This is a rush transcript from "Your World," April 28, 2011. This copy may not be in its final form and may be updated.
CONNELL MCSHANE, GUEST HOST: A live look now at the president’s moneyman, Tim Geithner, the treasury secretary, making a road trip today to the Motor City, praising the president’s auto bailout, a reminder of spending, and one of the reasons our next guest says we’re pushing up against our debt limit.
The former House Majority Leader, Dick Armey, is with us right now.
And it is kind of funny to see Tim Geithner talking about the bailout of the auto companies, when we want to argue to stop spending or at least to increase our -- our debt limit, which I guess would mean we’ll keep spending. What do you make of it?
DICK ARMEY, FORMER REPUBLICAN HOUSE MAJORITY LEADER: Well, my biggest disappointment in -- in Tim Geithner is that he’s a well-trained economist and he knows better.
The fact of the matter is the market would have cleared up all of that mess that was handled with TARP and so forth so much more efficiently. And it’s a lot of the taxpayers’ money down the drain and that debt ceiling being pushed up.
This government has got to get control of money. And nobody should know that better than Tim Geithner, since he’s pretty well now the last person on Earth that is willing to buy bonds for further federal government debt. And he has to understand, when the principal purchaser of newly issued bonds is the Federal Reserve, that is...
ARMEY: ... the expansion of money that’s going to give you inflation.
MCSHANE: And he was the New York Fed president before he was the treasury secretary during the crisis days.
But now you have this argument going down in D.C. And it is interesting. It’s getting very political on the debt limit. We have to raise this debt ceiling if we want to keep on borrowing. Now, the argument is, well, we want to attach spending cuts to it. But just before I get to that, at the end of the day, it has to go up, though, doesn’t it?
Would you agree to that, or is that not true, in your view?
ARMEY: Well, not necessarily. The fact of the matter is, you know, as -- as Pat Toomey has pointed out, there are lots of reprogramming opportunities and belt-tightening opportunities before that.
MCSHANE: Well, just for a short amount of time, though.
MCSHANE: It would just -- it would be -- just be pushing it off for - - I’m just saying, I think, even if we were able to play around with some accounting gimmicks for a while, and we wouldn’t default on our debt maybe the day after we were supposed to raise this limit, that doesn’t mean, eventually, we don’t have to raise it, or else we default.
ARMEY: Well, of course, the focus -- we would have to focus the -- the budget on paying the interest on the debt.
And we need to get something for it. The new Congress, the -- especially this new majority in the House, is staffed by conservatives whose mission is, mandated by the American people, get spending under control.
ARMEY: We have Senator Lee’s balanced budget amendment out there. That -- they should simply say, you pass a balanced budget amendment, and get this train rolling down the track, get the states in line to start verifying it, and we’ll -- we will then consider giving up our votes on raising the debt ceiling.
ARMEY: But, you know, the fact of the matter is, if your brother is an alcoholic, you don’t say we’re going to let you continue borrowing money to buy whiskey.
ARMEY: We’re going to say, go take the cure first. And then we’ll talk about what more borrowing you might do for things that are really productive to your well-being and that of the nation.
MCSHANE: I understand that, but at the same time, the argument there – I’m not sure if it is apples to apples, when you consider that your -- quote, unquote -- "alcoholic brother" is not the richest country in the world and wouldn’t be defaulting on these obligations that affect the world markets and everything else.
It just seems like; again, at the end of the day, you have to raise this limit. So to say we have to attach something to it, or else what? Or else what? You really wouldn’t raise it? You’d really let us default on our debt? Is that the argument?
ARMEY: Well, the point would be very simple. This is President Obama’s problem. And the Democrats in the Senate, it’s their problem.
The fact of the matter is that they have got to demonstrate some willingness to turn the corner and get spending under criminal.
And it is perfectly legitimate and necessary that, especially the small government conservatives in the House say, look, show us that you’re willing to move in a new direction. We may find that we have to do this now in order to clean up for the reckless spending practices of the last couple of decades, but we’re going to demonstrate that we don’t go and set ourselves back in motion with the same old business as usual...
ARMEY: ... that makes it necessary to come back and do it again in two years from now.
MCSHANE: Dick Armey, thank you very much. Good to talk to you. Thank you very much for coming on.
ARMEY: Thanks for having me.
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