This is a rush transcript from "Your World," March 28, 2012. This copy may not be in its final form and may be updated.
NEIL CAVUTO, HOST OF "YOUR WORLD": We now have five budget plans on the table in Washington, D.C.; it still looks scary to a lot of folks because generally none of them is given a chance of passage.
If you have been watching me trying to broker a budget deal with both parties this last week, you would know that we are not really making much progress here because no one is giving an inch here. So do we need a "Thelma and Louise" moment, where Democrats and Republicans essentially join hands and take the budget plunge together?
To Democratic Congressman John Garamendi of California.
What do you think of that, Congressman, that you Democrats have to budge on this entitlement thing, Republicans might have to budge on this closing the loophole and credits and thinking that they will always be deemed tax hikes and they give you revenue thing, but, without that, nothing?
REP. JOHN GARAMENDI, D-CALIF.: Well, I was just thinking about Thelma and Louise. We saw them go over the cliff, but we didn't see the result of the landing, and therein lies the problem, Neil.
We are very, very far apart. The Republican Caucus is also split. On the Democratic side, we can clearly go for the president's budget. We can go for modifications of it. The tax issues are really, really complex. In the Republican budget, there is an enormous tax giveaway to those would have more than $1 million of annual income.
There is like almost $349 million -- excuse me -- thousand dollars -- $349,000 of additional tax break to those who have $1 million income.
CAVUTO: But what they say then about you -- but what they say then about you, sir, and this goes back and forth, is, we will you know, the congressman and his buddies, they are not really serious about curbing entitlement growth and every time we stick out our neck and try to address Medicare and Medicaid, we’re pilloried for throwing grandma off the cliff.
CAVUTO: So, so, here is my proposal.
GARAMENDI: I understand. OK.
CAVUTO: Just to try to get the two sides to meet.
CAVUTO: If you would be open to make more concessions on those entitlements and the Republicans were to get over this idea that if you close subsidies, loopholes, special credits that prevent those from not paying their fair share of taxes, you are on your way, right? You on your way past your talking points, right?
GARAMENDI: Well, I think that is -- you are correct. How do you accomplish that?
Clearly, on Medicare, you -- we do not want to see Medicare end. It is an extraordinarily important program for seniors. But there's a lot that can be done in Medicare to curb the costs. For example, we ought to be negotiating, using the purchasing power of the government to negotiate drug prices. Clearly, there is fraud in this by various providers and schemers and scammers. There’s probably a half-a-billion-dollar -- excuse me, several billion dollars over a 10-year period in fraud.
CAVUTO: But, by the way, what the Republicans are saying, Congressman is that the Medicare issue is just as germane with the president and his plan because it effectively torpedoes Medicare down the road, maybe differently, but just as genuinely as the Republican plan.
GARAMENDI: I think not. But go ahead.
CAVUTO: I guess what I am asking you, sir, if the Republicans come to you -- I know -- Republicans come to you and say, all right, we are willing to look at these subsidies and tax breaks and take a bullet from the Tea Party members who say that is the tax hike, even though it is only benefiting only a select few, we will open that, but you cannot rip us a new one when we go after or try to curb the growth in Medicare and say we are trying to throw granny off a cliff.
Would you do the? Would you both hold hands and say that is a start?
GARAMENDI: Well, you said something really important, Neil. And that is curb the growth in Medicare.
That is exactly what we all need to do, and the Democratic proposal, including...
CAVUTO: But you're not doing it. You're not doing it. They're not doing it.
GARAMENDI: No, I think that is not correct.
There's more that can be done to curb the growth. And I just gave you two ideas. There are many, many more. And, actually, this -- looking at the various costs in the system and constantly analyzing those costs as to their effectiveness of the treatment is exceedingly important and you need to do that over time.
But what you do not want to do is to set up a system that ultimately will terminate Medicare and break the Medicare promise and guarantee, which, unfortunately, is where it is.
CAVUTO: All right.
GARAMENDI: But there is a lot of room in the Medicare system for controlling costs.
CAVUTO: Well, I'm just trying to -- I'm just trying to help you guys hold hands and not end up like the car at the bottom of...
GARAMENDI: Neil, you are so good.
CAVUTO: I am here to serve. I am here to serve.
GARAMENDI: Yes, you are.