This is a rush transcript from "Hannity," December 11, 2013. This copy may not be in its final form and may be updated.
NEIL CAVUTO, HOST: So, Mitch McConnell, was he making pitch to win back the Tea Party's love yesterday? And is this guy buying it?
Rand Paul, of course, a fellow senator, Republican, Kentuckian, and backed by the Tea Party and the very Senate Conservatives Fund that Mitch McConnell doesn't really like. Senator Rand Paul, thank you for joining us.
SEN. RAND PAUL, R-KY.: Glad to be with you, Neil.
CAVUTO: Do you -- do you buy that? Do you buy what Mitch McConnell was saying?
PAUL: Well, you know, I don't think any one person, myself or anybody else, really gets to speak for the Tea Party. And it is one unique facet of this grassroots group is that even though I say that I'm from the Tea Party and I want to be associated with it, when I go from city to city in Kentucky, they remind me very clearly that they are the Tea Party and that they speak for each of their cities and for themselves.
So, it really is a disparate voice. It isn't one voice that is the Tea Party. So, it is just like anything else. We all have disagreements. Even within the Tea Party, we don't all agree on everything. So it is kind of hard to say the Tea Party believes in this or this person. It is a little more complicated.
CAVUTO: Well, what's fairly black and white to me, Senator, is the emergence of the Senate Conservatives Fund, of which you are a favorite. They love -- they love you to death. So, methinks there is a split in Kentucky.
(LAUGHTER)
PAUL: Well, I don't know.
I think there's growing pains is a better way of putting it. I have been involved in the Republican Party since I was a kid. I was there in 1976 at the Republican Convention. My dad was Reagan delegate. But Ford was the establishment. There was a fight going on tooth and nail for the heart and soul of the party.
And so I think parties, particularly when they lose a presidential election, do struggle and I think we are going through that. There's some growing pains. But I think by and large what I try to emphasize to everybody is all of us, all of the Senate Republicans, Senator McConnell being one of the leaders, have all been opposed to Obamacare and have all been opposed to funding it.
CAVUTO: Well, he chafes at this notion that he hasn't done enough, apparently. And that's brought on a Tea Party challenger to him within the party in Kentucky. Who are you supporting in that battle?
PAUL: I have endorsed Senator McConnell.
And I think we have finite resources and we should direct those resources towards the people who really are causing problems in our country, and those are the Democrats. And you have people like Senator Pryor from Arkansas, Senator Landrieu from Louisiana, who have been big supporters of ObamaCare and big supporters of you losing your insurance, of specifically being canceled under ObamaCare.
I would rather direct our resources towards trying to take over a Republican majority than trying to eat our own.
CAVUTO: But, nevertheless, that appears to keep happening again and again. And I wonder if we didn't get a signal of that today, Senator, from Speaker John Boehner responding to a question about conservative criticism of this latest budget deal. He says that it does pare spending and essentially saying, shut up.
What do you say?
(LAUGHTER)
PAUL: Well, it is not a good deal. We are trading immediate cuts for the promise of cuts later.
When the sequester happened in 2011, S&P downgraded the U.S. dollar because they said it wasn't enough. And now we are reneging even on that small thing, the sequester. The sequester was beginning to nibble away at the growth of some of government. It was something that absolutely we need to keep and we need to add to. Instead...
CAVUTO: Well, I think what he was saying and what others say, what Paul Ryan has said, Senator -- and I could be wrong -- is that, look, whatever the government shutdown brought and whether the media fairly covered it or not, and we got the blame for it, and we don't want to cross that bridge again, so let's focus on getting a deal, keep the attention on ObamaCare, and that was the method to their madness.
What do you make of that?
(CROSSTALK)
PAUL: But it is sort of a separate question, because I'm not talking about shutting down the government, nor was I in favor of it.
But I would say that when we had the shutdown, the Democrats wanted to do a continuing resolution. This budget deal is worse than a continuing resolution, because it actually increases spending by $60 billion in the first two years. And we know the history of Congress is, they lie. They don't -- they don't -- they don't keep their word.
So, after two years, no budget deal is worth the paper it is written on. It is only worth something in the first year or two. And mark my words, they will go back on this deal also after a year or two, when they don't like it.
(CROSSTALK)
CAVUTO: Well, I think it is an example, though, Senator -- I'm sorry, sir.
But I think it is an example of the type of deal -- and maybe I'm wrong -- I don't want to put deals in his mouth or head -- that a Chris Christie would come up with, where they get deal done and it might not be perfect to either side, but it keeps moving the ball forward.
What do you think of that?
PAUL: But here's the problem. It doesn't. It moves it backwards. It is worse than the status quo.
The status quo will spend $60 billion less than the budget deal over the next two years. They do some ledger domain and they do some shell games and they want to say there's less addition to the deficit. But over 10 years, this deal will add $7 trillion to the deficit. It does not significantly alter our course. We are still on a course for disaster.
CAVUTO: All right. You're referring to the $7 trillion added to the cumulative debt over 10 year . But the latest polls, presidential polls, and they're years out, as you constantly me, show you number two in these polls, at least in Iowa, second to Chris Christie. What do you make of that?
PAUL: I'm just so glad I'm number -- not number one, because it is much better to be an underdog than to be the leader.
CAVUTO: Does he deserve to be number one?
(LAUGHTER)
PAUL: You know, I don't know. I don't -- I think really these are a great parlor game at this point in time. They're so early. And those of us who love politics and love to talk about it are interested in them. But the general public, I think, would rather have a job right now than a presidential poll. And so what we have to do is really debate what's best for our country.
The president says raising more taxes. I say, absolutely, the opposite way go. We need to lower taxes to stimulate the economy.
CAVUTO: By the way, last time I had you here, you were talking about a peace summit of some sort where you and Chris Christie would get together and bury the hatchet. You ever have that?
PAUL: We are still working on that. The invitation is out there. The olive branch is extended. We will just have to see what happens.
CAVUTO: You hate each other, don't you?
(LAUGHTER)
PAUL: Now, Neil, I think you are trying to start a fight. I don't think you are really being objective about this.
(LAUGHTER)
CAVUTO: So there is no bad blood? I'm overstating it?
PAUL: No. We are all good Republicans and, you know, the party of the big tent. So, we're -- we're -- you know, we're all together on the same page.
CAVUTO: So, if he were the nominee, you would be OK with it?
PAUL: We will have a little bit of discussion about that before we make the decision.
CAVUTO: OK. All right.
Well, looking at Detroit, as you know, it got the green light for a bankruptcy filing. You have said we have got to watch Detroit because there are a lot of cities and states that are in similar arrears and have really serious problems, to say nothing of our federal government, its unfunded liabilities. Why should we keep an eye on that?
PAUL: Well, I have also said that we need to propose solutions for Detroit.
So I was there last week talking about how we could help Detroit bail themselves out by cutting their taxes dramatically. I proposed a plan that would cut their taxes by $1.3 billion over the next 10 years. It would apply to them, but it would also apply to some impoverished areas in Eastern Kentucky, as well as in Louisville, in my state.
This, I think, would be a good plan and it is worth the discussion, because it is so much better than a government stimulus. It is a free market stimulus.
CAVUTO: Interesting.
Rand Paul, always interesting having you. Always fun. Thank you very much.
PAUL: Thanks, Neil.
CAVUTO: Rand Paul, the senator from Kentucky.
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