CHARLIE ROSE HIGHLIGHTS

November 15, 2010

Paul Ryan: No sugar high economics; need to restore foundations for growth

We've had an absolute gusher of domestic discretionary spending over the past two years. I would take all of that money back. It didn't work. It didn't bring unemployment below eight percent. We're still at 9.6 percent.

We need to restore the four basic cornerstones and foundations of economic growth: low tax rates; sound money; reasonable, predictable regulations; spending reform and controls. There's no substitute for those things. No sugar high economics, like a stimulus, is going to substitute for the fact that we're not getting the core foundations for economic growth right.

Paul Ryan on the Tax Debate

I don’t look at the tax code as a tool of social engineering and wealth redistribution. I see the tax code as something that’s necessary to raise proper revenue for the government. We should do it as efficiently as possible so that we can maximize economic growth.

I believe in a safety net. If we don’t address the looming debt crisis, we will shred the safety net itself. I believe in a society where we help people who cannot help themselves, we help people when they’re down on their luck, and we have an incentive-based system where people want to get up and make the most of their lives, for themselves and their kids. We don’t want to turn this safety net into a hammock that ends up lulling people in their lives into dependency and complacency. That’s the big debate we’re having right now. Tax policy is a big part of this.

Paul Ryan on the Need to Strengthen Social Security

I’m 40 years old. I’ll get about a one percent return on my payroll taxes. If Social Security could pay me my benefit, which of course it can’t, my children who are five, seven and eight years old will get a negative one percent rate of return on their money. And I would argue that Social Security is probably one of the most successful programs ever created, and it’s popular because multiple generations value it. If my kids are going to get a negative one percent rate of return on 13 percent of their payroll taxes basically, do you think they’re going to continue to support the program?

We should provide future seniors with the choice of having a personal account, like I have as a Federal employee, as a Member of Congress. It’s not privatized. It’s managed by the government in safe index funds. It harnesses the power of compound interest so they grow their money at five or six percent a year instead of negative one percent a year. They get better benefits. It’s a nest egg they own and control. It is their property.

My dad died when I was a kid. My mom got his Social Security benefits. She had to forego all those taxes she paid when she worked as a lab technician in Milwaukee. She lost that because it went back to the government. There are inequities in the Social Security right now, which can be fixed with personal accounts. If you don’t like them and you don’t want them, then don’t have it. I just think it ought to be an additional voluntary option, but it is not necessary to actuarially solve this problem. I personally think it’s preferential for younger people to have the option so they get a better deal, so they get a better benefit, so that we don’t consign them to a miserable rate of return.

Paul Ryan on the need to focus on price stability

I’ve never seen a country devalue its way to prosperity but it’s a quick fix at the expense of the long term and the medium term. There’s nothing more insidious that a government can do to its people than debase its currency, and my fear is that with this new QE2 move, the upside is so small but the downside is potentially so large. It is very dangerous in my opinion, and I think the Federal Reserve ought to be focused on price stability, not on this dual mandate.

I’ve had legislation for years that says- just like the ECB, the European Central Bank, your job is price stability, maintaining the value of our currency, and keeping prices stable. Price stability is a necessary precondition for economic growth.

Paul Ryan on defense spending

There's a lot of demand for defense, and we're at war – so I would plow a lot of those spending savings back into financing our troops and the things they need to be secure. There's a lot of waste in the Pentagon, no two ways about it. And the Commission did a good job of identifying a lot of that and so has Bob Gates. He's doing a pretty good job of going after a lot of the waste. You can't not have waste when you throw that much money at one government agency.

Paul Ryan: Print, borrow, tax & spend – OR – restore the foundation for growth?

Do we print, borrow, and tax money so Washington can try and spend it on the economy and people – OR – do we create the foundations, the atmosphere for economic growth so entrepreneurs and businesses can have the skills and the confidence to go forward to create jobs and create value? The foundations for growth are what have always worked in this economy. That's the American idea. That's what will work in the future.

We have so much uncertainty, regulatory uncertainty, price uncertainty, interest rate uncertainty, tax uncertainty. We need to provide certainty and confidence if we're going to be able to have people plan for the future and grow.

Paul Ryan commends Commission’s call for lower tax rates, dent on spending

Paul Ryan: What I like is the fact that you have the President's people that he put in charge of this – Erskine Bowles who's a great very conscientious Democrat – saying that for America to be competitive in the 21st century we need to lower tax rates. We need a lower corporate rate. We need a territorial tax system, which is very important for our competitiveness. We need lower tax rates on individuals. They're basically talking about broadening the tax base, lowering the rates. They're also going after spending. Now, there are some things I would do and some things I wouldn't do – but they're going after spending. What they didn't do in this plan which I think was a mistake is they didn't go after fixing health care. They pretty much skirted around on the edge.

Charlie Rose: Why not?

Paul Ryan: Because I think they wanted to accept the premise of Obama-care. They wanted to accept the structure and the architecture of Obamacare, which obviously I have a huge problem with.

Charlie Rose: Was there serious conversation about doing something about healthcare?

Paul Ryan: There is and there will continue to be. Alice Rivlin and I plan on putting out our own plan on healthcare hopefully this week.

We need to deal with Medicare. Medicare has a multi-trillion dollar unfunded liability and that wasn't really addressed in this plan – very, very little. I think you need to address Medicare and Medicaid if you're going to deal with this. Of the GAO’s, unfunded liability figure, which is $76 trillion figure, almost all of that is healthcare. You cannot preempt a debt crisis, get this fiscal house in order, without dealing with health care.

Paul Ryan on the need for a pro-growth agenda

We need to focus on having a low tax, sound money, limited government in order to promote growth and prosperity. The policies this government has put in place I believe are damaging our chances to get this economy growing.

Paul Ryan on hope for bipartisanship: Obama is my President too

He’s my President, too. I hope we can get a dent on spending. I hope he can decide: “I don’t want to use these issues as political weapons. I want to get some stuff done.” I hope there is some area for compromise. I’m not sure. Probably not on health care, but perhaps in other programs there’s going to be an area for compromise. I really hope we get that because that’s in the interest of the country. I just don’t know where he’s going to decide he’s willing to come together with House Republicans on these things. We need to try.

On the big issues of the day my guess is he’s not a Bill Clinton triangulation-type. He just has a difference of opinion on these big issues philosophically, and there’s nothing wrong with that. Hopefully there – on trade, on agricultural reform – on some issues we’re going to see some common ground and move forward.