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Mr. Chairman, thanks very much for coming in. REP. PAUL RYAN (D), WISCONSIN: Hey, thanks for having me, Wolf. Good to be with you.
BLITZER: You know, based on all the emails I'm sure you're getting and I'm getting, the tweets, everything else, Americans are sick of this fight that's going on over at the White House right now with the Democrats and the Republicans. Why can't this be resolved so there won't be a crisis on August 2nd?
RYAN: Well, I think ultimately it will be resolved. There won't be a, quotes/unquote, "crisis." The reason is, is we got to cut spending and there's not a big appetite in the White House to do that. That is the reason we're at the debt limit we are at because spending has grown far to fast. And, look, we just don't think it's a good idea to be raising taxes in this very, very soft economy.
And, yes, the president says he wants the tax increases to kick in about a year and a half's time, but the problem is, when you're raising taxes on businesses, they're forward-looking. And if they see taxes going up even higher than they are already scheduled to occur in current law, it puts a chilling effect on hiring today.
And the second thing I would say is, the good old days of like 2007, we used to say this debt is a problem for our children and grandchildren. It's not. It's a problem for us right now.
The debt is a hangover on our economy. Look what's going on in Europe that is costing jobs right now.
So, we've got to keep our eye on the ball, and that is we've got to cut spending. We're negotiating spending cuts right now. And so, this thing is just going to play itself out. It's a little fluid but it's going to play itself out.
BLITZER: Well, I just want to be precise. If, in fact, they do reach a deal, the speaker, the leadership, the Democrat and Republican leadership, who will theoretically be ready to vote yea, to vote in favor of raising the debt ceiling?
RYAN: Yes, I'm not one of those people who say under no circumstance I won't vote for an increase in the debt limit. Look, you know, those of us who voted for budget before, debt element increases were in those budgets, that's how it used to be done. We took that out of the budgets. And so, yes, if we get a decent package that gets a downpayment on our deficit and debt, then I will vote for it.
I've been saying all along, I think it's dangerous for the credit markets and for the economy to just raise the debt limit without any spending cuts. At the same times, nobody is looking to default. Nobody wants to see that happen. We've got to get a downpayment on our fiscal problems and that's our deficit and our debt.
And the more we can do that, the better off our economy can be, because we can remove this huge debt cloud that's overhanging us. BLITZER: Here's what David Brooks, the moderate conservative columnist at "The New York Times," wrote the other day in a column "The Mother of All No-Brainers." "If the Republican peter were a normal party," he writes," it would take advantage of this amazing moment. It is being offered the deal of the century: trillions of dollars in spending cuts in exchange for a few hundred billion dollars of revenue increases."
He says you should just say yes.
RYAN: That deal never came together. There were never any specifics that were actually presented to show you what David Brooks is talking about. So that deal never materialized.
Now we're off of I guess what they call the "Grand Bargain," because the Speaker and the president never came together on that, and so now we're going back to brass tacks, which is coming up with a spending cut package to lift the debt limit. So the whole point here is, let's get a down payment on the deficit and the debt, in conjunction with raising the dead limit.
Will we get the kind of spending cuts what we're looking for? No. Obviously, it's divided government. We cut $6.2 trillion in our budget. The president is not going to accept that. We're not going to accept all the tax increases he's asking for.
So, hopefully, clearly, with a $1.3 trillion deficit, we can get some common ground on the fact that spending is too high and we've got to get it down if we're going to deal with this problem. And I'd like to think we can find some consensus on that area.
BLITZER: If worst comes to worst, would you be prepared in principle to vote for Senate Minority Leader Mitch McConnell's compromised last-ditch proposal at least to avert some sort of economic collapse?
RYAN: You know, I don't want to get into that, only because I don't think it helps us to negotiate to the media on what we would take at the end of the day, worst comes to worst. But nobody wants to see a default situation happen. The McConnell plan has been received a little more coolly over here in the House, but it wouldn't surprise me if you have combinations of approaches that come together at the end of the day with this thing.
BLITZER: Presumably, that's what they're talking about at the White House, maybe even as we speak right now.
And I just want to be precise on this point. As far as the potential disaster occurring after August 2nd, what the Treasury Department says could be the deadline, you're with Mitch McConnell and John Boehner in saying you've got to avoid that, we can't take any chances, as opposed to Michele Bachmann and Sarah Palin, who say you know what, the government could deal with it if necessary?
RYAN: Well, look, I watch the daily cash flows. Nobody knows this stuff for sure, but you can see days in August in which the outflows, interest on debt, Social Security payments, paying our troops, things like that, far exceed the money we have coming in that day. So, on a day-to-day cash management, we could have some serious problems.
Not just not paying our troops or Social Security. I think we can do those things. But we have some big debt coming due that's going to be an issue.
So, look, I don't want to go down that path. I want to cut spending. And I've got to think we can get the president to cut some spending around here, and that's what we're negotiating.
BLITZER: Well, apparently --
RYAN: So, I don't want to see default, but I also -- I really think it's a mistake, Wolf, if we just rubberstamp a debt limit increase, because that will tell the credit markets, you know what? These Americans, they can't get their act together. Their fiscal house is not in order, and even having two parties involved in government doesn't do anything. So I think it would be a mistake if ours if we just have an (INAUDIBLE) increase in the debt limit.
BLITZER: Because the president, his supporters, his advisers, they have repeatedly said and he's suggested that that big deal, that $4 trillion deal he wanted, $4.5 trillion, and at least $3 trillion in spending cuts, maybe more, and then some tax revenues, not necessarily tax hikes, rates in the sense of raising the rate from 35 to 39.6 percent, the highest income bracket, but eliminating some of those loopholes, those subsidies, stuff like that.
Are you open to tax reform like that, by the way?
RYAN: Not only are we open to tax reform as you describe it, it's in our budget. What we propose in our budget that passed the House is, get rid of these loopholes in exchange for lowered rates.
Look, General Electric made a lot of money, didn't pay any taxes. UPS, another big company, paid a 34 percent tax rate, while their competitor, DHL, paid a 24 percent tax rate.
So, we've got a problem here. And what we want to do is get rid of these loopholes, all of these loopholes, in exchange for lowering everybody's and every business' tax rates to make us more globally competitive. But that is not what we saw coming together with this big deal.
And it wasn't a 3-1, by the way. If you run the numbers the honest way, we weren't looking at $3 of spending cuts for $1 of taxes. It was far different than that.
BLITZER: What was it?
RYAN: So -- I thought it was closer to $2 to $1, closer to $1 to $1. More to the point, we weren't getting the rates down. So we weren't getting any sure agreement that we were going to get those rates down. And if you don't get the tax rates down, then it really is a tax increase. And that's bad for the economy.
BLITZER: How surprised were you, Mr. Chairman, that the president was willing to put your issue, Medicare, Medicare reform, cuts in Medicare on the table?
RYAN: Well, the kinds of reforms he was putting on the table are the kinds of things you'll have to do if you don't do the reforms that we are talking about. The reforms we are talking about allows us not to change benefits at all for anybody above the age of 55 if you reform it for younger people like myself.
If you don't do that, then you will have to change benefits for current seniors. So it really is that kind of a tradeoff. Apparently, the president is more interested in going down that path. His independent advisory board and his health care law does that, which will, starting in 2013, start price controlling health care to current seniors.
We don't think that's the way to go. And that's why we think we should reform Medicare for the younger generation, and leave it alone, keep it as it is, for the current generation.
BLITZER: All right. One final question, and you can give me a yes or a no. You think there will be a deal by August 2nd?
RYAN: I think so.
BLITZER: OK. It doesn't sound a resounding "I think so," but you think so.
Mr. Chairman, thanks very much for coming in.
RYAN: You bet, Wolf. Nice to be with you.
BLITZER: Thank you.
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