Thune: We have a deficit problem that needs to be addressed

This is a rush transcript from "Your World," November 30, 2016. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: Let's read that now with John Thune, the South Dakota senator of the Senate Finance Committee, overall, a great read of things on Capitol Hill and the capital that is going up at the corner of Wall and Broad.

There does seem to be a connection, Senator, to the election of Donald Trump and what has been happening since. Do you buy that?

SEN. JOHN THUNE, R-S.C.: Of course there is, Neil.

And, by the way, you're anything but boring.

CAVUTO: Thank you.

THUNE: But, no, I think that there was some optimism and some hope that came out of the election particularly with regard to business.

We have had now, if you look at the worst economic recovery in 60 year, we haven't had a single year in the current administration where the growth rate has exceeded 3 percent. You have got this huge, heavy burden of regulation that is making it more difficult, more expensive to create jobs in this country.

And so I think people -- the election came and it's like people just felt like a huge sigh of relief. And I think that a lot of these things that are standing in the way of economic growth are going to be addressed. And I think that is why you see the activity in the market in the kind of trends being reflected there.

(CROSSTALK)

CAVUTO: Senator, I'm sorry, sir. But are we getting ahead of ourselves, not so much asking if we have markets who stay here, but that everything is going to fall into place?

Steven Mnuchin, who is going to be Donald Trump's treasury secretary, was on Fox Business earlier today, which, again, Senator, if you don't get, you should demand. And the incoming commerce secretary, or hopes to be commerce secretary, Wilbur Ross, they were talking about the various plans that are out there and the 100-day rush to get cuts in regulations, to deal with Obamacare, and also to cut all tax rates.

I want you to react what Steve Mnuchin had to say on that subject with Maria Bartiromo.

(BEGIN VIDEO CLIP)

STEVE MNUCHIN, TREASURY SECRETARY-DESIGNATE: We're already sitting down and discussing this with Congress. And this is going to be something that happens absolutely within the first 90 days of this presidency.

We're going to have a major tax reform, biggest tax reform since Reagan.  And it's not just going to be a cut in corporate taxes, but it's also going to be a very large middle-income tax cut that is going to help this country.

(END VIDEO CLIP)

CAVUTO: Now, I know, Senator, you're also one who watches out for spending.

You abhor deficits. You have not liked the piling of the debt we have seen doubling under this president. At least short-term, sir, it looks like we're going to dig into deeper deficits as we see hopefully, I'm sure the Trump people are arguing, for a bang for the buck later on. But, shorter-term, I'm sure deficits could and likely will get worse. Right?

THUNE: Well, we have a deficit problem that needs to be addressed.

And you address that in two ways, through fiscal restraint, through spending restraint and through faster growth in the economy. And I think what tax reform is all about and what the Trump team is starting to talk about is, how can we get the economy growing at a faster rate? How can we get growth back up at three percent to four percent?

Because ultimately, as you know, Neil, when people are working, they're investing, they're paying taxes and government revenues go up. And so the objective of tax reform should be economic growth. Now, we have -- my colleagues on the other side, a lot of the Democrats, think that tax reform ought to be about expanding and growing the government, generating more revenue.

We think it ought to be about growing the economy. If the economy is growing and expanding, you are going to see the deficit situation improve dramatically. And that's why this tax reform discussion that is going on is so critically important.

CAVUTO: But is it important to you, John Thune, coming right out the gate to see those tax cuts enacted, to get all of that going, live with maybe deficits that might get a little worse in the short-term, before that dynamic accounting, whatever you want to call it, and the revenue you get from tax cuts, which is clear? Could you live with that?

THUNE: I would prefer that any tax reform that we do would be revenue-neutral, it would not impact the deficit. I think that is the objective and the goal.

But, remember, you're talking about a 10-year budget window. That's what we operate with. You're talking about a dynamic economy. And if you use macroeconomic or dynamic scoring, tax reform is going to change behavior out there.

When behavior changes, you get more economic growth, you will see more revenue come in. So, I think what we're going to be looking at is how these things play out, not only in the near-term, but in the long-term.  The ultimate goal in all this is to get that growth rate back up to where it should be and get our economy healthy again.

When it's healthy again, people are going to be working, wages are going to go up, and obviously tax revenues go up with that.

CAVUTO: Well put.

Senator, thank you. When you went into that macro thing, I thought you were trying to out-dull me. You couldn't do that.

(CROSSTALK)

THUNE: No, no, nobody can do that, Neil.

CAVUTO: No, no, no, no, no.

John Thune, thank you very much. Great seeing you again.

THUNE: Thanks, Neil.

CAVUTO: All right.

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