This is a RUSH transcript from "The O'Reilly Factor," March 4, 2011. This copy may not be in its final form and may be updated.
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BILL O'REILLY, HOST: It takes a lot of guts to be very specific about spending cuts because you know some people are going to be angry with you. But Social Security, Medicare and Medicaid will all have to be revised. Many politicians are very frightened by that prospect.
Joining us now from Wasilla, Alaska, Fox News analyst Sarah Palin. So governor, let's start with Social Security. What would you do there?
SARAH PALIN, FOX NEWS CONTRIBUTOR: Oh yes, entitlement programs have to be reformed. You know, they're going to eat our lunch. They will certainly consume our entire federal budget by the year 2035 unless we reform.
First of all, we have to assure those who are of retirement age now who are reliant upon that pension plan of theirs -- a pension is a promise and we can't take away what is -- what's essentially confiscated from their paychecks by the government in every paycheck. And with trust, they allowed the government to invest their money. And now they believe that it -- it's time and it is time for them to be able to collect. But for new enrollees, everything changes. Everything must change.
O'REILLY: What's the cutoff -- what's the cutoff edge -- age? What would…
PALIN: Well…
O'REILLY: …say, new enrollees, does that mean we cut it off at 30? Do we cut it off at 21? What -- what is the cutoff age for the new Social Security scenario?
PALIN: Well, when we talk about specifics of the reform that is needed, when we talk about increasing that retirement age, I would say that Paul Ryan's roadmap can nail it quite accurately when he talks about age 55 being a cutoff age. But what we also need to do is not…
O'REILLY: Wait, wait, wait. Wait, wait, wait. I just want to be very clear. So 55, anybody over keeps the Social Security that they have coming to them, but younger…
PALIN: When we…
O'REILLY: …whatever the revision is?
PALIN: …when we talk about increasing -- when we talk about increasing the retirement age, there is a good proposal on the table, a good idea to look at age 55, but all of this does have to be looked at. But we need to quit assuming that government can, better than we as individuals, plan our retirements for us, our security, our savings…
O'REILLY: Ok, I got -- I got all that.
PALIN: …and we need to…
O'REILLY: But I got to get specific here, governor. All right, so what you're saying is instead of 52 it goes to 55. So you can't draw on it until 55. Some people want mandatory retirement age where you would have to take it raised up to about 67. Are you for that? Do you want to raise that mandatory age to 67 retirement? Is that…
PALIN: Everything -- everything is going to have to change for those who are enrolled in the program now and will be enrolled in the program now. But we do not change the pension benefit…
O'REILLY: I agree. The people who…
PALIN: …of those who are receiving it now and that what's people care…
O'REILLY: …brought in and the people who need it.
PALIN: And I really apologize that up here in Alaska we have the four second delay. So it's -- it's not an easy exchange…
O'REILLY: OK.
PALIN: …to try to -- to try to get my point across to you if you interrupt. So I'm going to -- I'm going to continue this thought on reform of entitlement programs. What we need to do is allow some personal accounts with part of that Social Security tax for new enrollees. Allow them to keep more of what they're earning and invest it according to their priorities and not assume that government can plan our economy, our retirement, our security for us.
O'REILLY: Ok. That's -- I -- I'm for that private thing and I'm for raising the ages. Now, in your state, a lot of people depended on Medicaid, particularly people in the sub-Arctic region up there and they're dependent on these government checks. You had to deal with that when you were the governor of Alaska. So we're going to have to cut back there. Poor people are going to get hurt. Poor people are going to get hurt, in the Medicare and Medicaid range. Are they not?
PALIN: Everything is going to have to change. Look, how can Michael Moore, for instance, as -- as you had said in your introduction, tell Americans that we're not going broke? We take in $2.2 trillion a year and yet we're paying out $3.5 trillion a year. What's in the water there in Hollywood and in D.C. for people to not want to understand or believe or trust what the reality is?
O'REILLY: Oh he's just not a truthful -- they are just not truthful people. They're just not telling the truth.
PALIN: They're not truthful so we have to be truthful. And we have to deal with the reality.
O'REILLY: OK, but let's get to the poor people.
PALIN: And reality is we are going bankrupt and the only way that we're going to get out of the problem that we face is to cut, is to cut budgets…
O'REILLY: But let's…
PALIN: …is to reform entitlements, and then to start a pro-growth agenda that's based on cutting taxes and incentivizing production and tapping our energy sources and again stop assuming that government can plan our economy for us.
O'REILLY: Ok. But what about the poor people who absolutely need the entitlements they get? You know in your state there are a lot of people on the dole, a lot.
PALIN: There will -- and there will always…
O'REILLY: So are you going to cut -- are you going to cut the subsidies going to people earning, say less than $15,000 a year? Is that going to happen?
PALIN: There is a need -- there is a need for a safety net for those who are disadvantaged and in some of the rural communities in Alaska where there's 80 percent unemployment. There is a disadvantage and there needs to be a safety net. But you know why there is a disadvantage here in Alaska? Because the federal government has locked up our lands and not allowed us to tap into energy sources so that we can create more jobs. Less than one percent of Alaskan land is in the private sector hands. Now, we asked the federal government and I've sued the federal government for allowance to be able to develop more so that people aren't of this entitlement mentality where they believe that the only way that they can get out of a disadvantaged stage is to have government provide for them. If we had a robust economy here and all across the country, then we wouldn't have to be looking at these insolvent entitlement programs that, yes, when we start pulling the plug on some of them, there is going to be a shared burden across our country.
O'REILLY: Now, some people are just, you know, I think there has got to be a cutoff date for Medicare and Medicaid as far as income level is concerned.
Hey, governor, always a pleasure to talk to you. Stay warm up there in Alaska. And we appreciate you taking the time.
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