Ryan: Tax Deal “The Best We’re Going to Get”

Rep. tells Al Hunt he doesn’t see compromise changing, believes it will be enacted.

From "Political Capital with Al Hunt" (courtesy of Bloomberg)

Interview to air Friday evening at 7:00 PM/ET.

Representative Ryan and Senator Conrad's reaction to this week's tax cut deal:

Rep. Ryan: "I don't think it will be changed…and yes, it will be enacted. We'll see what Nancy Pelosi does….Look, they're throwing a fit. We are opposed to raising taxes….There's a lot in this deal I don't like…But what I don't like the most is a huge tax increase in January that's going to put a lot of volatility in the economy and do damage to the economy and job creation."

"I do support this deal. It's the best we're going to get, I think. A deal is a deal. We have an agreement. And that ought to be honored, and it should pass soon, so we don't create this volatility in the economy."

Sen. Conrad: "I think [the tax cut deal] will be enacted….I think it will be changed and, hopefully, improved. The renewable energy program will be renewed. I was told last night that's going to be put in the package. It had been left out… I'm delighted that that's going to be put back in the package. I hope the estate tax provisions are changed, because they went too far on estate tax relief."

"I think [the tax cut deal is] more likely to be changed in the House. It needs to be changed, because, frankly, we just can't afford that kind of giveaway to the very wealthiest among us."

"This is a gift - if it was continued over 10 years - of $100 billion to the wealthiest one-quarter of one percent….I'm in favor of estate tax reform. I proposed in my budget going to $3.5 million a person with a 45% rate, but this goes much beyond that."

EXCERPTS FROM REPRESENTATIVE RYAN INTERVIEW:

Rep. Ryan on his support for lowering the estate tax:

"This is money that people already paid taxes on….With zero estate tax, you have a step-up in basis, carryover, and then you do pay capital gains when you sell the asset as an heir, so you do actually end up paying capital gains."

"This is the biggest killer of intergenerational transfer of businesses. We're not talking about, you know, Bill Gates here. We're talking about successful family businesses and farms that are big employers having to be cut in half or liquidated in order to pay a tax when the owner dies. This is not right."

Rep. Ryan on lack of public support for cutting spending and entitlements (per a recent Bloomberg News poll) and how this impacts cutting spending for Congress:

"I really sincerely do hope we can get something significantly done in the next Congress. Look, we have divided government. Health care is the biggest source of our budget and fiscal problems, and my guess is we're not going to get agreement on the president on that."

"Hopefully on these other issues, Social Security, perhaps, discretionary spending, budget controls, spending caps, things like that, we can get something done. We've got to get a dent in this problem. We cannot accept that for just two years we're not going to do anything to improve our fiscal situation."

"We've got to put a dent on this problem. That's why I'm hoping to get something with the president under this divided government scenario in the right direction."

Rep. Ryan on how Congress will address spending cuts and raising the debt ceiling:

"We intend to do lots of spending cuts and lots of spending reforms as soon as we take over in January, leading up until that moment, which will be anywhere from March to May…Hopefully by then we will have done a lot of good things to cut spending, to put controls on spending, and then hopefully accompanying a debt ceiling increase, we'll get some kinds of real fiscal controls that can get this thing turned around.

"The debt ceiling, obviously, is going to have to be increased if we're not going to default, so the question is, what do we get in exchange for that and what kind of fiscal controls? We don't think we have a revenue problem. Even keeping taxes where they are, revenues go back to their historic levels, what we have is a massive spending problem that's the source of our problems. And if we chase higher spending with higher revenues, we're going to shut down this economy and hurt job creation."

"The budget itself doesn't occur until spring, so before the budget, you can deal with current fiscal year spending. So we intend on doing some rescission bills. We want to bring spending back to something like pre-binge, pre-spending levels of 2008."

"That means we want to go after a good $100 billion down payment on discretionary spending before the spring occurs, because the budget doesn't occur until April, so that's why we have to go after discretionary spending now and current levels of discretionary spending.

Rep. Ryan's thoughts on the Obama administration tackling tax reform:

"It is a good idea. Tax reform is a good idea. The question is, what kind of tax reform? I was on the Bowles-Simpson commission, and they did some great things on tax reform. I would have done things a few things differently. But they acknowledged that high tax rates kills growth and jobs. We need lower tax rates."

"The idea of a broader tax base and lower tax rates, which is good for economic competitiveness, international competitiveness, and job creation, is something that that people from the center-left and the right are acknowledging together."

"I would like to think that there's becoming a centrist solution here, more internationally competitive corporate tax rates, more internationally competitive small-business tax rates, lower tax rates on all Americans, a broader tax base, so you get the revenue you need to fund the government.

"Where we might have disagreement is, what is the proper level of revenues? Because, again, we just have a different view on the size of government. We think it ought to be limited, it ought to be back toward its historic levels, and that's what we want to do."

Rep. Ryan addressing claims that his 'Roadmap for America's Future' also practices wealth transfer, except to already wealthy Americans:

"No, no, I don't see it that way. Look, you might be confusing me with someone who thinks we should use the tax code as a tool of economic redistribution, social engineering. I don't see it that way."

"We should have a tax code that maximizes competitiveness, job creation, economic growth, and raises the proper amount of revenue for the government…I do maintain a progressive tax code for individuals; I just don't do it as much as what we have right now, because I think it's hurting growth. We have a very internationally uncompetitive tax system.

"What I also do, that you're not giving me credit for is, I means-test our entitlement programs. I say to people who are wealthy, you're not going to get as much of a subsidy for Medicare or for Social Security as everybody else in America gets."

Rep. Ryan on his political mentor Jack Kemp and whether, like Kemp, Ryan would identify with special programs to assist African-Americans and Latinos:

"I do believe in that, of course…Nobody can match Jack's passion and zeal for bringing the ideas of economic growth, liberty, and freedom, pro-growth economics to people who have not seen it before. I do believe that we need to have a pro-growth opportunity message that goes to those people who've never seen it before.

"We need to lower the rungs of the economic ladder so people who've never seen it before can climb up and make the most of our lives. So I really do believe that this is a message that we've got to take….I'm just happy to be mentioned in the same sentence as Jack on this moment - on this issue."

EXCERPTS FROM SENATOR CONRAD INTERVIEW:

Sen. Conrad on whether the deficit can be cut when, as shown by a recent Bloomberg News poll, Americans oppose cuts to government programs:

"We need to get something done because we are on a completely unsustainable position. We are borrowing 40 cents of every dollar we spend…The notion that apparently people have - at least in this poll - that you don't have to touch entitlements, which is the biggest part of our spending, you don't have to touch revenue, which is half of the equation, that you can't touch defense, that you can't touch all of these other programs means you cannot solve the problem."

"[Elected officials] have to be prepared to sacrifice their political careers to do what must be done for the nation. If we fail to get our deficits and debt under control, America will become a second-class nation."

Sen. Conrad on what has to be done to muster votes to increase the debt ceiling:

"Yesterday I was at the White House with members of the fiscal commission meeting with the Secretary of the Treasury, meeting with the head of the Office of Management and Budget, and we told them this is going to be the decision point. When the debt limit has to be extended, there has got to be an agreement to deal with our long-term debt challenge, else extending the debt limit will not happen, but for short periods of time."

Conrad on how the bipartisan group's deficit reduction plan would differ from Bowles-Simpson Commission's plan:

"We'd start with what the [Bowles-Simpson deficit] commission has laid out as a blueprint and then listen to our colleagues about what is necessary to actually achieve an agreement. I have a list of things that I'd like to see improved. The domestic spending cuts went too far, because mandatory spending is really where the problem lies. That has now become about two-thirds of our budget, the so-called mandatory accounts, Social Security, Medicare, and the rest. We're going to have to achieve savings there and we can do that without hurting Medicare beneficiaries."

"We've got a huge educational job to do with the American public, because when you say poll numbers, as you just did, it says the American people don't want to do any of the things that you actually have to do to solve the problem, we've got a big challenge."

Sen. Conrad on whether the Obama administration's consideration for a major tax reform initiative next year is a good idea and whether it can be a revenue-raiser:

"It is a very good idea. I think it's a central idea to the debt commission-- dramatically reform our taxes, reducing tax expenditures, lowering rates to make America more competitive. It will also generate additional revenue, so it has a lot of merits."

"Our tax expenditures are $1,100,000,000,000 a year. So if they are meaningfully reduced, we can use money to lower rates, to help make America more competitive, and we can also use some of the money to reduce the deficit."

Conrad on changes he would like to see in the Obama administration, both policy and in personnel:

"I would like to see senior people who are very cognizant of our fiscal situation and our economic conditions….I'd like to see some gray hair, people with a deep understanding of how the economy functions, and also relationships here on the Hill. That's critically important."

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