This is a rush transcript from "On the Record," April 1, 2011. This copy may not be in its final form and may be updated.
GRETA VAN SUSTEREN, FOX NEWS HOST: Well, empty promises. That's what Congressman Paul Ryan says both sides of the political aisle have been making you for years, and now he fears our nation's fiscal crisis could be -- get this -- worse than the Great Depression. Congressman Paul Ryan, chairman of the House Budget Committee went "On the Record."
VAN SUSTEREN: Congressman, nice to see you, sir.
REP. PAUL RYAN, R-WIS.: Thanks for having me.
VAN SUSTEREN: How did we get into this budget mess? Where did it start?
RYAN: Politicians from both political parties made a whole bunch of empty promises that the government can't keep. I think the day has got to come where we speak honestly with people about our real fiscal situation. We literally have a tidal wave of debt coming in this country, and the sooner we tackle this problem, the better off everybody's going to be.
But if we keep kicking the can down the road, keep ignoring the problem, like the president's budget does, people are going to get hurt. We're going to have austerity, cuts to current seniors, tax increases (INAUDIBLE) on the economy. We want to prevent those things from happening. We want economic growth, prosperity, and we want to phase in entitlement reforms that protect people in or near retirement while solving these problems for future generations so we can get this debt paid off.
VAN SUSTEREN: Is it fair to blame the Republican Party because...
VAN SUSTEREN: Oh, I was going to say --
RYAN: Both parties.
VAN SUSTEREN: Well, I was going to -- because when President Clinton left office, there was a surplus of about $230 billion. Of course, we had 9/11...
VAN SUSTEREN: ... which, you know, was a...
VAN SUSTEREN: ... huge financial hit, not to mention the tragedy and everything else with national security. But were the Republicans in leadership -- were they largely responsible for the increase in the debt, or is that not fair?
RYAN: No, I'd say that's kind of not fair. I think the surplus was a bipartisan creation. Republican congressmen, Democrat Bill Clinton, president, the 1997 budget agreement paved the way for surpluses. We paid about $600 billion of debt down.
Then what happened? We went into a recession. Revenues went down. Remember the dot-com bubble burst. Then we had 9/11, so revenues went down even further, even more of a recession, and spending went up for 9/11 to pay for Afghanistan, to pay for rebuilding New York, the Pentagon, all of those things.
So revenues down, spending up, that's where the surpluses went. The surpluses were mostly projected surpluses, and they didn't project 9/11. They didn't project the recession. And when those things actually happened, those surpluses went away.
VAN SUSTEREN: So but for 9/11, we'd be in a vastly different situation?
RYAN: Oh, gosh, yes. Yes. But for 9/11 and the recession which occurred at that time. Absolutely.
VAN SUSTEREN: And the recession, of course, is what supplies the revenue to the government...
VAN SUSTEREN: ... to offset any spending. All right, now along comes President Obama, and he comes into office and he's in the middle of this bad recession...
RYAN: He inherited a $1.3 trillion deficit. So he inherited a tough fiscal situation. No two ways about it. And I don't think it's right for us to lay all the blame for the fiscal problems at his doorstep. The question is, what is he doing about it? And what I would say is he's made it much, much, much worse.
The president now is giving us a third trillion dollar-plus deficit. The president is proposing under his own budget $1.6 trillion in more taxes after he just passed $700 billion in taxes, $8.7 trillion in new spending and $13 trillion in more debt. The president will have doubled the debt in five years after taking office and tripled it in 10 years after he leaves.
VAN SUSTEREN: You know, when I look at that debt clock, it just spins out of control and it's, like -- it looks -- it's mind-boggling, looking at it...
RYAN: It's getting out of control.
VAN SUSTEREN: Is it too late?
RYAN: No, but we don't have that much time left. I personally believe, looking the numbers, consulting bond markets, that we have few years to fix this so we can do it on our own terms. But if we don't, then it's going to be a European kind of austerity, immediate, drastic cuts to current seniors, tax increases that slows down the economy.
We can prevent that from happening. We can preempt a debt crisis, get this economy growing, get spending under control if we do it soon. That's why I'm so frustrated with the president's budget. He punted. He ducked. He increases, he increases taxes, he increases spending. That doesn't work, and that will accelerate a debt crisis. We need to preempt this from happening so we can get America growing again.
VAN SUSTEREN: I suppose that it's not just an economic issue but it's also national security.
RYAN: It's national security. It's a moral issue. And we -- the way I look at it is this. The worst thing that I have ever been experienced with in this Congress was TARP. And when that crisis hit, that caught us by surprise. And when you have a crisis like that, you have ugly legislating, TARP.
Well, let me ask you this. What if your president and your congressman knew this was coming, knew how to prevent it, knew when it was coming and what to do to stop it, but chose not to do anything to prevent that great recession from happening because it wasn't good politics? What would you think of them?
VAN SUSTEREN: Did that happen?
RYAN: No, but we -- it's happening now. We see a crisis coming on our economic horizon worse than the great recession, worse than TARP, and we're not doing anything about it? We have a president who knows what it takes to fix it but has chosen not to do that. That to me is wrong, and that is why Republicans are not going to fail to add leadership.
We are going to step in and provide leadership on these fiscal issues where the president has left off. And we're going to propose a budget that does deal with the drivers of our debt, that does reform these entitlement programs, that does reform government so we can stop a debt crisis from happening in this country so our children can have a better standard of living, a debt-free nation, so we can still fulfill the mission of health and retirement security, which is the mission of these entitlement programs, and get this economy growing today. Getting the deficit and debt under control are some of the best things we could do to get jobs created today, and that's exactly what we're going to be doing when we produce our budget in April.