Transcript: The Great American Debates: 'There's Too Much Government In My Life'

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It created great increase in revenue. It helped us balance the budget, along with military cuts. And, you know, I do want to go back to the fact that it is the right wing that wants to expand the government in form of the military enormously and also claims it's job-creating.

Interestingly, the only way we create jobs, according to my conservative friends, in government spending, is not with highways and not with environmental cleanup, but overseas military bases.

But the point is that the Clinton tax increase was not for the wealthy. It helped, it raised taxes on the wealthy. It actually moved more in the direction of equality in the tax code.

Secondly, as to education, it is this attack on public spending that we have had to defend Pell grants, college aid for low-income people, against right-wing efforts to cut them. And in particular, and when I talk about income inequality, both Ben Bernanke and Alan Greenspan correctly hailed community colleges as a major way -- as a transmission belt (ph).

But community colleges are largely public-funded. And community colleges are suffering from this right-wing attack on government revenues so that our ability to give community colleges the funds that give people the skills they need, is being eroded by this blindsided attack on government.

AMANPOUR: Congressman, when it comes to taxes, we've just said that the top 1 percent pay 38 percent of all federal taxes. But 49 percent American households don't pay any taxes at all -- any federal taxes at all, is that fair?

FRANK: It is if you don't think Social Security is a tax. In fact, the Social Security tax, which is a very significant tax, which goes to what George was just talking about, Medicare and Social Security, is not only a tax heavily paid by lower income people, but it's regressive.

Because if you make $100,000, then everything you earn is taxed, and if you make $1 million, 10 percent of what you earn is taxed. So, yes, if you exclude the Social Security payroll tax from the calculation, then the lower income people don't pay taxes. But if you look at the percentage of their income...

RYAN: Yes, but the EIC, you can't make your point.

FRANK: What? But the percentage of income that's taxed is taken into account and you take Social Security tax, then that figure isn't true.

AMANPOUR: I want to go to the audience, we have got a question there about lobbyists.

GERALD BALILES, DIRECTOR, MILLER CENTER AT THE UNIVERSITY OF VIRGINIA: I'm Jerry Baliles, director of the Miller Center at the University of Virginia. My question is this, many Americans believe that Washington is dominated by lobbying groups that represent both the left and the right.

And I'm curious whether in your judgment that's the case? And if the government is influenced by too much in the way lobbying, then how do you reform it without jeopardizing or threatening our valued traditions of the right to organize and to speak freely?

FRANK: Well, let's broaden that one, jeopardized by lobbyists and historians. Let's get the whole...

(LAUGHTER)

AMANPOUR: Let me ask you first, Congressman. And then I'll ask you, Secretary Reich.

RYAN: I was struck at something Bob said. How does having big government get money out of politics? It's the other way around. If the power and the money are going to be here in Washington, that's where the influence is going to go.

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