Tuesday, April 12, 2011
Mr. Cantor: Good afternoon. Welcome. Today, I have with me the Republican Policy Chairman Tom Price, the Gentleman from Georgia. Obviously, we had a very busy week last week and are preparing for another one ahead.
As I have said in here for several weeks, we have, as far as the spending fight is concerned, three bites at the apple. We actually have two of those bites this week. One bite is the here and now, the decisions we are making as far as how we are going to spend the taxpayer dollars for the rest of this fiscal year with the final vote on the CR which will be on Thursday. Then, we have a second bite at the apple, which pertains to the Ryan budget proposal. That will be on the floor Thursday and Friday with the final vote on Friday. That speaks to how we project to spend taxpayer dollars off into the future, the next fiscal year and beyond. Then lastly, we will, in due time, have the vote on the debt limit, and that vote has to do with cleaning up the spilt milk or the mess in terms of the fiscal mismanagement of the past, and that is what that vote is about.
As for this week, this is about the CR vote on Thursday and the budget itself. Chairman Ryan and his Budget Committee have done a terrific job putting together a plan that reflects our vision on how we, number one, address the biggest problem facing this country which is the debt challenge. How do we manage down that debt and begin to get our fiscal house in order? We all know the facts. This government borrows nearly 40 cents of every dollar it spends. That has amounted now to a $14 trillion debt bill. You can't sustain that. Nobody can sustain that. So the budget lays out a proposal as to how we are going to manage down that debt.
At the same time, this budget is about growth. Central to that growth message is our plan to engage in a robust debate on tax reform. Dave Camp and his Committee are already holding hearings to look at ways that we can broaden the tax base and lower the corporate tax rate, so that we can see the growth occur that we need in order to get this country back on a path for folks to get back to work.
The budget, in terms of trying to manage down the debt, speaks specifically to entitlement reform, and it speaks especially to entitlement reform as it relates to Medicare and Medicaid. As most people know, these are the real cost drivers not only in the private sector going forward but certainly in the government and the governmental arena. And that is why we chose to focus on these. There is a fundamental principle that we are abiding by in terms of our prescriptions on entitlement reform. We say that we are going to protect the seniors of today and those nearing retirement.
So in other words, everyone 55 and older will not see their benefits or the programs change. It is for the rest of us, all of us 54 and younger, who have to accept the fact that these programs, if they are going to be around, are not going to look the same. We want them to be around because we care about those who need our help. We want a safety net in place that actually is there for people who need it, not for those who don't. Overall, this budget takes a look at the entitlement programs, melds that with some fiscal restraint on the discretionary side, and then proposes fundamental changes to our tax structure so we can increase competitiveness and see businesses start to grow again in this country and jobs created.
Now, there has been a lot of discussion about where the President is versus our budget coming out of Chairman Ryan’s committee. It is curious to me some of the coverage that has been out there about the President. And I know some have written and stated that, 'Oh, well the President has outsmarted us because somehow he forced us to go out first and now he will put his plan out there in response.' I look at it differently. The President called for Bowles Simpson. In fact, after Bowles Simpson issued its report, the President then had to put forward his own budget proposal. He failed to even respond or look at the Bowles Simpson report. So why is it that he didn't embrace Bowles Simpson the first time and now, this week, all signs indicate that is what he will do is embrace Bowles Simpson?
Again, it is a question of leadership. Which President, which White House is it? In the same way, you have seen all of the accolades and the credit being claimed by this White House about coming to a point to actually cut spending, as if that it was their idea somehow. Well I think all of us know for the last two months, this President has had to come kicking and screaming to the table to cut spending. I mean, we started this season with the President advocating a spending freeze on the discretionary side. That is zero savings. By the passage of this CR, we are going to see now $78.5 billion not being spent this year because of our actions. Now, again, this number is in relation to the President's proposal.
I know that many of you have covered his vote as a former Senator when he said he would never support a debt limit increase. Now, they have admitted his mistake on that and said, well, we need to increase the debt limit. Similarly, on the issue of taxes, the President and the White House like to talk a lot about being bipartisan and agreeing that it wasn't a good thing to raise taxes on anybody. But I suppose what we will hear tomorrow night is exactly the opposite: that they are now ready to violate the spirit of this agreement that they had signed with us in December. Again, the question is, what can you really believe out of this White House and where is it that they are trying to lead this country?
Lastly, as we look ahead, again, to that third bite at the apple, the debt limit increase vote is looming. We expect to have that over the course of the next several months and we are already engaged in this discussion. The Treasury has put an outside date on that some time in very early July. And I have said before and I will say it again, let me give notice to the White House that blindly raising the debt limit without implementing real reforms is irresponsible and will simply burden our children with more debt. And we Republicans are not going to go along with it.
So with that, I want to turn it over to the Chairman of the Policy Committee Tom Price.
Mr. Price: I want to thank Leader Cantor for his leadership and for asking me to join him here today.
I want to step back just a little bit and just say how positive and exciting that this Congress has been because what we are talking about is decreasing spending, not increasing spending. And when you think about the previous at least two Congresses, all we have heard about are increases in spending. So I think it is important to appreciate that the tone of the debate, the tenor of the debate, the direction of the debate has all changed because of the leadership of House Republicans. And it is very exciting to be a part of that.
Eric mentioned the 2012 budget, and I just want to concentrate on just a few items on that. This is what it is all about. This is, as Chairman Ryan has described, a choice of two futures. Clearly, the red is bad and that is the President's path. That is the President's path, to spend up to 800 percent of gross domestic product by the federal government within the lifetimes of many of you in this room. Ours is the green path. That is what gets us on the path to financial viability, financial sustainability and a balanced budget. I am privileged to serve on the Budget Committee as well and the 2012 budget that we will propose this week, and I believe will pass under the House, has wonderfully positive reforms in it, especially in the area of Medicare and Medicaid and the directions of tax policy.
In terms of Medicare, as the leader said, what we will do is propose saving it for the individuals currently in Medicare and those in and near retirement, the same program that already exists. But for future generations making it so that it is viable so that we save Medicare for future generations, which is what the President and his party have not done. And we do so in a way that makes it so that individuals are able to have the kind of health coverage that they want for themselves as opposed to the coverage that the government wants for them.
In terms of Medicaid, we would put in place the kind of solution that actually saved the welfare program in the mid nineties, with a Democrat President and a Republican Congress by block granting Medicaid to the states which gives predictability for the federal government but also greater flexibility and choices for states so that they can cover their indigent population in a way that makes sense for them, not necessarily that responds to the dictates of Washington.
Then, finally, recognizing that we can't get on this green path to a balanced budget by just cutting spending here at the national level, the federal level. We need to grow the economy. And the way that you do that is to incentivize the job creators out there and we would do that through a variety of mechanisms not the least of which is fundamental tax reform, positive tax reform that would make our business tax, corporate tax competitive in the industrialized world where it is not now and broaden the base for a much flatter tax system.
So I am honored to be joining my leader today, and I look forward to the conversation and questions that we will have.
Q: Mr. Leader, Chairman Jordan has come out against the bill and he says that it is not going far enough. I am wondering if you think it is a good deal over all and how many Republicans you think will drop out of supporting it.
Mr. Cantor: I think the spending bill this week reflects the best deal we could have gotten. Speaker Boehner went in, against all odds, and actually got the President, the Vice President, and Harry Reid in the Senate to go along with spending cuts. Again, let's compare that to where they were in the beginning of this Congress. They were for zero spending cuts. Listen, I know that Jim Jordan and others are frustrated. I am frustrated too. The House position was $61 billion. But this is the best deal we could have gotten given the situation that we were served up by the Democrats being in charge of the Senate and White House.
Q: Mr. Leader, there is a little confusion over how the Planned Parenthood and the health care law will work. I guess the Rules Committee is meeting today to work on that. Does the House actually have to pass stand alone measures and then send them to the Senate? And will there be an up or down vote?
Mr. Cantor: There will be two up or down votes. One on the issue of the funding of Planned Parenthood and the other is the funding on the issue of ObamaCare and the repeal of ObamaCare.
Q: But will the House have to do that first?
Mr. Cantor: Yes. The House will send to the Senate enrollment corrections that will then be voted on up-or-down in the Senate.
Q: That that means they don't need 60 votes to pass?
Mr. Cantor: That is correct. (Please note: Leader Cantor misspoke, the Senate will require 60 votes on these enrollment resolution items.)
Q: Mr. Leader, the Medicare reforms you propose in the budget would sort of phase in a system where seniors would be kind of in an exchange with subsidies, and to a lot of us in the room, I think that it sounds similar to the ObamaCare law. Why is that an okay system for retirees but not a good system for the rest of
Mr. Cantor: Again, I don't think that there are that many similarities, the way you suggest, as far as our proposals to reform Medicare and ObamaCare. If you are talking about Medicaid as far as how we are going to treat Medicaid, we are talking about block granting the funds to the states in order for them to be able to deal with their indigent population and the health care needs the way they know best. We also are giving the states, in our proposals that will come out of the Energy and Commerce Committee, but according to budget instructions, our proposals will allow Governors to put in place cost control mechanisms.
For instance, Mitch Daniels from Indiana, has put in place the ability to have health savings accounts in the Medicaid program. There are other options available for states and much more flexibility for our states to be able to control costs and not have all the mandate coming from Washington with the inability to actually achieve efficiency while trying to deliver care.
Mr. Price. If I could touch on the Medicare issue because I think that that is an important question. What we do, is what the President has called for and so many of our friends on the other side and that is, don't you think that seniors ought to have the same kind of health coverage as Members of Congress? The program we would put in place is one that essentially mirrors the federal employee health benefits program and a series of premium assistance for seniors who are not able to have the financial wherewithal.
Q: Now you indicated that the debt limit debate might last several months. Does that mean that you expect it to last beyond the May 16 deadline that Treasury has put forward saying we are going to hit the ceiling?
Mr. Cantor: I think Treasury, if I am not mistaken, has put out a notice that says that there is a window within which we have to act in order to avoid the eventual default of this country on its debt. And I believe that that outside deadline is early July.
Q: So that is your deadline is early July?
Mr. Cantor: Well, according to the Treasury.
Q: Steny Hoyer said today that the pairing the debt limit vote with other reforms that are more controversial would be a violation of the Republican pledge to separate out controversial provisions and not pair them, attach them to must pass legislation. What is your response to that?
Mr. Cantor: I think that there is maybe a misreading of our pledge in terms of what Mr. Hoyer's take is and what we intended in our pledge. What we have said always is, we didn't agree with the so called Gephardt rule, which basically attempted to hide Members' votes on increasing the debt limit. We understand it is a very serious vote with consequences on either side. But what we are saying is this, again, going back to the notion that this is about fiscal mismanagement of the past and cleaning up the mess. What we owe to our constituents is a guarantee that we are not going to let spending get out of control again. That is why we are talking about making sure that this vote is going to be connected with real reforms necessary to ensure a better result going forward.
Q: And I guess to add to that, what they are asking there, when you talk about it is "connected," you had said in the fall that you and this was the quote "would advocate a straight up or down vote on the debt limit." When you say "connected," do you mean that this would be a package of things or that your debt limit vote is contingent upon a couple of things that
Mr. Cantor: Again, the context within which we made that pledge for an up or down vote is in relation to what used to be the norm around here, which was hiding that vote in some kind of rule. And as you know, that vote used to come really in bringing up a rule. And it was an inherent action you were taking within the rule. But to the outside observer, it was just a rule vote. We said, no, we are going to be transparent. We are going to be holding ourselves accountable. That is what an up or down debt limit vote is.
Now, if we can get the President and Harry Reid and frankly Nancy Pelosi and Steny Hoyer to go along with us now, before we get to that vote to put in place budget process reforms, discretionary, mandatory caps, entitlement reforms, fantastic. But again, I would suspect, given what happened last week, we are going to be in a struggle. We are going to be in a robust debate with this White House and Harry Reid to try and get to a place where we can all agree that we shouldn't be letting the spending get out of control again.
Q: Sir, on tax repatriation, how optimistic are you of a deal this year? That is one of the major issues. And one of the CEOs at the Roundtable always said that we were like the least competitive of all the developed countries. And would you be considering some kind of a one time windfall for those who bring back profits into the United States from abroad?
Mr. Cantor: First of all, Dave Camp and Tom Price, who is on the committee so maybe he wants to speak to it, but Dave Camp is actively engaging in broad-based tax reform hearings and discussions. I am in full favor of that. I also know that the lack of competitiveness in this country comes from our tax rates being too high, as well as the lack of a territorial-based system that we have which penalizes our multinationals based here. And that brings up the need for repatriation and to look at ways that we could bring back that capital by inducing or providing incentives through a lower rate, through a window. Again, depending on where we end up, I am very much in favor of bringing the $1.2 trillion estimated to be out there back to this country because, as I have said before, that is money you don't have to print and can help towards wealth and job creation in this country.
Mr. Price: There is a pretty good consensus on the Committee. The question is whether or not that would be one time or whether it would be a permanent change. But there is recognition that in order to get this economy rolling again, getting that money back here without tax liability would be of great benefit?
Q: Are Republicans going to continue to push to defund Planned Parenthood if this amendment fails this week and the 2012 budget and debt limit, will that be a part of the debate?
Mr. Cantor: Where I think that we have consistently been is, we believe very strongly that government dollars shouldn't be used to fund abortion. I believe that is where the majority of the American people are and we will make sure that we continue in the spirit of the Hyde Amendment government-wide.
Q: On the long term CR, do you believe that that is going to create jobs? Steny Hoyer just now said that he thinks it wouldn't result in the loss of as many jobs as the $61 billion worth of cuts would have created. That is what the Democrats have been saying. What is your take on that?
Mr. Cantor: Overall, what we are saying is, we have to create an environment now where we are projecting a plan to manage down the debt of this country. That is the biggest problem we are facing. It impacts global investors' confidence in this country. It impacts the value of our currency. And long term, it impacts the future of our kids. That is why we are saying we need to address that. This long-term CR is putting those words and promises into action. So if Steny wants to say we are going to threaten jobs, you have got to ask your question, "How is it smart for this government to go about spending money and hiring people it can't afford to?" That is where his perspective comes from. And you ought to ask the question, "How is it good policy for us to be doing that?"
Q: Can I follow up to my colleague's question about the CR? So do you need the Democrats then to get the bill passed on Thursday?
Mr. Cantor: We will pass this bill on Thursday. And from every indication that I have, there is strong Republican support for this CR.
Q: Mr. Leader, you have dragged the President kicking and screaming to the budget discussion, but he is here now. And he will be here tomorrow again. If he embraces Bowles Simpson or something close to it, is that positive in your view even though it has taken him too long, as you have led or Mr. Ryan has led? Would that be a positive development if he got behind that? And is a bipartisan effort in the Senate something that you see as positive to getting towards a resolution? Because they are going to suggest things that are more to the center than what Mr. Ryan would have suggested.
Mr. Cantor: Look, the discussion and focus on how we deal with our debt, specifically bringing it down and reducing it is a good one. Now, you mentioned the Gang of Six in the Senate. When the Senator from my state, Mark Warner, was out with Saxby Chambliss talking about their proposals and Bowles Simpson, I said the fact that they are out there talking about it is good. Now, Senator Warner and I just disagree on one major factor, and that is he believes we ought to raise taxes to get this economy going again and I don't.
Mr. Price: I wouldn't cede the center to tax increases. I think the center of this country is that they don't want any tax increases. They recognize that the government spends too much and it is time to get government spending under control.
Q: Mr. Leader, if I could just follow on an earlier question. You said you have strong Republican support. But do you need Democrats and will you ask for them?
Mr. Cantor: We certainly will always ask for them. Again, I think Mr. McCarthy, as the Whip, is, as you know, charged with that responsibility. From the discussions I have had with him, he has indicated there is strong Republican support and that we are going to pass this bill with Republicans.
Q: With just Republicans?
Mr. Cantor. Again, I am not close enough to the vote count to know. So you will have to ask Mr. McCarthy.
Q: The Democrats are saying the 2012 budget gives them a gift, that you are voting on it, that you are bringing it to the floor, that a lot of your Members are going to vote on it. What do you think the politics of it are? And it is not going to become law, most likely, and it doesn't look like the Senate there is a lot of daylight between the Senate and House on that. So how is that good politics for your Members to take that up, 2012?
Mr. Cantor: The budget vote?
Mr. Cantor: Again, all this needs to be implemented through authorizing legislation. Once the outline of the budget is to take effect, either by the Senate joining us, or our putting that in place so that we could go about enforcing those limits. I think it demonstrates that we are really trying to be honest with the people that put us here, and the math doesn't lie. We have a debt in this country that we are not going to be able to live under if we continue on the same path. The extreme position is to continue doing what we are doing. So we put in place a plan that actually responds to that problem. Again, it is being honest with the people. I think that is what America wants us to do right now. We care about getting this country back on track. We care about making sure that this economy starts to grow again. We care about the people who are out of work who need a job. That is why we are doing what we are doing. And again, it demonstrates, I think, a totally different political dynamic now and we are trying to lead in a very difficult environment.
Q: Mr. Cantor, you have no worry that pending the 2012, when the taxes for, you know, 250 and above which President Obama wants to see done away with, do you guys want the tax keep, as I said before, in December? That is going to be a very volatile political issue on the debt. I mean, it increases the deficit by $4 trillion. You are comfortable with that? You are comfortable with planning on that in an election year?
Mr. Cantor: First of all, we have already settled that question last November. It wasn’t that long ago when the President then came around to our side once the election occurred. He is the one who agreed that we shouldn't be raising taxes in a difficult economy. Okay? So what we are saying is this, yes, you can't get this country back on track and manage the debt down with cuts alone. We need to grow this economy. That is why we are talking about tax reform that starts with broadening the base and lowering rates. We have to worry about global competitiveness. If we don't create a better environment for jobs and for businesses to grow here, we are not going to have it.
Q: But in 2012, you don't look at the critical issue of debt when you are allowing for these things
Mr. Price: Look at the numbers in the budget. It is over $600 billion in a decrease in the deficit on our budget compared to the President's budget. Over the 10 year window, it is $6.2 trillion in savings compared to the President's budget. So these are real numbers. This is what the American people want us to do. They want us to lead, and that is what we are responding to.
Q: Mr. Cantor, you talk on one hand I am just trying to get a sense of this whole debt ceiling, where we are, about the need to bring reforms forward. But then you talk about the gap between you and Warner and the gap between you and Bowles Simpson. It seems difficult, given what we have just been through relatively minor in the grand scheme of things how there is going to be this grand bargain reached. Even if it is 3 months, doesn't it seem difficult at best to agree to?
Mr. Cantor: Sure. This is all difficult stuff. None of it is easy. We understand that. But I go back to the simple notion of what the people who put us here and what they expect. And what they expect us to do is to try to make the right decisions and not repeat the same mistakes. That is what the debt limit vote is about, not making the mistake again of letting spending get out of control. Look, if you are a family that has a budget issue and you have maxed out your credit cards, what do you do? Well, if you need to extend the limit and your bank or your credit card issuer will actually let you do that, you have to be able to demonstrate that you are not going to dig the same hole for yourself again. That is what we are talking about here, making sure we stop digging the hole of debt and reverse that trend. We need to do so in a way that demonstrates and puts on the books some brakes so that Congress doesn't get out of control again with spending.
Q: Mr. Leader, just getting back to the revenue aspect, this weekend with your statement about you expect Obama to suggest raising revenues raising taxes, CBS said earlier that we are getting the lowest amount of revenues as a percentage of GDP since like 1950, 14.4 percent. Why just completely put revenues off the table? I mean, why not allow some flexibility there?
Mr. Cantor. It goes to your assumption of where those revenues come from. If you believe you can raise taxes and that doesn't have consequences on people and entities that we are relying on to grow the economy, then your question and the implication of your question would hold true. What we believe is, we have got to grow this economy. That is how you increase revenues as a percentage of GDP. There needs to be an all out effort to understand how we are going to do that. We believe strongly you do that by creating an environment for the private sector to put capital at risk and to grow. You don't sit here and just operate from one side of the government ledger and say we just need to fill that, because it is fictional.
Q: There is concern on the debt limit, Mr. Leader. The debt limit has been raised at least 10 times since 2001. How much additional debt are you willing to authorize?
Mr. Cantor: Again, I think my response to the question is just going to lie on the fact that we are only talking about even doing this if we can be assured there are guarantees in place that the spending doesn't get out of control again. What the American people are expecting us to do here is to do what they would do.
Q: When do you actually tell us what those reforms are going to be? For several months, you have talked about this being the second bite of the apple.
Mr. Cantor. Third.
Q: When are we actually going to learn?
Mr. Cantor: The third. The CR, budget, debt limit.
Q: Okay. Third bite. Bring apples next week.
Mr. Cantor: You got it. There will be Virginia apples here.
Q: You always bring us peanuts from Virginia.
Mr. Cantor: You want wine?
Q: When are we going to learn what the reforms are, the structural reforms? Is this going to be the Ryan budget? Is this going to be parts of the Ryan budget? When does this debate really engage?
Mr. Cantor: All the things that we have talked about need to be considered here. One certainly is spending caps both on the discretionary spending side and the mandatory side. There are other proposals out there to balance the budget, constitutional amendments and then some. I was just with Senator Mike Lee last night and he indicated they have a bill over there. I haven't taken a look at it, but I understand that it has got a lot of these provisions in it. All these are what we need to consider and come up with a way that we can be focused and be able to stand behind our promise that we are not going to let the spending get out of control again.
Again, just to put the White House on notice, we are not going to go blindly raise the debt limit, like Mr. Hoyer is advocating, without guarantees in place that spending doesn't get out of control again.
Q: But you don't need an agreement on a budget resolution to go along with the debt limit? It can be pieces if those pieces are satisfactory? It doesn't have to be a budget agreement?
Mr. Cantor: Again, the focus here on the debt limit is guaranteeing that spending doesn't get out of control again.
Mr. Price. Structural changes.
Q: Does that include Medicare and Medicaid, things like that?
Mr. Cantor: Again, I have said it includes all kinds of considerations. Again, we have got to come to a point where we can be credible in saying that spending is not going to get out of control again.