Interviews

Mike Huckabee on Solving Debt Crisis

Former Arkansas governor talks taxes, spending

 

NEIL CAVUTO, HOST OF “YOUR WORLD”: All right, we have been telling you the president wants to revive these debt talks, but it’s not looking good. He plans to meet with Senate leaders from both parties on Monday.

Now we are learning why Republicans, though, bolted in the first place -- sources telling Fox the Democrats wanted to eliminate tax breaks for anyone over the 28 percent bracket. That would impact couples making around $200,000 and individuals sometimes a lot less than that.

With us now, former presidential candidate Mike Huckabee, who, to be fair, had said that was pretty much the strategy all along, right?

MIKE HUCKABEE (R), FORMER ARKANSAS GOVERNOR: Well, I think it was, to be able to force the Republicans to a tax hike.

A lot of people are going to say that this whole thing is just political. And it is political, no doubt about it. But, Neil, there’s something else going on. There is a philosophical difference and a fundamental difference between where the Democrats are and where the Republicans are.

The Democrats honestly believe that you ought to tax people more, that we just aren’t paying enough. They ignore the fact that half the people in the country don’t pay any tax at all at the federal level, zero.

CAVUTO: Right. Right.

HUCKABEE: They have no skin in the game. Do they want the rich people to get taxed? Of course they do.

What they don’t understand is, when they get taxed, it’s not going to mean that the middle class improves. It means that the wealthy people simply do things that will cause the middle class to lose income and lose ground, like jobs, like extra things.

Remember when Bill Clinton said, let’s have that luxury tax; we’re going to hit the yacht owners and the airplane owners?

CAVUTO: Sure.

HUCKABEE: You know got hurt? It wasn’t the people that were in the yachts.

CAVUTO: The people who built the yachts.

HUCKABEE: The people that built the yachts that cleaned the yachts that serviced the yachts. That’s the way it works.

CAVUTO: I don’t even get into the class argument of it, though, Governor. The one thing I said was, before we talk about charging more for the product, I think it’s incumbent upon us to look at the underlying product, and then, if you spruce it up, make it better, and people all of a sudden say, hey, well it is worth paying more for, have at it.

But I think it takes the discipline away if you automatically put more revenues on the table. That’s my fear.

HUCKABEE: Well, it’s like saying to a person who is grossly overweight that you need to lose weight, but what we are going to do...

CAVUTO: Careful here.

(CROSSTALK)

HUCKABEE: Well, look at me.

But what we’re going to do is to take you to an all-you-can-eat buffet and give you a ticket and you can just continue to eat all you want. Obviously, that’s not the solution. We do have a government that is...

CAVUTO: Why not? Why not?

(LAUGHTER)

HUCKABEE: It just doesn’t work.

CAVUTO: OK.

(CROSSTALK)

(LAUGHTER)

CAVUTO: All right.

HUCKABEE: And neither does it work when the government continues to spend money with no discipline.

CAVUTO: So, why is it always raised -- you know, Governor, I always think there has got to be a method to what seems like madness. And it is a strategy obviously the Democrats keep using.

HUCKABEE: Sure.

CAVUTO: We’re not taking this off the table. We’re not taking this off the table, even though it has been repudiated certainly in elections and surveys, in countless opinion polls. So, why?

HUCKABEE: I think the Democrats believe that they can out-demagogue the issue. I really think that that’s what they’re hoping for in the election.

CAVUTO: But if it works, I would say, have at it, right? But it doesn’t seem to work.

HUCKABEE: Well, it doesn’t, at least for now.

CAVUTO: So, it rallies the base.

HUCKABEE: But if they can continue to portray the Republicans as wanting to hurt grandma, take her Medicare and Social Security away, and make it so little junior can’t go to college, it’s the doomsday scenario.

But the fact is the doomsday is upon us because we’ve spent ourselves into oblivion. And we’re going to have to at some point accept the discipline of saying we just can’t keep spending.

And it doesn’t matter where the spending goes. When you’re broke, which we are, at some point, you have to own up to it and quit spending money. It’s really not that complicated.

CAVUTO: But you know what? You’re talking about not complicated, but a lot of people say, well, Neil, you sound heartless, not being for strategic investing and everything. And I always tell people, Governor, I’m all happy for strategic investing. But that makes the assumption you have money with which to strategically invest. And we don’t.

HUCKABEE: Either money, or you have a credit situation that is comfortable for you to service.

It’s not incredibly wrong to be able to borrow money. Most people do that to buy their homes and maybe to send their kids to college. But you have to look at it in context of, what is the rate of return?

If what you’re borrowing is comfortably paid back, and it results in a net income or a net level of comfort that you can afford, go for it. But when you’re borrowing money against borrowed money, which is what we’re doing, and you can’t pay it back, that’s when you have crossed the line. And America has crossed that line.

And I’m not sure that the Democrats are willing to accept that we just can’t raise the debt ceiling without serious, serious cuts in the way we’re spending money.

CAVUTO: Or see that it piles on itself.

But, you know, I wanted to ask you about Republicans and what they risk doing now. I see them tripping over themselves who offers the biggest tax cut, the biggest write-off. And everyone’s for tax cuts and all of that, but do you think they risk getting reckless? I asked Governor Pawlenty this when he was here and others. And they -- they didn’t seem to think so, that the revenues would come in. Maybe so. But, as a governor yourself who had to balance budgets every year, you know that there could be -- there is an interim gap between that.

HUCKABEE: Yes.

CAVUTO: So, do you risk doing more harm than good?

HUCKABEE: I think the Republicans have to be careful. The mantra of tax cuts, I understand that, but reality is that I think that their message has to be no tax increases. They can’t promise that they’re going to cut more, because right now that’s an unrealistic viewpoint.

Now, I know that’s heresy among Republicans. But the fact is, why go and ask for something you cannot get out of this Congress and out of this president, which is an additional tax cut? What you ought to push for is a pledge no increase in taxes, but cuts in spending.

That’s a realistic goal. And that’s one that I think is politically viable to most people in the country.

CAVUTO: All right, the other idea being bandied about on the Hill is everyone sign this pledge about a balanced budget amendment, agree to keep the cuts, et cetera. Only a few of the presidential candidates have signed on.

What do you make of that?

HUCKABEE: Well, I think we ought to have a balanced budget amendment. Every state has it, except Vermont. And they practice it willingly, even though they don’t have, by law, to do it. But every other state does. And it works, especially in states where you have a mechanism that you control your spending. In Arkansas, we had a method called the Revenue Stabilization Act. You could not, on a monthly basis, spend more than 95 percent. And on every month, it was evaluated.

And what happened was, you automatically -- it wasn’t a matter of having to go back to the legislature -- you automatically cut back expenses month-by-month when your revenues didn’t meet the expectations of forecasts.

That’s what the federal government ought to be doing.

CAVUTO: It’s too reasonable. It makes too much sense. So it’s going to go nowhere.

HUCKABEE: But it ought to be done.

CAVUTO: All right, Governor, thank you very, very much.

HUCKABEE: Thank you.

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