Here’s the first super-committee interview with newly appointed member Sen. Pat Toomey (R., Pa.). He’s a supply-sider and Tea Party backer with rather minimal expectations for the super committee, although he does believe IT can pick up another $1 trillion of budget cuts without raising taxes.
KUDLOW: The House and Senate Republicans named their picks for the 12-member super committee charged with tackling the country’s debt crisis. This has all happened in the last 24-48 hours. Joining us now, first on CNBC interview, we have Pennsylvanian Republican Senator Pat Toomey. He will serve on the committee.
Senator Toomey, old friend, welcome back. Let me just ask you, before we get down to nuts and bolts on your assignment, so many people say to me, `You all elected representatives, House and Senate, ought to come back to Washington and start working on spending, on debt, on economic growth. Why are you all taking this vacation? We need help. The market needs help. The national psychology needs help.’
TOOMEY: Well, be careful what you wish for, Larry. You know, when Congress is in session, it’s not always the optimal thing for the markets. But let me say this, the folks on this committee, I think, will begin discussions before September and hopefully be able to really hit the ground running soon.
KUDLOW: Will you begin those discussions in Washington, Senator?
TOOMEY: Well, I suspect we’ll be doing it by conference call and by phone call before we get to Washington, but of course we’ll continue in-person meetings.
KUDLOW: What do you want to come out of this? Let’s talk spending cuts to start.
TOOMEY: Well, Larry, you know, the mandate from the legislation is at least $1.2 trillion. Frankly, I hope we can do more than that. I hope we can accomplish more because the deficit magnitude that we have is much bigger than that. But the other thing that’s equally important to me is that whatever we do is pro-growth. You know, we’ve got to have solidly pro-growth policies. You know, I tend to look at things from the supply side, looking for ways to make it less expensive to do more production. I think that’s what creates a demand and keeps an economy moving. So if we can do–if we can do some meaningful deficit reduction on at least the scale that’s called for in the legislation and do it in a way that encourages economic growth, that would be terrific.
KUDLOW: Is it possible, Senator, to put side by side spending reduction, entitlement reform and tax reform? Is that possible or are the expectations for this super committee too high?
TOOMEY: Well, it’s possible but it’s very tough. That’s a big combination. Our legislation does authorize that level of activity. And frankly, there’s some low-hanging fruit. This tax code is so incredibly inefficient, it’s so costly, it’s such a dead weight burden on the economy, we could simply it, get rid of so much of the junk, lower marginal rates, and I’m convinced that would have a very powerfully pro-growth impact. That would be good for the deficit, the revenue would increase in that fashion. So I hope we can tackle all of those things, but, you know, time will tell.
KUDLOW: Just two quick points. The stock market, which is crashing right now, as you well know. You use to be in the financial world.
KUDLOW: So many people are worried that we’re going to have root canal spending cuts but they’re not going to be accompanied by lower tax rates, and therefore we’re going into recession, that Washington may be causing this recession, Senator. Do you have a quick thought on that?
TOOMEY: Well, I think a lot of policies out of Washington have been contributing to the problems we have, especially on the regulatory side. The uncertainty of the size of these deficits and whether that’s going to lead to higher interest rates, inflation, higher taxes, that’s not constructive. So making some progress here, I think, you know, could go a long way to encouraging the kind of certainty and confidence that people need.
KUDLOW: Is it possible that this super committee can surprise us, deliver more deficit reduction, the right way, as you say, shrinking government, promoting growth, and we get our AAA rating back from S&P? Do the members of this committee have any sense of how to get that AAA rating back?
TOOMEY: We haven’t–we haven’t met yet as a committee. You know, we were just–membership was just announcement today, as you know. So it’s a little early to project just how ambitious we can be. But I can tell you it’s my hope that we will strive to do more than the minimum required by this legislation. We need to do more than that to get back that AAA, although I’m skeptical about why S&P reached the decision it did. I just want us to bring spending under control and do it in a pro-growth policy.
KUDLOW: All right. Senator Pat Toomey, a newly appointed members to the deficit reduction super committee. We wish you all the best of luck, Senator. Thanks very much.
TOOMEY: Thanks, Larry.