This is a rush transcript from "Your World With Neil Cavuto," May 6, 2010. This copy may not be in its final form and may be updated.
NEIL CAVUTO, ANCHOR: A short time ago, I spoke with Democratic Congressman Charlie Rangel from New York on the whole mess in the globe.
(BEGIN VIDEOTAPE)
CAVUTO: Why do you feel they’re being unfairly targeted to bear the brunt, when everyone there is paying higher rates, everyone is going to pay higher taxes, and the union members have just kept...
(CROSSTALK)
REP. CHARLES RANGEL D-N.Y.: Listen, all I’m trying to say is that whether you’re talking about the United States or Greece, it’s the people that manipulated the fiscal system in Greece, as they did in Wall Street here, that has caused the market to collapse, not only in Greece, but throughout Europe and certainly in the United States.
(CROSSTALK)
CAVUTO: But, Congressman, no one manipulated a government that was spending more money than it was taking in. By that definition, you’re part of the government doing the exact same thing, right?
RANGEL: This is not so. It’s not that we had invested all our money with Goldman Sachs. I think it’s abundantly clear...
(CROSSTALK)
RANGEL: ...certain financial banks...
CAVUTO: Congressman, you know that’s a very small part of this. You know that there’s a cradle-to-grave entitlement system in place in Greece that has now emboldened people to think they’re fully protected. You know, a lot of them retire at 53. A lot of them retire on full pension...
(CROSSTALK)
CAVUTO: Now, that’s great if you can get it...
(CROSSTALK)
CAVUTO: I just want to be clear with something, Congressman. Do you think...
(CROSSTALK)
RANGEL: You’re giving a speech.
And what I’m trying to say is that Bernanke, the chairman of our Federal Reserve, said that the fiscal collapse of Greece is directly connected to about seven large U.S. banking firms, including Goldman Sachs, and that’s what caused it.
And so all I’m saying to you, that, if there’s going to be pain, it should be equally shared. And certainly those people that enjoyed maybe too much of a liberal subsidy situation, that they should not pay for the mistakes that bankers have made and...
(CROSSTALK)
CAVUTO: Fair enough. Fair enough.
(CROSSTALK)
RANGEL: ...and manipulated the people. Yes.
CAVUTO: Understood. Understood, sir.
But, to be fair, what Ben Bernanke was saying is that many of those firms might have gunned the system to take advantage of the same situation I told you, that is, a government that was providing more in benefits than it was taking in, in money, and did so year after year, decade after decade, to the point we’re in.
(CROSSTALK)
RANGEL: That’s not what caused the fiscal collapse.
(CROSSTALK)
RANGEL: I mean, there is a question of how far they should go.
(CROSSTALK)
CAVUTO: Congressman, do you think — do you think there’s a come-to-Jesus moment here where governments, regardless of their relationship with U.S. brokerage houses, have spent more than they’re taking in, and are now looking at the reaper?
RANGEL: Listen, I’m not prepared to talk about coming to Jesus at this point in time.
(LAUGHTER)
RANGEL: I am able to say that one of the largest programs that we have that people attack as being a broad entitlement that we have to look at is Social Security.
No one can deny that this program, more than anything else in the history of the United States, removed our older people — removed our older people from poverty. And I think that we know that, when you’re old and you can’t work, it costs a lot more money to help people along than to be able to say that they feel secure.
Take Medicare, another one of our programs that we will be remedying with a national health insurance bill. And we will bring it into solvency. But the fact is that people who cannot get health care, which is true in Greece, cannot work, and ultimately cost more to the society, not just in lack of productivity, but the costs of being involved in serious conditions and complicated surgery.
So, what I’m saying is that...
(CROSSTALK)
CAVUTO: All good ideas, but how do we pay for it, Congressman? How do we pay for it? All good ideas. Everyone thinks the elderly should be protected. Everyone thinks we want a –- it’s a good idea to provide health care to everybody.
(CROSSTALK)
CAVUTO: But what the devil in the details is the criticism of you guys, Republican and Democrat, is that you haven’t figured out how the heck to pay for it, right?
RANGEL: I’m telling you that, if you read The Economist, if you listen to the Congressional Budget Office, which I heard you quote earlier, they say, in 10 years, we will be able to be solvent as relates to Medicare. There’s nobody that doesn’t believe that we can’t have a fixed Social Security, whether we’re dealing with age or whether we’re dealing with...
CAVUTO: Wait a minute. The Economist — I do read The Economist. I’m a bigger nerd than you.
RANGEL: Well...
CAVUTO: In their editorial, their lead editorial this past issue, the one before this issue, they talked about what’s going on in Greece. And they talked about the debt-to-equity, in other words, how much is poured in vs. how much is taken out, and that the U.S., within 20 years, will be looking at ratios much like Greece.
Do you agree with that?
RANGEL: Well, I will tell you this, that all The Economists that I have read, and it hasn’t been challenged, attribute our fiscal deficit crisis not to the one that Clinton left to Bush, but the fact that the connection between the dramatic cut in taxes has been directly responsible for the deficit. This, included the fiscal crisis that we’re facing, you’re trying to blame the entitlements, but the economists blame the fact...
(CROSSTALK)
CAVUTO: No, no. You know what, Congressman? I’m not trying to blame...
(CROSSTALK)
CAVUTO: I’m not red or blue on this. I’m just green. I look at the green, and I see it just all frittering away.
(CROSSTALK)
RANGEL: Well, let’s find out...
CAVUTO: Sir, what I raise with you now is what I raised with your Republican counterparts before, and I have raised with both parties over these many years. Do you think Washington can continue going the way it’s going, without someone realizing the well is running dry?
So, can you put more money in the well by raising taxes or just cutting those benefits, or do you think you’re going to have to do both, and dramatically, and soon?
RANGEL: Well, listen — I don’t think that the president ever took taxes off the table. But what we are talking about is increased productivity. What we are talking about is investment in education...
CAVUTO: Understood.
RANGEL: ...an advance in technology. What we are talking about, increasing trade.
CAVUTO: Investment is spending. Investment is spending.
RANGEL: What we’re talking — what we’re talking about is making America stronger, more competitive and, in the large sense, being able to export more than we import.
(CROSSTALK)
RANGEL: If you go after — if you go after the...
(CROSSTALK)
CAVUTO: Charlie Rangel, you are the it guy there. When you were — I hope you’re back running the House Ways and Means Committee. You’re a great guy and all that.
But if you come back there, you are looking at the landscape, whenever you’re clear of all this nonsense or whatever, you look around and just say guys, all right, here’s the skinny. We are in a heap of trouble. And we could look at raising taxes on the rich. After a while, that dog don’t hunt. We can look about scaling back benefits for the rich. After a while, that dog don’t hunt. Or we’re just going to have to redo everything, scale back on spending, and hike the taxes.
What wins out?
RANGEL: Well, you say hiking taxes. When I put together my bill in terms of tax reform, it didn’t cost anything because the money — we reduced corporate taxes to 28 percent. And, so, yes, it’s raising revenue when you cut out the loopholes, the fat that we have in the corporate taxes. We got people going overseas, evading U.S. taxes. We got loopholes...
CAVUTO: But do you think you can...
(CROSSTALK)
CAVUTO: ...just going after companies, just companies?
RANGEL: No, no, no. Of course, we have to take a look at our budget.
(CROSSTALK)
CAVUTO: Would you raise taxes on people under $200,000?
RANGEL: Of course not.
CAVUTO: OK.
RANGEL: Because these are the people that are working every day.
CAVUTO: Fine. Fine.
RANGEL: These are the people that are producing for our community. These are the people who have the ability to buy.
CAVUTO: Are you for a value-added tax? Are you for a value-added tax?
RANGEL: Well, the president said everything is on the table. I think it’s regressive.
CAVUTO: I know. Is it on the table for Charlie?
RANGEL: I think — no, it’s not on the table for me, until we can see that a person that is paying the tax...
CAVUTO: Because that would affect more than just the over-$200,000 crowd. That will affect everybody, right?
RANGEL: Well, the thing is, it affects the people that are the lower end of the income tax scale.
CAVUTO: Right.
RANGEL: And I don’t think it’s fair for somebody that, like Buffett would say, that when your secretary is paying more taxes than a multi-billionaire, there’s something wrong with the system.
(CROSSTALK)
RANGEL: And the VAT tax...
CAVUTO: Unless that secretary is earning billions. We left that out. But I’m –- I’m kidding.
(LAUGHTER)
RANGEL: OK. Well...
CAVUTO: Congressman, while I have still got you, you did step down as head of House Ways and Means while they sort through all your financial deals and the rest. Some are arguing you got sweetheart real estate deals.
RANGEL: That had nothing to do with it.
(CROSSTALK)
CAVUTO: So, why did — why did you step — why did you step down?
(CROSSTALK)
RANGEL: When the Republicans stopped talking about health care, and climate control, and started talking about me, wherever the leadership and Nancy Pelosi went, they were asking, what about Charlie Rangel? I said, let me step down, so we can get health care, which we did.
(CROSSTALK)
CAVUTO: Well, when do you step back into that — when do you step back to that post?
RANGEL: As soon as the Ethics Committee completes its work, I will be back sitting in the seat. Until then, the Republicans...
CAVUTO: And have you gotten any indication on that?
RANGEL: Listen, it’s been 18 long months. No, I haven’t.
But one thing is clear, that there’s no charges there by anybody, except allegations. And I turned that over to the Ethics Committee over a year-and-a-half ago.
(END VIDEOTAPE)
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