Interviews

Thune: 'We're Headed for a Train Wreck'

NEIL CAVUTO, HOST OF "YOUR WORLD": Well, my next guest has a plan get past all of this nonsense on whether a cut is really a cut by really cutting spending and by really cutting out the gimmicks.

Republican Senator John Thune of South Dakota joining me for this exclusive chat.

Senator, good to see you.

(CROSSTALK)

SEN. JOHN THUNE, R-S.D.: ...Good Afternoon Neil.

CAVUTO: I do want to get your plan, because I was looking at it, Senator, and it makes great sense, which means it's going nowhere.

(LAUGHTER)

CAVUTO: But having said that -- you know, I kid.

But what do you make of what this gentleman was just reporting -- and I have heard others saying it as well -- that the cuts in this sort of stopgap spending measure were not what they appeared or even appear to be.

THUNE: Well, I think it was the best we could help to achieve under the circumstances, Neil.

Obviously, a lot of us would liked to have seen bigger spending reductions, but given the fact that you have a Democrat Senate and a Democrat White House, being able to achieve the level of spending reductions that -- that we did in this continuing resolution, I think, in the end, is a victory.

Now, we can dispute about the various -- you know, how the cuts will be distributed and that sort of thing, but the point is we're reducing spending. That doesn't happen around here very often. And it gets the spending -- the debate about spending billions behind us, and allows us to focus on the debate about saving trillions by focusing on the 2012 budget and the debt limit votes, which are coming up ahead of us.

CAVUTO: I guess what's frustrating, sir, is the billions we thought we were cutting were nearly as many billions.

THUNE: Well, I think the thing that we all want to see is, we want to reduce the baseline spending, and that's where our side was trying to focus on reducing the discretionary part of the budget...

CAVUTO: Gotcha.

THUNE: ... because that would reduce the baseline. And that saves, as you know, hundreds of billions of dollars more over a 10-year period.  And that was the focus of all this. I think, in the end, there was a compromise reached between the White House and the lead negotiators on our side.

But the point of it is we are reducing spending for the first time in at least a decade.

CAVUTO: And you don't see this being jeopardized, Senator?

THUNE: And it's certainly a trend I want to see continue.

CAVUTO: You don't see this being jeopardized...

THUNE: What's that?

CAVUTO: ... either in the House or Senate, with a final vote?

THUNE: I don't think so...

CAVUTO: OK.

THUNE: ... only because we have gotten -- we have gotten all we can get.

Now, bear in mind again, this is a bill that the president is going to have to sign into law, that we're going to have to pass through a Democrat Senate. And it may not be perfect, but under the circumstances, it is what we can get done. We are reducing spending. We are reducing the overall cost of government for the first time in over a decade.

And now we can start talking about the trillions of dollars we need to start shaving out of the budgets in the future.

CAVUTO: One of the things that has impressed me most over your career, Senator, I have admired, on both sides here -- and I think they would readily agree -- you have tried to be the adult in the room on these discussions and go beyond the political heat of the moment and the extremes.

And even when it comes to dealing with these budgets in the future, you want to throw out the game plan and the ways in which we've been doing it. One idea is to make this a two-year affair. Could you explain what you mean by that?

THUNE: Right.

Well, I think, every year, we do -- we go through this process. And last year was a good example. Congress didn't pass a budget...

CAVUTO: Right.

THUNE: ... the most fundamental responsibility we have as elected officials to the taxpayers. And it didn't happen. Not a single appropriation bill passed.

And so the reason we're even having this debate about this continuing resolution is because it's the unfinished business of last year.  We're cleaning up the mess that Congress made last year. And so we have a broken budget process.

And what I am simply saying is, what we ought to do is, instead of doing a budget every year, do a budget every other year. Do it in a non-election year, when you don't have election year pressures. And then, in the non-election -- or in the election year, do oversight, and actually look for ways to save money, rather than ways to spend money.

I think that would be a better way of managing the nation's finances.  And it would ensure, at least hopefully, in that even -- in that odd- numbered year, that we are passing a budget and appropriation bills, but doing it in a more thoughtful way, rather than the rushed way that we do it now, if -- if we do it at all.

CAVUTO: But, no offense to your colleagues, not a lot is done thoughtfully. And in an election year, whether it's a two-year deal or not, if they were to revisit budgets that might or might not be controversial, they will -- they'll change it, right?

THUNE: Well, they -- there is always the chance that they could do that, but there's a provision in our bill that makes the resolution binding, which it isn't today. It's very easily waived.

We have emergencies declared all time. If there's something that somebody wants to spend money on, we just declare it an emergency. And so...

(CROSSTALK)

CAVUTO: So, how would you make yours anymore urgent and unbreakable?

THUNE: Well, my legislation changes that, so that it does away with this abuse of the term emergency. It changes the pay-go rules, which have been abused. That's how health care reform was paid for, by double counting revenues in the various trust funds that we have.

So, it makes a number of major changes in the way that we do the accounting here, the budgeting here in Washington. And it's long overdue, Neil. We cannot continue on this current path, because we're headed for a train wreck. We've got to change the way that Washington does its business.

And although budget reform is not a glamorous issue, it would fundamentally change the way that we do things here.

CAVUTO: But all of this comes ahead the president's sort of revisit to a debt solution tomorrow that's presumably will include tax hikes in the mix. John Boehner just put out a statement a little while ago, Senator, saying that, "If the president is willing to offer serious proposals that grow our economy, preserve and protect programs, such as Medicare, Medicaid, and set us on a path to pay down the national path, we're open to hearing them. However, if the president begins his discussion by saying we must increase taxes," I'll go on here, "my response will be clear. Tax increases are unacceptable."

Do you share that view?

THUNE: I do. I think that what we have in Washington is not a revenue problem. It's a spending problem.

And Paul Ryan demonstrated last week that you can do this. You can create a pathway that is a much more sustainable future for this country fiscally without raising taxes. And I think the worst thing that you could do in the middle of an economic downturn is raise taxes. It isn't necessary.

But I know the president is under a lot of pressure from his constituencies to make that a part of his proposal. But I think that is great. I think we will start the debate. I mean, it's not great that he's going to raise taxes, but I think it's great that he's finally going to have a proposal.

CAVUTO: But if you go into discussions and you say one of the key tenets the president has is to throw tax hikes into the mix, and you say no, I just have a feeling, Senator, we're going to be revisiting this 11th-hour "Will the government shut down or won't it shut down?" as we hit this debt ceiling.

THUNE: Well, the thing we ought to do in the lead-up to the debt ceiling, Neil, is -- is actually put a statutory cap on the amount the government can spend as a percentage of our total economy.

As you know, we are at highest level right now of federal spending as a percentage of our GDP than we've been literally in the last half- century, since World War II. And we have the highest debt to GDP that we have had literally in the last half-century, since World War II.

And so the issue around here isn't revenues. It's spending. And that's what we have got to focus on first. And I would like to see in the lead-up to the debt limit is a debate about putting the brakes on that and actually putting a cap, a statutory cap. And, obviously, you couldn't do it overnight, but where we get back down to a more normalized place in terms of spending as a percentage of our total economic output.

We cannot continue to grow that relative to our economy, or we're going to end up like a Western European social democracy. That's the path we are on right now.

CAVUTO: That's low blow right there.

(LAUGHTER)

CAVUTO: But, Senator, it makes a lot sense. Good seeing you again.  Thank you very much.

THUNE: Good to be with you, Neil. Thanks.

CAVUTO: John Thune

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