United States of Unfairness? President pushes 'Buffett rule'

This is a rush transcript from "Hannity," April 20, 2012. This copy may not be in its final form and may be updated.

LIZ CHENEY, GUEST HOST: No other president in American history has disparaged this country quite like Barack Obama. His message to voters is clear. America is unfair and our government is one that favors the rich and turns its back on the poor. Here's the president in his own words.


PRESIDENT BARACK OBAMA: We can either settle for our country where a shrinking number of people do really well, while a growing number of Americans barely get by. Or we can restore an economy where everyone gets a fair shot and everyone does their fair share and everyone plays by the same set of rules.

OBAMA: Fair play and shared responsibility will help protect our people and our economy.

OBAMA: Pay our fair share of taxes.

OBAMA: Paying my fair share of taxes.

OBAMA, JAN. 25: Paying my fair share of taxes. If everybody is getting a fair shot, everybody has a chance to do better.

OBAMA: We can build an economy that gives everybody a fair shot.

OBAMA: When we talk about everybody paying their fair share...

OBAMA: Americans who can afford it should pay their fair share.

OBAMA, JAN. 26Fair play and shared responsibility.

OBAMA: I think that's a fair approach.

OBAMA: American who can't afford it should pay their fair share.

OBAMA: Fair play and shared responsibility! That's what we are about!


CHENEY: A lot of empty rhetoric. But to remedy his so-called fairness deficit, the president is calling on Congress to pass the 'Buffett rule.'


OBAMA: When we have debates now about the 'Buffett rule' that we have been talking about where we say if you make a million dollars a year or more, you shouldn't pay a lower tax rate than your secretary. That is not an argument about redistribution, that's an argument about growth.


CHENEY: My next guest says the president's support for the 'Buffett rule' has little to do with growth, it's all about politics and winning that second term in office.

Here to explain is syndicated columnist, Fox News contributor Charles Krauthammer. Hi, Charles. Thank you for being on this evening.

CHARLES KRAUTHAMMER, FOX NEWS CONTRIBUTOR: It's a pleasure to be with you.

CHENEY: I feel like, in full disclosure, I need to tell people, I am the president of your fan club.

KRAUTHAMMER: That's great. I appreciate that very much. I hope that the Swiss Bank is paying your annual salary, regularly, the way it should.

CHENEY: Well, thank you. I appreciate it. We are small, but we are quality.


CHENEY: So, Charles, this issue of fairness in the 'Buffett rule,' the president has gone even farther. We have actually got a quote from last September, we can put up on the screen, where he claims, essentially, that the basic principle of fairness, by which he means the 'Buffett rule,' if applied to our tax code, could raise enough money that not only do we pay for our jobs, but we also stabilize our debt and deficits for the next decade. Sounds really incredible.

KRAUTHAMMER: It is literally incredible. It is almost an embarrassment, it is so shameless. If you were to collect the Buffett tax for the next 250 years, that's longer than the life of this republic, you will not have covered the deficit, Obama's deficit for 2011. You collect it for another 250 years, so we are now in the year 2612, and you have covered 2011 and 2012 and you need to cover only 498 other years of deficits. This is a preposterous statement. And he knows it. And also on growth, it is equally deceptive. What the tax essentially is, it's a doubling of the capital gains tax. It is disguised, but that's the reason why the Buffett rates are lower, it's the capital gains rate, and it's lower than the rate for normal income. So, he doubles it.

Now, the reason that that's not a good idea is because when you double the rate, you actually decrease the amount that the treasury receives. And you decrease the growth because you are shrinking the pool of capital that is out there that people can invest and hire other people. The reason that we had an economic boom after the Kennedy tax cuts and the Reagan cuts, 20 years later, it's precisely that they cut rates and particularly that they cut capital gains rates. But Obama is so obsessed with his notion of fairness, that when he was asked in 2008, in one of the interviews with -- I think it was in one of the debates.

CHENEY: I think we've actually got that video, Charles...

KRAUTHAMMER: Have you got that clip? Would you like to show it?

CHENEY: Yes. Let's show the clip, it's from a debate, exactly, in 2008, where he is asked about the historical fact of the impact of raising capital gains taxes.


UNIDENTIFIED MAN: Actually, Bill Clinton in 1997 signed legislation that dropped the capital gains tax to 20 percent.

OBAMA: Right.

UNIDENTIFIED MAN: And George Bush has taken it down to 15 percent. And in each instance, when the rate dropped, revenues from the tax increased. The government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down. So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected.

OBAMA: Well, Charlie, what I have said is that I would look at raising the capital gains tax for purposes of fairness.


CHENEY: So he really seems not to care that in fact, it's going to have a negative impact on revenue.

KRAUTHAMMER: Well, that shows that this show is spontaneous and unrehearsed, I have no idea you had that in the can -- but that's the famous line where he basically says, I am going to raise the rate, even if it decreases the amount of revenue. This is insane. The purpose of taxation is to raise revenue and to pay for stuff the government has to do. That's the only reason the government swipes your money. And he is saying, I will raise the rates even if it decreases the amount simply because of this abstraction I have, which means I want to take the money from the rich and distribute it elsewhere and think that somehow it's going to help the general economy. It makes no sense.

And look, what's the reason he is doing all of this? It's a misdirection play. It's a way to have the shiny object. He doesn't want to talk about what he has done. He has had the longest over eight percent unemployment since the Great Depression. He has had the great, the slowest and most anemic recovery of any recession since the Second World War and he's accumulated in one term, the greatest amount of debt -- $5 trillion -- in galactic history. So, he can't run on that. So, instead he's going to hold a ball over there, a shiny ball, and he'll say, look over here, so he doesn't have to speak about his record, which has been an economic disaster.

CHENEY: Well, and you have also made the point, Charles, that it's really a dereliction of duty. I mean, he has got this distraction going on while we are headed towards an immediate, a near-term debt crisis. So if you look at what he is doing here, it is beyond just sort of politicking on an issue that doesn't matter, it has great significance.

KRAUTHAMMER: And in a sense, it could turn out be historically tragic. We have one leg up on the Europeans, who are way ahead of us in the entitlement state syndrome, they are already in a debt explosion. We have a few years ahead of us because we are still less of an entitlement state, precious years. Obama himself has spoken about this, how this rate of debt is unsustainable. What is he do, he appoints a commission, then he completely ignores its recommendations. The Republicans have stuck their necks out, have gone out on a limb, proposing a budget, the Ryan budget, which would actually cut spending, lower tax rates while broadening the base, by cutting exemptions, and does entitlement reform, which everyone understand is where the money is and will save our economy.

Obama has not done a thing on any of that. The only thing he's done is to savagely attack the Ryan plan and claim that Republicans want to throw orphans and widows in the snow and protect the rich and do nothing else. That's his argument. And he hasn't done anything for a debt crisis that we can see coming and that he has left completely untouched in a very, very irresponsible way.

CHENEY: And the CBO said just today that his budget for 2013 is going to add potentially $3.9 trillion to deficits over the next 10 years. So, it is indeed a very troubling picture. But thank you very much, Charles, for being with us tonight.

KRAUTHAMMER: It's a pleasure.

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