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Fox News "Fox News Sunday with Chris Wallace" - Transcript


Location: Unknown

CHRIS WALLACE, HOST: I'm Chris Wallace.

President Obama takes on entitlements and wants to raise taxes on millionaires to cut the nation's debt, while continues a hard sell on his jobs plan.

With the U.S. in danger of a double-dip recession, are Republicans ready to deal with the White House?

We'll ask the man with his own plan to get the country moving, Congressman Paul Ryan, chairman of the House Budget Committee.

Then, fresh off the campaign trail, a presidential candidate with his own ideas on boosting the economy. We continue our series of 2012 one-on-one interviews with businessman Herman Cain.

Plus, the Fox News/Google Republican Party of Florida debate is now days away. We'll ask our group if top contender Rick Perry can cement his status Thursday as front runner or is in danger of flaming out.

All right now on "Fox News Sunday."

And hello, again from Fox News in Washington.

On Monday, President Obama will announce his plan to cut the nation's debt and pay for the job's program. And we're now hearing he will propose a minimum tax rate for millionaires as part of the package. But will Republicans agree to any of it?

To get an early response, we turn to Congressman Paul Ryan, chairman of the House Budget Committee and the GOP point-man on these issues. He joins us now from his home state of Wisconsin.

Congressman, while little has been confirmed, here's an outline of what the president is reportedly likely to announce tomorrow. Let's put it up on the screen -- $4 trillion in savings, at least $340 billion from entitlement reform to Medicare and Medicaid, at least $800 billion in revenue increases, including that new plan to insure millionaires pay, at least the same percentage of earnings as middle income taxpayers.

Let's start if we can, sir, with entitlements. Do you see anything

positive about a Democrat president taking on entitlements?

REP. PAUL RYAN, R-WIS.: I sure do. But I don't know if there's anything positive in this plan. I want to keep an open mind and see what it is. But from what we hear originally, it looks like it's just more price controls and reimbursement cut to the doctors and other health care providers, which simply leads to restricted access to care seniors.

Medicare already has a new the president's panel, the IPAD, starting next year, which will further price control Medicare providers. So, I think that's going to work if that's what he's going to continue doing.

The other thing, in the tax side is permanent tax increases on job creators doesn't work to grow the economy. It's actually fueling the uncertainty that is hurting job growth right now. And don't forget the fact that most small businesses file taxes as individuals. So, when you are raising these top tax rates, you're raising taxes on these job creators where more than half of Americans get their jobs from in this country.

So, what we want to see are pro-growth economics. Even the president's fiscal commission is saying, with Democrats on there, lower tax rates, broaden the tax base for economic growth, and just more nickel and dime reimbursement cuts to health care providers will simply lead to less access for care for senior citizens.

WALLACE: We'll get to the taxes in a minute. I want to stick on the entitlements for a moment. The Democrats have been hammering you part, have been hammering the GOP ever since they supported your plan, the Ryan plan, that would have created a premium support program which according to experts, some people call it a voucher plan, would have reduce -- made health care costs more expensive for Medicare recipients starting in 10 years.

Does the fact that the president is addressing any entitlement reform take the bull's eye off of the GOP's back?

RYAN: Well, it's constructive in that he's acknowledging that there's a big problem with these programs. And he has made that acknowledgment a couple of times now, saying they're going to go bankrupt if we don't do something to fix them. That's good.

So, the question then is -- what's the best way to fix them? We believe the best way to fix them is not to jeopardize the access to these benefits for current seniors. Our bill says leave them alone, don't disrupt their services and then have a new reform program for younger generations that gives them more choice, more competition, it's not vouchers. They choose among competing plans, just like they do in Medicare Advantage or the Part D benefit.

And what we do is we have a strengthened program that works like the one we have in Congress, so that it's actually something that's solvent. We actually make Medicare solvent and we don't do it by restricting access to drugs -- restricting to seniors care, like doctors and hospitals.

The problem is, what the president has said he's going to do, and what this new law does, is it puts 15 bureaucrats in charge of rationing prices to Medicare for current seniors. And that jeopardizes their care and also doesn't save the system.

So, what we've seen from the president so far -- more price controls and rationing. No plans to save it from bankruptcy.

We preserve it for current seniors and we have a new system that works like what we have in Congress that prevents the program from going bankrupt in the first place. We think that's a better idea. But I'm glad he's actually wading into the discussion. Now, let's talk about what ideas work the best.

WALLACE: Let's turn to taxes and there's a lot to talk about. I want to break it down in some bite-size pieces.

First of all, what do you think to all -- over the papers today, I guess, the New York Times reported that, first, this idea of a new minimum tax rate for millionaires to insure that they pay at least the same percentage of their money that they get their income as middle income taxpayers?

RYAN: Great. So, I guess what he's saying he's going to raise on capital at ordinary income tax rate, raising capital gains and dividends. Look, if you tax something more, Chris, you get less. If you tax job creators more, you get less job creation. If you tax investment more, you get less investment.

At a time when experts are telling us, including, I said the fiscal commission, we should lower tax rates on investment and job creation by getting rid of all of the loopholes so we can create economic growth. So, we think this is going in the wrong direction. Let's not forget that under the current law that the president has already passed, the top tax rate on individual and small businesses in 2013 goes to about 44.8 percent.

So, we have employers in Wisconsin that pay that tax rate are competing against countries that are taxing their businesses from 16 percent in Canada, almost 21 percent going in England, 25 percent in China. The world taxes their businesses at about 25 percent and he's saying we're going to tax these job creators at above 45 percent with this new tax. What it does is it adds further instability to our system, more uncertainty and it punishes job creation and those people who create jobs.

Class warfare, Chris, may make for really good politics but it makes a rotten economics. We don't need a system that seeks to divide people. We don't need a system that seeks prey on people's fear, envy and anxiety. We need a system that creates job and innovation, and removes these barriers for entrepreneurs to go out and rehire people. I'm afraid these kinds of tax increases don't work.

WALLACE: But, Congressman, this is being called the Buffett rule, because it comes after Warren Buffet, the multibillionaire owner of

Berkshire Hathaway said, I end up -- because I get so much of my money from capital gains -- I end up paying a lower tax rate than my secretary who gets her money in salary.

What about the question -- what about the question of fairness, sir?

RYAN: So, what he's saying, what he forgets to mention on that, that's a double tax. Capital gains and dividends are taxes on money that has already been taxed once before based on income. So, a person who's paying an income tax is paying the first level of tax on that money and then when you pay capital gains and dividends tax, you are paying that tax again on that money that earns it. What it does -- and we've done this before -- we have raised capital taxes gains and dividend taxes, we hurt economic growth, we stifle investment in our economy. So, if we tax investment in job creation more, you will get less of it. Like I said, this is -- this looks like to me not a very good sign, because it looks like the president wants to move down the class warfare path.

Class warfare will simply divide this country more. It will attack job creators, divide people and it doesn't grow the economy.

Go to and see a video we put that shows a common sense idea that has a lot of bipartisan support in Washington these days to lower tax rates on these things by going after the loopholes.


RYAN: People use tax shelters which we want to get rid of.

WALLACE: I got a lot to ask you. I don't mean to interrupt but I have a lot to ask you about, Congressman.

Let's take a look at the big picture on taxes. The President Obama is proposing almost $500 billion in increased revenue to pay for his job's plan. We're told, he's likely to propose at least another $800 billion in increased revenue as part of tax reform as deficit reduction.

Are you saying that Congress -- and I am talking about the Republican-controlled House -- won't go for any of it?

RYAN: You already have a $1.5 trillion tax increase coming in current law starting in 2013. Now, we're talking about another tax $1.3 trillion tax increase on top of that? I mean, he is giving us a stimulus bill which is basically like the old stimulus bill, just half as large. Temporary tax rebates with increases, and then another tax increase on job creators and successful businesses in addition to that? Why on earth would we go with that? Especially when the problem is spending.

We want to cut spending. We want to reform these entitlement programs. And if we do it the right way, it doesn't jeopardize seniors. And we want to have a tax system that is not designed on picking and choose winners in society, but on encouraging investment and job creation and economic growth.

WALLACE: But, Congressman, what you're basically saying is the supercommittee, the 12 members of the House and the Senate who have been charged with coming up with another $1.2 trillion to $1.5 trillion in deficit reduction by Thanksgiving, you are basically saying there's going to be no bargain, there's going to be no compromise.


WALLACE: Let me just finish -- because the Democrats are demanding more revenue be part of it. I'm not saying they're right or wrong. But that's what they are saying.

But if you don't get, then you got these automatic triggers which include $600 billion in automatic cuts to the Pentagon.

RYAN: The president has proposed about $13 trillion in new debt in his budget, more or less his core budget. Clearly, we can cut $1.2 trillion dollars. The president is planning on spending $46 trillion over the next 10 years. It can't be cut $1.5 trillion or $1.2 trillion from that. That shouldn't be that tough.

So, we see the supercommittee as an opportunity to get a down payment on debt through spending cuts. Where I thought we had a shot at bipartisanship -- and this new rhetoric to second-guess myself, was on business tax reform. President says get rid of the loopholes, lower the tax rates, make us more competitive. A simple system that helps us compete, that's what I was hoping we could get. And I thought the

supercommittee might have been a good vehicle to do that.

But if we are just going to do class warfare and trying to get tax increases out of this, and I don't think much will come of it. But if we come together and get a $1.2 trillion to $1.5 trillion spending cut, then I think we have a shot at actually getting something done. We should hold our expectations down on the select committee and let's just get another down payment on debt. There's so much spending that needs to be cut.

And I just clearly think we can come to consensus on this much. We propose $6.2 trillion in cuts in our budget. Clearly, Democrats could work with us and get $1.5 trillion.

WALLACE: Let me switch subjects on you. What do you think of the chances of the country is headed for a double-dip recession?

RYAN: The economist tell me it's about 50-50, because of all this uncertainty, they don't know what the tax regulations are going to be, you got 219 new expensive regulations on the table coming from the Obama administration to economy this year, you got and a massive tax increase coming in 2013. And now, these two proposals, the permanent tax and stimulus, and this new proposal for more tax increases, I think that just helped shoot down our economy.

And then you got all these European problems which could wash over on our shores.

And so, I do not think the president is not doing what we need to do to grow this economy.

WALLACE: OK. So, let's do a quick check list if we can of the president's jobs plan. Money to build roads and bridges, the so-called "shovel-ready projects." Are you going to go for that?

RYAN: Well, they're not shovel-ready, number one. But we are going to do a new highway reauthorization. And so, that's the normal course of business. But we don't want to do it with all this borrowed money.

So, we do believe infrastructure is good and we're going to fix this, but we don't think that's going to work. If you want to do the rightful shot, the temporary tax rebates -- we tried that in the Bush administration, they failed then, too. And when you pay for them with permanent tax increases, they don't work.

And we just don't think we should be bailing out state governments when the federal government's budget is even in worse shape than the state governments are.

WALLACE: So, not to infrastructure as part of the jobs plan and no to aid to the states to keep first responders and teachers on the payroll?

RYAN: That's the constitutional responsibility of state governments, not the federal government. This should not --

WALLACE: And how about these -- I just need to go through this quickly with you, sir. How about those payroll tax cuts? How about the retraining for long-term unemployed?

RYAN: So, I -- the Georgia plan sounds interesting. I think that's something we are looking, which is an unemployment reform. The temporary tax rebates, like I said, Chris, I'm all for letting people keeping their money. But this particular idea was tried in the Bush administration, earlier in the Obama administration. It hasn't worked, and especially when you're taking these temporary tax rebates and paying for them with permanent tax increases, that is actually self-defeating.

So, we just don't want to go with ideas that have already proven to fail. We want to advance solutions that are proven to work and these don't do that.

The president said business tax reform and trade agreements in the speech. We think those helpful for job creation. But he didn't put any of these ideas in the bill he sent us the other day.

WALLACE: President Obama has been going around the country selling his job's plan over the last couple of weeks. And he said if your party blocks his plan, that he will blame the GOP for the continued unemployment.

Let's take a look at the president.


PRESIDENT BARACK OBAMA: It's time for the people you sent to Washington to put country before party, to stop worrying so much about their jobs and start worrying more about yours.


WALLACE: Congressman Ryan, can he pull a Harry Truman and campaign next year against a, quote, "do-nothing Congress"?

RYAN: We passed a budget that balanced the budget, pays off the debt, reforms that tax code by getting rid of loopholes and lowering tax rates. We passed regulatory reform. We passed new energy development to explore domestic energy production.

We have passed so many bills out of the House to create jobs and they are sitting over in the Senate. And so if he wants to run against the do-nothing Congress, he should focus it on the do-noting Senate Democrats. It is 817 days since they bother to try to pass a budget.

We have passed ours on time.

And so, I think we should take a look where the problem is in Congress. I would argue at the senate. Not doing a budget two years to me is just ridiculous.

So, we have a difference of opinion on what -- how best to fix these problems. But when the president does things like this, it leads to believe that he's not in bipartisan consensus making mood. He's in a political class warfare mode and campaign mode. And that's not good for our economy.

WALLACE: We got less than a minute left, Congressman Ryan. And I want to ask you one last question, and that's about Solyndra, the solar panel-making company that got a loan $535 million federal loan guarantee from the government, as part of the first stimulus plan. The company just bankrupt, laying off 1,000 workers and leaving taxpayers footing the bill.

Less than a minute, what's the lesson of Solyndra, sir?

RYAN: There are billions more of this exact kind of spending that came out of the stimulus that will produce these results we fear. This is industrial policy and crony capitalism at its worst. It's exhibit A for how this kind of economic policy doesn't work.

We shouldn't be picking winners or losers in Washington. We should be setting the conditions for economic growth so that the private sector can create jobs. Washington is not good at picking winners and losers, so we shouldn't try.

WALLACE: Congressman Ryan, we're going to have to leave it there. I want to thank you for joining us tonight. It's always a pleasure to talk with you, sir.

RYAN: Thank you, Chris.


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