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CNN "The Situation Room" - Transcript


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BLITZER: And joining us, two members of Congress, Democrat Debbie Wasserman Schultz of Florida and Republican Paul Ryan of Wisconsin.

Thanks very much, to both of you, for coming in.

Let me start with you, Congressman Ryan.

This Pledge to America, you were obviously deeply involved in putting it all together, but look at the very sharp negative reaction from a prominent conservative, Erick Erickson. He is a CNN contributor from

He says this: "It is a series of compromises and Milquetoast rhetorical flourishes in search of unanimity among House Republicans, because the House GOP does not have the fortitude to lead boldly in opposition to Barack Obama."

Go ahead and respond to Erick Erickson, who says these are just words, but you don't deliver substance.

REP. PAUL RYAN (R), WISCONSIN: OK. So, I guess I will put him down as a critic.



RYAN: So, first of all, Wolf, we think it is important that we don't make promises we know we cannot keep in the next session.

If we have the privilege of serving in the majority, we are going to have divided government. So we don't want to go out there and promise REP. pie-in-the-sky things that we know won't be signed into law, because Barack Obama is going to be the president.

What we want to do is declare what our principles are, more importantly, say that we're not going to be like the Republicans that got kicked out four years ago, big-spending, earmarks, all of those things, and that these are the things we could do right now to get this country right on the right track, cut spending, create jobs, clean up the way Congress works.

This is not meant to be an exhaustive redo of the party platform or a complete, comprehensive agenda. This is meant to be a current governing agenda to fix the problems that are right in front of us, knowing that, if we do get the privilege of the majority, we will be in a divided-government situation.

BLITZER: Well, what is wrong with any of that, Debbie Wasserman Schultz?

REP. DEBBIE WASSERMAN SCHULTZ (D), FLORIDA: Well, what is wrong with it is that they have made a pledge today to the special interests, rather than to America.

And what is particularly galling, Wolf, is that on September 23, the day that the patient's bill of rights reforms actually go into effect -- and as a breast cancer survivor, I can tell you that that is particularly disturbing to me, that -- for example, someone like me is one job loss away from being dropped or denied coverage because of my preexisting condition.

Yet the Republicans would repeal health care reform, make sure that insurance companies would be back in the driver's seat. That is part of their Pledge to America. Their Pledge to America also includes repealing Wall Street reform, putting Wall Street back in the driver's seat, instead of focusing on balancing our policy between consumer protection and making sure that business can thrive.

They also want to pledge to America that we hold middle-class tax breaks hostage so we can give tax breaks to millionaires and billionaires that add $700 billion to the deficit.

BLITZER: All right. Well, you went through three points. Let's go through those three points.


BLITZER: Let's talk about -- this is six months right now, Congressman Ryan. Health care reform has been enacted.

A lot of folks are happy that their college-age family members, they're going to be able to stay, their kids, on the family plan until age 26. You want to repeal that. Why?

RYAN: The chief actuary of this administration has already told us that this bill is not meeting what they have already said it would do, bigger deficits, higher health care costs. The CBO is already telling us this thing is a massive deficit.

It's not that we don't want to reform health care. Health care needed reforming. We don't want this bill that reform health care by having a government takeover of health care. What this bill will do is make health care less accessible, lower-quality, more expensive, and give us a massive deficit, when we have huge deficits.

Here's the problem, Wolf. The Democrats here, they did not even do a budget this year, for the first time since 1974. We have to get the spending under control. We got to create jobs. Raising taxes on successful small businesses is not going to create jobs. According to the CBO, it is going to cost us 1.2 million jobs. So, obviously we have a different opinion on these things, as you can see.


BLITZER: Well, let's go through the tax cuts that the Bush administration implemented.

They are going to expire, Debbie Wasserman Schultz, at the end of this year, unless legislation is passed in both the House and the Senate. Looks like the Senate is punting until after the November 2 midterms. The House -- is there going to be a vote on this between now and November 2 in the House?

WASSERMAN SCHULTZ: Well, we are still talking about when that vote will take place.

But what we want to make sure -- and the clear contrast between Democrats and Republicans here is their pledge to special interests today came out with preserving tax breaks for the wealthiest individuals, for millionaires and billionaires, holding middle-class tax breaks hostage, and adding $700 billion to the deficit.

They talk out of both sides of their face. On the one hand, they talk about cutting spending, but they ignore and treat tax cuts for the wealthiest individuals, adding $700 billion to the deficit, like it's not spending. They are equivalent. They both add to the deficit.


BLITZER: Let me ask you Congressman Ryan to respond to that, because, if the wealthiest, those making more than $250,000 a year, get to keep the same tax rate as has been in business now since the Bush administration...

RYAN: Seven years.

BLITZER: ... yes, 35 percent, as opposed to going up to the Clinton administration's 39.6 percent, that will cost the American taxpayer $700 billion over the next 10 years.

You want to cut the debt, the national debt. There is $700 billion, Congressman Ryan, right there.

RYAN: Wolf, not only do I disagree with what Debbie just said -- 41 Democrats in her own caucus disagree with what Debbie said.

We have the votes to pass this if the speaker would let this come up. Now, you mentioned a good point. Shouldn't we just raise taxes on rich people? You know who pays these taxes? These tax rates hit 50 percent of all small business income, about 900,000 small businesses -- 70 percent of our jobs come from these small businesses.

The CBO just put out a report saying, if this happens, we could lose 1.2 million jobs. Here is the point. To get our fiscal situation under control, we need to do two things, grow the economy, create jobs, and cut spending.

Raising taxes defeats those purposes, those objectives. We don't want to slow down this economy. We want to cut spending.


BLITZER: Congresswoman Wasserman Schultz, a lot of economists say they agree with Congressman Ryan, that, if you raise taxes on those $250,000 or more, at a delicate moment in the economy right now, that could perhaps even trigger a double-dip recession.

WASSERMAN SCHULTZ: Wolf, the overwhelming majority of economists agree that the tax cuts that Mr. Ryan and his colleagues want to extend for the wealthiest Americans would do nothing to turn the economy around, that it is the middle-class tax breaks and for working families that we need to reenact, because most wealthy Americans don't use that windfall and put that money right back in the economy.

They sit on it. They sit on it and sit on their investments, and it does not help at all. All it would do is to add to the deficit. And I certainly agree and Democrats agree that we should be targeting our assistance when it comes to tax policy to small businesses, which is why the Republicans should have voted with us today on the small business lending and jobs bill.

But unfortunately they all voted against it. They have no interest in getting capital out into the hands of small business owners. They could have voted for that bill today and gotten that credit to be available. But instead, all they are focused on is victory, returning to the same tired old tax policy of the past.

And the American people are going to reject it on November 2.

BLITZER: Are you just the party, Congressman Ryan, the party of no, no to whatever the Democrats raise, even if these are issues, these are proposals that Republicans supported in the past?

RYAN: Look at the thing we just put out today.

These are a party of proactive ideas to get this country back on track, to replace government-run health care with patient-centered, consumer-directed health care, to get this debt and deficit under control, to create jobs in this country, to actually make members of Congress actually read the legislation they're voting on before they vote on it.

These are commonsense solutions that are anchored in our founding principles.

Look, going back to this tax cut issue, even the president's advisers, Peter Orszag, Mark Zandi, are telling us, you shouldn't be raising taxes at this moment.

We put out a list of 314 economists yesterday saying, do not raise taxes at this precarious time in our economy. It is very left- of-center to be suggesting we should have these tax increases. Moderates, Democrats, and Republicans are saying we should not be raising these taxes.


BLITZER: All right, stand by. Jack Cafferty is coming up next with "The Cafferty Pile" Then -- "Cafferty File," I should say.

Then lawmakers, these two lawmakers, they are fired up over Social Security. My interview with Representatives Debbie Wasserman Schultz and Paul Ryan will continue. It is about to get heated. Stand by for that.

And what the Iranian president, Mahmoud Ahmadinejad, said at the United Nations today that prompted the U.S. and several other Western delegations to walk out of the U.N.


BLITZER: Jack Cafferty is here with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: It is unlikely, Wolf, there were all that many champagne corks popping around the country when we learned this week that the recession officially ended more than a year ago.

Maybe that's because it doesn't feel like the recession has ended at all, not by a long shot.

A new Gallup Poll shows that 88 percent of those surveyed say that now is a bad time to find a quality job.

That number is as high as it was a year ago and higher than it was this time in 2008, when the recession was in full bloom. Only 55 percent felt this way in 2007, before the recession began.

The bottom line is, Americans are waiting for the jobs to come back. It could be a very long wait, and, in fact, a lot of the lost jobs will never come back.

The national unemployment rate, 9.6 percent. There are no signs it's going to improve significantly for a while, by quite a while. Since the recession began, more than seven million jobs have been lost, almost 2.5 million homes have been repossessed.

But the National Bureau of Economic Research says the recession, which began in December of 2007, ended in June of 2009, which makes the 18-month long recession the longest and deepest downturn since the Great Depression.

Add in weak economic data the last few months and concerns are growing about a possible double-dip recession.

According to, a group of top economists now says there's a 25 percent risk of a double-dip recession in the next year. And that's up from a 15 percent chance just six months ago.

So, here's the question: Do you feel like the recession is over?

Go to, and post a comment on my blog.

One of the articles I was reading today, Wolf, suggested the country was probably in for a long period of stagnation, which, I don't know, it is kind of feeling a little stagnant out there.

BLITZER: Yes. It is what they call a jobless recovery.

CAFFERTY: Yes, I guess so.


BLITZER: I don't know. Can there be a jobless -- if it is a recovery, you would think there would be jobs. CAFFERTY: Isn't that an oxymoron, jobless recovery?

BLITZER: That is what I was going to say, but you said it better.




BLITZER: Good work, Jack. Thanks very much.


BLITZER: Let's get some more now on the new Republican Pledge to America, as it is called, and a passionate debate between Democratic Congresswoman Debbie Wasserman Schultz and Republican Congressman Paul Ryan.


BLITZER: Congresswoman Wasserman Schultz, there is anger, as you well know, in the country right now. It was demonstrated directly to the president the other day by a woman who was a supporter, and she made a dramatic appeal to the president.

In several of these recent polls, when you ask the American people, is the country moving in the right direction or the wrong direction, the overwhelming majority say the country right now is moving in the wrong direction. A recent Reuters/Ipsos poll, only 33 percent thought the country is moving in the right direction -- 61 percent said it is on the wrong track.

Your party is in charge of the House and the Senate and the White House. You can feel that anger out there.


And we want to make sure that we continue to move the country in a new direction and focus on the change that people asked for when they elected President Obama.

The change that they don't want, and the type of policy they don't want, is Mr. Ryan's proposal to privatize Social Security and pull the rug out from under senior citizens, and get rid of the security that they have, or turn Medicare into a voucher program, which is also part of the book that he and Eric Cantor just put out that they are touring the country promoting right now.

And that -- those two items, because they are unpopular, weren't in the Pledge to America today, because that is not something that they think that they can get elected on. They're just going to try to sneak that in the backdoor if they somehow...

(CROSSTALK) BLITZER: She makes a fair point.

RYAN: May I respond to that?


BLITZER: Some of the recommendations you personally have made -- and you have a few supporters in the House of Representatives among the Republicans -- were not, were pointedly missing in this document, A Pledge to America. Why?

RYAN: Right.

Well, because I put out a budget plan to get a consensus of one person in Congress, me. I didn't put a budget plan to get a consensus of a majority of Congress.

But here's the point, what I was trying to get with this plan. I was trying to get this discussion about entitlement programs and our debt crisis at an adult level. Clearly, that is not happening.

What I'm proposing is, make sure that we don't cut benefits to people in and near retirement, 55 and above. They just took $522 billion out of the Medicare fund to spend it on another government program. They are the ones who raided Medicare.

What I'm saying is, let's get these programs solvent. If we don't fix this debt crisis and get ahead of it, Wolf, we will shred the social safety net that people have counted on. What I am trying to propose is something responsible, prevent cuts from hitting current seniors, people nearing retirement, and then reform these programs for those of us who are under 54, because we know they are going bankrupt, and put them on the path of solvency and sustainability.

That's the responsible thing to do. And I would like to get to an adult-level conversation, but, apparently, we're not having that these days.

WASSERMAN SCHULTZ: An adult-level conversation to invest Social Security in Wall Street. If that had happened in the last couple of years ago, Paul, you would have ended the protections that people have in their twilight of their life as we know it.


RYAN: I want to give younger people the option of having the same retirement you and I have, Debbie, if they want it or not. That is not privatizing. That...

WASSERMAN SCHULTZ: Then we need to reform Social Security, not yank the rug out from under them.


WASSERMAN SCHULTZ: Investing in the stock market is a risky gamble. RYAN: If it is good for you and me and our families, why isn't it good for everything else in this country?

WASSERMAN SCHULTZ: It's certainly not good for senior citizens or for the next generation...

RYAN: I am not proposing it for senior citizens.

WASSERMAN SCHULTZ: ... to preserve Social Security. That will end Social Security.


RYAN: I'm actually saving Social Security, according...


WASSERMAN SCHULTZ: No, not if you look at the track record of Wall Street in the last few years.


WASSERMAN SCHULTZ: I think, if we campaigned together around the country together, people would be looking at our view much more....


RYAN: In my bill, you wouldn't even be in the stock market when you're retiring.


RYAN: Look, if it is good for us in Congress, why isn't it good enough for everybody else? Look, these are -- we should have honest debates about this thing.


WASSERMAN SCHULTZ: Our Social Security is the same as everybody else's in the entire country, and you know it.

BLITZER: The debate on Social Security, I suspect, is only just beginning, the debate on a lot of these issues.

A good debate we had today, Debbie Wasserman Schultz, Paul Ryan.

Thanks to both of you for coming in.


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