OTR Interviews

Ryan on Obama's budget plan: 'Not a very serious attempt to get ahold of our fiscal problems'

House Budget Committee chairman reacts to president's late - and much anticipated - 2014 budget proposal


This is a rush transcript from "On the Record," April 10, 2013. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Good news and bad news tonight. For weeks, we've been hammering President Obama for not doing his job. The good news is we finally have the president's budget. The bad news is you might not like what's in it, House Budget Committee Chair Paul Ryan tweeting, "Good news, Barack Obama finally released his budget. Bad news, it includes a nearly $1 trillion spending increase, a $1 trillion tax hike and record debt."

Congressman Paul Ryan joins us from the great state of Wisconsin. Night to see you, sir.


VAN SUSTEREN: OK, so what's wrong -- well, let's take this bit by bit -- nearly $1 trillion in spending.

RYAN: So we have a trillion-dollar deficit. We've got a debt crisis on the horizon, and it's-spending driven. And so what does the president propose? About a $1 trillion spending increase, only to be eclipsed by a $1.1 trillion tax increase. So the total deficit reduction in this 10-year budget, spending $46.5 trillion, is $119 billion. Oh, and the deficit reduction he proposes will start beginning of the year 2020, four years after he's left office.

VAN SUSTEREN: So you think this is just a...


VAN SUSTEREN: Is this a budget or a political document, in your mind?

RYAN: It's more of the same, take more from families, spend more in Washington, ignore the deficit and the debt. So it's just not a very serious attempt to get ahold of our fiscal problems. That's what we see.

VAN SUSTEREN: All right, do you see any part of it that -- for instance, the chained CPI -- and if you could explain it for the viewers (INAUDIBLE) you see that as sort of an olive branch or at least reaching out to...

RYAN: That's what I interpret that as. So chained CPI -- this is another way of saying the Consumer Price Index. Economists claim that it is overstated. And so this is an attempt to make it more accurate. And what that does is it ends up saving money throughout the federal government on various programs that are tied to spending to the Consumer Price Index.

The president puts this proposal in there, in his budget. First time he's done something like that. It does affect the spending on things like Social Security and Medicare and lots of different programs.

And so we interpret this as more or less an olive branch, meaning a good thing from the perspective that he's willing to put something on the table that's controversial. We've never proposed it before. Our proposals have always been don't deal or touch current seniors, reform these programs for younger generations so that they can have these programs when they retire, so they don't go bankrupt, while making sure that current seniors don't have any changes.

This changes current seniors and rejects reforms to the next generation, like what we've proposed on Medicare, which we think saves Medicare. So it's a different approach, but at the very least, he's putting something on the table that I think he's -- he intends to be an olive branch. And so I see that as a good thing.

VAN SUSTEREN: All right. You know, and just the -- for the chained CPI, that doesn't really -- I mean, we sort of shorthand oftentimes sort of almost a little bit sloppy call it cutting Social Security benefits.

RYAN: No, it's not. That's not...

VAN SUSTEREN: You're not proposing cutting, and neither is the president.

RYAN: No, I wouldn't...

VAN SUSTEREN: It's really -- it's really how much does it grow...

RYAN: That's right.

VAN SUSTEREN: ... and how -- how does it -- so that you keep the same sort of buying power for the...

RYAN: That's right. So it's a more accurate measurement of inflation, according to statisticians and economists. It slows the growth of spending. It's not a cut in spending. And it's a proposal that has been around for a number of years. President Clinton proposed something like this in the 1990s. It's not a new idea. It's new from the White House.

It saves about $230 billion. There are different iterations of this idea. But it's really the only thing in here that I would say is a serious attempt at budgeting, but it's outdone or washed out by the massive spending increases. It's outdone and washed out by the fact that he's proposing $1.1 trillion in higher taxes after he just raised taxes $.6 trillion, and a $1 trillion spending increase.

I mean, look, he says that we need to deal with this deficit. He's proposing we start reducing the deficit in 2020.

VAN SUSTEREN: After he's gone.

RYAN: After he's gone. Four years after he's gone.

VAN SUSTEREN: Why do you think he does that? Do you think that's a political reason or you just think that that's sort of a smart way to do it, sort of ease us into trying to do this?

RYAN: Ease us into trying to do it?

VAN SUSTEREN: Well, I mean, like -- I mean, like -- it's a slow...

RYAN: Maybe waiting a year is easing us in...


RYAN: ... but waiting until 2020?

VAN SUSTEREN: Well, he -- he believes that -- that by spending money to stimulate the economy -- if you stimulate the economy, there'll be more revenues, more revenues (INAUDIBLE) the government. I mean, that -- that happens the way he thinks the...

RYAN: So that was his thinking behind the stimulus package.


RYAN: It obviously hasn't worked, but that is the way he thinks about economics, I think that's fair to say. But this is 2013. He's saying we should start deficit reduction in 2020? The debt crisis will have come and gone by then if we don't get this situation under control.

Look, we proposed a budget that balances the budget in the House. We balance the budget not just because we want numbers to add up, because we know it's the right thing to do to grow the economy, to improve people's lives. Look, if we want to restore opportunity in this country, if we want to fight poverty and get people back on their feet again, if we want to get out of this malaise we're in, this slow economy, shrinking paychecks, we've got to have a break with the politics of the past.

The president is proposing more of the same. That's the problem as we see it. And so this is one of those status quo budgets, much like the Senate budget. And that's why there's a big difference between what we propose -- he proposes to never to balance the budget ever. We propose not only to balance the budget but to save these incredibly important programs like Medicare so they're solvent without changing current seniors.

VAN SUSTEREN: All right, I'm going to ask you about Medicare (INAUDIBLE) but first I want to ask you about this. According to a report, the U.S. federal budget deficit fell this year compared to last year. That's the right direction. You agree with that?

RYAN: It's the right direction and it's because of the economy.

VAN SUSTEREN: All right, well -- OK, so -- so does that indicate -- the fact that it's fallen in a year, is that an indication to you that the economy is sort of revving up, if the economy revs up, there will be presumably more jobs and more revenue. Are we -- or at least, you know, to sort of to supplement, you know, whatever the budget plans are.

RYAN: So if the economy grows, that does happen. I wouldn't say revving up. We're actually at a fairly slow...

VAN SUSTEREN: Well, I know, 88,000 jobs in -- in March...

RYAN: Yes, so I don't think you can say the economy is revving up. But if it does rev up...

VAN SUSTEREN: But that doesn't...


VAN SUSTEREN: ... that's a significant number, though, that our deficit -- that the deficit has fallen.

RYAN: Well, there are natural things that are occurring in the budget, which is some programs, automatic stabilizers, unemployment and things like that, are shrinking. But the president in his budget proposes to increase the deficit next year. He proposes more spending, which increases the deficit.

So what we prose is not only -- we get the deficit down, cut it in about half right away, and then we balance the budget.

VAN SUSTEREN: All right. Explain...

RYAN: We're showing that you can do this. And yes, cutting spending and growing the economy, that's the secret sauce to fixing this budget mess.

VAN SUSTEREN: Explain this to me. I -- I mean, actually explain the president's thinking, which probably isn't fair, but he's not here -- is that -- it was my understanding, and perhaps incorrect, that the ObamaCare sort of decided -- resolved a lot of our health care issues, including issues about Medicare. Now I see in the president's proposal all these sort of changes in Medicare...

RYAN: Right.

VAN SUSTEREN: ... all these taxes and things going up and benefits going down, and I, you know, hearken back to the president saying, If you like what you had before...

RYAN: That's right.

VAN SUSTEREN: ... it was going to keep everything. Well, now I see it sort of, like, you know, chipping away, and I see all sorts of different things, you know, decreases in payments to Medicare health providers.

RYAN: That's right, about $400 billion.

VAN SUSTEREN: So whatever -- I mean, why are we seeing sort of ObamaCare now almost being managed through a budget proposal? Or am I wrong on that?

RYAN: No, you're right about that. And I think this is what the world looks like under ObamaCare. Don't forget ObamaCare changed three programs. It changed Medicare and Medicaid and then created ObamaCare. And what ObamaCare did to Medicare is it took $716 billion from Medicare to spend on ObamaCare." Then it put this new board of 15 bureaucrats in charge, putting price controls on Medicare providers, which leads to denied access.

And now in addition to that, in this budget, they're calling for about $400 billion more in price controls and cuts to Medicare providers. The problem is what the Medicare providers are telling us is they're just going to stop providing health care to Medicare beneficiaries. If you go down this path of having the government ration and price control medical are to the Medicare community, people aren't going to be able to get Medicare. And that's what we see coming with ObamaCare.

This is why we propose fundamental Medicare reform, which says get rid of all of that, leave Medicare alone like it is so that my mom, who's been on it for over 10 years, can keep it like she has, and then reform it for my generation, those of us, you know, who are 55 and younger, so that it reforms -- reform it in a way that makes it sustainable. So it works like the plan we have in Congress.

That makes it sustainable for us and it helps us keep the commitment to our current seniors. That's what we propose. The president has rejected that. And so as a result, he has to do this.

VAN SUSTEREN: Well, it almost seems like there's -- that in the budget -- in his budget plan -- I mean, I understand why you would want to modify ObamaCare through your budget plan, but in his budget plan, it does appear to me that there's some effort to sort of modify the ObamaCare almost through the back door.

RYAN: Well, it's to do more of the same. The point I'm trying to make is...

VAN SUSTEREN: Well, no, but there -- but I mean, there are -- there's a decline -- maybe more of the same, but there's the decline -- all of a sudden, it's more evident because I haven't seen the 20,000 regulations, but I see it's more evident, you know, where people are going to be taxed a little bit more or there are going to be a little decline in payments for service providers. I mean, I can see it going through the budget.

RYAN: Yes. And so that's what ObamaCare started to do. It said less money for Medicare providers through ObamaCare. That passed. That's coming. And now we see Medicare providers are having a real hard time providing health care.

Now what he's following up on is saying, Here's my only real cost- saving idea in entitlement reform. Stick it to the providers again, lower reimbursement rates to Medicare providers in addition to what's already coming, which simply means more price controls and fewer services for Medicare beneficiaries.

That is his version of entitlement reform, of Medicare reform, which is very different than what we've been proposing. But that's the path we're on with his ObamaCare program in place.

VAN SUSTEREN: All right, AARP has gone after him a little bit on this chained CPI. He said something in the campaign -- we have a tape from 2008, when he was running against Senator John McCain.


THEN-SEN. BARACK OBAMA, D-ILL./PRESIDENTIAL CANDIDATE: John McCain's campaign has gone even further, suggesting that the best answer for the growing pressures on Social Security might be to cut -- might be the cost of living adjustments or raise the retirement age. Let me be clear, I will not do either.


VAN SUSTEREN: All right. Well, obviously he's changed. And so is the president right? Because, I mean, this is obviously gotten a lot of people upset in his base, is he -- he says he's meeting the Republicans more than halfway. Is -- do -- you sort of roll your eyes.

RYAN: Well, I wouldn't say he's meeting us more than halfway. We've never proposed this. This is not our idea. This is his proposal.

VAN SUSTEREN: But just in general in the budget. I mean, is -- is there any -- anything else in the budget where you see a sort of a -- you know, a gesture to you to talk?

RYAN: We cut $5 trillion in spending. He raises a trillion dollars in spending and raises a $1.1 trillion in taxes.

VAN SUSTEREN: So this is dead on arrival.

RYAN: How do you see this as meeting us halfway? Honestly, I mean, OK, we say take $5 trillion out of spending to balance the budget and reform the tax system. Get rid of loopholes, lower tax rates for families and businesses to grow the economy. He says, Don't do that, but raise taxes $1.1 trillion and raise spending a trillion dollars. How is that meeting us halfway?

VAN SUSTEREN: So he -- I mean, he -- his budget, in your eyes, in the House of Representatives, dead on arrival.

RYAN: Of course. But I think they probably understand that, but...

VAN SUSTEREN: So where do we go from here.

RYAN: So that's -- look, I don't want to be as dour as I come across right now. I'd like to think because the Senate passed a budget this year for the first time in four years, the president finally put his budget on the table, it's about 65 days late -- I'd like to think that that puts in place a process under which we can start talking. When you get some...

VAN SUSTEREN: I'd like to think, but is that realistic? I mean, is it realistic?

RYAN: I think it is realistic. I think putting this chained CPI idea that the president has put on the table shows me that he's more serious than he has been in the past, albeit the macro statistics of this budget, the trillion in tax increases and spending increases, that's not very serious.

VAN SUSTEREN: Well, do you think he loaded it up that way because -- so he could give some when he comes to the table a little bit?

RYAN: You know, I don't know. I honestly don't know. I don't...

VAN SUSTEREN: But you know, it's -- it's sort of, I mean, interesting when he spoke today, he said -- and when he spoke today, he said -- I mean, there's a couple things struck me. He says, My budget also replaces the foolish across-the-board spending cuts that are already hurting our economy." He's talking about the sequester. But that...

RYAN: He's -- he wrote the sequester.

VAN SUSTEREN: You know, but I -- I can't figure out why he said that. He actually said it twice in his speech.


RYAN: I stopped trying to figure this stuff out. The point is, Senate passed a budget, we passed budget in the House, the president's put one on the table. We need to start talking. We've got to find where common ground exists because what we think this divided government owes the American people is a down payment on the problem. We need to get this deficit and debt under control so we can grow our economy, so we can improve people's lives, so we can get people back to work.

And so this to me tells me we got to get to work. We got to start talking to each other. And at least they passed something in the Senate and at least he proposed something so at least we can start talking.

VAN SUSTEREN: Would you have a different view if the February 2009 stimulus had revved up the economy? Would you have a different view of his -- of his...

RYAN: Well, it didn't, so...

VAN SUSTEREN: No, no, I...

RYAN: ... it's a hypothetical.

VAN SUSTEREN: No, no, but I'm saying, is -- I mean, is the fact that the stimulus bill was so disappointing and the fact that his budget in some ways mirrors much of the ideology of the stimulus bill -- is that, you know -- is that a sign that we're just -- you know, that he's just on the wrong track?

RYAN: Well, I don't think he's learned the lesson of economics or of history, and he continues to repeat the same mistakes that have been made. And if we have any value, Republicans, House of Representatives, divided government, it is that we're not going to help him repeat these mistakes. We're going to help him prevent those mistakes and actually get a down payment by cutting spending, reforming entitlement programs in a smart way, growing the economy, reforming the tax code, opening up energy exploration so we can have the energy renaissance that is on the cusp in this country, if we allow it to happen.

Those are the kinds of things that we think will increase paychecks, increase jobs, get this economy revving up, and yes, getting this deficit and debt under control.

VAN SUSTEREN: Congressman, thank you. Always nice to see you, sir.

RYAN: You bet. Thank you.