Following is the video and transcript of my Monday night Kudlow Report interview with Rep. Eric Cantor, Republican majority leader of the House:
KUDLOW: Now let us bring in, exclusively, we have House Majority Leader Eric Cantor. He’s a Republican from Virginia. We got him on Capitol Hill.
Mr. Cantor, first up, welcome back, sir. We appreciate your time. And let me just begin by asking you, what’s so bad about the Senator Harry Reid plan? It looks very Republican to me.
CANTOR: Well, look, Larry, number one, we’re about trying to achieve real reform in the entitlement programs. And what Harry Reid’s plan does is really kick the can down the road. What it does is it gives the president the full $2.4 trillion extension in the debt ceiling and does not have the ability for us to force this president to get serious about the entitlement reforms. And that’s what’s wrong. I mean, the choice is very clear this week. And that is, do we want to have a discussion? Do we want to actually make some progress on cutting spending and reforming the entitlement programs, which is the only thing that really folks are waiting for to indicate Washington is serious about getting its fiscal house in order. Do we want…
KUDLOW: But, Mr. Cantor….
CANTOR: Do we want to do that or don’t we? And Harry Reid’s…
KUDLOW: All right.
CANTOR: Harry Reid’s plan does not afford the ability to do that.
KUDLOW: Yes. But, Mr. Cantor, is that really true? I mean, both your plan and Senator Reid’s plan has a joint congressional committee which is suppose to report by the end of this year on the very same topic you just raised, appropriately, entitlement reform. But in a sense, it looked like Mr. Reid’s idea originally came from Republican Senator Mitch McConnell. Now everyone has coalesced around it. That’s why I wonder what’s so bad about it.
CANTOR: Well the issue is, number one, we’ve always said that what the people of this country want to see is a stop to the kind of spending that’s been going on. So Speaker Boehner, he came out months ago and said, `We’re not going to increase the debt ceiling unless we have commensurate or even greater cuts in spending.’ Now Senator Reid’s plan doesn’t do that. What Senator Reid’s plan says is, `We’re going to raise the debt ceiling $2.4 trillion and we’re also going to cut spending.’ But what he does is he counts over a trillion dollars in spending that is assumed to decrease and go away anyway, which is the spending associated with the wars in Iraq and Afghanistan.
KUDLOW: Yes. But isn’t that…
KUDLOW: Isn’t that in the Paul Ryan baseline also, which is the baseline for cap, cut, and balance?
CANTOR: But it absolutely–absolutely it is, but it’s not anything additional. And what we’re saying is you are increasing the credit limit now to afford additional and new spending. We’re about really trying to do the right thing and to cut spending in this town to reform the entitlement programs. And what our–what our bill does in the House, which we will bring up on Wednesday, is it will give us the ability to say to the president, `You have the opportunity to raise the debt ceiling now to avoid what all of us want to avoid, which is default on August 2nd.’ No one wants to see that happen. But it also sets in place a procession with a pivot point or a leverage point that once again we’ve got to get serious.
KUDLOW: All right. But a lot of people…
CANTOR: Because the president has indicated, Larry, all along, he’s not serious about cutting spending without raising taxes. We’re not for job-killing tax increases.
KUDLOW: Look–OK. OK, I know you’re not. But that’s another similarity. The Reid plan says no new taxes. Your plan says no new taxes. They have adopted the Republican position, have they not? And isn’t that a huge concession?
CANTOR: No, because Reid plan doesn’t require commensurate cuts in new spending to go along with the increase in the debt ceiling, and the Reid plan doesn’t afford a forcing mechanism to say to the president get serious, let’s not kick the can down the road. We, as Republicans, are serious. We put on the table our plan to reform entitlements. He’s never done that.
KUDLOW: But he…
CANTOR: There’s never going to be any forced discipline, Larry, unless we have another discussion here. And the only thing we hear about–out of the president is he doesn’t want to have to talk about it again until he–until his election. And now that’s not–that’s really not what this is about. It’s not about the politics here. And what we’re saying is preserve the ability to talk about doing some real cuts and reform.
KUDLOW: I will say this, though, Senator Reid’s plan, which would raise the debt ceiling once–it would raise it once, the so-called long-term. You would raise it twice. There’s a lot of sentiment on Wall Street, sir, that wants it once. Let’s get it done. Let’s be done with it. And the spending cuts on paper–I acknowledge your point–but on paper, Mr. Reid’s spending cuts equal the debt ceiling as you want, too. So it looks like that’s another concession to your position.
KUDLOW: But Wall Street, I think, it’s fair to say this evening, after watching markets and hearing experts today, Wall Street would greatly prefer one debt ceiling increase. You have two. Is that a problem for your plan?
CANTOR: But what–but what Wall Street, I believe, and the rating agencies are also looking for, is not only the fact we can get it over with. It’s not certainty for certainty’s sake, it is to get it right. And what I’m saying to you, the Reid plan kicks the can down the road. It doesn’t afford the opportunity for us to get it right and to actually begin to cut real spending and reform the entitlements. That’s also what Wall Street and investors are looking at, whether the US government is going to get serious, put its fiscal house in order in order to honor its long-standing tradition of being the number one credit risk in the world.
KUDLOW: All right. Well, I have two other…
CANTOR: And again, the Reid plan doesn’t get us to do that.
KUDLOW: All right, what…
CANTOR: It kicks the can down the road.
KUDLOW: What do you need for a compromise to bring the two sides together? And what’s the process here? I mean, the bottom line is let’s get a debt ceiling increase so we don’t have some kind of Armageddon in the financial markets. I can’t predict it. You can’t predict it. My point is let’s not take a chance.
CANTOR: I agree.
KUDLOW: We don’t need predictions.
CANTOR: I agree.
KUDLOW: And, of course, the issue of an S&P, Moody’s downgrade. Let me just ask you, what would it take to bring you together and a merger with the Reid plan, sir?
CANTOR: Well, I think that, you know, what Harry Reid has indicated, I believe has suggested, is the operation of this joint select committee. It’s something that he and the Senate wants. We in the House like to see our committees work towards this end. But this is in the House plan, the Harry Reid suggestion of a joint select committee.
You know, we would like to see no tax hikes, and we’d like to see some actual movement on reforms and spending and entitlements. That’s in the House plan. So there’s a compromise here.
KUDLOW: So if you can work out–if you can work out this congressional entitlement deficit committee, if you can work out those details, would you have a plan? Would you have a deal?
CANTOR: No. What we want–what we’re trying to say, Larry, is our plan offers the majority leader in the Senate what he wants, which is a joint select committee, but it also gives us the dollar for dollar cuts to the increase in the ceiling, which I think is very promising in terms of the beginnings of reform. And that’s what we’d like to see. And in fact, by making sure this is a two-stage process and ignoring the insistence of the White House to go beyond the election. Again, that’s just political. The president doesn’t want to have to talk about this while he’s campaigning.
KUDLOW: All right.
CANTOR: That’s not…
KUDLOW: Can you get a…
CANTOR: That’s not a sustainable position.
KUDLOW: Can you–can you get–Mr. Majority Leader, it’s hard for me to keep a straight face because I have so much respect for you. You know that.
CANTOR: Well, I don’t understand why that’s funny. I mean, to sit here and say…
KUDLOW: There’s nothing–there’s nothing funny about it. In fact, my next question, my final question to pitch to you is, can you get this done by August 2nd?
KUDLOW: And can you get it done in time to codify it in legislation?
CANTOR: I am–I am–I am certain that we will make sure that this country doesn’t default. Absolutely. None of us want to see that happen. You know, that–it’s never happened and we’re not going to let it happen. But what we’re saying is we’ve got the best opportunity right now to put in place a process through the House bill that will actually lead to real reform and cuts. The Reid plan kicks the can down the road.
KUDLOW: All right. So the issue…
CANTOR: It doesn’t accomplish that.
KUDLOW: Is it fair to summarize, sir, just say the issue is over this joint committee? Is that–is that really the key sticking point?
CANTOR: No. No. Because the joint committee is present in both plans. And that’s what I’m saying to you, we proffered that in our plan, something that the majority leader in the Senate wants is that joint select committee. What’s different is the forcing mechanism, the force discipline that this town needs to actually do the tough things.
KUDLOW: The enforcement.
CANTOR: Which is…
KUDLOW: The enforcement mechanism, that’s the key point?
CANTOR: The enforcement–the enforcement mechanism, Larry, is the second vote. It is the forcing of the discussion to increase the debt ceiling another time, because otherwise this town will walk away from anything that’s tough.
KUDLOW: All right. As it has in the past, I acknowledge that. I acknowledge that. Majority Leader Eric Cantor, thank you very, very much. I appreciate you coming on. I know you’re very busy. Good luck, sir.
CANTOR: Thanks, Larry.