an opportunity to succeed. That's what we need to talk about and these other diversionary issues on accusing Ryan and-- of throwing grandma over the cliff, and Romney of killing somebody's wife, and not paying taxes, these are diversions. Let's talk about the issues.
GREGORY: Let's talk about Medicare then. There's been so much noise and back and forth on Medicare. Let me try to boil it down this way. There are still questions out there about each side and how they would approach it. This is what we know. Let me start with the President's approach and I want to put it up on the screen for our viewers so we can have a basic understanding of this. The President wants to leave the program in place the way it is. It's a defined benefit program. He does, already passed under the health care law, will reduce payments to hospitals, to health care providers, and private insurers to the tune of 716 billion dollars. You've heard that figure a lot this week. And he claims that he would extend the solvency of Medicare eight years until 2024.
Here is the Romney approach as we understand it so far. Beginning not until 2023, he would change the program. He would offer premium support or a voucher so that seniors could buy private insurance through competition. There would also be a choice, Romney says, that you could have the option of keeping traditional Medicare. He says he would end the President's health care plan, take that 716 billion dollars that was moved out of the program and put that back in to the Medicare program. So, Governor O'Malley, that's the approach. What are the key differences that people need to understand?
GOV. O'MALLEY: The-- the differences is really going to the heart of what kind of country we want to become. I mean Governor Romney's plan is for a country of less where we actually cap what we-- what we do to protect the security of seniors. We give them a voucher and we tell them, good luck, you're on your own to cover whatever the difference is. And the congressional budget office has estimated that this will lead to our nation spending anywhere from 5900 to 8,000 less per seniors. Those are dollars that are going to have to be covered by senior citizens themselves.
GREGORY: But to be fair, that was scoring of the Ryan budget which would not necessarily be the Romney plan. I mean, that sixty
GOV. O'MALLEY: Actually Governor Romney said that there's really very little difference.
GREGORY: He did say there's very little difference. Though, let me have Governor McDonnell respond to that point. The argument is if you put seniors in a position where they're exposed to the vagaries of the private market they're going to have to pay more, again we're not talking about current seniors or current beneficiaries, but down the line, that's what folks would be forced to do.
GOV. MCDONNELL: Well, all you need to know is that we're going the-- the Medicare trust fund is going broke in twelve years, and President Obama's not only for the status quo, but he wants more spending without reform. That's just irresponsible and reckless. Every governor in the country is reforming their pension systems because it's a defined benefit and the-- the numbers just don't work. I think Romney and Ryan are honest in saying, look; we're not going in the right direction. If you want money there for future generations, you need reform. Paul Ryan-- and I think you've accurately descri-- described the differences. Paul Ryan doesn't touch any benefits for people over 55. But after that, yes, gives people some choices. Do we not trust people to make good decisions for their own health care or do we believe government's got to make every decision for you? That gets to the heart of it. But if you get rid of Obamacare and take that 716 billion dollars back, you can do an awful lot to shore up the solvency of the system and that's what they're going to do.
GREGORY: But one of the-- one of the claims out there, and Paul Ryan has made it, is that the President has robbed the Medicare fund of 716 billion dollars. Now Democrats have attacked Republicans in the past for doing the very same thing. But these are not benefit cuts. And indeed Ryan made those same cuts in his own budget. In fact, he is denying payments to hospitals, providers, trying to get to the idea of more efficiency in the health care system instead of just paying for volume. Don't you think that that criticism is over the top by the Republican ticket?
GOV. O'MALLEY: I do.
GREGORY: I know Governor O'Malley does-- Governor O'Donnell-- Governor McDonnell first.
GOV. MCDONNELL: What I think is-- what I think is-- we-- we're broke. And they're being honest about the fact that we're broke. And Obamacare is the-- the largest expansion of the federal government, I think, in our lifetime and as well generally not acceptable to the American people. So, we need to get rid of the 21 taxes and the 500 billion dollars of new taxes in the Obamacare system. Use the free market approach. And then some of those savings can be plowed back into Medicare reform. But, to say that this is being-- that we're taking seniors and literally throwing them over the cliff, is the rhetoric from the-- from the left in the Obama campaign, is-- is really disingenuous. If we don't reform it, David, here's the bottom line, and Martin I hope agree, if we don't reform this Medicare system-- Martin and I, when we get to 65, it's not going to be solvent and our families won't be taken care of. That's the biggest difference. We have rhetoric of Obama and we have serious, hard talk and real solutions from-- from the Romney/Ryan ticket. We're in trouble in the country. We've got to make changes.
GREGORY: Governor O'Malley, I want to end on this point just to shift it a little bit and talk about the broader economy. The reality for voters as they go to the polls in swing states and all states is the unemployment situation. And here were some of the state by state numbers that came out this week, and we'll put it up into a graphic. All of those in yellow, the unemployment rate ticked up in all of those states. I should point out that one blue section between Indiana and Pennsylvania, that's Ohio, it did come down slightly. Still, pretty tough picture for a president running for re-election.
GOV. O'MALLEY: Well, there will be ups and downs on this road to recovery. But there are some things that you cannot debate. And most important in my mind is this. We've had 29 months in a row of private sector job growth in our country. That's the longest stretch we've had since 2005. There were more jobs created last year in our country during the entire presidency of George W. Bush. More jobs created the year before than during the entire presidency of George Bush. The unemployment rate can and must be driven down, but that's only going to happen when we make some changes in Congress, remove the obstructionist Tea Party Congress. I mean, to what end talking about the country's solvency down the road, as Governor McDonnell was, to what end and what does it help to give five trillion dollars more in tax breaks to people like Mitt Romney and his friends? Look, our country is a country that can create greater opportunities and a better life for our kids. But it's not going to happen if we continue to give away huge tax cuts to the wealthy.
GREGORY: And the tax debate, the Medicare debate, it's all going to continue. Governors, as always, thank you both very much.
GOV. O'MALLEY: Thank you, David.
GOV. MCDONNELL: Thanks David.
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