This is a rush transcript from "Special Report," November 21, 2011. This copy may not be in its final form and may be updated.
BRET BAIER, HOST OF “SPECIAL REPORT”: We welcome to our "Center Seat" tonight the governor of Texas and currently a candidate for the Republican presidential nomination, Rick Perry. Welcome, governor.
RICK PERRY, (R) PRESIDENTIAL CANDIDATE: Thank you. It's good to be with you, all of you.
BAIER: Thanks for coming.
First to the breaking news today about the failure of the Super Committee, your reaction to this and what it means?
PERRY: Obviously, this is, frankly, what a lot of us expected when you -- being the president of the United States, you've got to lead. And this president has not led on this issue. We know what the problem is. We're spending too much money. We're taxing way too much. And it's one of the reasons I laid out that 20 percent flat tax to get Americans back working again.
And that's what this was always about, how are we going to get Americans back working again? And this president, if you think about it, he was looking for somebody to blame. He didn't want to be in a leadership position. And I think this was a contrived opportunity for him to pitch this over to Congress. Now Congress has fouled up.
Well, that’s one of the reasons that I am calling for a part-time legislature, because I think Americans are fed up with Washington being so broke-down and corrosive that they can't fix anything. And the president of the United States is playing into that. I think Americans are ready to throw them all away, cut the pay in half, cut their staff in half. And if they don't have a balanced budget on the way to me by 2020, cut the pay in half again.
BAIER: Governor, I ask every candidate that comes to the ‘Center Seat’ about the path they will take to the nomination. The latest national polls and the average polls have you at 8.2 percent. As you scroll through here you can see the numbers. And then in Iowa, you’re down to six percent, and in New Hampshire you are at two percent. How do you get the nomination? Where do you have to win? Is Iowa crucial?
PERRY: Well, all the states are crucial. You go in and you talk about the plan. I think you talk about your vision. I got in late. I understand that. We laid out a policy on how to get Americans back working a month ago, the first of it. Then we laid out a second part of it with our 20 percent flat tax and spending cut and balancing the budget.
And then just last week we laid out our opportunity to talk about how to restructure Washington, D.C., to deconstruct, if you will, and part-time legislature. Some people say you can't do that. Let me tell you, there are a lot of states in which it works really well. In my home state Charles, 140 days, every other year. It's the 13th largest economy in the world. We get our business done. Those legislators have the jobs back home that they go work at and stay with the constituents and we make it work.
BAIER: So first or second in Iowa?
PERRY: Either way.
BAIER: OK. Bill?
BILL KRISTOL, EDITOR, THE WEEKLY STANDARD: Governor, speaking of the legislators failing, you’ve reacted pretty sharply to the revelations about senators and congressmen selling stocks and seeming to use insider knowledge to profit themselves. What would you do about that?
PERRY: Well, I think the first thing you do is pass a piece of legislation that clearly says it's illegal. Any Congressman or senator who used the insider information -- if you did it, you would go to prison. I mean, that is the fact.
KRISTOL: That would be bad.
PERRY: That would be bad if a congressman or a senator. Any of these individuals that are sitting there today, I challenge Nancy Pelosi to come debate. She was busy she said. And I think so. She wants to forget what she has done and how she profited by this. But I'm telling you she needs to give the information to the SEC, let the SEC investigate. If there is a member of Congress or senator used their position to profit, they need to go to prison.
KRISTOL: Do the members of the Texas state legislature buy and sell stocks. Do you have laws at the state level?
PERRY: Absolutely. We have transparency in the state of Texas. And no one should be able use that -- as a matter of fact, if you did that in the state of Texas you'd be investigated by the Travis County district attorney's office. I’ll guarantee you.
CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Governor, one of the virtues of your flat tax is that -- of any flat taxes that it eliminates all the loopholes, and it's simple. You offer the taxpayer a choice between 20 percent or the old corrupt system. So doesn't it leave in place the loopholes, all of the opportunity for sharp lawyers and accountants and all of the possible corruption in the old system and it doesn't actually cure it?
PERRY: The reason we leave that old system in place is there are a few folks throughout to set the business model up to use the old system. But the vast majority of people -- I'm glad you brought up that, because there it is.
KRAUTHAMMER: You just happen to have that.
PERRY: That’s it. You fill that out, 20 percent. You take the deductions for the charitables, you take deductions for your local taxes, you take the deductions for your mortgage, get rid of the cap gains, get rid of the dividends tax, take 20 percent. Even Tim Geithner will get his in on time.
KRAUTHAMMER: But if the reason not to upset people who have set plans, why don't you have a sunset provision?
PERRY: It's a good idea and one worth.
PERRY: Yes, sir.
KRAUTHAMMER: Would you endorse it right now, right here?
PERRY: Let me explore it a little bit more. But, Charles, it does make sense to give period of time. We did the same thing with the offshore dollars, that $1.6, $1.7 trillion that's out there offshore that is taxed at 35 percent. One year at 5.25 percent, that's what our economic expert said was a good rate to bring the money in and create the jobs. American Chamber of Commerce said it would create 3.5 million jobs bringing that money back in. There’s an example of how we set a sunset, and it might be a good idea to do that on the old system.
JUAN WILLIAMS, SENIOR EDITOR, THE HILL: Governor, you know a lot of conservatives got very upset with you after you said that giving in-state tuition to children of illegal immigrants was a good idea and people who didn't support it no heart, I think was your quote.
PERRY: They should have gotten upset. My wife did. She said it was insulting thing to say.
WILLIAMS: Hold on. Let's stick with the idea. Is it the case that Republican Party is hostile to immigrants?
PERRY: Not at all. As a matter of fact when you think about the state I represent and our population as approaching 37-38 percent Hispanic. My brother-in-law is Hispanic. Mexico’s our number one trading partner. But we understand the important issue is securing the border. We know that the border is being used for a host of illegal activities up to and including Iran working with the Zeta cartels to come in the country to commit an act, to murder a Saudi diplomat. We know Hamas and Hezbollah -- that border has to be secure.
WILLIAMS: But Governor, most legal immigrants is not involved with illegal drugs or terrorism. The point is your attitude in that debate suggested that you saw and I think the Texas Chamber of Commerce saw an important point in giving education to those children who are in your state.
PERRY: Listen, we have as governors to make decisions, and that was a decision that Texas made. But what I said about people that didn't agree with me was that was my error.
WILLIAMS: Do you think --
PERRY: My error was in saying that people didn't agree with what we did in Texas were heartless. That was incorrect. It was an insult to them and I shouldn't have said it because I do respect individuals all across the country and their opinion about that.
In Texas, that's what we decided to do, but we're forced to do it because this federal government has been such an abject failure at securing our border. I know how to secure the border. You put the boots on the ground. You put the strategic fencing in place, the aviation assets in the air. I guarantee you in 12 months after I'm sworn in as president of the United States, that border will be shut down and it will be secure then.
WILLIAMS: If Republicans took a more moderate position wouldn't that help them with the Hispanic vote, which is critical to the party's future?
PERRY: I think the Hispanic voter in America wants to see the border secure. They don't want terrorists using that border -- well, that's my point. To try to say somehow or another that the Hispanic voter is different than anybody else, they're not. They want jobs. There are 14 million people around the kitchen table tonight watching the show and asking the question, who is it amongst those candidates that’s going to get this economy going? And I've laid out an economy plan that’ll get this economy gong. And I happen to think a whole lot of them would love to see a part-time legislature.
BAIER: We hope 14 million are watching tonight. We really do.
Governor, thank you. We'll turn to another panel after a quick time- out. Stay with us.
BAIER: We're back with our panel and our guest Governor Rick Perry. Now to foreign policy. Charles?
KRAUTHAMMER: Governor, the big crisis in the Middle East, first we had Libya and now we have Syria. It's taken a turn from the peaceful demonstrations to armed resistance. There's the free Syrian army. Would you have the United States support the armed resistance in Syria?
PERRY: Well, let me back up and say we missed great opportunities. Iran is the real issue in the Middle East from my perspective. And we had the opportunity in 2009 with the Green Revolution to use the economic sanctions, to use diplomatic sanctions over covert. We had an opportunity to help the citizens overthrow that very repressive regime and to stop them in their quest to get nuclear weapon in ‘09. We failed naively. This president and this administration was talking to Syria and the Iranians and we wasted a great opportunity.
The point should always be when there is this type of oppressive regime obviously working with Iran in that area to be very hostile to our oldest friend and longest serving democracy, Israel; we need to put everything on the table there. There should not be anything set aside that keeps the pressure off of those individuals.
KRAUTHAMMER: Would you do what we did in Libya, which was to institute a no fly zone over Syria? If you were the president today would you advocate we do that to Syria?
PERRY: Absolutely. Absolutely.
BAIER: OK. Bill?
KRISTOL: You'd do that I suppose unilaterally without waiting for the U.N. to approve it?
PERRY: I would not spend a lot of time waiting for the U.N. I will tell you that my position on the U.N. is if they continue to go around as they, the Palestinians state tried to do, that we need to sit down as a country and have a conversation about is the continued funding of the United Nations in the best interest of America. I’ve got some real questions about whether or not.
We can get in to the whole foreign aid. I'd start at zero on every country and let them prove up why we're sending that money. But the U.N. in particular, also, all too often is not acting in America's best interest. And that has to be the first question everytime.
KRISTOL: So you would actually ask the question whether we should give any funds to the U.N.?
PERRY: Absolutely. I think it's a conversation worth having. The idea that somehow or another we just need to write a blank check and say here because we've always done that is not acceptable. We’ve got a country with an economic crisis on its hands. There's Americans out there without a job. And they're watching billions of dollars -- you think about the billions of dollars we're sending to China, a country that has some incredible moral issues. There are aborting 35,000 babies a day, and we are sending them billions of dollars in aid. Why?
WILLIAMS: Well, let's stick with the foreign aid question. You've zeroed it out. So President Perry’s sitting next to me and I say President Perry, name the three -- well, two, country that you would zero owe out right now? Which countries would you eliminate all foreign aid for?
PERRY: Obviously, I would cut out the foreign aid to China. That'd be one of the countries -- we'd have a negotiation and I’d just say, listen, the foreign aid that is going -- I think -- I can't remember how many $30 million that’s going to China for PEPFAR type dollars. And I understand humanitarian, but when you have got a country that is engaged in the type of moral dilemma that -- the government is forcing people to abort the children.
WILLIAMS: OK, China, but what other country?
PERRY: You know, I would say, I don't know whether Venezuela’s getting any money or not, but we sure shouldn't send them anything in foreign aid. We're sending them plenty in foreign aid because of our petro dollars that are going down there. That is one of the reasons we need to be independent in this country so that no more dollars go to the countries that are not working in America's best interest.
KRAUTHAMMER: Would you zero out Pakistan?
PERRY: Listen, Pakistan is a -- I would zero out every country to start.
KRAUTHAMMER: Who you end up with zero?
PERRY: I don't know. And I can't say I know that answer. That is such a complex issue because the military and the secret police there and - - this isn't a country that’s easily working with. Any country that has nuclear weapons in that part of the world where you got India and Afghanistan, we may have some leverage with those countries working together.
WILLIAMS: Is that an argument for keeping foreign aid? Because you are speaking against the national interests.
PERRY: I'm not against foreign aid. I'm just against testing it and making sure that it's actually spent properly. Look, Israel’s a great example. Israel, we started out giving foreign aid to Israel and it has become a country that has been successful.
Now, I don't get foreign aid confused with strategic military dollars going to an ally. I don't get confused about that. But foreign aid to Israel, they’re doing their own foreign aid now because they’ve become a very successful country. That's what we ought to be doing, putting American companies into those countries instead of just writing them a blank check for starters; to help create whether it’s infrastructure or what have you.
BAIER: Governor, you are looking for one or two in Iowa. Is South Carolina really important?
PERRY: Oh, yes, absolutely. South Carolina’s very important.
BAIER: You think you can get the nomination?
PERRY: Yes, sir, absolutely. Look, this is a very fluid race. People are looking for individual with vision. They're looking for somebody who has got the executive governing experience. I'm the only person sitting on that stage who has actually run the 13th largest economy in the world for the last 10 years and created more jobs than any other state in the nation.
BAIER: Governor, thank you very much for your time today.
PERRY: It's an honor to be with you.
BAIER: Thanks for coming on "Center Seat."
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