• With: Rick Santorum, presidential candidate

    SANTORUM: Look, I was against a lot of what the president did, particularly at the end of his term.

    CAVUTO: You were. And to be fair, you were very much so in that regard.

    (CROSSTALK)

    CAVUTO: But I do want to ask you this, Senator. Is there a sense you get that Republicans risk tripping over themselves on who offers the biggest tax cut?

    Governor Pawlenty of Minnesota, the former governor there, saying a 25 percent top rate. Others have said that they could go even lower.

    Do you risk, for whatever reasons, maybe for more stimulus, more oomph, just killing the economy by killing the revenues for it?

    SANTORUM: Well, as you know, Neil, the best way to make up this deficit is to have a strong economy, revenues go up, and entitlement spending goes down.

    But you have to have enough tax rates to -- so you can raise that money.

    (CROSSTALK)

    CAVUTO: So, is there a threshold, Senator, which you will not go below? In other words, if it’s 25 percent as a top rate from 35 percent now, is that too low?

    SANTORUM: Yes, I’m not going to propose a rate reduction of that magnitude.

    I’m going to focus a lot more. And one of the things I think that...

    CAVUTO: Why not? Why not?

    SANTORUM: Well, because I think we need to focus in on where the problem is.

    And I think one of the problems that we have in this country is that we’re losing far too many jobs in the manufacturing sector. We have a lot of innovation going on in this country. And then the manufactured products tend to migrate offshore, and we don’t see the trickle-down effect of innovation. We don’t see the trickle-down effect of technology and the manufacturing that should be coming with it.

    And, so, my focus is going to be -- and I’m going to put forth an economic plan here in the next several weeks that’s going to try to turbo- charge that sector of the economy, which I believe is the key to the great middle of America doing well and doing better.

    CAVUTO: But would that include more tax cuts than we’ve seen out of Governor Pawlenty? I mean, you guys are going fast-forward with a lot of these economic plans. And it just seems to me that, the bigger the tax cuts, the bigger the notoriety.

    SANTORUM: Well, I will – there’ll be some -- I think some eye- opening tax cuts, but they will be done in a way that makes sure that we still get the revenue that’s necessary to fund the government.

    Remember, we’re trying to -- you try to target revenues around 17 percent, 18 percent of GDP, maybe as high as 19 percent if things are really cooking. And that’s -- that’s something that we’ll need, because we are talking about getting spending down to that level with some of the suggestions I’ve made on the entitlement side.

    So, you can’t go out and say, well, we need to get entitlement spending and other types of spending down to 18 percent, 19 percent of GDP, which are historic norms, and then come in with revenues at 15 percent. That doesn’t make any sense. I mean, we need to come in with revenue numbers that make sense to get us a balanced budget.

    CAVUTO: Senator, it’s always a pleasure. Thank you, sir.

    SANTORUM: My pleasure. Thank you.

    CAVUTO: Senator Santorum. All right.

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