Rep. Ryan: Pres. Obama trying to divide country to distract from his failed policies

This is a rush transcript from "On the Record," April 19, 2012. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: House Budget Committee Chair Paul Ryan is also steamed about the Senate's failure to come up with a budget. We spoke with him earlier tonight.


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

REP. PAUL RYAN, R-WIS.: Great to be back with you.

VAN SUSTEREN: OK, some harsh words, at least I see quoted, that you have for the Senate chairman about -- the Senate chairman of the Budget Committee, the fact that they are not bringing their budget to the floor and such terms as " embarrassing spectacle," what went on.

RYAN: It is. We have a law that says you have to pass a budget every April. They haven't followed the law for three years now.

VAN SUSTEREN: If I get caught speeding, I get into trouble.

RYAN: Yes, but there aren't any consequences of this particular law. But we believe in the rule of law. More importantly, we have a moral obligation. A debt crisis is coming to this country. that means you need to pass a budget to prevent it from happening.

But if you are not going to have a budget, then you're not going to prevent it from happening. And unfortunately our friends in the Senate have decided they just don't want to go on record, take any tough political vote. And therefore, they're just not going to budget again.

I feel sorry for Kent Conrad, who tried, but he just gave us a budget that had $2.6 trillion in new taxes, no spending cuts, and he couldn't even get that marked up in committee.

VAN SUSTEREN: You say that you feel sorry for him. Look, I know all members of Congress and the House work hard. But the reason why he didn't get that markup done, he's the chairman, is because he was getting political pressure, as I understand it, from the leadership.

I don't consider that try, because he still has the power and the authority. I don't know if your budget is a good one or not. We are not getting --

RYAN: But we did one,.

VAN SUSTEREN: Yes, I know. I'm saying, but in order to consider yours and to balance against the Senate, the Senate has to produce one. So trying is not good enough.

RYAN: I agree, because America deserves better. America does not deserve a debt crisis. This is the most predictable economic crisis we have ever had. Look, in 2008, when we had that economic crisis, that one caught us by surprise.

What if your president, your congressman and your senator knew about it that time, knew when it was coming, what was going to happen, how it stop it and had time to stop it, but didn't do so because it wasn't good politics? What would you think of that person?

That's basically what we're doing right now. We know a debt crisis is coming, just like what's going on in Europe. We know approximately when it's happening, why it's happening and what to do to prevent it from happening.

You have to pass a budget to do that, which is what we're proposing, which is what we're doing. And we don't have any willing partners in the White House or the Senate to do that.

So yes, that's why we are frustrating. But that's why we need new leadership. And that's why we are going to the country with a referendum on fixing this problem and letting at least the country decide this November, what do you want? Do you want a country that prevent this is debt crisis and gets back to prosperity, an opportunity society with a safety net?

Or do you want to go down this path we are on, which is a debt crisis, where our children have an inferior standard of living than the one we have?

VAN SUSTEREN: All right, if Senator Conrad were here, and I doubt he is going to show up, because I have been very harsh about the fact that, you know, produce a budget. He may produce a better one than yours, in my opinion. I don't know. But they're not producing it.

But if he were here and I said, why don't you at least put one on the table, what would his response be?

RYAN: He would say the Budget Control Act is a budget.

VAN SUSTEREN: Last October.

RYAN: Last October, which obviously it's not, in every way, whether it's technical or in real life. It capped the growth of spending on discretionary spending, calls for across-the-board cuts which are not near the amount you need to solve a debt crisis. It doesn't even come close to reaching the standard of any budget that prevents a debt crisis. And it was not --

VAN SUSTEREN: Are you saying, though, it's a lousy off -- a lousy budget?

RYAN: No, it's just a small step in the right direction.

VAN SUSTEREN: Why isn't that a budget? Why does Senator Conrad think that's a budget and you don't think it's a budget?

RYAN: Because it doesn't make the choices. It doesn't priorit5ize spending. It doesn't say here's how you fix our entitlement programs that are going bankrupt, like Medicare and Medicaid.

VAN SUSTEREN: So you're just saying it's a lousy budget, though.

RYAN: No, but it actually isn't a budget. It technically not even a budget. It doesn't say here's how you prioritize spending, this level, that level. It doesn't do that. It just says, if Congress doesn't fix the problem, then across-the-board cut happens.

It says on 39 percent of our government, our discretionary, government agencies, it just sets those levels. But the rest of government, which is running on auto pilot, which is driving our debt to a catastrophic level, it doesn't deal with those.

VAN SUSTEREN: I tell you what I -- what worries me about that particular budget, whatever the Budget Control Act, is that all the cuts that go into effect occur after the election, deliberately by -- by Republicans, Democrats, anybody who voted for it. That's so that we, the voters, don't take it out on them.

RYAN: Not in the House. Not in the House.

VAN SUSTEREN: In the Senate?

RYAN: In our budget, we replace that by saying here's specifically how we would solve this problem. That's what we passed,.

VAN SUSTEREN: Do you agree that that Budget Control Act doesn't -- does those big cuts from last August --

RYAN: Yes. But those cuts aren't near the amount you need to prevent a debt crisis in the first place, even. So we are saying, here's how we will replace them. We are going to vote on a bill in three weeks in the House that says, here's specifically how we will replace those across-the- board cuts.

So we are actually marking up legislation and passing legislation, in plain sight, with the public in full view, on how we will prioritize spending to prevent a debt crisis.

VAN SUSTEREN: Well, I don't think anybody's going to criticize you for not producing a budget. You have produced one. They may not like your budget, you have done your legal obligation. Now we are waiting for the Senate. Don't hold your breath, right?

RYAN: It's been over 1,000 days already.

VAN SUSTEREN: 'Washington Examiner" quotes you today as saying -- this may be incorrect quote, but maybe it is -- "President Obama lies to distract the nation."

RYAN: I didn't say "lie," I said he distorts our record to distract the nation. I think what he is trying to do is divide the country in order to distract the country from his failed record, his failed policies.

He can't run on his record. It's not a good one. Look at gas prices. Look at poverty rates. Look at the economy.

And he hasn't changed his tune. He has gone farther to the left. He hasn't moderated his position or his philosophy. So his only choice left, from what we see from all these speeches he's giving in campaign mode, is to divide the country in order to distract the country.

That's what I am saying. I'm not saying he's lying. But he is dramatically distorting. If you look at all the speeches he is giving on our budget, he is making up these assumption, not a single statistic is accurate. But in order to try and distort, in order to divide and then distract the country.

VAN SUSTEREN: Catholic Bishops are a little bit unhappy with you. They don't like the cuts in your budget to Food Stamps, as well as cuts in tax credits for parents of illegal children.

RYAN: Well, we have long had a policy on other benefits that they don't go toward people who are here illegally. We are simply applying, like we do with Welfare, over to the tax credit.

Food Stamps have quadrupled. What we are saying is let's bring them back down to pre-recession levels starting in 2016, hardly Draconian cuts. And this is just some of the Bishops.

Look, I welcome this kind of dialogue. I think it's fine. and good people of good will can have a disagreement over how to prioritize spending. But in a budget where we are growing spending at three percent a year, versus the president's 4.5 percent a year, hardly Draconian.

VAN SUSTEREN: How did we get to the point where there are 46 million people on Food Stamps? I mean, what in -- what happened? Because it does reflect on our nation as a whole that's it gotten to the point where -- you know, whether people need them or so impoverished they don't have food. What happened?

RYAN: We just had a hearing on this. About 40 percent of the rise in Food Stamps was because of the recession, but another 160 percent of the rise in Food Stamps was because of the legislation that the Pelosi Congress passed with the president in office, when it was Pelosi -- the last Congress, Pelosi, Reid and Obama Congress passed massive expansions in the Food Stamp program, which led to its quadrupling.

VAN SUSTEREN: Congressman, nice to see you. Thank you for joining us.

RYAN: Thank you.