HH: One of the key issues facing us this year is going to be what happens in the next 30-60 days with regard to the debt ceiling and entitlement reform. I’m joined now by United States Senator Pat Toomey from the great state of Pennsylvania. Happy New Year, Senator, good to have you back.
PT: Hey, Happy New Year, Hugh, thanks for having me.
HH: So as this is already shaping up, I talked to Leader McConnell last Thursday about this. He’s hoping the House passes and sends over by regular order a bill that couples debt ceiling increase with entitlement reform and spending cuts. Do you think there’s a good chance of that happening?
PT: I certainly hope so. There’s just no way in the world that we should give this president another increase in our debt ceiling without beginning to put our country on a road to fiscal survival. It’s survival at this point, Hugh. The spending is so out of control, these deficits are so unsustainable, we’re living on borrowed time, and all the President wants is taxing and more borrowing authority. Well, he got his tax increase by virtue of preexisting law. We’re done with that. Now it’s time to get spending under control. So I think Mitch is exactly right. Senator McConnell’s right. The House should go through regular order, give us the entitlement reform. I would also suggest some process reforms that would help to avoid putting us in these situations where we always spend more money. But there’s a mix of things we ought to do, get it over to the Senate, and let’s have a fight over this.
HH: Now Senator, you were on the supercommittee, the ill-fated supercommittee last year.
HH: And so you are deep into the weeds on what needs to be done on the entitlements. And I’m begging the GOP to stay focused on message on this, because this is where the heavy lifting’s going to have to occur. In your view, what are the sort of entitlement reforms that have to be a part of a fiscal restructuring in the country, with as much specificity as you can offer.
PT: Well, there are a lot of ways you can do this, but I would start, for instance, I do agree that with respect to Medicaid and the other welfare type programs, the best solution is to let the states solve this problem. So bloc granting these programs to the states with very, very few strings attached, and a cap on total spending, will result in huge savings, and probably better health care for poor people, which the states will figure out better ways to deliver. So that would be one category. Look, on generally the growth of benefits, I think we ought to use the more realistic measure of CPI. We choose to use one that inflates, inflates inflation, if you will. It exaggerates the amount of inflation. The more realistic one would save huge amounts of money over time without cutting anyone’s benefits, but instead, just cutting the rate of growth. Medicare, I think, does need fundamental transformation of the sort that President Obama’s not going to agree to. But we should still be making the principle case for how we can make sure that program can survive the next generation. So those would be some of the things that I think we ought to be insisting on, some combination of that.
HH: Should we also be insisting on a rise, continued, gradual rise in the retirement age for Social Security, because it’s clear that’s what the country is doing anyway. And we have to enforce it.
PT: Well you know, that does gradually rise under current law. It rises gradually up to 67. And what I think the more immediate need would be to have Medicare converge with Social Security, because Medicare does not have that same feature. And so if the age qualification for Medicare over time, and we’d be talking about many years, very gradually, transitions to the point where it converges with Social Security, that’s very substantial savings.
HH: So if those three or four things came over, a bloc grant of Medicaid with a cap, a CPI that’s chained, and a Medicare convergence to Social Security, and maybe adding another year on there to 67 or 68. Would that justify, in your mind, Senator Toomey, a debt ceiling hike?
PT: If we get those things properly, that would go a tremendous way to putting us on a sustainable fiscal path. We could start to get our debt under control with those things. It wouldn’t solve everything, but it would go a hugely long way. I think that that would justify some reasonable increase in the debt limit. Certainly not the unlimited permanent authority to put it anywhere he wants it, the way the President asked for, but some combination of the kind of reforms you just described? Yes. I think it would justify some increase in the debt ceiling.
HH: Politically speaking, do you think it’s a poison pill for reelection for people who are up in two years, because I know you’ve got Mary Landrieu sitting there as your colleague from Louisiana. She’s a Democrat from a red state. She needs her blue voters to come out. And then you’ve got people like Tom Udall in Colorado. Do you think they’re blowing up their campaigns if they do something reasonable like this?
PT: Oh, I really don’t think so. I think voters are going to be increasingly insistent that people have a solution for this problem that we’re in. People get that this is unsustainable. Not everybody feels is as acutely, but it is increasingly, I think the public is increasingly aware that we’re on the road to Greece, and they’re going to want to see people stepping up and offering real solutions that make sense, that would put us on a sustainable fiscal path.
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HH: Senator, I find it kind of easier to discuss all these things since the tax issues are behind us. It’s really remarkable how it’s cleared the field of all sorts of other issues. I’m not sure I like the deal, but the deal’s the deal, and it’s done. Now, there’s really only spending to talk about.
PT: Well, that’s exactly right. Of course, we should have been talking about spending all along, because the problem is a spending problem. Now, the President, by virtue of preexisting law, he got this tax increase. That solves 6% of the deficit problem we have over the next ten years. But could we finally begin a discussion about the other 94% of this problem? So I think we will. We’re going to force it. And I think we’ve got to force it around the events that are occurring. The debt limit expiration that’s coming up, the expiration of the current government funding, these are the opportunities for us to force the President to finally confront what he has refused to confront, which is this grotesque overspending.
HH: I’m hoping that you keep the debt ceiling apart from the continuing resolution, because the fewer the moving parts, the easier it is for the public to understand what’s going on here.
PT: That’s right.
HH: So looking at that, are you willing to go through, as Senator Paul said on the program last week, before Senator McConnell came on, Senator Paul was on. He said look, I’ll go through the debt ceiling. In fact, he won’t vote for a debt ceiling without a balanced budget amendment. I don’t think many people will agree with that position, but are you willing to see it go through in order to get real reform?
PT: Well, I was on Morning Joe a couple of days ago, Hugh, and I made the point very clearly, if we go past the deadline on debt ceiling, it means some bills don’t get paid for a while? That is disruptive, that is not optimal, I certainly hope we can avoid it. But I would rather pay that price, if that’s the price we have to pay to start to get us on a sustainable fiscal path, I’d rather pay that price now than the kind of fiscal and financial and monetary collapse that awaits us if we continue with this Obama spending policy. So the answer is I’m not voting for a debt ceiling increase unless we get some meaningful reforms that start to put us on a sustainable path.
HH: Will you use the parliamentary tactics available to you to force that as well?
PT: If the reforms are not adequate, I will.
HH: Now let me ask you about the filibuster reform that is pending, as we speak. There won’t be a resolution of this for a couple of weeks, if I understand it. What do you make of this?
PT: Well, it’s, first of all, it’s not clear what, if anything, is going to happen. Senator Reid has discussed changing some of the Senate rules, but has not actually done it, yet. And what he’s proposed doing, potentially, is to break the rules of the Senate so that he can change the rules in a fashion that will deny Republicans the opportunity to offer amendments. Right now, we use parliamentary procedures that are available to us to negotiate from the majority leader the opportunity to offer some amendments. And you know, this is a little bit maddening, because the way the Senate has always operated, you never needed to negotiate for amendments. It was just understood that part of the way the Senate worked was an open amendment process. That’s part of the deliberative nature of the body. And eventually, you ran through enough amendments that people wanted to get onto the final passage of the bill, and that’s, you know, once you adopted those amendments, you did. When Senator Reid has allowed an open amendment process, the legislative process has worked. We’ve gone through bills. In fact, they passed. Generally, they’ve been bills that I haven’t agreed with, but they’ve gone ahead and gotten consideration. We dispensed with the amendments and they passed. Some in the Democratic conference in the Senate, the Democratic caucus of Senators, want to avoid having to cast tough votes. So they don’t want guys like me offering amendments to cut spending, or to require us to get on a path to a balanced budget, or to restore tax rates to people who ought to have them restored. They don’t want to have to cast those votes, and so they want procedural devices that are designed to block us. That’s what this fight is about. I certainly hope that Senator Reid will remember the importance of vigorous debate, an open amendment process, the role the Senate has always played in our republic. And I hope that he won’t insist on just shutting out the minority and breaking the rules in the process. So let’s see how this plays out. We still don’t know.
HH: Now back to the debt ceiling. Now what is your opinion that the market ought to take of one of these temporary breeches where we can’t borrow? Do you think that is an end of days situation? And do you think the market will treat it as such?
PT: No, I think the market will react entirely based on whether it believes we are making progress on the underlying problem. Here’s one of the great lies that many on the left have propagated, and that is that the downgrade and the disruptions in the markets last summer were about Republican insistence on getting some spending cuts tied to the debt ceiling. It wasn’t that at all. In my view, it was an increasing awareness that we weren’t going to solve the underlying problem.
PT: And if the market sees that Republicans are willing to take some real hits, and take the political heat, and let the media pile on, but we’re still going to insist on getting on the sustainable fiscal path, I think the markets would love to see that.
HH: I agree with that, and I 100%, it’s all about how the GOP messages that and talks about what’s going on. Now I want to close by asking you about Campaign 2012, Senator. A lot of us fell for the Pennsylvania Lucy & the Football trick again. And Ohio was real. My home state was real, but we all fell for you. Is Pennsylvania ever going to go red?
PT: Yeah, it absolutely is, Hugh, but I was right there holding the football. No, no, actually trying to kick it. I thought we had a real good shot in Pennsylvania. You know, we win at every other level. I won in 2010, we have a Republican governor, we have a Republican statehouse, a Republican state senate, and 13 of the 18 Congressional districts are represented by Republicans. So we’ve had tremendous success in every office except the presidency. So it’s just a matter of time before we put it together at the top of the ticket, too.
HH: Do you think Governor Corbett’s going to continue to forward the reforms on voter security and ballot security? Because there was some fraud, there was fraud all across the United States.
PT: Well, you know, the legislation has been signed into law. It was challenged in court, and it was upheld. Now the court, what the court did say was there was not enough time to ensure that people who legitimately had a right to vote would have a mechanism to do so for this past election, and that’s the only obstacle that they put in the way of this legislation. So there’ll certainly be more than enough time before the next election. And so a voter ID law that has passed is going to go into effect in Pennsylvania.
HH: Senator Pat Toomey, thanks for joining us early in the new year. Come back early and often, especially during this debt ceiling fight. You’re the kind of guy we need out there explaining this in the way that you just did.
End of interview.