HH: I’m very pleased that the first guest of the new year is House Budget Chairman, Paul Ryan. Congressman Ryan, Happy 2013 to you, good to have you back.
PR: Hey, Hugh, Happy New Year.
HH: Let’s start with yesterday. You voted for the McConnell-Biden deal and H.R. 8. I think that was a good choice. Why did you do so?
PR: We had been hit with a $4.4 trillion dollar tax increase yesterday, and I had the opportunity to knock it down by $3.8 trillion dollars. That means 98% of the country don’t get hit with a tax increase. I wanted 100% of the country not to get hit with a tax increase. The problem is, current law spoke otherwise. President Obama held the card on that. And so we were able to knock it down by $3.8 trillion. I’ll also say that John Boehner originally offered $800 billion in higher revenues. This gives Obama $600 billion. So we actually moved it in the right direction. And I did not see a better deal coming, given that the Senate was 89-8 in favor of this deal. It was obviously, you know, I’ve been legislating here for a while, that we were not going to get a better deal. And if you think something should pass, because I think if we failed to pass this, it would have been a disaster. If you think something should pass, then you should vote for it. And you know, I know a lot of people in Congress were saying I hope somebody else votes for it so I don’t have to. Well, I just don’t take things like that. If you think something needs to pass, then you vote for it. There’s a lot of stuff in this bill I didn’t like, but I liked the fact that we prevented $3.8 trillion dollars in tax increases, and prevented tax increases on 98% of the country.
HH: Many conservatives are upset that spending wasn’t part of this…
PR: I agree with that as well.
HH: So how do you respond to them? I’ve got my own answer, but how does Paul Ryan respond to that?
PR: Well, I’m upset about that as well. I mean, this is a president who has proven over and over again that he’s not interested in cutting spending. But I do not want to hold taxpayers hostage for the fact that this president will not help us cut spending. I want to prevent taxpayers from having a tax increase. Now that this excuse is gone, it helps us to focus solely on spending. His excuse of having a higher tax rate on wealthy people is gone. He got it. That’s what the law did. We tried to prevent it. We couldn’t. He’s got it. Now there are no excuses left. And so I like the idea of getting the excuse behind us so that we can now solely focus on spending, which really is the issue here. That is the driver of our debt crisis. That is what we have to focus on. And the President can’t hide behind any other excuses anymore. He has to face this.
HH: And that brings us to the debt ceiling, Congressman Ryan. Will you vote to raise that unless there are serious spending reforms in place?
PR: No, that’s the whole point. That’s what we’re all working on strategizing, how do we get the most of spending cuts and reforms during this debt debate? We have very few pieces of leverage that we can use by being the minority of divided government. This is one of the obvious ones. And so that’s what we want to do, is get the most spending cuts we can get, to at least buy time with the debt crisis. I don’t think, given that Obamacare is being implemented because Obama got reelected, I of all people understand the consequences of that, I don’t think we’re going to solve our debt crisis once and for all, because health care entitlements is the biggest part of that. But we have to get spending down in every way we can, and reform these entitlement programs in every way we can with the divided government that we have.
HH: Will the Republicans speak with specificity as to what they are demanding on Social Security, Medicare and Medicaid as part of this round of spending reform?
PR: Yeah, I mean, I have been, we have twice already. I mean, this session ends today, or we have a new session tomorrow. We passed two budgets that showed you exactly how we would fix this. We’ve passed budgets that show you precisely what we would do with Medicaid, precisely what we would do with Medicare. We’ve shown exactly how we would handle Social Security, exactly how to do welfare reform part two with food stamps and all the other benefits, exactly where we want to cut discretionary spending. There is no lack of specificity and detail on how we think we ought to prevent a debt crisis and get spending down, balance the budget, and pay off the debt. We don’t have a problem with that. We have a problem with a president who literally does not want to do any of this. And so that’s the challenge we have in front of us. But I’d like the idea that we got this tax issue behind us so that now we can get on with the spending issue.
HH: Now Congressman, I agree that the budget is very specific, but not as to the priority of what you must have in this deal. And I think one of the problems we had in the last two months is that there wasn’t great specificity as to what the Republicans insisted on having as opposed to wanting to have.
HH: So is there a conversation underway? Will the Republicans on the Hill unveil their specific, must-haves as opposed to want to haves before we get to the end game, as happened over the last 48 hours?
PR: Yeah, I mean, I’m not going to get deep into detail, because we’re still having all those kinds of discussions among ourselves, and we need to have it with our friends in the Senate as well. And the idea here is to show early on what it is we are going to do in addressing this. Look, we will have a debt crisis in this country based on the path that we are on. That’s really not a question. It’s really a question of not if but when. And we feel that it is our obligation, just as members of Congress representing our districts, representing the country, to do what we can to deal with this debt crisis. And that means spending. And so we’re going to come up with the best plan we can to deal with a president who is really unwilling to deal with spending, and to make sure that we can leverage as much as we can out of this divided government that we have. But I think getting this tax issue behind us, look, using the Democrats’ own formula of three to one, their own “balanced” plan meant for every dollar of tax increases, you get three dollars of spending cuts. Well, President Obama just got about $600 billion dollars in spending increases, so we ought to be getting $1.8 trillion dollars in spending cuts from him right now. Well, we’ll see. We need to talk about that. We need to see where are those spending cuts? We’ve offered ours. Our budgets offered $4-6 trillion dollars of spending cuts. So we can show you plenty of ways from our perspective on how to achieve it. The President seems to be against all of them. But now he cannot hide behind the tax increase for the rich. He’s got to put up, using his own rhetoric, using their own formula, where are the spending cuts that he says are necessary to “have a balanced plan”.
HH: Talking with Congressman Paul Ryan as we begin the New Year on the most important conversation we’ll have this year about how to get spending under control. Congressman, there are some shortcuts in the language that Republicans sometimes use and don’t. For example, chained CPI came into the language over the last two days, and then it went out again. Raising the retirement age, raising the eligibility, all these different things, will the Republicans learn to communicate in those phrases as opposed to…
PR: I don’t know. That may be asking too much. We talk like accountants too often, that’s for sure.
HH: But that at least sets up something that everyone…already the media is attempting to say that we will be in grave trouble if we do not raise the debt ceiling. It’s already warning, but we’ve got to warn back about what you just said, which is there is a debt crisis coming sooner or later.
PR: Yeah, it is coming. I mean, look. It’s just a math problem. If you want to look at how it looks, what it looks like when this happens, just look at Europe. Look no further than that. We have our Federal Reserve buying most of our paper, meaning most of our debt. That’s a very dangerous proposition. And it just means that we will have an even harder fall down the road if we don’t get our fiscal policy under control.
HH: What does that look like? Because I really think a lot of Americans are driving around, and they’re listening intently, here you’re the national nominee, and you’re the chairman of the Budget Committee, and you’ve used the term debt crisis. But they may disconnect with their own lives, yeah.
PR: Yeah, what does that mean? So what happens when you have a debt crisis is once the markets don’t believe you’re going to get your fiscal house in order, you’re going to get your deficit and debt under control, they’re going to charge you a whole lot more to lend you their money. And the problem for us as Americans is we’re not like the Japanese where we save a lot of money and lend our own money to our government. We borrow money from other countries. About half of our debt is borrowed from other countries. The Federal Reserve is printing money to buy our own debt in a way that sort of artificially keeps down interest rates. Once those rates go, then the cost of servicing our massive debt gets really high. And so we’ll have high interest rates, which is bad for economic growth, bad for getting a car loan, bad for getting a home loan, bad for getting a small business loan. We’ll have slower economic growth, fewer jobs, less take home pay. And it will cost us so much more as a country and a government to get out of the ditch we are in, because our interest rates will go up, and our fiscal system, situation, compounds away from us to the point where we can start losing control of our own fiscal situation, and we are basically slaves to the interest on the debt that we owe, because our debt has gotten so big. That’s the problem.
HH: That makes an enormous amount of sense. Let me switch, then, to what happens if we do not raise the debt ceiling in order to maximize the leverage that you have. We’ve been talking about the debt ceiling. So what happens if the Congress and the President can’t come to an agreement on the spending reforms that are necessary by March 1, and we do not raise the debt limit? What do you think happens?
PR: Well, I don’t want to get into an elaborate default discussion. Technically speaking, what happens is Treasury does not have the authority to go out and borrow money to pay our bills, and they can’t redeem bonds. So the problem with “default” is you can’t make good on your bonds. And that means you’ll have a triggering event where your interest rates shoot skyrocketing up. And it will cost us a whole lot more money to borrow money, and it will cost us a whole lot more money as individuals to borrow money. It hurts our economy, and it will cost our government a lot more money to borrow money, and it triggers a debt crisis. That’s the horror scenario that is played for people when you entertain the idea of whether or not we would default on our bonds. I don’t believe that that would happen. I don’t believe we’re going to default on our bonds. I believe that we can do things to prevent that from happening, but more importantly, we need to snap out of this, and recognize the fact that we have a spending problem, plain and simple. We spend more than a trillion dollars than we take in each year. We have done that for each and every year of the President’s presidency. We’re on path to doing it again this year. And it’s not just that we’re hurting the economy today because the debt is so great, we are destroying it tomorrow for our children and our grandchildren if we don’t get this under control. This is why we passed budgets to get it under control. The President has opposed budgets to get it under control. He won the election, though, and so elections have consequences. He won, and we have divided government. And so we’re just going to have to try to find a way to make this divided government work, so that we can get this spending under control, to try to prevent this kind of a default or debt crisis from happening.
HH: Speaking of the election, I want to turn there for just a couple of minutes. And first, I want to being by saying when you were on the show the first time after your nomination, I surprised you with a question. And I never clear my questions with anyone, but I surprised you with a question about your running, and I’m sorry about that, because you didn’t have a chance to check with your brother.
PR: Well, I just forgot. I mean, it was, what, 22 years ago? I hurt my back when I was like 24 or 25, and I quit running. But I used to run a lot, and I’d literally just forgot what the time was, and I threw it off the top of my head. That was the mistake I made. I ran an ordinary time. I thought I gave you an ordinary time answer. Apparently not, because I just forgot that the sense of these things.
HH: But that was an illustration of the environment in which the campaign operated.
HH: …where hypertechnical gotcha overtook the big issues like we’ve been talking about.
PR: Right. Yeah.
HH: Having run for vice president, there are very few people in the country who can speak to this, you and Governor Romney, the President and the Vice President. Have we lost the ability to have the conversation about the big issues?
PR: No. Gosh, no. I don’t think so. Look, Mitt and I worked at making this a big choice election about two very different views of government, visions for the future. And we did that. And you know, look at our advertising. Look at our speeches. Look at the way we closed our race versus the way President Obama closed the race. We tried to give the country a very, very clear choice. Look, it was a closer election than the media likes to say. It was something like between 400,000 and 500,000 votes spread across four different states that would have made the difference. So it’s a close election, it’s a closely divided country. And what we wanted to do was give the country a very clear choice so they could see what choice of two futures they want. He won the election, and I would argue that I don’t think the country in voting for the President gave an enthusiastic endorsement to the kinds of deficits we have, the kinds of fiscal profligacy we have, or for Obamacare, such as it’s going to be implemented. Nevertheless, he won the election, and we have to live with that. You know, I of all people need to understand that.
HH: I have argued that the combination of Sandy, Candy and ORCA undid this, Sandy the storm taking the narrative away, Candy, a friend of mine and a friend of this show, but she did make a mistake in that critical debate about Benghazi, and then the failure of the get out the vote system. Is that enough of an explanation for what happened?
PR: You know, I just don’t like getting, I don’t want to go into the woulda-shoulda-coulda, what was the explanation, and why it happened. It happened, and I’d just prefer not to get into all of that hindsight stuff. It happened, it’s unfortunate, it’s not what we thought was going to happen, it’s not what we’d planned on happening. And you know, the disappointing part of it all is this isn’t one of those elections where the country just goes slightly left of center instead of slightly right of center. It’s a much bigger election than that. And the pendulum swings pretty far to the left, because that’s where President Obama is. And these are the consequences.
HH: Now I was a, and have been a big fan of, Governor Romney for a long time. Do you believe that the American people got a good sense of who he was?
PR: That’s what I always was concerned about. No, I don’t. Mitt Romney would have been a fantastic president. Knowing him as well as I do, first of all, he is just a genuine, good man who is a very caring person. And I think of the hundreds of millions of dollars of negative advertising spent against him, based on his successful business career and all the rest, it made it look as if he’s an un-relatable guy. That was the President’s, you know, that was President Obama’s campaign strategy. He’s one of the most compassionate, intelligent, honest people of integrity that I have ever known. And so I really believe he would have been a fantastic president, because he had the temperament, he had the demeanor, he had the intellect, and he had the core, guiding conservative principles that I think are necessary for anybody to be a successful president. And more importantly, he was not going to be afraid of taking on the big issues. He was not going to be afraid of tackling this debt crisis head on, taking on our entitlement programs and reforming them, to getting the economy growing, reforming the tax code, getting our military built up so that is unquestionably the strongest in the world. That was going to be the agenda of 2013 under a Romney presidency. And it’s a shame that it didn’t happen, because I think this man would have been a fantastic president.
HH: Two exit questions, Congressman. The DOD sequester, you just mentioned Defense, and the Sandy relief bill, and let’s start with the sequester. A lot of Republicans are headed isolationist, they are not concerned about the sequester. I think it will be devastating to the military. Will it be reversed by March 1?
PR: I think so, but it’s got to be with other spending cuts. Look, this was, because we needed $1.2 trillion dollars in spending cuts, to pay for the last debt ceiling increase. We don’t like these spending cuts on Defense, so let’s substitute them for other spending cuts. I agree with you. I think this combined with the Obama budget on Defense, which is $487 billion dollar cut, would be devastating, and would severely undermine our military. So I agree with that. And number two, the flood, there’s a flood insurance fund that starts running out of money in a handful of days, where it can’t pay all the claims. So that fund does need money soon, and I think we’ll replenish that funding so that those claims can be paid, because a lot of claims are coming in, obviously, in New Jersey and New York, and that area.
HH: And you expect that to occur this week?
PR: I expect that to occur in the next day or two. But all the other stimulus spending on top of it, which is not as emergency, I’d say, as the flood funding is, will probably go in a different traunch.
HH: Paul Ryan, great to have you back. Thanks for joining us, and a Happy New Year to you and your family.
PR: You bet, Hugh. Take care.
HH: Thank you.
End of interview.