'This Week' Transcript: GOP Vice Presidential Nominee Paul Ryan

RYAN: Here's the secret on this one. Medicaid spending still goes up under what we're proposing. What we're saying is we want to repeal ObamaCare, because we think it's a terrible law. And so we're taking away the massive increases in ObamaCare that are attributable to Medicaid. About a third of the people that ObamaCare is supposed to serve, they're just pushing people on Medicaid.

Here's the problem, George. Medicaid is not working. More and more doctors are less likely to even take people with Medicaid. It's a system that needs reforming.

So we don't want to put more money and force more people on a program that's failing, that's not working. We want to reform Medicaid. And so what were saying is, don't expand this program as dramatically as ObamaCare does. Keep it like it is, increase its funding and send it to the states so the states can fix this problem. I think government closest to the people, especially in providing health care for the poor, works the best.

STEPHANOPOULOS: But The Urban Institute has estimated that between 14 million and 27 million people will -- fewer people will be covered under that plan. And won't the block grant, block-granting this program, sending it to the states, mean that low-income and disabled people will lose their guaranteed right to coverage?

RYAN: No, not at all, of course not. Look, governors are asking us all the time for more flexibility on Medicaid. There are a lot of different ideas out there on how best to cover the low-income populations of various states. And look, every state has different issues and different problems. So we want to be able to give the states the tools they need, make sure that they spend this money on their Medicaid population, but give them the ability to fix the problems in their unique state --

STEPHANOPOULOS: But doesn't --

(CROSSTALK)

STEPHANOPOULOS: -- individuals will not have a federal guarantee under a block grant. That's correct, isn't it?

RYAN: Sure. No, with maintenance of that -- I won't get into the details, but with maintenance of effort requirements, which is what we've done in the past, they still have to serve this population.

They just get more flexibility on how to serve this population, instead of all these rules and strings from Washington that make it really hard for them to make sure that they can meet the mandate and provide the best possible quality care to low-income populations.

STEPHANOPOULOS: Let's talk about foreign policy. In his convention speech, President Obama called your ticket new to foreign policy - that's a quote -- and went on to mock Governor Romney.

(BEGIN VIDEO CLIP)

OBAMA: You might not be ready for diplomacy with Beijing if you can't visit the Olympics without insulting our closest ally.

(APPLAUSE)

OBAMA: My opponent said that it was tragic to end the war in Iraq. And he won't tell us how he'll end the war in Afghanistan.

(END VIDEO CLIP)

STEPHANOPOULOS: So will -- how will a President Romney end the war in Afghanistan?

RYAN: Well, look, those kinds of comments are things that are said when you don't really have a good record to run on, when you're offering nothing but four more years of the same. The president --

(CROSSTALK)

STEPHANOPOULOS: You don't think the president has a good foreign policy --

RYAN: -- Mitt Romney has been very clear about this.

STEPHANOPOULOS: -- record to run on, including the killing of Osama bin Laden?

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