NBC "Meet the Pres"- Transcript - Budget and Deficit

Interview

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DAVID GREGORY:
And we're back. Switching gears a little bit to talk about the budget battle here in Washington, I'm joining by ranking member of the budget committee, Democratic congressman from Maryland, Chris Van Hollen; and the majority whip, Republican congressman from California, Kevin McCarthy. Welcome to both of you.

Big week in this debt dual, competing budgets in the Senate and the House. How these get reconciled, I don't know. But I want to start with a different part of the debate. The president I thought was pretty provocative this week in talking about the need to take on the debt all together. It was just days before the election last fall when he spoke to Mika Brzezinski and Joe Scarborough of Morning Joe, and this is what he said back then.

(Videotape)

MIKA BRZEZINSKI: How would you define your mandate for the next four years? And what is -- I'd like to know the sacrifice that will not be asked of just the 1% but of the 99% as well?
PRESIDENT OBAMA: Well, there's no doubt that our first order of business is going to be to get our deficits and debt under control.

(End videotape)

DAVID GREGORY:
And then, just this week, a different tone. He said, "We don't have an immediate crisis in terms of debt; in fact, the next ten years, it's going to be a sustainable place." Congressman Van Hollen, why the change?

REP. CHRIS VAN HOLLEN:
Well, there's not a change. They're totally consistent. Right now, our big problem is to sustain the economic recovery. We've seen momentum in the job market, and the last thing we want to do right now is to put the brakes on that. In fact, one half of this year's deficit is due to the unemployment, the fact that more people aren't at work.

So what the president is saying is our focus right now should be to get people back to work, sustain the recovery, and then reduce the deficit in a measured, balanced way. There's no doubt that we have to do it, and the budgets the president will present and the ones we will present will do that. It will put us on a sustained downward trajectory on deficits. But our priority is job growth.

DAVID GREGORY:
And this is the point, right? His argument is, "Don't get us in the middle of austerity over the next ten years. You're going to hurt economic recovery rather than solve the problem you really want to solve."

REP. KEVIN MCCARTHY:
No. The president said deficits don't matter? Well, all these deficits add up. We're at $16.6 trillion, more than 100% of our GDP. The problem is-- I disagree with what the Democrats are doing. It's the old Washington fiscal game of Jenga. You try to build as much debt as you can take, as much tax as you can take, until you topple the entire economy. This is the challenge that this week we'll have. This week, Republicans will have a budget that balances in ten years; the Democrats' budget never balances. No household can run that way.

DAVID GREGORY:
Let me challenge you on this point, though, because here is Paul Ryan this week, and he laid out very clearly what he thought the job was. Let me play that.

(Videotape)

REP. PAUL RYAN (R-WI): We think we owe the country a balanced budget. We think we owe the country solutions to the big problems that are plaguing our nation, a debt crisis on the horizon, a slow-growing economy, people trapped in poverty. We're showing our answers.

(End videotape)

DAVID GREGORY:
But the answers rely on $700 billion in savings from interest; most of the deficit reduction comes from repealing the president's health care reform, which nobody thinks is going to happen. So how seriously should this be viewed as a road map for a balanced budget?

REP. KEVIN MCCARTHY:
Should be very serious because budgets are--

(OVERTALK)

DAVID GREGORY:
You're not going to repeal Obamacare.

REP. KEVIN MCCARTHY:
Budgets are blueprints and priorities. We lay out we think Obamacare should be repealed. The majority of Americans agree with us. But we also think tax reform should happen so you can grow the economy. If you allow these debts to continue to grow, they'd crowd out the private sector. They'd crowd out the opportunity for small businesses to grow. That's why the economy to continues to linger. If we are able to balance the budget, which ours does in ten years, you will unshackle this growth in America.

REP. CHRIS VAN HOLLEN:
David, it's worse than that. Their budget is built on a hoax. On the one hand, they say it balances in ten years; on the other hand, they say they'd repeal Obamacare. The fact is, they repeal all the benefits of Obamacare, the things that help provide affordable healthcare to millions more Americans. But you know what? They keep the savings of Obamacare. And if you were to repeal Obamacare today, their budget would not be in balance.

Now, Kevin has said that our budget will never balance. We believe that, our projections show that the budget we will submit will actually balance. It will balance in the same time the Republicans' budget balanced last year, which is out in the future around 2040, because we put ourselves on a path downward. But our priority is to have job growth. And their budget will slow job growth at exactly the wrong time.

DAVID GREGORY:
But aren't you also building something that's false in the political climate that Republicans face? I mean, here the Senate budget requires more tax increases, roughly $1 trillion. You know how difficult it is for your colleague here to go back to Bakersfield or other conservatives to go back to their districts and play, "We need more tax increases," when there simply isn't support for that.

REP. CHRIS VAN HOLLEN:
Well, David, two things. 1) the Senate Democratic plan has less tax revenue embedded in it than the bipartisan Simpson-Bowles plan. Number one. Number two, Republicans, in their budget, say there are about $5.7 trillion in tax breaks that you can eliminate.

Their plan would drop the top rate from 39% to 25%. They claim that they're going to make that up by just taking away deductions from the wealthy, but the reality is they're going to be raising taxes on middle income taxpayers. Family will pay $2,000 more in order to finance tax breaks to the very wealthy. It's like the Romney plan on steroids.

DAVID GREGORY:
You would dispute that. The Wall Street Journal though, Congressman, wrote something on Friday that caught my attention. Here was the headline: "Conservatives Warn Lawmakers Against Tax Deals. Conservative activists and organizations have begun warning Republican legislators that, if they agree to raise taxes in any broad budget deal with the president, they should expect to face challengers from the party's right wing in their next primary election." I've tried to ask this week after week: Is there any ratio of spending cuts to tax increases that any Republican is actually prepared to support?

REP. KEVIN MCCARTHY:
Every viewer that's watching today that's working already got a tax increase. The president took $600 billion of this economy. He talks about a balanced plan, but he never talked about cutting. The public wants--

DAVID GREGORY:
You extended 99% of the Bush tax cuts. Your own leader--

(OVERTALK)

DAVID GREGORY:
--said that that was a pretty good deal.

REP. KEVIN MCCARTHY:
He raised $600 billion worth of taxes. He took from the economy and he never made any cuts. Look, the president has a different belief than we do. He believes deficits don't matter; we do. This president has never missed on a deadline turning in a March Madness bracket, but four out of five times he's missed turning in a budget.

DAVID GREGORY:
But I asked a question--

(OVERTALK)

DAVID GREGORY:
--about spending cuts to tax increases.

REP. KEVIN MCCARTHY:
There are no tax increases--

DAVID GREGORY:
Is there any ratio that you could accept?

REP. KEVIN MCCARTHY:
There are no new tax increases because you don't need it. If you look at this report--

DAVID GREGORY:
But you're never going to get entitlement reform--

REP. KEVIN MCCARTHY:
You're going to get nothing.

DAVID GREGORY:
--without tax increases. Is that political reality?

REP. KEVIN MCCARTHY:
Why do you have to wait? Why do you have to wait? Why does the public have to have a bigger crisis? The longer we wait, the more we add to it. But there's only one person at this table who voted to raise Medicare; the Republicans did not. We're planning to save Medicare, not only for this generation but for the future. And for someone to say that you can't do that--

(OVERTALK)

DAVID GREGORY:
Raise Medicare what? You said to raise Medicare.

REP. KEVIN MCCARTHY:
To save Medicare.

DAVID GREGORY:
To save Medicare.

REP. CHRIS VAN HOLLEN:
Actually, their plan deals with Medicare by shifting rising costs and burdens on the beneficiaries rather than reduce some costs. But Kevin repeatedly says the president never talks about cuts. We did $1.5 trillion of cuts over the last couple years.
The president's plan that he's put on the table for Republicans has another $900 billion in cuts. But, yes, we also want to cut the special tax breaks, the tax expenditures for very wealthy people which, by the way, Speaker Boehner said he had a plan that could raise $800 billion by doing exactly that. Let's see your plan.

(OVERTALK)

DAVID GREGORY:
Before I let you go, I want to just cover a couple of other issues while the budget fight continues. On gun control, is it possible that what passes for meaningful reform is a background check? That looks like it's still complicated in the Senate, but could pass. Can it pass the House?

REP. KEVIN MCCARTHY:
Well, what came out of the Senate, it was just a Senate committee. I don't think that bill passes the full floor. The House is taking up the bills right now. They're analyzing it. I would say that's pre-judging, to see where they go.

DAVID GREGORY:
But do you think that--

(OVERTALK)

DAVID GREGORY:
--universal background checks is a reasonable way to deal with gun violence?

REP. KEVIN MCCARTHY:
I think that's one of the things that they will look at; that doesn't mean it's going to pass.

DAVID GREGORY:
What do you think?

REP. KEVIN MCCARTHY:
But I think they're also going to look at from a stand-- in California, we have a background check. The challenge that I have: They're not enforced. If you looked at the president's administration, even though somebody came in, put in their form, but they said they lied on it? They won't prosecute it. I think the first thing you ought to do is look at what we're doing with the current laws we have, and see if we can go there.

REP. CHRIS VAN HOLLEN:
Well, if they have background checks in California, we should have universal background checks. They should be enforced. This is a commonsense idea, supported by the overwhelming number of Americans, gun owners and non-gun owners alike. And the House of Representatives owes the American people a simple vote on whatever universal background check or other gun safety measures come out of the United States Senate. The people who were shot down in New Town, people who are shot down every day, they deserve a vote on these very important issues.

DAVID GREGORY:
The issue of energy is one that looks to be something that the president perhaps can get some bipartisan agreement. That XL pipeline coming down from Canada, the State Department, Congressman, has cleared the way for the president to say, "Yes, let's open it up." Why shouldn't he?

REP. CHRIS VAN HOLLEN:
Well, I'm in the process actually of looking at the State Department's analysis. I mean, they did a very complicated analysis. We have resolved that you can actually build the pipeline safely in terms of the communities it goes through because they've rerouted the pipeline because the president and others raised concerns. Now the question is whether or not the overall climate effects, the overall energy impacts, are something we support. So I'm in the process of looking at the State Department's report right now.

REP. KEVIN MCCARTHY:
That's the easiest thing to do. He could create 20,000 new jobs. It's been out there for three years. I mean, this is the challenge: Energy isn't even in our budget. The budget to balance this? It puts a new energy perspective in there that we become energy independent. Think how many jobs that creates.

Why do we have to wait? This is common sense. This is an easy route. This isn't talking about, "You have to give more taxes," "Do you have to do something on Social Security"? Just make the decision and build the Keystone pipeline.

REP. CHRIS VAN HOLLEN:
Well, we've got all of the above energy strategy. As you know, we've got more oil and gas being produced now--

(OVERTALK)

REP. CHRIS VAN HOLLEN:
--than we did before, and natural gas, throughout the country.

(OVERTALK)

REP. CHRIS VAN HOLLEN:
Well, it's a good thing. I mean--

REP. KEVIN MCCARTHY:
It is a good thing.

REP. CHRIS VAN HOLLEN:
--natural gas actually is a good alternative--

(OVERTALK)

REP. CHRIS VAN HOLLEN:
--we're seeing. As you know, there are lots of people who have these leases right now who aren't using them. Let's see them used more.

DAVID GREGORY:
So let's see if this progresses in a maybe more complete--

(OVERTALK)

REP. CHRIS VAN HOLLEN:
--you were talking about the pope. Maybe a little prayer. Little prayer for this--

DAVID GREGORY:
Might help.

REP. CHRIS VAN HOLLEN:
--one could help resolve--

(OVERTALK)

DAVID GREGORY:
Well, good luck to both of you as these debates continue. Thanks very much.

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