CNN "The Situation Room" - Transcript - Budget and Tax Policy

Interview

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BLITZER: President Obama back on Capitol Hill for a third day in a row, having lunch today with Senate Republicans. Their leader, Mitch McConnell, and the president both called the 90-minute meeting great.

BOLDUAN: Great meeting. Then the president was off to meet with House Democrats, wrapping up what's dubbed his charm offensive. It also included a closed-door session with House Republicans.

(BEGIN VIDEOTAPE)

BLITZER: Joining us now from Capitol Hill, Eric Cantor. He is the majority leader of the House of Representatives.

Mr. Leader, thanks very much for coming in.

REP. ERIC CANTOR (R-VA), HOUSE MAJORITY LEADER: Appreciate it, Wolf.

BLITZER: I want you to listen carefully to what the president said last night at one of his supporters meetings here in Washington. Listen to this.

(BEGIN VIDEO CLIP)

OBAMA: Over the last several weeks, the press here in Washington has been reporting about Obama's charm offensive.

Well, the truth of the matter is, all I have been doing is just calling up folks and trying to see if we can break through some of the -- some of the gobbledygook of our politics here.

And I do believe that -- you know, that -- at this juncture, one of the things I believe is that we have got to get members of Congress involved in these discussions, not just leadership.

(END VIDEO CLIP)

BLITZER: All right. Well, you're the leadership, Mr. Leader. What do you say to the president? He seems to want to go around you, given the history of what happened a couple of years ago.

REP. ERIC CANTOR (R-VA), MAJORITY LEADER: Well, Wolf, the president came to Capitol Hill yesterday to meet with the members of our Republican conference, and, you know, I hope that he is sincere in wanting to work together.

Because the fact is, there are a lot of things that we do agree on. We know we've got to -- we know we've got to balance the budget. We know that there are things in common within his proposals and ours. In fact, when the House moved to put a proposal across the floor, one of which I sponsored, it included things that were in the president's budget.

So I'm hopeful that we can work together and not let things get in the way, like how the president's desire to put more taxes on the American people. We don't agree on that. But we can agree on some things that can move towards balance in the budget, so we can grow our economy.

BLITZER: Well, do you believe he is sincere?

CANTOR: Well, I certainly hope so. You know, it is -- it would be a good thing, I think, for the country. And you know, the problem is, you have some fundamental disagreements here. I mean, the president was quoted on a TV program that he was on, saying that there wasn't a debt crisis. He was quoted as saying we don't have a spending problem. Obviously, I think most Americans would disagree with that. And, you know, that's why we don't believe you go and put more taxes on the American people to solve this problem. You want to bring the budget into balance. You want to grow the economy. And that means you have to deal with the reforms and the spending reductions necessary to achieve that balance.

BOLDUAN: Mr. Leader, talk to me about that meeting yesterday. We hear that the president got a standing ovation going in, when he came into Capitol Hill. What did you say to him and did you -- where was there encouragement in your mind that there could be a deal here? Where is there an area that you see really agreement with President Obama?

CANTOR: I mean, first of all, I mean, the tone and the reception I think was appropriate. He's the president of the United States. We welcome him to Capitol Hill.

I think that where the agreement could be is that we all want to do right by the people that elect us. And there's a lot of disaffected Americans out there, working families who just want to see their life work again. And I believe that all of us want to see folks who are in failing schools, to have parents have the ability to give their children an opportunity for a quality education.

BLITZER: Let me get your reaction to that major article in "The New Yorker" magazine the other day, written by "The New Yorker's" Ryan Lizza, who himself is a CNN contributor. In there, you're quoted as acknowledging that, back in the summer of 2011, you said it's a, quote, "fair assessment" that you talked the Speaker John Boehner out of accepting Obama's deal. Is that right?

CANTOR: Don't quite know if that was the exact context of the answer to that question. What I can say is, John Boehner and I have never differed on the fact that you've got to do something about reducing spending in this town. In order to achieve the balance that we want to grow the economy. We've always said you've got to do that.

It's not about raising taxes. The two of us have always been together on that. We continue to deliver that message to the White House and to the president. We want to work with the president to achieve that balance. It's not about putting more taxes on the American people. It's about getting control of the spending in this town.

BLITZER: You weren't in agreement at the end of December when you voted against that legislation to avoid the so-called fiscal cliff, because it included a lot more tax revenue coming from rich people. He voted in favor of it. So it was a split -- there was a split between the two of you then.

CANTOR: That is -- that is correct. John Boehner and I, the speaker, we are in constant communications, know where each other are. And certainly on that vote, there was a difference. But we're a team, and we're working to try and achieve the best outcome for the people that put us here and elected us, to try and balance the budget, to try and produce a growing economy.

BOLDUAN: Let me ask you about the here and now. Paul Ryan just released his budget. Do you support it?

CANTOR: I do support Paul Ryan's budget. It is a -- it is a comprehensive plan to address the growing unfunded liabilities of the entitlement programs at the federal level. And so that we can save the safety net for those who need it. And that we can bring the budget into balance and grow the economy. That's the essence of what the plan is about.

BOLDUAN: But Mr. Leader, in order to achieve that balance, to balance the budget, it also assumes that $600 billion in tax increases that you opposed in January.

CANTOR: Well, I mean, unfortunately, we have, in fact, after the last election, a situation where the status quo of the president there, the Democratic-controlled Senate and the Republican House, that those tax increases were something that the president supported.

But I can tell you, if you look at the alternative vision coming out of the Senate, there really is a two separate visions of the way this country ought to go.

On the one hand, we have the House budget that is -- promotes a balance within ten years, that can grow our economy. And that you can get people back to work with more jobs.

On the Senate side, what you have is a budget calling for $1 trillion of additional tax increases, and you have more borrowing, more spending, and never a balance.

So the real question for the American people is, which side would they come down on? I believe the people feel a balanced budget is something that makes sense and is an imperative at home for them. It should be here in Washington, as well. Because the tax dollars that are in Washington are nothing but the dollars earned by the hard- working taxpayers across the country.

BOLDUAN: It should be an imperative, as well. But I want to just make sure on one point: So you are comfortable and will support those $600 billion in tax cuts -- tax increases?

CANTOR: As you note and as Wolf pointed out, I didn't support those tax increases.

BOLDUAN: Right.

CANTOR: They are put into law at this point because of the president's reelection. What we want to do is achieve real tax reform to bring rates down for everybody. And, you know, we want to get rid of those special interest loopholes in the tax code, make it a fairer system, lower rates for everybody.

But again, what you see in the Senate plan is never a balance, in terms of the budget, and you see a call for additional $1 trillion in tax increases for the American people. That's not what we need right now. We've got to get ahold of the problem here in Washington, and then grow this economy.

BLITZER: The Ryan budget does call for a reduction in the growth in defense spending by about, what, $2.3 trillion over the next ten years. You come from Virginia. That's a major military state, as you well know. Are you with Ryan on that?

CANTOR: I support the Ryan budget. And I've always said, Wolf, as far as the Pentagon is concerned, you can't defend every dollar and cent that the Pentagon spends. We've got to be able to do more with less.

And I am a huge national security individual. I believe that, if we don't lead in America, there's going to be no leadership. And certainly, my state of Virginia has a long heritage of playing a role in the projection of military power of this country and across the world. And I'll continue to support the men and women who are part of that effort, as well as the infrastructure and the industrial base that has been established in our state to make sure that that happens.

BLITZER: Good discussion. Thanks so much for joining us.

CANTOR: OK. Thank you.

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