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Romney: Well they can look at my record. I understand that my opposition will do its very best to try and change, anyway they can, the narrative to fit their objectives. The president has certainly changed his view on a whole host of things. He was going to close Guantanamo. It's open. Military tribunals were going to be ended, now military tribunals continue. The president was opposed to same sex marriage, now he's in favor of same sex marriage. So I--
Pelley: But what about you?
Romney: So I--
Pelley: People wonder, "Does Romney believe the things that he says?" You say what to those people?
Romney: The principles I have are the principles I've had from the beginning of my political life. But have I learned? Have I found that some things I thought would be effective turned out not to be effective? Absolutely. If you don't learn from experience, you don't learn from your mistakes. Why, you know, you ought to be fired.
We spoke with the former governor of Massachusetts as he pitched a plan for a different nation; a government smaller than most Americans have ever seen, reform of Medicare and Social Security, a balanced budget and cuts in tax rates.
Pelley: What would the individual federal income tax rates be?
Romney: Well, they would be the current rates less 20 percent. So the top rate, for instance, would go from 35 to 28. Middle rates would come down by 20 percent as well. All the rates come down. But unless people think there's going to be a huge reduction in the taxes they owe, that's really not the case. Because we're also going to limit deductions and exemptions, particularly for people at the high end. Because I want to keep the current progressivity in the code. There should be no tax reduction for high income people. What I would like to do is to get a tax reduction for middle income families by eliminating the tax for middle income families on interest, dividends, and capital gains.
Pelley: The tax rate for everyone in your plan would go down.
Romney: That's right.
Pelley: But because you're going to limit exemptions and deductions, everybody's going to essentially be paying the same taxes.
Romney: That's right. Middle income people will probably see a little break, because there'll be no tax on their savings.
Pelley: Now, you made on your investments, personally, about $20 million last year. And you paid 14 percent in federal taxes. That's the capital gains rate. Is that fair to the guy who makes $50,000 and paid a higher rate than you did?
Romney: It is a low rate. And one of the reasons why the capital gains tax rate is lower is because capital has already been taxed once at the corporate level, as high as 35 percent.
Pelley: So you think it is fair?
Romney: Yeah, I think it's the right way to encourage economic growth, to get people to invest, to start businesses, to put people to work.
Pelley: And corporate tax rates?
Romney: Corporate tax rates, also, I'd bring down and with the same idea. Let's get rid of some of the loopholes, deductions, special deals, such that we're able to pay for the reduction. I don't want a reduction in revenue coming into the government.
We followed the governor last week on his relentless schedule; campaigning, raising money, practicing for the debates. And in Boston, we asked him exactly which tax deductions and exemptions he intended to eliminate.
Romney: Well, that's something Congress and I will have to work out together. My experience with the government--
Pelley: You're asking the American people to hire you as president of the United States. They'd like to hear some specifics.
Romney: Well, I can tell them specifically what my policy looks like. I will not raise taxes on middle income folks. I will not lower the share of taxes paid by high income individuals. And I will make sure that we bring down rates, we limit deductions and exemptions so we can keep the progressivity in the code, and we encourage growth in jobs.
Pelley: And the devil's in the details, though. What are we talking about, the mortgage deduction, the charitable deduction?
Romney: The devil's in the details. The angel is in the policy, which is creating more jobs.
Pelley: You have heard the criticism, I'm sure, that your campaign can be vague about some things. And I wonder if this isn't precisely one of those things?
Romney: It's very much consistent with my experience as a governor which is, if you want to work together with people across the aisle, you lay out your principles and your policy, you work together with them, but you don't hand them a complete document and say, "Here, take this or leave it." Look, leadership is not a take it or leave it thing. We've seen too much of that in Washington.
Pelley: You talk about balancing the budget without raising taxes. But to do that, you would have to have trillions of dollars in budget cuts. So let's be specific in this interview: what would you cut?
Romney: The first big one is I'm not going to go forward with Obamacare. I will repeal Obamacare. It costs about $100 billion a year. Second big area is taking major government programs at the federal level, turning them back to the states, where they'll grow at the rate of inflation, not at a multiple of that rate. And that saves about $100 billion a year. And finally, I'll cut back on the size of government itself, as well as go after the fraud and abuse and inefficiency that's always part of a large institution like our government.
Pelley: You would move some government programs to the states. What would they be?
Romney: Well, for instance, Medicaid is a program that's designed to help the poor. Likewise, we have housing vouchers and food stamps, and these help the poor. I'd take the dollars for those programs, send them back to the states, and say, "You craft your programs at your state level and the way you think best to deal with those that need that kind of help in your state."
Pelley: So how does moving those programs to the states bring relief to the taxpayer?
Romney: Because I grow them only at the rate of inflation, or in the case of Medicaid, at inflation plus one percent, that's a lower rate of growth than we've seen over the past several years, a lower rate of growth than has been forecast under federal management. And I believe on that basis you're going to see us save about $100 billion a year.
Pelley: So you're going to cap the growth on those social welfare programs?
Romney: Exactly right.
Pelley: Why would shrinking the federal government on the large scale that you have in mind not throw the country back into recession?
Romney: Well, the plan I have to go after the deficit and to shrink federal spending is metered out in a very careful way, such that we don't have a huge drop off with an austerity program that puts people out of work in government. But instead, through attrition, over time, we scale back the number of federal workers so I'm very careful in the way I do this.
But lasting budget reform isn't likely without doing something about Social Security and Medicare. They are exactly one third of the entire federal budget. That's one reason Romney chose as a running mate, Paul Ryan, the chairman of the House Budget Committee.
Pelley: There is a lot of rhetoric about Medicare. What do you intend to do?
Romney: Well, I don't want any change to Medicare for current seniors or for those that are nearing retirement. So the plan stays exactly the same. The president's cutting $716 billion from current Medicare. I disagree with that. I'd put those dollars back into Medicare.
Pelley: Mr. Ryan has proposed something similar, almost precisely the same number, 716.
Romney: Yeah. He was going to use that money to reduce the budget deficit. I'm putting it back into Medicare and I'm the guy running for president, not him. So what I do in my Medicare plan for younger people coming along is say this, "We're going to have higher benefits for low income people and lower benefits for high income people. We're going to make it more means tested." I think if we do that, we'll make sure to preserve Medicare into the indefinite future.
Pelley: The idea under your plan for future seniors would be that the federal government would write that senior a check, essentially, and say, "Now, you can go buy a private insurance plan or you can buy Medicare from the federal government." Is that essentially it?
Romney: Yeah. That's essentially it. People would have a choice of either traditional, government-run, fee-for-service Medicare; or a private plan, which has to offer the same benefits.
Pelley: Does the government have a responsibility to provide health care to the 50 million Americans who don't have it today?
Romney: Well, we do provide care for people who don't have insurance, people-- we-- if someone has a heart attack, they don't sit in their apartment and die. We pick them up in an ambulance, and take them to the hospital, and give them care. And different states have different ways of providing for that care.
Pelley: That's the most expensive way to do it.
Romney: Well the--
Pelley: In an emergency room.
Romney: Different, again, different states have different ways of doing that. Some provide that care through clinics. Some provide the care through emergency rooms. In my state, we found a solution that worked for my state. But I wouldn't take what we did in Massachusetts and say to Texas, "You've got to take the Massachusetts model."
Pelley: How would you change Social Security?
Romney: Well, again, no change in Social Security for those that are in retirement or near retirement. What I'd do with Social Security is say this: that again, people with higher incomes won't get the same high growth rate in their benefits as people with lower incomes. People who rely on Social Security should see the same kind of growth rate they've had in the past. But higher income folks would receive a little less.
Pelley: So in the Romney administration, in the Romney plan, there would be means testing for Social Security and for Medicare?
Romney: That's correct. Higher income people won't get as much as lower income people. And by virtue of doing that-- and again, that's for future retirees. For-- by virtue of doing that, you're able to save these programs on a permanent basis.
Pelley: Balancing the budget will require sacrifice. And I wonder, what is it, specifically, that you're asking the American people to sacrifice?
Romney: I'm going to look at every federal program and I'll ask this question, "Is this so-- program so critical it's worth borrowing money from China to pay for it?" And if it doesn't pass that test, I'm going to eliminate the program because we just can't afford to keep spending more money than we take in. This is, this is something which is not just bad economics. I think it's immoral.
Pelley: So many people at home look at Washington and think that it is completely broken. You are going to have to reach out to Democrats in order to get anything done. How do you heal that breach, especially after a fairly acrimonious campaign?
Romney: There's no question but that Washington is broken. And I happen to think that flows from the president. I think ultimately the buck stops at the president's desk. He'd probably say the same thing. I think you have to have a president--
Pelley: The president would probably blame it on the Republican Congress, governor.
Romney: His challenge with blaming it on the Republican Congress is of course that for his first two years, right now the majority of his term, he had a Democrat Congress, a super majority in the Democrat Congress. And he had a whole series of things he said he was going to do, he didn't do. Leadership is not just working with your own party, but working with both parties. And I learned that. I was governor of a state with a legislature 87 percent Democrat. Just as you said, Scott, I realized I was going to get nothing done unless I had a relationship-- a respect, and trust with the members of the opposition party.
Pelley: Governor, what do you have to do in these last six weeks?
Romney: Well, I have to go across the country, particularly in the states that are closest, and describe how it is I'm going to get the economy going and how we're going to restore the economic freedom that built this economy in the first place.
Pelley: Can you win this thing?
Romney: I'm going to win this thing.
In Florida, a state with high foreclosure rates and unemployment over the national average, Romney hammered away with his economic message. That's where he believes the campaign will be won. He does not spend much time at his rallies talking about foreign policy -- a subject in which he has limited experience and no military background.
Pelley: Governor, the president has the United States on track to get most of our combat forces out of Afghanistan by 2014. Is there anything that you would do differently?
Romney: Well, I also agree that 2014 is the timeline we should aim for. I thought that the surge troops should have been brought back in November of this year, not September. I don't think you try and bring back troops during the fighting season. I think that was a mistake. I think it was also a mistake to announce the precise date of our withdrawal.
Pelley: How would you ease the anti-American sentiment that we see in the Middle East?
Romney: Communicate to nations like Egypt, and Egypt is-- if you will, the major player, 80 million people, the center of the Arab world. Egypt needs to understand what the rules are. That to remain an ally of the United States, to receive foreign aid from the United States, to receive foreign investment from ourselves and from our friends, I believe, around the world, that they must honor their peace agreement with Israel. That they must also show respect and provide civil rights for minorities in their country. And they also have to protect our embassies. I think we also have to communicate that Israel is our ally. Our close ally. The president's decision not to meet with Bibi Netanyahu, prime minister of Israel, when the prime minister is here for the United Nations session, I think, is a mistake and it sends a message throughout the Middle East that somehow we distance ourselves from our friends and I think the exact opposite approach is what's necessary.
Pelley: There are a lot of unknowns in being president. I wonder how you would make a decision on whether to send U.S. forces into combat.
Romney: Well, it would be a very high hurdle. Number one, a very substantial American interest at stake. Number two, a clear definition of our mission. Number three, a clear definition of how we'll know when our mission is complete. Number four, providing the resources to make sure that we can carry out that mission effectively, overwhelming resources. And finally, a clear understanding of what will be left after we leave. All of those would have to be in place before I were to decide to deploy American military might in any foreign place.
Governor Romney has been criticized lately for comments during a private fund raiser when he said that his "job is not to worry about" the 47 percent of Americans who don't pay income taxes and are dependent on government.
Pelley: You're the CEO of this campaign. A lot of Republicans would like to know, a lot of your donors would like to know, how do you turn this thing around?
Romney: Well, it doesn't need a turnaround. We've got a campaign which is tied with an incumbent president to the United States.
Pelley: As you know, a lot of people were concerned about the video of the fundraiser in which you talked about the 47 percent of the American people who don't pay taxes. Peggy Noonan, a very well-known conservative columnist, said that it was an example of this campaign being incompetent. And I wonder if any of that criticism gets through to you and whether you're concerned about it at all, whether--
Romney: Well, that's not--
Pelley: --the concerns of Republicans--
Romney: That's not...that's not the campaign. That was me, right? I-- that's not a campaign.
Pelley: You are the campaign--
Romney: I've got a very effective campaign. It's doing a very good job. But not everything I say is elegant. And I want to make it very clear, I want to help 100 percent of the American people.
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Pelley: What are the essential qualities of a leader?
Romney: Well, a leader has to have the capacity to build trust in the people he or she works with. People have to look at that person and say, "I may disagree with them. But I know where they stand. And I can trust them." A leader has the capacity of vision, the ability to see where things are headed before people in general see those things. That vision is typically a product, in part not just of their skill and brilliance, but even more their experience, their life experience. And so if you're looking for a leader to guide an economy, you hope that you have someone who didn't just study it in school, but someone who's actually lived in the economy.
Pelley: The historian, David McCullough, says that great presidents learn from the history of the office. And I wonder what you've learned from the history of presidents in the White House.
Romney: You know, I enjoy reading David McCullough's writings. My favorite book is perhaps of a biographical nature, was his book on John Adams, a person who had extraordinary character, a relationship with his spouse who may have been even brighter than he. We don't know as much about her as we do about him. But a man who had a very clear sense of direction, who helped guide the process of writing the Declaration of Independence and the Constitution. He wrote the Constitution of my state of Massachusetts. And, we saw in him an individual who was less concerned about public opinion than he was about doing what he thought was right for the country. And even though he was defeated in his run for reelection, he did what he thought was right for America. And I respect that kind of character.
Pelley: Presidents and presidential candidates are booked down to the minute. And I wonder if you ever have a moment to be alone with your own thoughts. If so, when? And what does that mean to you?
Romney: Well, at the end of the day, usually at about 10:00, things have finally wound down. And I'm able to spend a little time. I talk to Ann. She is on her own schedule. And we spend 15 or 20 minutes on the phone. And then I read. And I think, think about the coming day and think about what I want to accomplish. I pray. Prayer is a time to connect with the divine, but also time, I'm sure, to concentrate one's thoughts, to meditate, and to imagine what might be.
Pelley: You pray every night before you go to bed?
Romney: I do pray every night, yeah.
Pelley: What do you ask for?
Romney: That's between me and God. But mostly wisdom and understanding. I seek to understand things that I don't understand.
Pelley: Presidencies are remembered for big ideas, emancipation, Social Security, man on the moon. What's your big idea?
Romney: Freedom. I want to restore the kind of freedom that has always driven America's economy. And that's allowed us to be the shining city on the hill. The kind of freedom that has brought people here from all over the world. I want people to come here, legally, to want to be here. I want the best and brightest to say America's the place of opportunity, because of the freedom there to pursue your dreams. So my message is restore the kind of freedom that allows America to lead the world.
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