Rep. Ryan: We Need to Fix the Budget Process

Wisconsin congressman on new plan to get rid of budget gimmicks

This is a rush transcript from "Your World," December 7, 2011. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST OF “YOUR WORLD”: Twenty-four days to go until a payroll tax hike could be kicking in. And while time’s running out, the proposals are running up, at least seven so far, still no deal.

To a guy who wants to stop this kind of drama once and for all. Paul Ryan says we can end these year-end fights for good by upending the budget process, and now.

The Republican House budget chairman joins me now. Mr. Chairman, very good to have you. What do you want to do?

REP. PAUL RYAN, R-WIS., BUDGET COMMITTEE CHAIRMAN: Well, I want to fix the budget process. It is broken, Neil.

We have a law called the 1974 Budget Act. It has not worked for a long time. The Senate has not proposed or passed a budget in 952 days. That means our government has not had a budget for that period of time. We are still living off a 2009 budget.

So we have proposed 10 bills, 10 reforms to the budget process to make it more reliable, to have real spending controls, better congressional oversight and more transparency on how taxpayer dollars are spent. We spent a long time looking at how to best rewrite the process so that it sticks, so that it works and so we do not stumble from budget crisis to budget crisis and have all of this uncertainty thrown up in the air every single year.

CAVUTO: But how would you prevent the deadlines that invariably come up when either you have to get a measure done, a budget extended, some cash into a program whose time is running out? You know what I mean. What would you do?

RYAN: Well, so, we would basically propose to change the whole nature of the system. Number one, have long-term spending bills with caps on them.

Have a binding joint resolution so the budget has the force of law. If -- we don’t have any more government shutdown scenarios, because we have automatic continuing resolutions that occur even if we exceed past these deadlines, so we do not have the specter of all these government shutdowns that create all this uncertainty and force a lot of bad decision-making at the last minute.

There are a lot of things we think are real imperfections to the system that we have proposed changes. The list is far too long for me to go into on your show.

CAVUTO: Right.

RYAN: But there will be sunsets in law, and we have to deal with those, and that provides more oversight. But we want to make these things occur in a more gradual way. We propose a biannual budget, a two-year budgeting cycle, so that we don’t spend all time around here spending money and then doing it all over again and not doing any oversight.

So, we want to get the drama out of the system, have real accountability, transparency, and spending control, and have a system that is just much more smooth, so that we can actually prepare for and businesses do not have all this upheaval and uncertainty surrounding them.

CAVUTO: On this payroll tax cut thing more to the immediate interest of a lot of OK, is it going to happen? Will we get a deal? What does your gut tell you?

RYAN: I don’t know. My guess is yes, but I don’t the answer to that, Neil.

We are basically saying there are plenty of ways we think we can cut spending to pay for this. Cutting some wasteful spending to let people keep more of their money is fine with me. This is a tax holiday, as you know, so it was always meant to be temporary as sort of a rebate.

If we treated this as permanent policy, then we have a huge problem with Social Security’s finances, or we will just turn Social Security into a general fund program like a cash welfare program and not a social insurance program. I don’t think anyone wants to see that happen.

We don’t think the demand side Keynesian stimulus rebates work very much to grow the economy. But I am happy to cut spending to pay for letting people keep more of their own money. That to me is fine. So we are trying to find ways of doing that. And that is hopefully what we will end up doing at the end of the day here.

CAVUTO: Hats off to you, Congressman, because early on you actually took the American people by their word and said they were serious about getting entitlements under control. And so you tried to tackle it. And then you were made a villain in these granny ads.

I think that was you pushing granny off the cliff. I can’t prove it.

RYAN: That was the attempt, yes.

CAVUTO: Yes.

Having said, I’m curious. Newt Gingrich originally came out not fond of what your proposal was, then I think dialed it back a little bit and said he was. I’m not sure where things stand.

I am curious where things stand with you and the former speaker now, whether you are surprised by his run up in the polls, whether you are backing him, could back him or what.

RYAN: Well, I am staying neutral in the race.

I think what people are hungry for are people of actions, and ideas and solutions. Obviously Newt is tapping into that. He is an idea factory. I think, also, what is happening is people know we have a serious situation on our hands. And the leaders around here in the Senate and the White House are not doing anything. The president has not put out a credible proposal for three years. He has not budgeted for 952 days. And we put out a plan out there. We put out a plan out there to fix the problem.

(CROSSTALK)

CAVUTO: Yes, but he is stalling his vacation to Hawaii to get a deal done, so what do you think of that?

(LAUGHTER)

RYAN: That is lovely.

This is end-of-the-year stuff. This has nothing to do with fixing the fiscal crisis that is just right over the horizon. You know, just as well as I do, Neil, that we will have a European situation on our hands if we keep kicking the can down the road.

What I am encouraged about -- and, as you have mentioned, Newt did sort of took back what he had said earlier, because he basically just misspoke.

CAVUTO: Right.

RYAN: What I am encouraged about is I see a consensus emerging, a consensus on tax reform, broaden the base and lower the rates, a consensus on Medicare reform, the kinds of ideas that came out of the Clinton 1990 commission that Republicans and now some centrist Democrats, Alice Rivlin and others, are echoing.

So we see a consensus emerging on how to tackle this debt crisis. The problem is it is not what the president and what the Harry Reid Senate -- they are on the outside looking in far to the left center, but I see a centrist consensus emerging which if we get the right leadership in this town, we can fix it.

CAVUTO: All right. We will watch closely.

Mr. Chairman, always good to see you.

RYAN: You bet, Neil. Take care.

CAVUTO: If I don’t talk to you again, have a Merry Christmas.

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