How a Perry presidency would handle the national debt

Perry's 'vulture capitalism' plan of attack

Gov. Rick Perry goes after Mitt Romney's job creation credentials in what could be a do-or-die S.C. primary

This is a rush transcript from "On the Record," January 12, 2012. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: It's happening again, another showdown between President Obama and House Republicans. Today, President Obama officially asked Congress to raise the nation's debt ceiling again. How much this time? $1.2 trillion. Now, the House has already announced it will put forth a resolution of disapproval. The vote is set for next week.

And the debt crisis is not ending anytime soon. Whoever wins the presidential election will have to deal with it. So what would Governor Rick Perry do if he were president?

Governor Perry joins us from South Carolina. Good evening, Governor. And there is fact pattern for tonight. What would you do if you're president? Because we got a huge debt, in case you hadn't noticed, and it's not getting any better.

GOV. RICK PERRY, GOP PRESIDENTIAL CANDIDATE: Hey, Greta. Thanks. It's good to be with you. We'll do what we did in Texas. We cut $15 billion out of -- which is about 8 percent of our total budget.

This is not rocket science. We just need to have men and women in the United States Congress and the Senate that understand that you got to reduce spending. I mean, reduce spending, and do it in a thoughtful way. You prioritize what's important. You sure don't cut a trillion dollars out of the Department of Defense budget just without thinking about how that's going to impact America.

But getting this country back to work, cutting the tax burden, the regulatory climate, where the small businessmen and women understand that they can risk their capital and have a return on their investment. I mean, this administration is the most job-killing administration certainly in my lifetime that I remember. And they're doing it with the regulatory climate as much as they're doing it with the tax and spending climate.

VAN SUSTEREN: All right, prioritize it. Tell me what would be how you would prioritize it. What's going to get the biggest cut out of a Perry administration? Who's going to suffer the most or going to take it the most?

PERRY: Well, I don't think you have to talk about suffering. I'll tell you who's going to suffer if we don't make these reductions in spending...

VAN SUSTEREN: Well, all right. Well, let me reword it, then.

PERRY: It's the next generation of kids.

VAN SUSTEREN: Let me reword it. Where are you -- where are you going to -- where are you going to impose those cuts? Because if you're going to have $15 billion in cuts, or whatever, somebody is going to have some program -- something's going to have to be cut, so I'm curious, what's high priority for you in terms of cutting.

PERRY: Well, obviously, there are agencies out there that we talked about that we can cut. But the real key is you're going to grow your way out of this. Opening up our federal lands and waters for exploration of energy, and let all of those dollars go towards paying down the debt. I mean, there are trillions of dollars worth of energy that's sitting in America that's not being used, proven reserves. But you got a president who is, for whatever reason, I think driven by his left-leaning environmental friends that won't build a pipeline to create the jobs and the wealth that this Canadian all by itself would create.

And then only 9 percent of the proven reserves on our federal lands and waters are being produced at this particular point in time. Get the federal government out of the energy business, is really important. Quit subsidizing oil and gas. Quit subsidizing solar, wind, ethanol. All of them need to be phased out at the same time and allow the market to decide which one of these energy sectors that we're going to use.

VAN SUSTEREN: Your program, though, assumes we have sort of the luxury of time. And if you think about it going back to August, when we had the sort of showdown in terms of whether to raise the debt ceiling or not, is that there was some deal the Congress came up with that the president could have three installments, asking for the debt ceiling to be raised. We're now at the third and last. So I assume that one's not going to last us too long.

A super committee was created with the expectation it would do those cost cutting so we figure out what to do. Well, that didn't happen. In fact, now we have these automatic cuts that are going to happen January 2014, after they've all gone through the election cycle again because they're running away from the voters so the voters don't know.

So I'm not so sure you have the luxury in terms of time on hoping we're going to grow from all these -- you know, getting rid of regulation or getting -- or lowering the taxes or whatever.

So what are you going to do in the short run? Because I think that debt ceiling is going to come right back to bite us very soon again.

PERRY: Well, then, you just sit down and start making across-the- board cuts, I would suggest to you, if you're -- if the issue is what are we going to do, not raising the debt ceiling is not an answer. I mean, I will tell you that the Republicans in the House and the Republicans in the Senate shouldn't be even thinking about raising the debt ceiling.

If the issue is we've just got to make cuts, then across-the-board cuts may be one of the ways to do it, and prioritize the military side of it. But you know, the fact is there's probably places in the military side. How many civilian individuals do we have on the DoD employment rosters that we could do without?

So prioritizing and then making those cuts, I would suggest to you, is one of the ways that you can deal with it if it's an immediate answer that you have to have. And we're going to have to grow our way out of this in the long run, though.

VAN SUSTEREN: In terms of the battle down in South Carolina, the politics, is that I heard today -- I heard the audiotape where Laura Ingraham was politely grilling you a little bit about -- for giving Governor Romney a little bit of hell for Bain Capital. And then you've had private equity funds I think to the tune of $7 million contributed to your campaigns as governor of Texas.

So I'm curious, you know, what -- I'm curious how you reconcile the criticism of Governor Romney for his Bain Capital private equity, and then you take -- and accepting the funds of the largesse of private equity people.

PERRY: Well, I think this is a little bit overblown. When I was talking about Governor Romney, I was talking about two companies right here in South Carolina, where they came in and they made that decision to throw a lot of debt at these companies, and then strip out the assets and sell the companies, and those people lost their jobs.

I don't think that is the theory and the best way for a Republican presidential candidate to be talking about, Here's the way that we're going to operate in the future. I'm the candidate that's actually created jobs working with our legislature and over a million jobs, and that is an indisputable fact, that we've created over a million jobs in the state of Texas while I've been the governor, creating that business climate where people know they can risk their capital.

But the idea that -- America has now been leveraged by this current president that we have. And you know, you ask yourself, What do you want? Do you want someone who's going to throw more debt at it, as Governor Romney did with these two businesses in South Carolina, the photo album business in Gaffney, South Carolina, and the steel mill in Georgetown? Or do you want someone with a proven track record who has, in fact, created the environment, cut the taxes and the regulations and put a legal system in place that doesn't allow for over-suing, and then get out of the way and let the private sector grow?

I think the latter. My record in Texas is what Americans are looking for, rather than the private equity background that Mitt Romney has.

VAN SUSTEREN: Governor, looking at sort of the complement of people running, it's clear that probably Congressman Ron Paul is a little bit different than the rest of -- than the rest of the field. And I'm just curious, if you were the nominee, and in recognition of the fact that he has strong passion, lots of followers, but that he could create almost a Ross Perot situation for the Republican Party, what would you do to bring him inside the tent so that he didn't torpedo the Republican candidate?

PERRY: Well, listen, I think Congressman Paul's got some -- you know, he's got some good ideas when it comes to the economy, with the Federal Reserve and what have you. You know, where most people kind of go off the track with Congressman Paul is on his foreign policy and some of his statements about the military and Iran in particular, and whether or not he would defend Israel. That's where we have a real problem. But economically, there are some things that Congressman Paul's talking about that are spot on.

VAN SUSTEREN: So how would you bring him in the tent?

PERRY: And you know -- well, you said -- I mean, obviously, I don't think he wants to be outside the tent. I think he wants to be inside trying to get rid of Barack Obama. He knows that the real target here is getting rid of Obama. I mean, the man who has put $15 trillion of debt on future generations -- I mean, ask yourself, America, are you better off today than you were $4 trillion ago? And the answer is no.

I mean, no one that's, I mean, the least bit honest can say that the $4 trillion experiment that Obama and his administration has put America through is good for this country. And Ron Paul knows that. And I think that he cares more about this country. He cares more about getting America back on track economically.

And that's the reason that not only will he stay hitched from the standpoint of the Republican standpoint, but we need him to be in there swinging away and helping us to beat Obama in 2012.

VAN SUSTEREN: Governor Perry, thank you, sir. And good luck, sir. Thank you.

PERRY: You're welcome, Greta. So long.