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REP. ERIC CANTOR, R-VA.: Good to be here, Chris.
WALLACE: Nancy Pelosi announced Friday that she is going to run to stay on as the leader of Democrats in the House. Now, the Republican National Committee, which had a sign on -- outside its building here in Washington that said "Fire Pelosi" during the campaign promptly changed that to "Hire Pelosi."
Question: Why are Republicans so happy that Nancy Pelosi will likely remain as the face of the House Democrats?
CANTOR: Well, if Democratic members in the House elect Nancy Pelosi as their leader, it's almost as if they just didn't get the message from the voters this election.
I mean, the voters outright rejected the agenda that she's been about. And here they're going to put her back in charge. And in fact, Chris, over the last two years -- in fact, almost four at this point -- she has refused to even meet with Republican leadership to talk about any way forward together.
I mean this is the woman who really, I think, puts ideology first, and there have been no results for the American people. And that seems the direction they want to take again. It just doesn't make sense.
WALLACE: So what are you saying, it's a thumb in the eye to voters if she becomes the House Democratic leader?
CANTOR: Yeah, I don't think there's any question that this says to the voters, "We're not listening to you. We think we're right. We're going to continue the same path."
WALLACE: All right. Meanwhile, President Obama has been giving his analysis of the Democratic defeat. Now today in India, he said the election means that he's going to have to make some, quote, "midcourse corrections." And here is what he said in his weekend Internet address. Here it is.
(BEGIN VIDEO CLIP)
OBAMA: This week, Americans across the country cast their votes and made their voices heard. And your message was clear. You're rightly frustrated with the pace of our economic recovery. So am I. You're fed up with partisan politics and you want results. I do, too.
(END VIDEO CLIP)
WALLACE: Based on those comments, does the president get it? Does he understand what voters were trying to say on Tuesday?
CANTOR: Well, Chris, I'm worried that he doesn't, just as it's worrisome to see Nancy Pelosi will maintain leadership in the House, because what the voters said is, number one, "We're tired of the 20- month agenda that we've seen under the Obama administration," because, number one, it hasn't produced results.
But number two, it is anathema to most people. I mean, it is this expansion of government and the fact that we need to keep cranking up the spending machine of money we don't have. It is government getting into more and more aspects of our economy that the voters outright rejected.
And when you hear the president say things like, you know, "We did a poor job of explaining what we were trying to do," I think that that's indicative of his not getting it, because the voters have had enough of the Obama agenda.
WALLACE: OK. You're among the congressional leaders who has been invited to the White House to have dinner with the president on November 18th. What do you intend to say to him about how Republicans will deal with him?
CANTOR: Well, I feel, Chris, that it is going to be incumbent upon us to say, "Mr. President, we are here to talk with you to try and work out solutions. But if the message from the voters is anything, it is we need to stop the direction in which your administration has been heading. And we need to go back towards a commonsense agenda which starts with limiting government, cutting spending, so we can get jobs created again."
And that's what it's about. And we've got to demonstrate that we heed the message from the people and that he'll come along with us.
WALLACE: Do you -- are you hopeful that he will receive that and respond?
CANTOR: Well, you know, Chris, the president did say this week that he's willing to work with us. Now, listen, are we willing to work with him? I mean, first and foremost, we're not going to be willing to work with him on the expansive liberal agenda he's been about, but if he's serious about working with us on things like earmarks, for instance, which -- he said he would work with me on that -- I'm absolutely hopeful that we can do that.
I hope he calls Harry Reid the first thing to get the Senate to go along with the House position.
WALLACE: OK. Let's talk some specifics. The Bush tax cuts are going to be the big issue in the lame duck session of Congress, which is going to come in just a few days.
If the president says, "Extend the tax cuts for the middle class permanently and I'll agree to a two- or three-year extension for tax cuts for the wealthy," could you buy that?
CANTOR: First of all, Chris, let's set the record straight. No one's getting a tax cut here. One of two things is going to happen January 1. That is your rates are either going to -- either going to go up or they're going to stay the same. So this notion that somehow we are passing tax cuts is just not true.
And so, no, I am not for decoupling the rates, because all that says to people looking to go back in and put capital to work and invest to create jobs is, "You're going to get taxed on any return that you can expect."
I am not for raising taxes in a recession, especially when it comes to job creators that we need so desperately to start creating jobs again.
WALLACE: OK. You talk about compromise. If he says to you, "All right, we'll extend all of the Bush tax cuts or," as you say, "keep the rates as they are now, but only for a few years," could you accept that?
CANTOR: Chris, I am not for sending any signal to small businesses in this country that they're going to have their tax rates go up. Washington -- I mean, people -- I think it's -- the election result reflected the fact that people get Washington does not have a revenue problem. It's got a spending problem.
WALLACE: But wait. Are you saying that if -- it's either permanent extension of all the Bush tax cuts or nothing?
CANTOR: No. What I'm saying, Chris, is we've got to come to grips with the fact that the money is going to be spent one way or the other. And the fundamental difference on this -- on this issue is their -- I mean, the Obama position has been "We think government ought to be spending this money, not the people who earn it."
That's what this election's been about. Government doesn't know best. People in America know they want to strive for opportunity. They're willing to take responsibility through risking their capital.
WALLACE: But I'm trying to get a specific answer. Would you accept a temporary extension of all the tax cuts or are you saying that all of it has to be permanent?
CANTOR: Chris, at this point, we -- I really want to see that we can come together and agree upon the notion that Washington doesn't need more revenues right now.
And to sit here and say, "Well, we're going to just go about halfway," or, "We're going to send a signal that is going to be uncertain for job creators and investors to put capital to work," that's exactly what we don't need right now. We need to lift the veil of uncertainty.
WALLACE: All right. House Republicans have set an ambitious goal for spending cuts and we're going to get into the details with Paul Ryan, who's going to be the head of the Budget Committee, in a moment.
But -- and I want to put this up on the screen -- you want to cut non-defense discretionary spending by $100 billion in the first year -- non-discretionary -- or non-defense discretionary is only 16 percent of the total federal budget.
So cutting $100 billion from there would amount to a 22 percent cut in those programs. Do you really think that's possible?
CANTOR: Chris, if we don't change direction in this country, we'll not see the kind of opportunity that most Americans have had in their lives. We have -- we have not gotten to where we are overnight. We're going to have to go and orient this Congress back towards a cost-cutting and a job-creating Congress.
And that's going to mean we're going to embark upon a regular diet of spending cut bills being brought to the floor weekly. That would be my hope.
WALLACE: And 22 percent from non-defense discretionary is not excessive?
CANTOR: Chris, look, these are '08 levels. I think that most Americans would agree the sun rose and set in '08. You know, you see people around their kitchen tables and small business people tightening the belt, and large business people trying to cut payrolls, trying to cut expenses so we can make it through these tough times.
We're going to have to make some tough decisions. That's what this election was about. People are disappointed that there's no results and, frankly, because the promises that were made in '08 have fallen flat and the results haven't been there.
WALLACE: All right. You say you want to make tough decisions. In your statement this week, your governing document, you said you want to see a moratorium on earmarks.
Why not make a tough decision and say, "Earmarks dead forever?"
CANTOR: Well, it is -- it is essentially a suspension for the entire Congress is what we're saying. And I believe that that is necessary because earmarks are a symptom of a culture gone bad here in Washington.
And if we're unable to make the decisions on the things like earmarks, we are certainly not going to have the credibility to make the big decisions on the kinds of cuts you're talking about or the ability for us to address entitlements.
WALLACE: You're also going to face a vote at least by May on whether or not to raise the debt ceiling for this country. And Republicans are apparently planning to demand even further spending cuts from the president in return for raising the debt ceiling.
If he refuses, does that mean that you're willing to let this country go into default?
CANTOR: Well, look, Chris, you know, a vote on either side of the issue of debt limit ceiling increase has serious consequences. OK? But before we even get to that vote, we're going to have at least three to four months to demonstrate that this is going to be a cost- cutting Congress, that we're going to get spending under control.
We cannot sit here and continue the path that we've been on over the last 20 months and beyond, continuing to spend money we don't have without any signal that we're going to get this country back onto a path of fiscal sustainability.
That's the job I'm going to hopefully be about over the next three to four months, is to make sure that we do demonstrate our commitment to fiscal discipline, which has been sorely lacking here of late.
WALLACE: Fair enough. But I think it's fair to say that the last time that the Republicans took control of Congress in 1995, the Gingrich Congress, they got in trouble by overstepping and ending up -- and you can argue who caused it, but there was -- the result was a government shutdown, and Republicans got blamed.
So let me ask you, because some people say that's -- that would be a way for the Obama White House to show that you guys are too extreme, are you willing to say right now, "We're not going to let the country go into default and we won't allow a government shutdown?"
CANTOR: Well, look, Chris, look at this, now. The chief executive, the president, is as responsible as any in terms of running this government. The president's got a responsibility as much or more so than Congress to make sure that we are continuing to function in a way that the people want. So instead of saying, Hey, this is going to be a congressional test one way or the other, I look at it to say, Look, this president certainly, as in his own words, took a shellacking by the voters. They're looking at him to try and come to the middle and set aside this extreme agenda that he's been about that has killed jobs and created the most uncertainty that businesses can even remember. It is time for him to try and come meet us and say, Fine, let's get back to the kind of things that Americans are about. It is living within our means. It is making the tough decisions so that we can see America prosper and lead again.
WALLACE: So you're saying, to flip it around, if there were to be a default on the debt or a government shutdown, it's his responsibility, not yours?
CANTOR: I would say, Chris, it's as much as his responsibility. In fact, he is the one who sets the agenda as the chief executive and as the president of this country.
Congressional role is to look to and account for the expenditures that have been made, to make sure that his administration is following through on the mission and the will of the people.
And right now, what people are asking us to do is to make sure that his administration, through the bureaucracy, is not doing that which they were unable to do in the legislative body in Congress.
WALLACE: OK. I've got a minute left and I want to get into one last area. There could be as many as 90 members of the tea party in the new House. And that would be more than a third of all Republicans.
Now, Michele Bachmann, the congresswoman from Minnesota, is running for the number four position in the leadership. But you and a lot of your colleagues in the leadership are backing a member of the Republican establishment, Jeb Hensarling, instead for that.
Instead of listening to the new members and saying, Let's come in, let's listen to you, isn't this a case of the old boys' network saying to the tea party, Wait your turn?
CANTOR: First of all, Chris, we are fortunate in the Republican conference to have two good conservatives running for this position. Both Jeb and Michele have a reputation as being some of the most commonsense, committed conservative -- constitutional conservatives in our -- in our conference.
And you know, I endorse Jeff -- I mean Jeb, because I feel that we've had a history of working together, and...
WALLACE: Yeah, but that's the old boys' network.
CANTOR: You know, we've had a history of working together and Jeb is someone who can produce results. But listen...
WALLACE: Doesn't the tea party deserve something for the role they played in this election?
CANTOR: Listen, you know, the fact is, again, you've got two conservatives in this race. You have an incoming class that is probably more diverse and more reflective of a growing conservative majority in this country than I've seen since I've been here in Washington.
And these individuals will be allowed to vote for which conservative that they -- that they choose. I mean, again, these are two conservatives. Neither individual could ever be accused of being anything but a conservative.
WALLACE: But real quickly, you're not willing to guarantee that there will be, if not in that position, a member of the tea party in the leadership?
CANTOR: Well, I think if you look at the tea party, the tea party are -- you know, it's an organic movement that played a tremendously positive role in this election. I mean, certainly, it produced an outcome beneficial to our party when you're picking up at least 60-some seats.
That is something that I think that the tea party has done which is fiscal discipline, and we're going to be focused on that.
WALLACE: Congressman Cantor, we want to thank you so much for coming in after an intense campaign. Please come back, sir.
CANTOR: Thank you, Chris.
WALLACE: Up next, two congressmen ready to take control of powerful committees. And we'll be right back.
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