Get the rates down, lower deductions and exemptions to create more jobs, because there’s nothing better for getting us to a balanced budget than having more people working, earning more money, paying — (chuckles) — more taxes. That’s by far the most effective and efficient way to get this budget balanced.
Look, we’ve tried this — we’ve tried both approaches. The approach that Governor Romney’s talking about is the same sales pitch that was made in 2001 and 2003. And we ended up with the slowest job growth in 50 years. We ended up moving from surplus to deficits. And it all culminated in the worst financial crisis since the Great Depression.
Bill Clinton tried the approach that I’m talking about. We created 23 million new jobs. We went from deficit to surplus, and businesses did very well.
So in some ways, we’ve got some data on which approach is more likely to create jobs and opportunity for Americans, and I believe that the economy works best when middle-class families are getting tax breaks so that they’ve got some money in their pockets and those of us who have done extraordinarily well because of this magnificent country that we live in, that we can afford to do a little bit more to make sure we’re not blowing up the deficit.
My plan is not like anything that’s been tried before. My plan is to bring down rates but also bring down deductions and exemptions and credits at the same time so the revenue stays in, but that we bring down rates to get more people working.
What are the differences between the two of you as to how you would go about tackling the deficit problem in this country?
Well, mathematically there are — there are three ways that you can cut a deficit. One, of course, is to raise taxes. Number two is to cut spending. And number three is to grow the economy because if more people work in a growing economy they’re paying taxes and you can get the job done that way.
The presidents would — president would prefer raising taxes. I understand. The problem with raising taxes is that it slows down the rate of growth and you could never quite get the job done. I want to lower spending and encourage economic growth at the same time.
What things would I cut from spending? Well, first of all, I will eliminate all programs by this test — if they don’t pass it: Is the program so critical it’s worth borrowing money from China to pay for it? And if not, I’ll get rid of it. “Obamacare” is on my list.
I’m sorry, Jim. I’m going to stop the subsidy to PBS. I’m going to stop other things. I like PBS. I love Big Bird. I actually like you too. But I’m not going to — I’m not going to keep on spending money on things to borrow money from China to pay for it. That’s number one.
Number two, I’ll take programs that are currently good programs but I think could be run more efficiently at the state level and send them to state.
Number three, I’ll make government more efficient, and to cut back the number of employees, combine some agencies and departments. My cutbacks will be done through attrition, by the way.
This is the approach we have to take to get America to a balanced budget. The president said he’d cut the deficit in half. Unfortunately, he doubled it. Trillion-dollar deficits for the last four years. The president’s put it in place as much public debt — almost as much debt held by by the public as all prior presidents combined.
When I walked in the Oval Office, I had more than a trillion dollar deficit greeting me, and we know where it came from. Two wars that were paid for on a credit card. Two tax cuts that were not paid for, and a whole bunch of programs that were not paid for. And then a massive economic crisis.
And despite that, what we’ve said is, yes, we had to take some initial emergency measures to make sure we didn’t slip into a Great Depression. But what we’ve also said is, let’s make sure that we are cutting out those things that are not helping us grow.
So, 77 government programs — everything from aircrafts that the Air Force had ordered but weren’t working very well. Eighteen government — 18 government programs for education that were well- intentioned but weren’t helping kids learn. We went after medical fraud in Medicare and Medicaid very aggressively — more aggressively than ever before, and have saved tens of billions of dollars. Fifty billion dollars of waste taken out of the system.
And I worked with Democrats and Republicans to cut a trillion dollars out of our discretionary domestic budget. That’s the largest cut in the discretionary domestic budget since Dwight Eisenhower.
Now, we all know that we’ve got to do more. And so I’ve put forward a specific $4 trillion deficit-reduction plan.
It’s on a website. You can look at all the numbers, what cuts we make and what revenue we raise.
And the way we do it is $2.50 for every cut, we ask for a dollar of additional revenue, paid for, as I indicated earlier, by asking those of us who have done very well in this country to contribute a little bit more to reduce the deficit.
And Governor Romney earlier mentioned the Bowles-Simpson commission. Well, that’s how the commission — bipartisan commission that talked about how we should move forward suggested we have to do it — in a balanced way with some revenue and some spending cuts. And this is a major difference that Governor Romney and I have.
Governor Romney stood on a stage with other Republican candidates for the nomination, and he was asked, would you take $10 of spending cuts for just $1 of revenue, and he said no. Now, if you take such an unbalanced approach, then that means you are going to be gutting our investments in schools and education. It means that — Governor Romney talked about Medicaid and how we could send it back to the states, but effectively this means a 30 percent cut in the primary program we help for seniors who are in nursing homes, for kids who are with disabilities…And that is not a right strategy for us to move forward.
I — look, the revenue I get is by more people working, getting higher pay, paying more taxes. That’s how we get growth and how we balance the budget. But the idea of taxing people more, putting more people out of work — you’ll never get there. You never balance the budget by raising taxes.
If we’re serious, we’ve got to take a balanced, responsible approach. And by the way, this is not just when it comes to individual taxes.
Let’s talk about corporate taxes. Now, I’ve identified areas where we can, right away, make a change that I believe would actually help the economy. The — the oil industry gets $4 billion a year in corporate welfare. Basically, they get deductions that those small businesses that Governor Romney refers to, they don’t get. Now, does anybody think that ExxonMobil needs some extra money when they’re making money every time you go to the pump? Why wouldn’t we want to eliminate that?
Why wouldn’t we eliminate tax breaks for corporate jets? My attitude is if you got a corporate jet, you can probably afford to pay full freight, not get a special break for it.
When it comes to corporate taxes, Governor Romney has said he wants to, in a revenue-neutral way, close loopholes, deductions — he hasn’t identified which ones they are — but thereby bring down the corporate rate. Well, I want to do the same thing, but I’ve actually identified how we can do that.
And part of the way to do it is to not give tax breaks to companies that are shipping jobs overseas. Right now you can actually take a deduction for moving a plant overseas. I think most Americans would say that doesn’t make sense. And all that raises revenue.
…if we’re asking for no revenue, then that means that we’ve got to get rid of a whole bunch of stuff, and the magnitude of the tax cuts that you’re talking about, Governor, would end up resulting in severe hardship for people, but more importantly, would not help us grow.
…you said you get a deduction for getting a plant overseas. Look, I’ve been in business for 25 years. I have no idea what you’re talking about. I maybe need to get a new accountant…the — the idea that you get a break for shipping jobs overseas is simply not the case.
Mr. President, do you see a major difference between the two of you on Social Security?
…And that’s the perspective I bring when I think about what’s called entitlements. You know, the name itself implies some sense of dependency on the part of these folks. These are folks who’ve worked hard, like my grandmother. And there are millions of people out there who are counting on this.
So my approach is to say, how do we strengthen the system over the long term? And in Medicare, what we did was we said, we are going to have to bring down the costs if we’re going to deal with our long- term deficits, but to do that, let’s look where some of the money is going. Seven hundred and sixteen billion dollars we were able to save from the Medicare program by no longer overpaying insurance companies, by making sure that we weren’t overpaying providers.
And using that money, we were actually able to lower prescription drug costs for seniors by an average of $600, and we were also able to make a — make a significant dent in providing them the kind of preventive care that will ultimately save money through the — throughout the system.
So the way for us to deal with Medicare in particular is to lower health care costs. But when it comes to Social Security, as I said, you don’t need a major structural change in order to make sure that Social Security is there for the future.
We also have 50 percent of doctors who say they won’t take more Medicare patients. This — we have 4 million people on Medicare Advantage that will lose Medicare Advantage because of those $716 billion in cuts. I can’t understand how you can cut Medicare $716 billion for current recipients of Medicare.
…What I’d do to make sure that we can keep Medicare in place for them is to allow them either to choose the current Medicare program or a private plan — their choice. They get to — and they’ll have at least two plans that will be entirely at no cost to them.
…let’s see if we can’t get competition into the Medicare world so that people can get the choice of different plans at lower cost, better quality. I believe in competition.
…Every study has shown that Medicare has lower administrative cost than private insurance does, which is why seniors are generally pretty happy with it. And private insurers have to make a profit. Nothing wrong with that; that’s what they do. And so you’ve got higher administrative costs, plus profit on top of that, and if you are going to save any money through what Governor Romney’s proposing, what has to happen is is that the money has to come from somewhere.
And when you move to a voucher system, you are putting seniors at the mercy of those insurance companies. And over time, if traditional Medicare has decayed or fallen apart, then they’re stuck. And this is the reason why AARP has said that your plan would weaken Medicare substantially, and that’s why they were supportive of the approach that we took.
Regulation is essential. You can’t have a free market work if you don’t have regulation. As a business person, I had to have — I needed to know the regulations. I needed them there. You couldn’t have people opening up banks in their — in their garage and making loans. I mean, you have to have regulations so that you can have an economy work. Every free economy has good regulation.
What is your view about the level of federal regulation of the economy right now?
…with some of the legislation that’s been passed during the president’s term, you’ve seen regulation become excessive and it’s hurt the — it’s hurt the economy. Let me give you an example. Dodd- Frank was passed, and it includes within it a number of provisions that I think have some unintended consequences that are harmful to the economy. One is it designates a number of banks as too big to fail, and they’re effectively guaranteed by the federal government.
This is the biggest kiss that’s been given to — to New York banks I’ve ever seen. This is an enormous boon for them. There’s been — 122 community and small banks have closed since Dodd-Frank.
The reason we have been in such a enormous economic crisis was prompted by reckless behavior across the board. Now, it wasn’t just on Wall Street. You had — loan officers were — they were giving loans and mortgages that really shouldn’t have been given, because they’re — the folks didn’t qualify. You had people who were borrowing money to buy a house that they couldn’t afford. You had credit agencies that were stamping these as A-1 (ph) great investments when they weren’t. But you also had banks making money hand-over-fist, churning out products that the bankers themselves didn’t even understand in order to make big profits, but knowing that it made the entire system vulnerable.
So what did we do? We stepped in and had the toughest reforms on Wall Street since the 1930s. We said you’ve got — banks, you’ve got to raise your capital requirements. You can’t engage in some of this risky behavior that is putting Main Street at risk.
Governor Romney has said he just wants to repeal Dodd-Frank, roll it back. And so the question is does anybody out there think that the big problem we had is that there was too much oversight and regulation of Wall Street? Because if you do, then Governor Romney is your candidate. But that’s not what I believe.
Governor Romney. You wanted repeal. You want the Affordable Care Act repealed. Why?
…when you look at “Obamacare,” the Congressional Budget Office has said it will cost $2,500 a year more than traditional insurance. So it’s adding to cost. And as a matter of fact, when the president ran for office, he said that by this year he would have brought down the cost of insurance for each family by $2,500 a family. Instead, it’s gone up by that amount. So it’s expensive. Expensive things hurt families.
I just don’t know how the president could have come into office, facing 23 million people out of work, rising unemployment, an economic crisis at the — at the kitchen table and spent his energy and passion for two years fighting for “Obamacare” instead of fighting for jobs for the American people.
It has killed jobs. And the best course for health care is to do what we did in my state, craft a plan at the state level that fits the needs of the state. And then let’s focus on getting the costs down for people rather than raising it with the $2,500 additional premium.
And let me tell you exactly what “Obamacare” did. Number one, if you’ve got health insurance it doesn’t mean a government take over. You keep your own insurance. You keep your own doctor. But it does say insurance companies can’t jerk you around. They can’t impose arbitrary lifetime limits. They have to let you keep your kid on their insurance — your insurance plan till you’re 26 years old. And it also says that they’re — you’re going to have to get rebates if insurance companies are spending more on administrative costs and profits than they are on actual care.
Number two, if you don’t have health insurance, we’re essentially setting up a group plan that allows you to benefit from group rates that are typically 18 percent lower than if you’re out there trying to get insurance on the individual market.
…The irony is that we’ve seen this model work really well in Massachusetts, because Governor Romney did a good thing, working with Democrats in the state to set up what is essentially the identical model. And as a consequence, people are covered there. It hasn’t destroyed jobs. And as a consequence, we now have a system in which we have the opportunity to start bringing down cost, as opposed to just leaving millions of people out in the cold.
Right now, the CBO says up to 20 million people will lose their insurance as “Obamacare” goes into effect next year. And likewise, a study by McKinsey & Company of American businesses said 30 percent of them are anticipating dropping people from coverage. So for those reasons, for the tax, for Medicare, for this board and for people losing their insurance, this is why the American people don’t want — don’t want “Obamacare.” It’s why Republicans said, do not do this.
And the Republicans had a — had a plan. They put a plan out. They put out a plan, a bipartisan plan. It was swept aside. I think something this big, this important has to be done in a bipartisan basis. And we have to have a president who can reach across the aisle and fashion important legislation with the input from both parties.
Governor Romney said this has to be done on a bipartisan basis. This was a bipartisan idea. In fact, it was a Republican idea.
And Governor Romney, at the beginning of this debate, wrote and said, what we did in Massachusetts could be a model for the nation. And I agree that the Democratic legislators in Massachusetts might have given some advice to Republicans in Congress about how to cooperate, but the fact of the matter is, we used the same advisers, and they say it’s the same plan.
It — when Governor Romney talks about this board, for example — unelected board that we’ve created — what this is, is a group of health care experts, doctors, et cetera, to figure out how can we reduce the cost of care in the system overall, because the — there are two ways of dealing with our health care crisis.
One is to simply leave a whole bunch of people uninsured and let them fend for themselves, to let businesses figure out how long they can continue to pay premiums until finally they just give up and their workers are no longer getting insured, and that’s been the trend line. Or, alternatively, we can figure out how do we make the cost of care more effective. And there are ways of doing it.
So at — at Cleveland Clinic, one of the best health care systems in the world, they actually provide great care cheaper than average. And the reason they do is because they do some smart things. They — they say, if a patient’s coming in, let’s get all the doctors together at once, do one test instead of having the patient run around with 10 tests. Let’s make sure that we’re providing preventive care so we’re catching the onset of something like diabetes. Let’s — let’s pay providers on the basis of performance as opposed to on the basis of how many procedures they’ve — they’ve engaged in. Now, so what this board does is basically identifies best practices and says, let’s use the purchasing power of Medicare and Medicaid to help to institutionalize all these good things that we do.
And the fact of the matter is that when “Obamacare” is fully implemented, we’re going to be in a position to show that costs are going down. And over the last two years, health care premiums have gone up, it’s true, but they’ve gone up slower than any time in the last 50 years. So we’re already beginning to see progress. In the meantime, folks out there with insurance, you’re already getting a rebate.
Let me make one last point. Governor Romney says we should replace it. I’m just going to repeal it, but we can replace it with something. But the problem is he hasn’t described what exactly we’d replace it with other than saying we’re going to leave it to the states.
But the fact of the matter is that some of the prescriptions that he’s offered, like letting you buy insurance across state lines, there’s no indication that that somehow is going to help somebody who’s got a pre-existing condition be able to finally buy insurance. In fact, it’s estimated that by repealing “Obamacare,” you’re looking at 50 million people losing health insurance at a time when it’s vitally important.
…pre-existing conditions are covered under my plan. Number two, young people are able to stay on their family plan. That’s already offered in the private marketplace; you don’t have — have the government mandate that for that to occur.
But let’s come back to something the president — I agree on, which is the — the key task we have in health care is to get the costs down so it’s more affordable for families, and — and then he has as a model for doing that a board of people at the government, an unelected board, appointed board, who are going to decide what kind of treatment you ought to have.
Obama: No, it isn’t.
In my opinion, the government is not effective in — in bringing down the cost of almost anything. As a matter of fact, free people and free enterprises trying to find ways to do things better are able to be more effective in bringing down the costs than the government will ever be.
Let me just point out, first of all, this board that we’re talking about can’t make decisions about what treatments are given. That’s explicitly prohibited in the law.
But let’s go back to what Governor Romney indicated, that under his plan he would be able to cover people with pre-existing conditions. Well, actually, Governor, that isn’t what your plan does. What your plan does is to duplicate what’s already the law, which says if you are out of health insurance for three months then you can end up getting continuous coverage and an insurance company can’t deny you if you’ve — if it’s been under 90 days.
But that’s already the law. And that doesn’t help the millions of people out there with pre-existing conditions. There’s a reason why Governor Romney set up the plan that he did in Massachusetts. It wasn’t a government takeover of health care. It was the largest expansion of private insurance. But what it does say is that insurers, you’ve got to take everybody. Now, that also means that you’ve got more customers.
But when Governor Romney says that he’ll replace it with something but can’t detail how it will be in fact replaced, and the reason he set up the system he did in Massachusetts is because there isn’t a better way of dealing with the pre-existing conditions problem, it — it just reminds me of — you know, he says that he’s going to close deductions and loopholes for his tax plan.
That’s how it’s going to be paid for. But we don’t know the details. He says that he’s going to replace Dodd-Frank, Wall Street reform. But we don’t know exactly which ones. He won’t tell us. He now says hes going to replace “Obamacare” and assure that all the good things that are in it are going to be in there and you don’t have to worry.
And at some point, I think the American people have to ask themselves, is the reason that Governor Romney is keeping all these plans to replace secret because they’re too good? Is — is it because that somehow middle-class families are going to benefit too much from them? No, the — the reason is because when we reform Wall Street, when we tackle the problem of pre-existing conditions, then, you know, these are tough problems, and we’ve got to make choices. And the choices we’ve made have been ones that ultimately are benefiting middle-class families all across the country.
And what we did in Massachusetts is a model for the nation, state by state. And I said that at that time. The federal government taking over health care for the entire nation and whisking aside the 10th Amendment, which gives states the rights for these kinds of things, is not the course for America to have a stronger, more vibrant economy.
Do you believe there’s a fundamental difference between the two of you as to how you view the mission of the federal government?
The first role of the federal government is to keep the American people safe. That’s its most basic function. And as commander in chief, that is something that I’ve worked on and thought about every single day that I’ve been in the Oval Office.
But I also believe that government has the capacity — the federal government has the capacity to help open up opportunity and create ladders of opportunity and to create frameworks where the American people can succeed. Look, the genius of America is the free enterprise system, and freedom, and the fact that people can go out there and start a business, work on an idea, make their own decisions.
But as Abraham Lincoln understood, there are also some things we do better together.
So in the middle of the Civil War, Abraham Lincoln said, let’s help to finance the Transcontinental Railroad. Let’s start the National Academy of Sciences. Let’s start land grant colleges, because we want to give these gateways of opportunity for all Americans, because if all Americans are getting opportunity, we’re all going to be better off. That doesn’t restrict people’s freedom; that enhances it.
And so what I’ve tried to do as president is to apply those same principles. And when it comes to education, what I’ve said is we’ve got to reform schools that are not working. We use something called Race to the Top. Wasn’t a top-down approach, Governor. What we’ve said is to states, we’ll give you more money if you initiate reforms. And as a consequence, you had 46 states around the country who have made a real difference.
But what I’ve also said is let’s hire another hundred thousand math and science teachers to make sure we maintain our technological lead and our people are skilled and able to succeed. And hard-pressed states right now can’t all do that. In fact, we’ve seen layoffs of hundreds of thousands of teachers over the last several years, and Governor Romney doesn’t think we need more teachers. I do, because I think that that is the kind of investment where the federal government can help. It can’t do it all, but it can make a difference, and as a consequence, we’ll have a better-trained workforce, and that will create jobs, because companies want to locate in places where we’ve got a skilled workforce.
MR. LEHRER: Two minutes, Governor, on the role of government, your view.
The role of government — look behind us: the Constitution and the Declaration of Independence.
The role of government is to promote and protect the principles of those documents. First, life and liberty. We have a responsibility to protect the lives and liberties of our people, and that means the military, second to none. I do not believe in cutting our military. I believe in maintaining the strength of America’s military.
Second, in that line that says, we are endowed by our Creator with our rights — I believe we must maintain our commitment to religious tolerance and freedom in this country. That statement also says that we are endowed by our Creator with the right to pursue happiness as we choose. I interpret that as, one, making sure that those people who are less fortunate and can’t care for themselves are cared by — by one another.
We’re a nation that believes we’re all children of the same God. And we care for those that have difficulties — those that are elderly and have problems and challenges, those that disabled, we care for them. And we look for discovery and innovation, all these thing desired out of the American heart to provide the pursuit of happiness for our citizens.
But we also believe in maintaining for individuals the right to pursue their dreams, and not to have the government substitute itself for the rights of free individuals. And what we’re seeing right now is, in my view, a — a trickle-down government approach which has government thinking it can do a better job than free people pursuing their dreams. And it’s not working.
We — as president, I will sit down on day one — actually the day after I get elected, I’ll sit down with leaders — the Democratic leaders as well as Republican leaders and — as we did in my state. We met every Monday for a couple hours, talked about the issues and the challenges in the — in the — in our state, in that case. We have to work on a collaborative basis — not because we’re going to compromise our principle(s), but because there’s common ground.
My philosophy has been I will take ideas from anybody, Democrat or Republican, as long as they’re advancing the cause of making middle-class families stronger and giving ladders of opportunity into the middle class.
. . . And I’ve got to tell you, Governor Romney, when it comes to his own party during the course of this campaign, has not displayed that willingness to say no to some of the more extreme parts of his party.