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CNN "The Situation Room" - Transcript - Budget


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BLITZER: The House Budget Committee chairman, Paul Ryan, he's going to talk about his plans to balance the nation's budget with some major spending cuts, reacting to Xavier Becerra. He's standing by live.


BLITZER: Up on Capitol Hill this afternoon, the Senate passed a bill to avoid a government shutdown next week. A bigger fight, though, is underway. The House just rejected a series of alternatives to Congressman Paul Ryan's controversial blueprint to balance the budget. Ryan's plan, which is due for a vote tomorrow, is heavy on spending cuts and repeals Obamacare, ideas that have Democrats calling for the House Budget Committee chairman to, quote, "come back to earth."

Congressman Ryan is joining us now live from Capitol Hill. Thanks very much for coming in.

REP. PAUL RYAN (R-WI), HOUSE BUDGET COMMITTEE CHAIRMAN: You bet. Believe it or not, Capitol Hill is on earth, actually. I know some people don't believe that.

BLITZER: Some people don't believe it, but I know you do.

Listen to the Democratic congressman Xavier Becerra. I'll play the clip.


REP. XAVIER BECERRA (D), CALIFORNIA: To many of us, this new Ryan Republican budget looks a lot like the old Romney-Ryan Republican budget that Americans less than six months ago rejected at the polls.

Earth to chairman Ryan. Come in, chairman Ryan. Come back to earth, because people want to get to work. People want to make sure that the earned benefits that they pay for are there for them when they finally need them. And I think what we have is a budget on the Democratic side that reflects the reality of people on earth.


BLITZER: All right, Congressman, you want to respond to the Democrat?

RYAN: Well, we want to compete for the earthling vote as well. I don't really know what to say about Xavier there. I like Xavier quite a bit. We disagree on some of these things.

We're the ones that have the bipartisan idea to save and strengthen Medicare, not only for the current generation but for the next generation. We're the ones with the courage to say our entitlements need repairing if we're going to avoid a debt crisis and if we're going to make sure they don't go bankrupt. We are the ones that proposing fundamental tax reform, which a lot of centrist Democrats agree with us on this, Wolf. Plug the loopholes. Lower the tax rates for businesses and families for economic growth.

Our budget was reviewed by two prominent Stanford economists. It projected it would increase jobs by 500,000 next year and 1.7 million jobs a year by the end of the budget window. Faster economic growth. The reason we're balancing the budget, Wolf, is not just to make our spreadsheet look good. You know, expenditures equal revenues. It's to get our payment on our debt down. It's to have a healthy economy. It's to create faster economic growth, to get jobs. You have to reform government to do that.

BLITZER: All right. Well, on the Medicare issue which is maybe the most sensitive issue out there, are you saying there are Democrats who support your plan, which Democrats describe as creating a voucher for Medicare recipients?

RYAN: It's not a voucher program. It's a politesse (ph) word they used to describe it. It's called premium support, and it is an idea that originated from the Brooking Institution from Democrats to begin with. It is an idea I used to work on with Alice Rivlin. It's just like what we call the Rivlin-DeMenici (ph) plan, which is a bipartisan group that put out there. It's exactly just like the idea I worked with Ron Wyden, the senator from Oregon last year on.

The point is, good people from both political parties can look at this problem, a bankrupt Medicare system in the future, and come to a solution. And that is what we're proposing.

Our solution by the way, Wolf, doesn't affect benefits of anybody in or near retirement. But it puts reforms in the program so we can make it solvent for the next generation like my generation and our kids. We think it is the best idea for saving and strengthening Medicare. We think the Medicare board that will be put in place because of Obamacare is going to lead to cuts to Medicare that will deny access to Medicare beneficiaries.

So, yes, we have a problem with Obamacare because we think it is very dangerous for Medicare. And we think we have a better idea.

BLITZER: Let's look ahead. I assume your budget will pass the House tomorrow. But you know it isn't going to pass the Senate. What happens next?

RYAN: Well, the Senate budget was brought on the floor today here as well, and didn't pass the House. So, therein lies -

BLITZER: So, what is going to happen?

RYAN: Therein lies the issue.

Where I'm cautiously optimistic on this, Wolf, is at least the Senate is doing a budget. In the past four years, the Senate hadn't done a budget. That means the process stopped. What we call regular order, where the House and the Senate pass a budget, then you try to reconcile the differences --

BLITZER: Can you reconcile it?

RYAN: -- then find agreement.

We'll find out. But at least they're doing a budget. So, I actually am cautiously optimistic because the process is continuing.

Now, we have a big difference. We balance the budget; they never balance the budget. We don't want to keep raising taxes. We just have a $1.6 trillion tax increase that is already beginning this year. We don't want to do more of that because we think it is going to hurt the economy. Spending is the problem. Under our budget, spending grows 3.4 percent on average every single year, and just restraining the growth of spending like that gets us to a balanced budget.

So, hopefully somewhere between our budget, the spending cuts we have, the reforms we have, we can find some common ground. We need to keep talking to each other, and hopefully at the end of the day, now that we have a budget process that is moving, we can find some common ground and get some kind of agreement to get a down payment on the problem.

BLITZER: Because in early April, the president eventually is going to release his own budget. So, there will be a House budget, Senate budget, the president's budget. Do you believe based on the luncheon that you had with the president that he is ready to make compromises, that you're ready to make compromises --by the end of July, early August there will be what we call a grand bargain?

RYAN: I think it would be helpful to the process if he made them publicly. If he actually said on paper here is what I'm willing to do. Because that's what we've been doing for years.

BLITZER: Isn't he going to do that in early April?

RYAN: I don't think so. He's going to produce a budget. It's two months late. What he has been leading us to believe is he is not going to do anything new in the budget. He's not going to --

BLITZER: Do you think he is sincere? Do you think he is sincere?

RYAN: I don't know the answer to that question.

BLITZER: You had lunch with him. What was your impression?

RYAN: I enjoyed our lunch. I thought we had a very frank and candid conversation. I got the impression he wants to get something done, that he believes the window of getting things done is finite.

The question on sincerity is really one that time will tell, which is will he reengage the campaign in just a few short months? Will he focus on the campaign against Republicans for 2014, or will he work to bridge the partisan divide? The question is, will he go back to impugning our motives, making it impossible for compromise to occur? Or will he produce an environment where people of different parties can talk to each other so that we talk more and end up finding common ground and getting an agreement at the end of the day.

Time will tell. I'm hopeful but -- you know, it's trust but verify, as far as I'm concerned.

BLITZER: If there is no deal by the end of July, early August, will you vote to raise the nation's debt ceiling? Because that's when it has to be raised.

RYAN: Well, I think this will come down to all of that. I'm not going to get into what we will or will not do. I do believe that we can make sure that default is not going to happen. I'm not really worried about us defaulting. I think we can give the authority to the president to prevent default from happening.

But I have to tell you, Wolf, we can't keep running up deficits like this. It will damage our economy deeply, and people are saying that we don't have a crisis on the horizon. Of course we do. We've got a debt that is on a tear right now. And if the debt takes off like it's projected to do, it's not only hurting our economy today, it's destroying it for the next generation. And we just can't sit around and be complicit with that. That means the problem, we have to do something about that.

BLITZER: Let me get your thoughts on a couple other sensitive issues coming before Congress. Immigration reform. Do you support a pathway to citizenship for the 11 or 12 million illegal immigrants in the United States?

RYAN: Well, I think we can get the comprehensive immigration reform. I support reform. I supported the Bush reforms in 2005 and 2006. I think we can find a way of making sure that people here with an undocumented status have an ability to adjust that status. We're not going to be able to deport 12 million people.

And there is a way to do this without rewarding them for breaking the line or breaking the law. Without rewarding them for cutting in front of the line so they don't have a special and unique pathway, so that those who came here legally, who paid the fines, who waited patiently, are not penalized by letting people cut in front of them.

I think there is a way to do this, and I would call it earned legalization status. And I think there is a way to do that. I think the Rubio reforms --

BLITZER: Excuse me for interrupting. Is it just legalization status, or eventually under certain conditions, citizenship?

RYAN: Well, sure. I'm just saying no special pathway for rewarding lawbreakers. I think there is a way of regularizing this process so that people can get in the back of the line and become a citizen just like anybody else does in society. We just don't want to reward them by giving them an advancement in the line in front of all the people who have been waiting patiently and playing by the rules.

BLITZER: One final question: do you support any new restrictions on guns?

RYAN: Well, I think the loophole issue is one that is going to be debated here in the House, which is are we getting at the fact that people who are not legally allowed to buy firearms, are they buying firearms? Are there loopholes that we need to address? I am more than willing to look at that. I think we have to take a look at this instant check system. I think you need more personnel to make the instant check system work. But I'm not interested in infringing our Second Amendment rights on some of the other proposals I've heard around.

BLITZER: I lied. One final question. Senator Rand Paul yesterday was here in THE SITUATION ROOM, 24 hours ago. He said flatly he is going to Iowa in the next few weeks. He is seriously thinking of running for the Republican presidential nomination in 2016. He thinks that is a good idea for him. What about you?

RYAN: I'm going to make my mind up later. The reason why -- I think I need to do this job. I'm the chairman of the Budget Committee. When we have a budget crisis on our horizon, we've got to get these agreements done. And I don't think it's good for me, it's good for the Wisconsin first district, it's good for my colleagues to cloud my judgment at this time with other things.

I need to do what I think is right in this moment working on the budget. I have a leadership position. I take it seriously. And I don't want to cloud it with ideas of what I may or may not do in the future. I want to do the right thing now. Then I'll consider those things. And I will give it serious consideration, but I'm going to do that later on.

BLITZER: You enjoyed campaigning with Mitt Romney, right?

RYAN: I did. I did.

BLITZER: So, maybe you'll do it again.

RYAN: We'll see.

BLITZER: All right. Hey, Congressman, thanks very much.

RYAN: Thanks, Wolf.


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