This is a rush transcript from "On the Record," August 2, 2011. This copy may not be in its final form and may be updated.
GRETA VAN SUSTEREN, HOST: Is the debt ceiling law just a Band-Aid on the economy, or will it work? The law raises the debt ceiling through 2013 and cuts more than $2 trillion from our national debt over the next 10 years. But what happens when the year 2013 comes? We asked Republican Senator Chuck Grassley of Iowa.
VAN SUSTEREN: Senator, I know you're a no vote, but explain this to me, that in terms of this debt ceiling deal is that there's $20-or-some-change billion in the first year, $40-and-some-change billion in the second year, but when are we going to see the last $900 billion in this first group of cuts?
SEN. CHUCK GRASSLEY, R-IOWA: Well, as we always do when we budget, it's spread out over a 10-year period of time. So the figure of approximately $900 billion is looking ahead 10 years. Now, if that's carried out, that's not a bad deal. But so often, we've seen Congress change things along the way. So you're only sure of what's going to be for the next couple of years, and for the first year, it's just $21 billion less to be spent next year than being spent this year.
But remember, that's in just 15 percent of the budget we call discretionary. In the 44 percent that's in entitlements, it doesn't affect that at all, and that's going to go up 6 or 7 percent. So if you look at the entire expenditure, it's going to go up next year regardless.
VAN SUSTEREN: Well, the thing that sort of caught my attention is that this is a 10-year plan, to the extent that anything is certain here in Washington, but the budget -- the ceiling is -- the debt ceiling only is being raised through 2013. And so we all have the hope that the economy is really going to rev up, or come 2013 we're now sitting with all these cuts that we've planned for and we now -- we might be up against the ceiling again.
GRASSLEY: Well, in March of 2013, we're going to be back here doing the same thing. The only advantage is this. We have established a principle. And I say this even if I voted against the bill. If the principle is established that we are going to reduce expenditures dollar for dollar for an increase in the debt of a dollar, then we've established a principle that if that goes on for 10 years, at the end of 10 years, we'll have a $10 billion surplus.
But again, what's -- you got to always raise questions: Is Congress going to stick to its guns? And that's always a question that's out there. And since it's kind of like a bird in a hand -- it's not necessarily a bird in the hand, like we're two in the bush, you know.
VAN SUSTEREN: But if -- well, if we've already -- if we've already cut for the year 2014, if we make the plan now for 2014 what we're going to cut, in theory, if come the end of -- come March 2013 and we have to have raise the debt ceiling, you know, we're going to have to find something to cut again or we're going to have to raise revenue at that point.
GRASSLEY: Well, but here, that shouldn't be very hard. And let me explain why I don't think that's very hard. There's got to be a lot of -- of room in any budget because you get the president submitting a budget on February the 14th. Then he gets a lot of heat from his own Democrat Party. So on April the 13th, he revises it in a speech, national speech. And already, he's found ways of saving $4 trillion, OK? Then we go through this process that we went through in the last two or three weeks and we vote on it today. And we found another way of saving another $2 trillion. So, you know, the public is going to be looking at us and saying, what's the game? You know, if the president says we got to spend -- budget that has a $13 trillion deficit, two months later, it's going to be a $9 trillion deficit, and then Congress acts today and the president backs it up, and it's going to be a $7 trillion addition to the national debt, you know, did we start out in the real world? And probably we didn't because Washington is island surrounded by reality.
VAN SUSTEREN: Should the American people watching what's happened in terms of this decision and this vote -- should the American people feel like we're on the right path? And that's assuming everyone keeps his word on this whole deal. Or should the American people instead think that there really has been no structural change, there's just been a lot of promises?
GRASSLEY: There would be structural changes in the 15 percent that is discretionary. No structural changes yet in entitlements, 44 percent of the budget. Very little change in the 20 percent of the budget that is defense. And if you're really going to make changes, they're going to have to come in the area of defense and the area of entitlements. Now, I don't say in the area of entitlements just to save money. It's a case there, are you going save the program for our children and grandchildren? They're paying for it today, they ought to have some benefit from it. But they won't have any benefit from it if we don't make structural changes.
VAN SUSTEREN: How do you feel about the committee? Would you like to serve on it?
GRASSLEY: I would be willing to serve on it, but the leader put out, say tell us if you're interested in serving. I'm not going to say I'm interested in serving. If they want me, I'll serve. But I'm telling you, it's not going to be an easy job. And if they don't reach some agreement by Thanksgiving, you have these automatic across-the-board cuts, 50 percent for Medicare, 50 percent from defense. And I don't know how you're going save 50 percent of that savings all from defense or from Medicare. It's got to be broader based than that.
VAN SUSTEREN: How should the American people feel: good about this, bad about this, wait and see or indifferent?
GRASSLEY: Well, if I want to be kind, I'd say wait and see. But knowing how Congress has acted in the past on efforts to reduce the deficit and have automatic triggers and have those automatic triggers overwritten by acts of Congress later on because they didn't have cuts enough to follow through, you know, I think then you ought to be pretty cynical about it.
VAN SUSTEREN: Senator, thank you, sir. Nice to see you. Always nice to see you.
GRASSLEY: Thank you.
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