This is a rush transcript from "Hannity," August 1, 2011. This copy may not be in its final form and may be updated
SEAN HANNITY, HOST: And breaking news tonight after a day of high drama on Capitol Hill, the U.S. House of Representatives approved the controversial debt deal that was announced by President Barack Obama last night at the White House. Now, that means the bill now heads to the U.S. Senate where a vote is expected at noon on Tuesday, but tonight the spotlight was on the House and among the 269 members who voted in support of the measure was none other than Arizona Congresswoman Gabrielle Giffords who made a surprise return to the floor. Now, this is the first time the Congresswoman visited the capital since the tragic shooting that nearly took her life in January of this year. And as you can imagine, she was greeted with a stirring round of applause from both sides of the aisle. Now, that incredible moment of unity in the House was preceded by a day of disagreements as Republicans and Democrats voiced serious concerns over this deal on the right. Members from Michele Bachmann, Senator Tom Coburn have slammed the bill, saying it does nothing to decrease spending, nor does it institute any real long-term reforms, and Congresswoman Bachmann by the way will be here later live this hour. Now, meanwhile, on the left, it is a different story, as Democrats are outraged over the fact that the bill does not immediately trigger any new tax hikes on you, the American people. However, this is something that we are keeping a close eye on, because it is the belief of many that the bill authorizes a so-called special committee to repeal the Bush tax cuts and also possibly set into motion other so-called revenue enhancers down the road. Joining me now for an exclusive interview, somebody who voted for the compromise, and he is the chairman of the House Budget Committee, Wisconsin Congressman Paul Ryan. Congressman, always good to see you. Thank you for being with us.
REP. PAUL RYAN, R-WIS., BUDGET CHAIRMAN COMMITTEE: Yeah, you too Sean. Thanks for having me. Good to be with you.
HANNITY: Alright. I know it's been a long battle, a difficult process. Why don't you give us your take on it? You voted for it, why you think this is good for the American people.
RYAN: Because we're cutting spending. Look, is this everything I want? Of course, not. Our budget proposed to cut $6.2 trillion. This cuts $2.1 to $2.4 trillion. First thing we get right off the bat is a trillion dollars out of government agency budgets. We actually got discretionary caps in law. I've been fighting for these spending caps ever since the day I came to Congress. We couldn't even get these kinds of spending caps in the Bush administration. This kind of tells you just how far the culture has changed. So, we got $2.1 trillion to $2.4 trillion in just spending cuts. The president first started off asking us for a blank check, then he asked for a big tax increase, he got none of those, and we kept our pledge, which was we will cut more spending than we will raise the debt limit by. That pledge was maintained.
HANNITY: Alright. Let me ask -- so, the president is going to get an immediate trillion dollars, or just shy of a trillion dollars --
RYAN: Nine hundred
HANNITY: Alright, $900 billion in the debt ceiling. And these cuts are going to take place over a 10-year period of time.
RYAN: That's right.
HANNITY: Alright. How much are we getting the first year and how much are we getting the second year? How much is in defense? And how do we hold future congresses accountable to what you're doing today?
RYAN: Right, right, that's a good question. So, $21 billion right away for the first fiscal year. Then it's about $46, I think, that's off the top of my head, for the second fiscal year. How much out of defense in the first fiscal year will be $9 billion from what we call the security accounts. That's not just defense. That's all security. The Homeland Security, National Security. And then $2 billion to $4 billion the next year. So, the cuts on defense are -- were minimized quite a bit by the most recent agreement John Boehner reached. More to the point, how do you bank these cuts? What conservatives like me have been fighting for, for years are statutory caps on spending, legal caps in law that says government agencies cannot spend over a set amount of money.
And if they breach that amount across the board, sequester comes in to cut that spending, and you can't turn that off without a supermajority vote. We got that in law. That is here. So, the best way you can actually bank that trillion dollar spending cut is to have legal caps in law which we haven't had since the 1990s. We now have them. And in the committee, the special committee, is tasked for getting the $1.1 to $1.5 trillion in cuts. Now, this, I'm going to tell you, Sean. We're not going to raise taxes in this committee. Number one, we're not gonna put the kind of people on this committee --
HANNITY: Are you on the committee. Are you on this select committee?
RYAN: I don't know yet. They haven't been named yet. But we're not going to put that kind of people on this committee, that are going to, you know, go for a tax increase, number one. Number two, it couldn't pass the House even if they tried. Number three, the baseline they used, the measuring stick that they use for this committee, makes it really basically impossible to raise taxes, because to raise taxes and get credit for it in this committee, you would have to commit a $3.5 trillion tax increase. The Bush tax cuts go away, the alternative minimum tax kicks in. You wouldn't get credit for any of that. And then you'd have to raise taxes on top of that, that's why we think tax increases are a nonstarter.
HANNITY: I know you know budget numbers better than anybody here. The CBO, though, is scoring this bill to include that the Bush tax cuts expire.
RYAN: No, no. The CBO does not -- that is not true. The CBO does not -- no...
HANNITY: That's not true? That's what I've been reading all day.
RYAN: I know. The CBO baseline assumes that. Current law --
HANNITY: Well, that's what I mean.
RYAN: So this bill doesn't address tax policy. This bill cuts spending. This bill is scored as cutting $2.1 to $2.4 trillion in spending.
RYAN: The current law has all the Bush tax cuts going away in 2013, the alternative minimum tax kicking in. The Obama care tax increases kicking in. And CBO simply in their baseline reflects current law. This doesn't change current law on taxes. This changes current law on spending only.
HANNITY: Look, I guess the problem is, and I've been trying to explain this, and you know this as well as anybody. And this is the problem I have with the bill, I agree that there's been some changes, there's no tax increases here. I was very happy with the House. And I want to be clear about this, about repealing Obama care, about passing your plan, about passing cap and tax. I felt that strategically and tactically, and tell me where I'm wrong here -- that when the competing bills came out, the Gang of Six, the McConnell plan, and the President had alternatives that the one bill we should have focused on the most didn't get the attention it deserved.
RYAN: I agree with that. Cut, Cap and Balance --
HANNITY: And for example, S&P and Moody's are saying, neither one of these bills meets muster and we're going to be downgrading.
RYAN: Well, so, first of all, I'd say a couple of things. This bill cuts spending. This bill caps spending. And this bill for the first time in 50 years forces a vote on the Balanced Budget Amendment. We're going to have a vote on the Balance Budget Amendment. And we're also guaranteed a vote in the Senate on the Balance Budget Amendment; we haven't had that in 15 years.
HANNITY: Can Harry Reid table that?
RYAN: No, he can't. That's part of this deal. So, we will have a crack at an actual balance budget in the House and the Senate on this bill. So, we cut spending, we cap spending, and we get a guaranteed vote on a balanced budget amendment. We can't guarantee it will pass because members of Congress have to make up their minds on that. The other point I would say Sean is, we're getting 60 percent of the spending cuts we called for in our budget in discretionary spending. Look, I wanted 100 percent of what I wanted, but I got 66 percent. That's better than nothing. More to the other point, here's our problem. Barack Obama is president, Harry Reid is the majority leader. We control just the House. So, we're not getting everything we want because we have divided government. But what we got out of this is, we said no rubber stamp to the president, no tax increases, and we got good spending cuts. Not as much as I want, but I'm going to take these spending cuts and I'm gonna go fight for some more tomorrow.
HANNITY: Alright. Congressman, this is important. And I spend a lot of time on the program, and I know that Louie Gohmert talked to you about.
RYAN: He did.
HANNITY: And apparently, you promised that you'd move this in your committee.
RYAN: Oh, yeah. Baseline budgeting. Absolutely.
HANNITY: Baseline budgeting. For example, we're going to save these trillions that you talk about, but every year spending for the federal government -- and correct me, is around an increase every year of about eight percent. The Mack Penny Plan, which is what I think Louie Gohmert was talking to you about, literally says, we're going to freeze spending at 2011 levels, and then cut one percent a year every year for six years. It seems to me something that we can really sell the American people -- either that or Cut, Cap and Balance. I thought your plan was a good start. But if we don't deal with this baseline issue, where we're increasing eight percent a year spending while the American people are suffering, we're never going to get to a balanced budget.
RYAN: Look, Jeb Hensarling and I have been authoring budget process reform for years.
RYAN: One of those provisions is to fix this baseline joke. I mean, the baseline. So Louie is completely right about baseline. We're going to be doing budget process reforms, line item veto, more spending caps, [INAUDIBLE] budgeting, and fixing this baseline issue. But let me just leave you with this. This bill brings discretionary spending lower next year than it is this year. That's never happened before. For two years in a row now, not -- we're not slowing the rate of growth, we're actually bringing spending down, so it's lower next year than it was the previous year --
HANNITY: -- so how much will we spend more next year than this year?
RYAN: We will spend $22 billion less, $21 billion less next year than we are this year. And then it goes down to $46 I think next year versus the prior year.
HANNITY: So, it doesn't go up - so real dollar spending doesn't go up eight percent next year?
RYAN: I'm talking about discretionary spending. I'm talking about government agency budgets.
RYAN: Medicare, Medicaid, all that autopilot spending, that spending is on autopilot. That's why you have to do entitlement reform. That's what we proposed in our budget. Those things grow because baby boomers are retiring, healthcare inflation is going up. Those things are on auto pilot. Congress doesn't have a control of those spending programs, which is 60 percent of our budget, on any given year. That's why we want to reform those programs, too.
HANNITY: Alright. Paul Ryan, appreciate your time. And I hope you can get to the baseline issue, because for me, that is, if we're going to really cure the problem, and you know these numbers well -- that is -- we've got to deal with that.
RYAN: I agree.
HANNITY: Alright, congressman, good to see you. Thank you.
RYAN: Thanks, Sean. You too.
HANNITY: And coming up, continued coverage of all tonight's breaking news. Now, this bill, now will head to the U.S. Senate for a vote tomorrow at noon. When we come back, Dick Morris is here. We'll ask him what we can expect, and how this deficit debt deal is going to impact the 2012 race. That and much more, straight ahead.
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