This is a rush transcript from "On the Record," July 27, 2011. This copy may not be in its final form and may be updated.
GRETA VAN SUSTEREN, FOX NEWS HOST: Well, the Speaker [House Speaker John Boehner] needs 217 votes or his bill is, frankly, buried. And do we need to remind you we hit the debt limit in just six days. One congressman who is, in the speaker's words, getting his, quote, "ass in line" is Florida congressman Allen West. Now, he tweeted, "Boehner plan is not a perfect bill. However, the fact Pelosi, Reid and Obama hate it doggone makes it perfect enough. Where is their plan?"
But even if the Boehner plan passes the House, the word is that it is absolutely dead on arrival when it gets to the Senate. No one thinks it'll pass in the Senate, and if there's any doubt, check this out. The Senate majority Democrats just a short time ago sending the speaker of the House a letter saying they will vote against his plan if it does pass the House and shows up at the Senate.
House Budget Committee chair Paul Ryan joins us. Good evening, sir.
REP. PAUL RYAN, R-WIS., BUDGET COMMITTEE CHAIRMAN: Hey. Good to be with you again.
VAN SUSTEREN: Well, doesn't look like the Boehner bill is -- it may go far in the House, but that's about all.
RYAN: I think that's a lot of talk right now, and I think what they're trying to do is make these sort of threats to try and reduce the chance of Democrats voting for it in the House itself.
Look where we started. President Obama asked for just a blanket increase in the debt limit, no spending cuts, nothing. We said no. We said, You got to at least cut more than a dollar's worth of spending for every dollar you raise the debt limit.
Then he asked for big tax increases. We got rid of the tax increases, no naked (ph) debt limit increase. And now we got a bill that does what we said it should do, cuts more than what we raise the debt limit by. Is it perfect, like John said? No, it's not. But it's a good step on spending cuts. Is it as much as we proposed in our budget and passed? No. We cut $6.2 trillion out of our budget.
This doesn't do that, but it gets us down the right path. It's a bank. It's -- it's cuts we can bank right now and a step in the right direction. And so I think it's a good step in the right direction (INAUDIBLE) pass.
VAN SUSTEREN: All right, it has to get 217 votes. You've got a rather rowdy freshman crowd who ran on the promise of a balanced budget amendment, and the balanced budget amendment is not in the Boehner bill. How do you get them to -- how do you get enough of them to get to your 217 mark and have them go home and face their voters where they promised balanced budget amendment?
RYAN: So we are going to have a vote on the balance budget amendment.
VAN SUSTEREN: Separate from the Boehner bill.
RYAN: Separate from the Boehner bill. And that was always the case. It was going to be separate from the bill. The second (INAUDIBLE) "cut, cap and balance" had the BBA separate from the bill.
VAN SUSTEREN: Balanced budget amendment is BBA.
RYAN: That's right. Excuse me. And then this also requires that the Senate have a vote on the balanced budget amendment. We've never had the assurances that we could even get a vote on the balanced budget amendment in the Senate.
What I never really agreed with was the idea that we would expect Harry Reid and Nancy Pelosi to deliver 40 to 15 votes from Democrats for our version of the balanced budget amendment. You know, I just never thought that was realistic, to demand Democrats vote against their conscience for our version of the balanced budget amendment. So I just never thought that would work.
I think this is a far more workable plan, cut spending, cap spending, and then have a vote on the balanced budget amendment and let's see where people stand on this issue in Congress.
VAN SUSTEREN: How realistic are the cuts that you talk about? I mean, the -- you know, oftentimes, we hear these bills -- I remember about six months ago in March, there has this -- all this hoopla about how much is being cut, and then when the dust settled, it really looked like chump change.
RYAN: Yes, so we had the CBO give us the most recent estimate on this today. We're cutting $917 billion in spending. That brings the deficit down by $917 billion. The deficit goes down $22 billion next year. Is this as much as I want? No. We offered far more than that, but it does cap spending. It caps what we call...
VAN SUSTEREN: For how long?
RYAN: For 10 years.
VAN SUSTEREN: OK.
RYAN: So it's discretionary spending, which is all government agencies, we put legal statutory caps on it with an across-the-board cut to kick in if spending goes above that amount. And we have a super-majority vote threshold to prevent that cup from happening, meaning we protect these caps with a super-majority protection to make sure these caps stay in place.
VAN SUSTEREN: Meaning that...
RYAN: Do I want them lower? Yes.
VAN SUSTEREN: Meaning the next Congress...
RYAN: Exactly. So...
VAN SUSTEREN: ... doesn't come along...
RYAN: ... so future Congresses, it takes a super-majority to violate these caps that we are now setting in law. The last time we had legally binding caps in the 1990s, they stuck for a good while and we actually got spending cuts
VAN SUSTEREN: For a good while, the operative words.
RYAN: Well, they did another budget agreement which replaced it with pay-go, which...
VAN SUSTEREN: But see, I think that's why a lot of people -- a lot of Americans want a balanced budget amendment because they hear, Well, it sticks for a while.
RYAN: I think that's right.
VAN SUSTEREN: And I think that's what's so distressing to those who are supporting it is that it -- that the whole idea of spending caps -- you know, I guess Washington doesn't have a huge track record with Americans...
VAN SUSTEREN: ... a lot of -- a lot of these decisions.
RYAN: I want to make sure the balanced budget amendment has spending caps in it, though, too, because you can balance the budget with a really big government with really high taxes, or if you put spending caps in place, you can balance the budget with a smaller government, with more economic freedom. So to me, the kind of balanced budget amendment that we pass matters a great deal because that will determine the kind and size of government we have.
VAN SUSTEREN: Who gets cut?
RYAN: Who gets cut?
VAN SUSTEREN: Yes. I mean, because ...
RYAN: It's across the board.
VAN SUSTEREN: Well, I mean...
RYAN: With the discretionary cap...
VAN SUSTEREN: But I mean, stop...
RYAN: The Pentagon gets cut, all domestic agencies get cut by about a trillion dollars.
VAN SUSTEREN: All (INAUDIBLE) what about any of the entitlements? What -- what about...
RYAN: So this does not -- this particular agreement does not have entitlements. That's what this select committee is all about.
VAN SUSTEREN: So does it affect anybody on Medicare...
VAN SUSTEREN: ... or Medicaid or receiving Social Security?
VAN SUSTEREN: Absolutely zero to do with them.
RYAN: That's correct.
VAN SUSTEREN: This only essentially to do with government agencies...
RYAN: The government agencies, the first half of this bill, the first tranche, we call it. The second half -- remember, the president wants a debt limit increase to get him through the election. This doesn't do that. This gets him through the year. Then if he wants to have that debt limit increase, we got to cut more spending. And that means you have to have this committee report out and pass into law spending cuts.
And that area of law, what we call mandatory spending, entitlements, is what this committee will look at. And they have to come up with at least $1.8 trillion in spending cuts to give the president the kind of debt limit increase that he's looking for to give him the time horizon he's looking for.
VAN SUSTEREN: All right. And that $1.8 trillion is going to come, like, in November or December?
VAN SUSTEREN: That's when the report will be issued, sometime then. And that's -- that's what's going to hit the entitlements.
RYAN: Look, I'm not a big fan of commissions and committees. I just want us to do our jobs.
RYAN: I was just on one. I've been...
VAN SUSTEREN: That didn't go very far! How'd that go for you?
RYAN: Exactly! Isn't that the point? I just think we should put our bills on the floor, say, Here's how we're going to cut spending, pass it. That's exactly what House Republicans did. We passed a budget that cut $6.2 trillion in spending. We showed you exactly in detail how we would do that. It's been almost 820 days since the Senate passed a budget. The president still has yet to offer an actual plan to deal with this at all.
VAN SUSTEREN: All right...
RYAN: And so because of that, that's why we're doing this committee.
VAN SUSTEREN: OK, let's assume for a second that this is the greatest plan ever, and that I'm for it...
RYAN: It's not.
VAN SUSTEREN: ... you're for it and everybody -- no, I know, but (INAUDIBLE) It's got to travel across to the United -- across the Hill to the Senate. They hate it. The majority hates it. So where does that leave us now?
RYAN: I think they're going to say they hate it right now because they don't want it to pass because this puts the president...
VAN SUSTEREN: That matters!
RYAN: ... in a tough spot.
VAN SUSTEREN: If -- I mean...
RYAN: It does, but...
VAN SUSTEREN: If the Democrats don't want to pass it...
RYAN: Let me say why. Harry Reid put out a bill to the right of Barack Obama. John Boehner put out a bill to the right of Harry Reid. Harry Reid's bill says...
VAN SUSTEREN: (INAUDIBLE) Harry Reid?
RYAN: Yes, that's right. So Harry Reid says, We disagree with the president, basically. We're not going to raise taxes. We will cut spending. So at least we have moved this debate to not if we cut spending but how much we cut spending. And we've also moved the debate for however much you want to raise that debt limit, you got to cut more spending. That's where we've gotten this debate, and Harry Reid has basically agreed with that premise.
Now, I think his bill is full of budget gimmicks, accounting tricks. But the premise that we got to cut spending to raise the debt limit has now been enjoyed and embraced by both parties. And the cuts that John Boehner put in his bill were pre-agreed to in this Biden group by Democrats! And so this is a bill that has spending cuts in it that were agreed to in this Biden group by Democrats.
And so we believe if we pass this and move this over to the Senate, knowing that the Reid bill cannot pass the Senate, we think this improves the likelihood that this can pass the Senate, and the president won't have much of a choice. We'll see how this plays out.
VAN SUSTEREN: OK, well...
RYAN: But if this passes, we think this puts the president and the Senate in the difficult position of saying, Do we reject spending cuts that we'd already previously agreed to because we just don't like the fact that it's John Boehner's bill, or do we sign it? Do we risk default or do we sign it? And that's the decision they're going to have to make if we pass this bill.
VAN SUSTEREN: All right. Well, I think I'd bet against (INAUDIBLE) whether it's going to -- whether it's going to become the bill because the -- President Obama has said -- at least the word has come from the White House that he...
RYAN: From the White House staff.
VAN SUSTEREN: From the White House -- the White House staff...
RYAN: Yes, There's a difference ...
VAN SUSTEREN: I know. The White House staff has said that he would veto it. And on Capitol Hill, the Democrats, who are the majority in the Senate -- they're not wild about it, at least not now. So it's being said.
RYAN: If that's the case and they try to ping-pong this back and forth, then we start running out of time.
VAN SUSTEREN: All right, what -- now, the president has said that if it's a short term deal, which is what this is, short term until November with the commission...
RYAN: That's right.
VAN SUSTEREN: ... who would report back in December and it's (INAUDIBLE) be done probably in January -- that it -- that the -- the people who do our credit rating -- that they're still going to downgrade our credit.
RYAN: I think what would be worse is if we passed a deal that was full of gimmicks that actually didn't cut the spending it claimed to cut, like Harry Reid's bill does. Ours is proposing...
VAN SUSTEREN: But is there something...
RYAN: ... actual cuts.
VAN SUSTEREN: All right, but is there something that would avoid even a downgrade? And don't get me started on the credit rating agencies because they're the same ones...
RYAN: These are the guys who gave us mortgage-backed securities...
VAN SUSTEREN: No, can you...
VAN SUSTEREN: Why -- I mean, I'm just so scandalized by that.
RYAN: I know.
VAN SUSTEREN: These people are the reason that we are in this mess because they gave AAA ratings to those horrible toxic CDOs, where they packaged all these horrible -- the credit swaps...
VAN SUSTEREN: And now we're listening to them and now we're running in fear and now they have their foot on our throat about our credit rating as a nation?
RYAN: But they affect the bond markets. They do affect our interest rate.
VAN SUSTEREN: What are you going to do about them? I know...
RYAN: We can did a show on that.
VAN SUSTEREN: But I mean, that -- that should outrage the American people!
RYAN: But the point I would say is you've got to cut spending to prevent a default and to prevent a downgrade.
VAN SUSTEREN: Yes, I...
RYAN: We put out a plan that would prevent a downgrade.
VAN SUSTEREN: All right, we...
RYAN: We got to cut spending.
VAN SUSTEREN: All right, we have to cut spending to avoid a default, but cutting spending to avoid a credit downgrade by the very people who put us in a credit -- who put us in this horrible situation is a little appalling.
RYAN: Pretty ironic, isn't it.
VAN SUSTEREN: No, it's not ironic, it's appalling! It's even worse than that. I don't know how these people sleep at night.
RYAN: Look, I would agree with them on this. America is running out of road to kick the can down. America can't keep spending money it doesn't have! We can't keep having a president and a Senate that chooses to ignore this problem by offering no solutions! We're borrowing 42 cents of every dollar the government spends. Half of that money comes from other countries like China! You can't cash-flow half your deficit by borrowing it from other countries. We're losing our sovereignty and our own control based upon our spending policies.
Tax increases aren't the answer. That kills job creation, slows down economic growth. And it doesn't solve the problem. And so it all comes back down to, will Congress cut spending or not? We've shown how much we're willing to cut. We've shown that we will fix this problem and pay off the debt with our budget. Now we're just trying to get as much spending cuts as we can, given the fact that we have divided government.
VAN SUSTEREN: Well, we'll see what happens. Congressman, thank you. Always nice to see you -- Congressman Paul Ryan from the great state of Wisconsin.
VAN SUSTEREN: Of course.
RYAN: Thanks, Greta.
VAN SUSTEREN: Nice to see you.