This is a rush transcript from "Your World," September 28, 2017. This copy may not be in its final form and may be updated.
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(BEGIN VIDEO CLIP)
REP. NANCY PELOSI, D-CALI., HOUSE MINORITY LEADER: We on the Democratic side are pay as you go. You want a tax cut, pay for it.
We want to fight their rigging the system even further for the wealthy and well-connected, and against hardworking middle-income families.
We're not there to be accomplices to increasing the deficit with a bill that does not create jobs.
(END VIDEO CLIP)
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NEIL CAVUTO, "YOUR WORLD" HOST: All right.
Now, I'm not one to take political sides here. But, again, how many times have I told you, this would be like me offering you dietary advice or to speed it up on the life cycle.
A prominent Democrat lecturing anyone about the deficit and getting worse into the debt, pay as you go, making sure whatever you propose is paid for, don't go there. Those in glass houses just put down the...
Ohio Democratic congressman Tim Ryan with us right now.
Congressman, I don't know if she was the right messenger for that. I don't mean to disparage your party leader in the House. I'm just saying that that particular message and lecturing Republicans on tax cuts that might not be paid for kind of fell on a lot of deaf ears. But that's just me.
REP. TIM RYAN, D-OHIO: Well, I'm trying to get the visual of you on a treadmill out of my head real quick, Neil. Give me a minute.
CAVUTO: That's fine. That's fine. This could be a painful for you.
So, continue. You're well on your way.
RYAN: Give me a minute here.
CAVUTO: All righty.
RYAN: No, I think what Leader Pelosi was saying, if you go back to the Clinton level taxes, if you go back to the Clinton economic plan, you saw at the end of that decade surpluses. You saw balanced budgets.
And it did have both pay as you go and it also asked the wealthiest in the country to pay a little bit more. And if you...
CAVUTO: But it also cut for the wealthiest in the country virtually all investment-related rates. So, there was a little bit of everything.
RYAN: Well, no one is saying that there shouldn't be balance.
And I think, as Democrats, I have been critical of saying, look, we can't be the anti-business party.
CAVUTO: Well, would you vote for this, Congressman, what you have seen of it? I know it's just a broad blueprint more than anything else.
Would you vote for it as it is now?
RYAN: Absolutely not.
I mean, I think -- look, let's take this -- take a step back and look at this whole thing. Since the recession ended, about 85 percent of income growth went to the top 1 percent, OK?
So, this is just another supply-side economic plan, where you're getting rid of the Alternative Minimum Tax, you're getting rid of the estate tax, which doesn't start until 10 million bucks. So, this is going clearly to the top 1 percent. They have seen all of the income growth in the last seven to 10 years, Neil. So, then...
CAVUTO: But does it bother you, Congressman, that more than 40 percent of Americans pay no income tax at all?
Now, I'm not saying that they should pay what the rich pay and all. And I'm not saying the rich are saints. They do pay a good deal of the taxes here, but you almost act as if they're getting away with murder.
RYAN: Well, what I'm saying is, they're benefiting from the economy as it's operating today.
CAVUTO: Whether it's operating today, almost half aren't paying any income taxes at all. I take nothing against FICA taxes, payroll taxes, that sort of thing, but isn't the inherent system itself stilted this way?
RYAN: Neil, that's a commentary on the lack of economic and sustainable growth for middle-class people across the country.
Look, I was here when...
CAVUTO: Then cut taxes for them. When John Kennedy cut taxes -- they came to fruition after his death -- we were growing on a 6 percent clip.
Then, President Trump and the Republicans in Congress should adopt my plan to have a trillion-dollar expansion of the Earned Income Tax Credit, which would give a family making $75,000 a year and three kids a $12,000 tax credit.
You want to help those people? That's how you do tax reform. Those are the taxes...
CAVUTO: The big effect on an economy, Congressman, are across-the-board cuts.
John Kennedy got that. Ronald Reagan got that. I gave you a Democrat and a Republican.
RYAN: George Bush did it. Listen, we're...
CAVUTO: I'm just saying we do know from those cuts the economy jumped.
Is it crazy to think with Donald Trump, whether you're not a fan of his tax cuts -- I understand that -- and there's a lot that we don't know about them yet -- I understand that -- but that that it could grow the economy in and of itself, that we can do better than the 2, 2.5 percent growth we have seen?
And if we get it up to anything approaching numbers like we have seen under those presidents, we could very well be off to the races helping the very groups that you want to help and everyone else.
RYAN: Neil, it's not 1960. It's not 1980.
George W. Bush...
RYAN: Let me -- Neil, let me finish.
RYAN: Neil, you keep interrupting me. Let me make my point.
CAVUTO: I will.
But you just said something wrong.
CAVUTO: In 1980, they said it wasn't 1960. When we had the big investment tax cuts that Bill Clinton asked for, they said it's not the 1980s.
RYAN: OK. Can I ask you a question?
CAVUTO: So, go ahead.
RYAN: Neil, let me ask you a question.
George W. Bush cut taxes primarily for the wealthy twice.
CAVUTO: They were all across the board, across the board.
RYAN: OK? I was here. I was here.
And tell me -- tell me what happened to the economy in that decade. It was the slowest...
CAVUTO: I will tell you what happened.
No, no, in 2000, the market was suddenly going in reverse. And then I think we had this little thing called 9/11. But you can refresh me. Go ahead.
RYAN: It's the most stagnant-growth decade we have had since the Great Depression. It ended in a complete economic collapse in 2008-'9.
CAVUTO: What about the last decade? What about the last decade?
RYAN: And we had -- I'm just saying, you have revisionist history.
All I'm telling you is...
CAVUTO: No, I don't. I have good numbers, Congressman.
RYAN: Bill Clinton came in -- Bill Clinton came -- OK, well, how about these numbers?
CAVUTO: Could we have done better than the numbers we did in the last decade? You're quite right.
RYAN: Neil, why are you yelling at me?
CAVUTO: I'm not yelling. I'm just trying to say this.
CAVUTO: Barack Obama inherited a mess. I grant you that. You and I have talked about that.
CAVUTO: The growth was subpar. I think you and I agree would agree that.
What is wrong with an across-the-board tax cut for everything to give it a chance to get it to grow better?
RYAN: Neil, it's not an across-the-board, when the wealthiest people are going to drive a $2.2 trillion hole in the deficit.
Where are all these deficit hawks? I have heard you a million times talk about balanced budgets, and we have to be revenue-neutral. Where are all these guys right now?
CAVUTO: So, you think that these tax cuts are not going to give you the growth to deal with the very debt you're worried about?
By the way, you're one of the few Democrats who is, if that's true. But go ahead.
RYAN: There's absolutely no evidence that supply-side economics has the kind of impact that you guys say it has. And the problem is, Neil...
CAVUTO: Don't call me you guys. Don't call me you guys.
CAVUTO: I'm just saying, I'm telling you the effect of taxes.
I don't think John Kennedy was a supply-side president.
CAVUTO: I don't think Bill Clinton was a supply-side president.
I just think that you -- they saw the effect of reducing investment-related rates that you would probably have bemoaned at the time benefit only the well-to-do.
You're right. The taxes did on the upper income did go up, but they were offset by investment-related taxes and a market boom that more than compensated for that. So, that's not a left or right opinion. Does it help or not?
RYAN: Look, you're trying to equate our economy in 2017 with the economy in 1960.
The world is globalized now. Capital moves more freely. So, the same economic philosophy that may have worked or economic techniques that may have worked in 1960 -- hold on.
CAVUTO: You don't want to give across-the-board tax cuts a chance. Right?
RYAN: I want to give a trillion-dollar expansion to working-class families who are making $75,000 or $100,000 a year.
Those are the people that needed help. And I will tell you that those are the people that voted for Donald Trump. Those are the people Donald Trump promised he would help them. And then he puts this dog in front of us that is going to get rid of the estate tax and is going to get rid of the Alternative Minimum Tax and is going to cut taxes for people who have seen all of the income growth in the past seven or eight years.
CAVUTO: But you said you didn't know enough about it to say that this group would or wouldn't benefit. And now you're convinced that it won't benefit. How do you know?
RYAN: Because I have watched this. I was in Congress in 2003, '4, '5, '6, '7, when there was no growth, Neil. That's evidence. Those are facts.
CAVUTO: You think we can do better than 2, 2.5 percent growth?
RYAN: Yes, I do. I do.
CAVUTO: Do you think you giving a tax credit to the folks you mentioned, just the folks you mentioned is going to do that?
RYAN: I think that's part of a plan.
We can't oversimplify things. We need to extend broadband. We need to make a huge infrastructure investment into the United States.
CAVUTO: But a tax cut would be the down payment on it, right?
RYAN: A tax cut is going to -- your tax cut is going to go to people doing who are already extremely well. And they have seen the income grow.
CAVUTO: And already paying the lion's share of the taxes.
RYAN: I understand that.
CAVUTO: I'm not partial to one group over another, Congressman.
RYAN: I'm not either. I'm not either.
CAVUTO: I think everybody, everybody should get a tax cut.
RYAN: Well, you're going -- this plan is going to drive a $2.2 trillion hole in the economy. Now, where is this transportation...
CAVUTO: I admire your view on that, Congressman, because you stand out among Democrats who would be worried about deficits and debt, because, to be fair to you, during your career, you have been.
I just find it rich from some of your colleagues who all of a sudden get religion and feel that, hey, wow, that's bad. For eight years, you said nothing. Not you specifically, but I think your party.
And I think it's a little rich now to say, guys, you have to watch this.
RYAN: That's an oversimplification.
If you go back to the Clinton plan, the Clinton economic plan, people did really well. All income categories saw an increase in wages, because we were both cutting taxes for middle-class people. We had some tax reform. But we were also making investments.
CAVUTO: And we had an Internet boom. And I agree with you on all counts, Congressman.
RYAN: Why did we have an Internet boom? Because we made investments over the years into technology, into research, into development, into the human genome.
CAVUTO: And we dramatically cut the cost of those investment taxes, so that we could.
I give you all the credit for that. I give you and Bill Clinton all the credit. I said it on this show many, many times. Give that another chance again.
RYAN: But that's not this plan, Neil. That's not this plan,
CAVUTO: How do you know? You said you didn't know the plan.
RYAN: Well, I know what I read and what they have put forward so far.
CAVUTO: But you have already concluded it's going to screw people. And you don't even know that.
RYAN: It's going to blow a $2 trillion hole in the deficit. Who is going to pay that bill, Neil? Who is going to pay that bill?
CAVUTO: You said at the outset, Congressman, that you didn't know what was in it to say that it was going to do this. And you're saying it's going to blow a $2 trillion hole in the deficit.
RYAN: Neil, Neil, you're being ridiculous. You're trying to twist my words. What I said...
CAVUTO: No, I'm not twisting your words. You're being ridiculous, because you don't -- you don't attach...
CAVUTO: ... the same things you do to Bill Clinton and his investment- related tax cuts to something here that might do the same.
You just don't know, right? And I don't know.
RYAN: I -- no, Bill Clinton's strategy was completely different.
He didn't drive a huge hole in the deficit. He closed the deficit to the end of his presidency. There was a huge surplus.
CAVUTO: And how did he do it? How did he do it? How did he do it?
RYAN: He asked the wealthy to pay more.
CAVUTO: Yes, he did.
RYAN: OK. And that didn't -- the sky didn't fall.
CAVUTO: Capital gains, dividend-related taxes, all the taxes that Wall Street abhors, that some of rich people, of which you're not a big fan, they benefited.
They all, all went down dramatically. The market went up dramatically. Touche to Bill Clinton, to say to your point of view. I'm saying give that touche a chance again, right?
RYAN: Yes, but this plan doesn't do that. I mean, that's the problem.
And I don't dislike rich people. I love rich people and I just said, if they're...
CAVUTO: I don't think they're getting that vibe from you right now.
RYAN: Well, look, if they're -- they have made 85 percent of all income growth in the last seven or eight years, Neil. And then you're going to turn around and give them a tax cut, while the guy working with the lunch bucket in Youngstown, Ohio, has had stagnant wages for 25 or 30 years.
CAVUTO: But you will acknowledge they do pay the lion's share of taxes, right?
RYAN: Well, of course they do. The concentration of wealth in the top 1 percent -- there was just an article of a couple of weeks ago...
CAVUTO: But they're not evil, right? You don't hate them?
RYAN: No, I don't hate them.
RYAN: I don't hate them at all.
And I don't think they're evil.
If you're self-dealing, and you do bad things, you should get busted.
RYAN: Just like someone who robs a bank. We have to have justice and laws. I don't hate rich people.
I want them to invest in my community. They need to pay their fair share in taxes. But I want them to start jobs and create jobs and start businesses in my community.
CAVUTO: Real quickly, what is a fair share to you? What is a fair share?
If we keep it at 39.6, and you have the Medicare-related, health care- related surtaxes that bring it up to the low to mid 40s, what is a fair share to you, Congressman Ryan?
RYAN: Well, I think it's all dependent on the whole package.
I don't think you could just say this sliver or that sliver.
CAVUTO: But you think it should be more than you're paying now?
RYAN: What do the other aspects look like?
Yes, I think, when you get to the 0.1 percent of the top earners, we probably do need a billionaire's tax in order to generate more revenue.
We have a huge hole in the deficit. We have got to make investments in the country. We have got to do work force development. We have got to lay broadband. We need a new energy grid. We need to do research.
CAVUTO: Fair enough.
RYAN: These are all things we need to do. And we need revenue to do it.
CAVUTO: We will get you back and we will bring this up in another -- in the meantime, I am going to send you that life cycle picture, just to make your day miserable.
CAVUTO: Congressman, thanks for taking the time. I do appreciate it.
RYAN: Thank you. Thanks, Neil.
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