BREAK IN TRANSCRIPT
GOV. MARTIN O'MALLEY, D - MD: Thanks, Chris.
SEN. KELLY AYOTTE, R - N.H.: Great to be with you, Chris.
WALLACE: Let's start with those jobs numbers that came out Friday, the unemployment rate dropped from 8.1 percent to 7.8 percent. That's the lowest since President Obama took office. The government said 114,000 jobs were added. But in a household survey, 873,000 more Americans reported having jobs. Senator Ayotte, isn't the economy getting better?
AYOTTE: Well, I think, what is disappointing about the report is the downtick we saw in unemployment is because of part-time work, for economic reasons. So people who want full-time jobs, taking lower pay, you can't support a family on part-time work.
And, of course, we still have the sad fact that we have the lowest labor participation rate since 1981. If the number of people who were working or participating in the workforce were the same as when the president came into office the unemployment rate would really be 11 percent.
So, I don't think there's any cause to celebrate, here and I think if you told the American people four years ago, that the unemployment rate is going to be 7.8 percent, at this point, during the president's term, I don't think anyone should be satisfied or happy with that.
WALLACE: Governor, are you satisfied or happy?
O'MALLEY: No, I don't think any of us should be happy. We want to return to full employment. But what we've seen now is 31 months in a row, consecutive months in a row, of private sector job gains. So, it is far better to be gaining jobs than losing 800,000 a month, as we were when George Bush was in office.
We still have a long way to go, but we are moving in the right direction.
Unemployment, now, has been driven down to a 44-month low. It is lower now than it was in the last month of George Bush's presidency, the last four months.
And we'd have seen home foreclosures driven down to their lowest levels, in five years. So, they are lower now than when President Obama took office.
So it's all about middle class security -- security in your home, security in your jobs and we are making progress.
WALLACE: But, Governor O'Malley, at 7.8 percent, what it is as of Friday, no president has been re-elected with unemployment this high since FDR back in 1940. No president has been elected with growth this low. It's now 1.3 percent, for the second quarter -- with growth this low, since they started measuring GDP growth in 1930.
By historical standards, this is still a very weak recovery.
O'MALLEY: Oh, without a doubt. We still have a long way to go.
And speaking of FDR, no president since him was left bigger job losses, bigger unemployment and bigger deficits and more wars than President Obama, was, by the failed policies of George W. Bush, which resulted in directly, the greatest job losses since FDR. This is not easy and it is hard work but we are moving forward.
AYOTTE: Hey, Chris, let's talk about, though, his policies. Of course, we didn't hear in the hour and 25 minutes of debate anything about the stimulus package, because if you look at the policy, the trickle-down government policy, as the governor described it, they represented below 6 percent unemployment right now, after spending all of that money.
So, they had full charge of the first two years and the policies that this president put into place, actually made it worse. Including the fact that ObamaCare is actually -- you ask small employers, it is causing them not to hire because of rising health and gas prices doubled.
The middle class is buried under this administration. And the vice president said it aptly and it's true.
WALLACE: Let's turn to a couple of issues that came up in the debate.
Obviously, the jobs report came out after the debate. Both sides since the debate have been saying that the other candidate is lying about his position and let's start with taxes.
Governor, the president keeps saying that Mitt Romney is proposing a $5 trillion tax cut. That's not true.
O'MALLEY: Well, Chris, wait a minute here. The governor -- former Governor Romney is proposing a 20 percent cut to income taxes, including income taxes for the wealthiest of Americans. And, I believe a 30 percent cut to corporate income taxes, including for people like big oil, that is socking all of us at the pump, right now.
Any economist may debate whether it adds up to $4.9 trillion or $5 trillion and the fact of the matter is, in this debate, we saw Big Bird meet the big lie. In fact, when you do those sorts of tax cuts, there are costs to those tax cuts. The biggest driver to our deficit --
WALLACE: If I may, sir, that's -- you are talking about half the plan. It would be like talking about Obama's jobs plan, the entire plan for getting the country back to give more money to teachers and, then saying, well, that's a ridiculous plan. Well, it's not Obama's plans.
Similarly, you are mischaracterizing the Romney plan, you're saying, it is -- you are right, $5 trillion by lowering the tax rate but he talks about cutting loopholes -- but is part of the plan.
O'MALLEY: Oh, Chris, which loopholes and which deductions?
Senator, I doubt seriously you would be in favor of doing away or cutting the home mortgage deduction, for middle class Americans.
Senator -- I mean, Governor Romney has not said what the secret plan is for these $5 trillion in tax cuts like he will not talk about what his tax returns have been or how much money --
AYOTTE: With all due respect, Governor, Governor Romney made it clear in the debate and he was actually able to speak directly to the American people, that he is not going to lower the burden on upper income individuals. We all know, Chris, that upper income individuals rely more heavily on deductions, that he is going to give the relief to the middle class, that it's going to be deficit neutral.,
And, of course, one of the best lines of the debate, you can -- I've got five sons and you can tell the story, I'm used to hearing the story five times and having me believe it to be true. But we know it's not true what they are saying about his tax plan.
Now, let's talk about the president's vision.
O'MALLEY: Well, let's talk about where his deductions are.
WALLACE: Wait, let's finish that and then we will talk about that, Senator, because part of the problem, I have asked Romney and Ryan repeatedly, I asked Ryan on this show, last Sunday, I don't agree with you it is a $5 trillion tax cut but, I said where do you make up the $5 trillion for lowering tax rates in terms of the deductions and, the loopholes, how do you make it up -- they refused to tell us, and, independent experts say even if you took away all the deductions, it's not going to add up to $5 trillion.
AYOTTE: Chris, what the governor said in debate, he understands he has going to have to work with both sides of the aisle. We know, right now, that for example, in the House, Dave Camp is working on the issue of lowering, simplifying -- even Max Baucus in the Senate -- they've had discussions and he said in the debate, listen, I'm going to work with members of both sides of the aisle. It's looking at a Simpson-Bowles-type model.
This is not new and we know it can be done. And, of course, if you go back to when it was last done, of simplifying the tax code, that was of course --
WALLACE: Simpson-Bowles were a lot more specific about lowering the rates, but also how they were going to --
AYOTTE: What he has said is he's going to work across the aisle -- unlike this president when he pushed through the health care bill on a partisan basis -- he's going to listen to both sides of the aisle and he's going to make sure, though, that these three principles stay clear. That he is going to give relief to the middle class, and he's going to make sure that we're more competitive, of course, creating jobs, because so many small businesses, file as individuals, and higher income individuals will not pay less and it will not impact the deficit.
WALLACE: Now, you were about to talk about the president's vision.
AYOTTE: Yes. You know, one of the things is the president's vision for or country, the best way you put forth a vision is the budget. And he talked about, at the debate, his so-called $4 trillion plan to reduce the debt.
But, what that really is, is this budget, the budget that he puts forth, one of the most shocking things about the lack of leadership in Washington, from this president, is that in three years, not one member of either party would vote for his vision, his budget. Why? It's the worst of both words, a massive tax increase that hurts jobs creators, and it brings us to $25 trillion in debt.
And so, that's the vision. We can expect more.
One of the things that came out of the debate is, here we are, we're going to have more of the same -- more taxing, regulations, and debt, and economic stagnation.
WALLACE: Let me ask you about the president's budget, Governor, because, one thing he counts a trillion dollars, that was already part of the debt deal last August. It's not a new proposal, it's old savings, that both sides agreed to in August, and, he also takes almost a trillion dollars in budget savings -- spending savings -- from the wars that we weren't going to fight anyway and we were borrowing money for.
So, you are not saving money, you're not reducing the budget. You are just saying we're going to count as savings the wars we were never going to fight in the first place.
O'MALLEY: I think there is actually -- actually two different numbers, you have to look at. You have to look at the operational budget, but you also have to look at the structural deficit. When President Obama took office he was left a $10 trillion deficit, by his predecessor, who squandered our surplus, into a huge deficit.
So, in paying the deficit down, you should score the fact that we are coming out of Iraq and Afghanistan.
And, the other thing that the president has proposed and understands, is, that we cannot cut our way to prosperity. We need a balanced approach. And, growing our economy, by doing things like the senator opposed, like restructuring the auto industry, in order to put people back to work, and make manufacturing jobs grow, is one of the actions that we need to take, in order to do that.
The fact of the matter is, the president, because he has the responsibility of office, has been specific about what he proposes and Mitt Romney tells us, to trust him, with his plan, it is hiding behind door number 3, with Carol Merrill and his undisclosed tax returns.
AYOTTE: You know --
WALLACE: I'm glad you practiced some lines for this.
AYOTTE: Really, the lines are great, but, Chris, the bottom line is this: his budget, tax increase on job creators, budget gimmicks, and, brings us to $25 trillion in debt over 10 years. In fact, this president has added more debt than any other president.
O'MALLEY: Not true.
AYOTTE: He said he would cut the deficit in half --
O'MALLEY: Well, Senator -- Senator --
AYOTTE: -- Governor, and we have had four years of trillion dollar deficit.
O'MALLEY: Senator, it's simply not true. You know, you are in the United States.
AYOTTE: -- is it not true that he said he would cut the deficit in half?
O'MALLEY: Senator, $10 trillion is what he inherited and you should know the deficit is now around $15 trillion or $16 trillion, it is not true. When you say it and you're repeating Governor Romney.
AYOTTE: He has added more debt than any other president.
O'MALLEY: That is not true.
AYOTTE: Than any other president.
O'MALLEY: No, it is not true. President Bush left him with $10 trillion deficit --
AYOTTE: President Bush added $4.8 trillion over eight years.
WALLACE: Guys, I said I'm going to be tougher than Jim Lehrer and I'm going to be.
Let's discuss a big issue that never came up in the debate, and that is the fiscal cliff of spending cuts and tax increases that is coming at the end of the year -- sequestration as it's called, unless the president and Congress work out a deal.
Under what's called the WARN Act, employers, this is not just federal employers, all companies, must tell workers, 60 days in advance, of mass layoffs.
But 10 days ago, the Obama administration told companies with federal contracts to ignore the law, don't notify your workers of these coming layoffs, as part of the fiscal cliff, sequestration, and, it would pick up the legal costs from any losses.
Senator Ayotte, what's wrong with that?
AYOTTE: It's actually quite shocking, Chris, but it's another example of this administration ignoring or skirting the law, to help the president's re-election chances, because, here's where we are. Sequestration is going to be the law in January, if we haven't seen the leadership on the president on this, and, he is worried because the companies know they'll have to lay people off and they've told Congress this.
And so, OMB comes out with an opinion saying you don't have to comply with the law and the worst part is that taxpayers are on the hook for the litigation costs when their workers don't receive the warnings that they are supposed to.
WALLACE: Governor, why is that right?
O'MALLEY: Chris, I have a lot of moms and dads who work in places like Northrop Grumman and Lockheed Martin, I refuse believe, once the election is passed that members of Congress will not come together, to find a way to put a greater priority on our nation's defense than we do on defending gobs of tax cuts for millionaires and billionaires.
The senator, herself, I think voted against the sequestration move. Paul Ryan voted for it. I do believe. It is an irresponsible path.
And, I'm confident that after this election, this we'll find a way to reprioritize --
WALLACE: If you are so concerned about the middle class, why not let these workers know they may be laid off?
O'MALLEY: Chris, none of those employers wanted to send out those WARN notices. Why would you do that when -- why would you assume --
WALLACE: Obviously the law was passed because they didn't want the employers to decide, they wanted to force them to notify their workers.
O'MALLEY: But to cause that sort of disruption about something that, all of us as Americans, trust, and believe that our Congress will be able to work out --
WALLACE: Why would you believe Congress is going to work out anything?
O'MALLEY: Well, Chris, because the devastation to the economy would be so great. I mean, look, I oftentimes disagree with my counterpart, Bob McDonnell of Virginia but we share a region of science and security, jobs depend on our ability to put a greater priority on our nation's defense and a balanced budget than it does on more tax cuts for millionaires and billionaires.
AYOTTE: I just have to make two points, Chris. First of all, we know from Bob Woodward's book said it was the president's idea on sequestration.
Second, the other that's ironic about this -- do you know that when the president was in the Senate, he and Hillary Clinton introduced a bill to allow workers to have greater notice. But now, he doesn't want to comply with the law because these notices will fall right before the election. Here's the most disturbing fact. What sequestration does to our national security and this president has not shown leadership, and I'm deeply concerned. He should be leading the effort now in Congress to resolve this.
WALLACE: We have less than a minute left and I'd like you to share it equally.
Early indications, after the debate, that Romney got some kind of bump in the polls, I'm going to ask you both, briefly, 30 seconds, each, Governor, where does this race stand now?
O'MALLEY: Well, I think we have three more debates coming up, one of which is the vice presidential campaign. Where Paul Ryan has been very specific about what he'd do in a budget, and that is the budget that would be bad for our economy, bad for job growth, it would increase taxes on 18 million people.
And, so, we have a few more rounds to go on this fight. What we saw on the first one was a very energized performance. It was Big Bird meets the big lies. And now, Governor Romney is going to be challenged for the remaining 30 days to explain how it is he pays for $5 trillion in cuts and tax cuts for millionaires and with billionaires, without the rest of us suffering the cost --
WALLACE: Senator Ayotte?
AYOTTE: The debate was a reset of this campaign, Chris, and what it gave was an opportunity for the American people, first of all, to debunk the myths created by the Obama campaign, through false advertising about Governor Romney. We saw the Mitt Romney that I know and those who have work with him and the American people got to see that, which is someone who is a proven, effective leader with a vision how to turn around the economy, and a path forward to address the debt. Unlike this president, we heard more of the same, America can't afford more of the same.
WALLACE: Senator Ayotte, Governor O'Malley, thank you both for coming in, who was the person behind door number 3?
O'MALLEY: Carol Merrill, you don't remember that?
O'MALLEY: "Let's Make a Deal?"
WALLACE: "Let's Make a Deal" but Carol Merrill, she was the one behind door number 3?
O'MALLEY: I believe so, and Governor Romney is hiding his plans and his tax returns --
WALLACE: I got that part of it. I mostly remember people dressed up like lobsters. Thank you.
AYOTTE: I think his vision was clear, unlike where we've been in the last four years.
WALLACE: All right. Enough. Thank you.
BREAK IN TRANSCRIPT