Paul Ryan takes on critics of budget plan

This is a rush transcript from "Hannity," March 12, 2013. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: Tonight, the chance for real economic prosperity has been unveiled courtesy the House Budget Committee Chair Paul Ryan; and he will be joining me live momentarily to detail his bold and controversial budget plan.

But first, let's take a look at what he's proposing and why the president and Democrats need to listen and why they need to act. And here are the basics. According to Ryan's fiscal blueprint, the budget will be balanced in 10 years and it will not raise taxes. So, how does he accomplish this? Simply, he doesn't spend what we don't have. Now, here is how the congressman explained it earlier today.

(BEGIN VIDEO CLIP)

REP. PAUL RYAN, R-WIS.: This budget cuts spending by $4.6 trillion over the next 10 years. Historically we've paid a little less than one-fifth of our income to the federal government, but the government has historically paid a lot more, spent a lot more. We match revenues with expenditures, so our budget matches the spending with our income just like every family and business must do throughout America.

(END VIDEO CLIP)

HANNITY: All right. To help us reach this balanced budget in just 10 years, Congressman Ryan lays out four major issues that we as a country must tackle.

First, energy. Now, Ryan's proposal opens lands to development, paving a path for affordable and American produced energy, most notably, the plan green lights the Keystone pipeline which is estimated to generate almost 140,000 jobs.

Now, second, health care. Now first and foremost, the budget repeals ObamaCare, strengthens the Medicare system by making it sustainable for future generations.

Third, welfare reform. The plan builds on the changes to welfare that were made in 1996 by extending reforms to other federal aid programs. It gives states flexibility so they can tailor programs like Medicaid and food stamps that will met their state's needs.

Now, lastly, it addresses tax reform by calling for Congress to simplify the code, by closing loopholes and consolidating tax rates. Now, Ryan's goal is to have just two tax brackets, 10 percent and 25 percent.

So the question now is, well, will Democrats see this as Congressman Ryan and again, just throwing granny over the cliff, are they going to demagogue it? Now, don't laugh a sequel to the original ad is already out, we're going to play that for you in just a few minutes. Or, will Senate Democrats who haven't passed a budget in more than 1,400 days, will they seize this opportunity to get the country on a fiscally sound path like Paul Ryan is presenting?

Now, I'd like to be optimistic, but judging by the reaction from the president himself earlier tonight, that's not going to be the case. Now, listen to what he told ABC's George Stephanopoulos.

(BEGIN VIDEO CLIP)

GEORGE STEPHANOPOULOS, ABC ANCHOR: Paul Ryan today put forward his budget and he says he's challenging you to come forward with a budget that also reaches balance. Are you going to do that?

PRESIDENT BARACK OBAMA: No. My goal is not to chase a balanced budget just for the sake of balance. My goal is how do we grow the economy, put people back to work, and if we do that, we're going to be bringing in more revenue. If we've controlled spending and we've got a smart entitlement package, then potentially what you've have is balance, but it's not balance on the backs of the poor, the elderly, students who need student loans, families who have got disabled kids. That's not the right way to balance our budget.

(END VIDEO CLIP)

HANNITY: Oh, deja vu all over again. The president demagoguing Armageddon, what a shocker.

Now, here to expand on the budget plan that he unveiled earlier today in the House, that is the Budget Committee chairman himself Paul Ryan. Congressman, welcome back to the program. Good to see you sir.

RYAN: Hey, great to be back with you, Sean, thanks for having me.

HANNITY: All right. Let me first let you respond to the president. Are you going to be spending every year? Will your budget spend more money every year or will it spend less money every year than we spend today?

RYAN: Actually, more.

HANNITY: Every year will spend more than the next year?

RYAN: Every year. Yes, I just listened to this for the first time, I just heard his interview, I think that was George Stephanopoulos if the voice was right.

HANNITY: Yes.

RYAN: That didn't sound too charming to me, I guess I would say. Our budget grows government spending every year by 3.4 percent, instead of the president's path that we are on right now, which is five percent a year. So, here is what we're saying, is it so draconian to scale back the increase in spending by 3.4 percent a year instead of growing it by five percent a year over the next decade.

The difference, of course, is balancing the budget and getting our debt on a path to being paid off so our children inherit a debt-free nation. I'd also say, balancing the budget helps grow the economy and that's what we're trying to do here.

HANNITY: Look, I really want people -- because I don't think that most people understand the calculators that you guys in Washington use, so I want to be very, very clear here. So, every year for 10 years under your plan, spending real dollars will increase 3.4 percent, every year, there will be no cuts in spending.

RYAN: That is the average increase of annual spending growth each and every year over the next decade.

HANNITY: And the president's planned spending will go up over five percent a year.

RYAN: That's right.

HANNITY: All right. So, you just have a difference on how much you're going to increase spending.

RYAN: Right.

HANNITY: All right. So the difference over 10 years is they will spend $46 trillion under the president's plan and you will spend 41 trillion.

RYAN: That's right.

HANNITY: So, and that is all we need to do to get to a balanced budget?

RYAN: That's right.

HANNITY: Yes.

RYAN: Without raising taxes.

HANNITY: Without raising taxes -- all right, so the next big question is what about ObamaCare, because that's obviously a key issue. I don't think the Senate Democrats will give in on it, I don't think the president would sign a bill that takes away his signature legislation.

RYAN: So, I find this criticism a little confusing or surprising. We call for repealing ObamaCare, why do we do that? Because we don't like ObamaCare. As if we're supposed to put our budget out, which reflects our vision, which reflects to how we think we ought to fix our fiscal problems, what the federal government ought to look like -- for the fiscal policy for the next decade, and we're all of a sudden supposed to include ObamaCare in our vision?

No, we don't agree with ObamaCare, we think it's a terrible law, we think ObamaCare is going to do great damage to our health care system. We think it's going to break the bank, we think it's going to bankrupt hospitals and nursing homes and health care providers and damage the quality of health care to Americans. Now, here is the other dirty little secret, Sean. ObamaCare isn't fully implemented, it has two more years before it's fully implemented and the gory details that are coming in this law have not yet been seen by the American people.

And so, we do think that this law is going to become even more unpopular than it is today and we're not just going to call for its repeal as our budget does. We are going to show a better way to go. We're going to show a better way to have a patient-centered health care system that is controlled by the patient and her doctor, not the a government-run system and that's a big difference of opinion.

HANNITY: When the president sold ObamaCare to the country, he said it would cost 900 billion.

RYAN: Right.

HANNITY: It was under a trillion dollars. The latest CBO estimate that I saw was 2.8 trillion and there was a study that came out that over a long period of time will add six trillion more dollars to our national debt.

RYAN: That's right.

HANNITY: Are those numbers right?

RYAN: That's right, those are recent numbers by the Congressional Budget Office, yes.

HANNITY: OK. So I guess the question I have -- there was a CNS News article that said that Republicans are again vowing symbolically to appeal ObamaCare, and their criticism is, is that when you decided fund the government through the continuing resolution through for the rest of 2013, that that was the moment where you could have defunded ObamaCare. So the question I have for you is, let's assume the House won't pass your bill, but the -- the House will pass your bill, the Senate won't pass it.

You'll go to conference, but this part is, they will want to remove it. In other words, your repeal of ObamaCare. Would you have the power in the House right now with your majority to stop funding ObamaCare and would the House do that?

RYAN: No, because here is the problem, almost all of ObamaCare spending is in entitlement spending. We call that mandatory spending up here, continuing resolutions don't deal with that. They just deal with government agency budgets. Almost all of the spending, the exchange spending, the Medicare, the Medicaid, that's outside of the continuing resolution. That's outside of what we call discretionary spending. So, all of that spending which we repeal in our budget is outside of the purview of these appropriation bills.

HANNITY: What about when we hit the debt ceiling? Because at that point the Congress has the power of the purse.

RYAN: Right.

HANNITY: Would you have the power at that point?

RYAN: So, that's why we have a budget process, right? So our budget process, that our budget proposes to repeal that -- Patty Murray I'm glad she's doing a budget, they're proposing a budget that raises taxes that never ever balances the budget, but at least they're passing a budget for the first time four years in the Senate, that gives us a process where we can look at all spending in government, that's what the debt limit thing is all about. Which is, by doing a budget process, which we haven't done for four years, we can look at all government spending. Right now with the continuing resolution, that just looks at a small slice of the pie, what we call discretionary spending, which does not deal with the vast majority of ObamaCare spending.

HANNITY: All right. Let me ask maybe the question in another way. Is there another way, assuming the Senate and a radical agenda president are never going to go along with repealing ObamaCare. Is there a way that the House will ultimately be able to get that done?

RYAN: Well, you'd have to get the Senate and the president to agree with it. So, short of the Senate and the president agreeing to it, no.

HANNITY: You can't defund it.

RYAN: You can if the president and the Senate agree with it.

(CROSSTALK)

I could pass legislation tomorrow getting rid of ObamaCare, I'm going to be bringing it to the budget committee, but you have to have the Senate and president agreeing to it for that to actually occur. I mean, that's how laws are made, right? This is the law of the land, to change the law of the land, you have to have a bill passed --

HANNITY: Doesn't the Constitution give you the power of the purse?

RYAN: Right, but the power of the purse means spending bills that are signed into law by the president. Therein lies the rub. Therein lies the problem. So what are we trying to do? What we're saying is, this is a terrible law. Americans are in for a rude awakening, we're showing how we repeal it and what we replace it with. And we believe that we can still get at this law because Americans are not going to want this thing to stand as far as we're concerned. So, that's one of the components that we put in our budget as we balance the budget without raising taxes.

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