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CNN "Newsroom" - Transcript: The Budget


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LEMON: Ali Velshi is at the World Economic Forum in Davos, Switzerland. That's where the global leaders in business and government gatherer once a year to talk big ideas.

And that's where Ali sat down with House Republican Majority Leader Eric Cantor to discuss Washington's next big political battle and that's budget.


ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: When you look at the options out there, President Obama's budget proposal and Paul Ryan's offer, they both don't do what guys like you say need to be done, balancing the budget, for a long time.

So, now, you guys have a proposal or you're coming with a proposal that says you'll balance the budget in 10 years.

I asked Paul Ryan this. I can't get an answer. How? What gets cut? Because it's going to hurt.

REPRESENTATIVE ERIC CANTOR (R), VIRGINIA: Well, I mean, there are new baselines now in the budget.

I mean, obviously, we just -- as we know, some of the difficulty and the differences in Washington were centered around the method of accounting, whether it's static or whether it's dynamic.

Because it's static, when you raise taxes, that $650 billion of additional taxes that went in because of the cliff deal, that adjusts the baseline. That is going to make the numbers look somewhat differently, right?

And we'll have to make some choices. There's no question about it. But we have committed to putting a budget out there that will actually bring it to balance within 10 years.

VELSHI: The fact is nobody seems to want to own up to a budget that will hurt. There's no solution that is not going to hurt.

CANTOR: Well, the Ryan budget, I mean, the last one, didn't balance in almost 30 years.

VELSHI: Correct.

CANTOR: But the way that we were trying to move is say, look, like in most in the private sector, we want to transition from a defined benefit scenario to a defined contribution scenario.

But you need to affect some real reforms in healthcare delivery and compensation and payment if you're going have that happen.

We cannot get agreement from the White House or the Democrats in Congress to join us in the effort.

VELSHI: So, whether it's spending cuts or whether it's taxes, ultimately, you started by saying it's about growth. We all agree.

In fact, here at the World Economic Forum, everybody in the world agrees it's about growth. And you can achieve that a few ways. Some say spending cuts. Others say increased employment.

But, ultimately, what's the thing that you can do to really move the ball forward and create growth?

CANTOR: What I think that the election said more than anything else is the people of our country want to see a government that works.


CANTOR: And we ...

VELSHI: Regardless of whether that's about taxes or cuts.

CANTOR: And we've got to and I hope the administration and Barack Obama, the president, will come and join us and say, look, it's time for us to set differences aside and do what any couple does, any group of people do, which is say, look, you're not going to agree 100 percent on everything. And you're not going to agree 100 percent on anything.

So, find where we agree.

VELSHI: But when they did on that on January 1st of this year, you voted against it. We found middle ground between Democrats and Republicans ...

CANTOR: There was no middle ground. There was no middle ground because where were the cuts? Here's what we did ...

VELSHI: There was middle ground on the fact that you guys had asked for no tax increases then you put a threshold of a million dollars. Then we got that ...

CANTOR: We had always said -- according to the Boehner rule, we had always said, if we're going to raise revenues through borrowing, through taxing, is we've got to do something about the problem.

You can't keep digging the hole deeper and keep asking people to pay more taxes.

VELSHI: But you did vote against a consensus agreement?

CANTOR: No, there really wasn't. There really wasn't. This was a last minute jam of a deal that I think we could have done a lot better for the American people.

VELSHI: Are we going to have a last minute jam of a deal on sequestration, on the debt ceiling now which is going to happen in May, on a continuing resolution, on a budget?

CANTOR: I hope that we can work things out and come to an agreement that you're going to have to do something about the problem. It is about spending. We've got to get control of the spending.

VELSHI: But you understand you're never going to get Democrats to really agree to that? So, you're going to have to find another way around coming to that solution.

If we get stuck on ...

CANTOR: If we don't get control of the spending, then you're going to end up like Europe. VELSHI: Then don't we go back to Bowles-Simpson then? The idea that nobody likes it, but this could solve the problem.

CANTOR: Bowles-Simpson didn't solve the spending problem.

Back to that, the main driver of the spending problem are the health care entitlements. Bowles-Simpson left that out.

VELSHI: So, can you lead and say let's do a Bowles-Simpson and add ...

CANTOR: Absolutely. We're working with the Fix the Debt Coalition and others to say, yes, let's come together, both sides of the aisle.

We've got proponents on our side. We're looking for those on the other side who say, fine, let's do something.

VELSHI: But you're prepared to go in with documents rather than saying, the president won't do this and the Democrats won't do this and Harry Reid won't do this.

You're prepared to go in and say, this is what it looks like. Let's talk.

CANTOR: I think we have done that since Barack Obama was elected with the stimulus plan.

VELSHI: I think some may disagree, but starting with ...

CANTOR: We've got papers.

VELSHI: You'll go in and say, let's negotiate on our suggestion and let's come to the table. Here's the room.

CANTOR: We consistently have done that and, unfortunately, it's not been properly or accurately portrayed because it is about sitting down together ...

VELSHI: Right.

CANTOR: ... and figuring out how we fix the problems for the people who put us there.

VELSHI: It's going to be accurately portrayed now because it's coming out of your mouth. Thanks for being with us.

CANTOR: Thanks.

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