Massive government debt becoming key issue in 2012 race

CKE Restaurants CEO Andy Puzder weighs in

This is a rush transcript from "Your World," May 15, 2012. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST OF "YOUR WORLD": Well, $5 trillion deeper in debt since President Obama took office, despite promises like these.

(BEGIN VIDEO CLIP)

PRESIDENT OBAMA: Actually, I’m cutting more than I am spending, so that it will be net spending cut. I’m pledging to cut the deficit we inherited by half by the end of my first term in office.

To try to root out waste large and small in a systematic way.

If we stay on the current path, our growing debt could cost us jobs and do serious damage to the economy.

I refuse to leave our children with a debt that they cannot repay.

(END VIDEO CLIP)

CAVUTO: Well, unfortunately, it didn’t work out the way president wanted.

Now Governor Mitt Romney is taking the be guided task, launching a coordinated attack today in, among other places, the battleground state of Iowa.

Here is what he said just moments ago.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: We can’t spend another four years talking about solving a problem that we know that we are making worse every single day.

(END VIDEO CLIP)

CAVUTO: All right.

One of his top economic advisers with us now, that is Mitt Romney’s, CKE Restaurant CEO Andy Puzder, who says this is why Governor Romney must win.

But how do you know that a goal doesn’t become a failed mission, as it has been for the president, that this just never gets solved?

ANDREW PUZDER, PRESIDENT & CEO, CKE RESTAURANTS: I think the big difference between the president and Governor Romney is Governor Romney -- again, his private enterprise experience.

He has already taken businesses. He’s taken the state government of Massachusetts. He’s reduced expenditures. He’s increased revenues. He knows what it takes to make something work. He knows how to make it work in the real economy.

With all due respect to the president, he didn’t come in with that experience. And I think he had a very difficult -- not only did he not reduce the deficit by the 50 percent that he promised, but he almost increased it by 50 percent, took it from $11 trillion, $12 trillion, up to about $16.7 trillion. I just checked on the debt clock this morning.

So it’s really a difference of approach. And you really have to check the debt clock every morning if you are to get that number right because it just keeps growing.

CAVUTO: Well, you better mark it down in pencil because it changes a lot. We’re showing how it’s growing right now.

But, Andy, the one thing I – what’s to stop me from thinking that should Mitt Romney be elected president, he doesn’t come in as did presidential-elect Clinton and say, hey, this is a lot worse than I thought, this tax cut I was going to offer you folks, I can’t do. In fact, I’m going to hike taxes on the well-to-do, in other words, he just completely reverses himself?

It has been done. There is precedent in both parties for it.

PUZDER: I will tell you, number one, I know Mitt. That’s not the kind of thing Mitt would do.

Number two; there may be candidates out there that don’t understand this economy. Mitt Romney is not one of them. He understands it very well and knows what needs to be done. Number three, Mitt firmly believes that if we lower the marginal rates and eliminate deductions, so you’re not really impacting tax revenue, but lower those marginal rates, the rates you pay on the next dollar you earn, and you encourage businesses and you encourage individuals to earn that next dollar, that you will see increases in productivity, job creations, and increases in tax revenue, even though you lowered the marginal rate.

So he believes that very strongly.

(CROSSTALK)

CAVUTO: No, I understand what you are saying. And there’s that view going back to the Reagan years.

There’s a gap between cutting everyone’s taxes and then seeing the revenue from all of that, from the new jobs created, from the new incentives created and on and on. But in that gap, deficits get even worse. And do you think he has appreciated the magnitude of that or knows the magnitude of that and just ain’t saying?

PUZDER: I do think he understands that.

And I also -- a key part of his tax marginal rates reduction program is the elimination of a number of deductions, as the Simpson-Bowles commission proposed. So you have the elimination of deductions. You shouldn’t have a meaningful impact to tax revenues.

The important thing though is to encourage growth with those lower marginal rates. I think he understands it. I know he has done the numbers. I know him well enough to know he has done the numbers on all of this. It’s a big problem. And I think his wife has been on TV saying that one of the things she asked when they were talking about running again was whether or not the economy could be fixed or whether we were over the cliff. And Mitt answered her, we’re close to the cliff, but we’re not over it. I think Mitt believes he can fix this. I believe he can fix it. And I think he’s got the plans that will make this work.

CAVUTO: Am I looking at his next commerce or treasury secretary?

(LAUGHTER)

PUZDER: You know I have a job, as you know. And I’m certainly not looking for a job. It’s obviously very difficult to tell the president no if he asks you to do something.

But we’ve had no conversations like that. And like I say, I have got a great job. I love what I’m doing.

CAVUTO: You do have a great job and you do get incredible models to market your hamburgers.

(LAUGHTER)

CAVUTO: But if you think about it, you’d be the first food guy to come into a job like that and the guy who stayed thin in food for the decades you’ve been in food. So you bring some gravitas to the table, right?

PUZDER: Herman Cain’s been looking pretty good.

(CROSSTALK)

CAVUTO: Yes, but he’s out of the race.

(CROSSTALK)

PUZDER: And he kept his weight down. That’s true. That’s true. But maybe he’d like the position. You never know.

(LAUGHTER)

CAVUTO: Andy, thank you. Always good seeing you, the CKE Restaurant CEO and who knows what else.

PUZDER: Good seeing you, Neil. Thank you.

CAVUTO: He’s been with Mitt Romney right from the beginning. And Romney had a lot of fair-weather friends, but not Andy.

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