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

PHOTO: Nobel Prize-Winning Economist and New York Times Columnist Paul Krugman, ABC News Cokie Roberts, ABC News George Will, Newark, New Jersey Mayor Cory Booker, and Republican Sen. Rand Paul of Kentucky and author of "Government Bullies" on "This Wee

STEPHANOPOULOS: Good morning and welcome to "This Week."

(BEGIN VIDEOTAPE)

MICHELLE OBAMA, FIRST LADY: The president of the United States of America.

STEPHANOPOULOS: Obama on offense.

PRESIDENT BARACK OBAMA: The path we offer may be harder, but it leads to a better place, and I'm asking you to choose that future.

STEPHANOPOULOS: The president and his party make their pitch.

FORMER PRESIDENT BILL CLINTON: We believe that we're all in this together is a far better philosophy than you're on your own.

SEN. JOHN KERRY, D-MASS.: Ask Osama bin Laden if he's better off now than he was four years ago.

VICE PRESIDENT JOSEPH R. BIDEN JR.: This man has courage in his soul, compassion in his heart, and a spine of steel.

STEPHANOPOULOS: Did Obama convince voters he deserves to be rehired? Will Friday's sobering jobs report-

MITT ROMNEY, GOP PRESIDENTIAL CANDIDATE: It's just simply unimaginable.

STEPHANOPOULOS: -- undermine his message? With less two months to go, what will define the final sprint and break this election deadlock? We'll ask our headliner, Congressman Paul Ryan, in his first Sunday interview since becoming Mitt Romney's running mate.

RYAN: We will win this debate.

STEPHANOPOULOS: Plus, Newark Mayor Cory Booker and Tea Party favorite Senator Rand Paul join our powerhouse roundtable, with George Will, Cokie Roberts, and Nobel Prize winning economist Paul Krugman of the New York Times.

(END VIDEOTAPE)

STEPHANOPOULOS: Hello again. The conventions are done, debates are coming, and new polls show a bit of a bounce for the Democrats. But Friday's mediocre jobs report may tamp that down. So President Obama was fighting hard in Florida yesterday.

(BEGIN VIDEO CLIP)

OBAMA: When our opponents say this nation is in decline, they are dead wrong. This is America.

(END VIDEO CLIP)

STEPHANOPOULOS: Here now with a response, just 58 days from the final votes, the Republican nominee for vice president, Congressman Paul Ryan.

Good morning, Congressman. How are you doing today?

RYAN: Hey, good morning, George. Good to be with you.

STEPHANOPOULOS: So the president, I think, was quoting you there. Do you stand by your belief that America is a country in decline?

RYAN: I think President Obama has placed us on a path to decline. Four budgets, $4 trillion deficits, 23 million people struggling to find work, the highest poverty rates in a generation, nearly one out of six Americans in poverty.

And we just learned on Friday that it's the 43rd month of unemployment above 8 percent. For every person who got a job last month, nearly four stopped looking for work. That's not a good direction. That's the wrong direction.

I mean, George, we have to create 150,000 jobs every month just to keep up with population growth, and we didn't even do that.

STEPHANOPOULOS: You know, you and --

RYAN: It's on the wrong path.

STEPHANOPOULOS: -- you and Governor Romney are promising --

RYAN: Go ahead.

STEPHANOPOULOS: -- to create 12 million new jobs. But that's only about half as many jobs as Governor Romney has said would be produced by a normal -- quote, normal recovery, and it's almost exactly the number that private sector economists say will be created no matter who is president or what the policies are. So that seems to be a concession that your plans won't improve the economy from its current path.

RYAN: I beg to differ. We do not have a normal recovery today. Just look at the jobs numbers we just got on Friday. And what we're saying is it's President Obama's failed leadership and flawed policies that are why we have such stagnant recovery.

And so what Mitt Romney and I are saying is if we get the right policies in place - that's what the Romney-Ryan five-point plan for a stronger middle class is all about -- these are good economic pro-growth policies -- that if we get those pro-growth policies in place, we think this economy can grow a lot faster than it's been growing.

(CROSSTALK)

STEPHANOPOULOS: But Moody's Economics says --

RYAN: If we get that growth, well get those 12 million jobs.

STEPHANOPOULOS: But Moody's Economics says that on the current path, the government's -- the country's on path to create 12 million new jobs.

RYAN: We've been growing under 2 percent, George. We are not on that kind of a path. We need to get on that kind of a path. We need to get on a faster growth path. And that's what I'm saying. Pro-growth economic policies, an energy policy that puts people to work, lowers gas prices; an education policy so workers can get good jobs in the 21st century; getting spending and the deficit under control, because that's hurting the economy; helping small businesses; building things, making things, growing things in America, selling them overseas with better trade. These are the things that have worked in the past. They're proven success stories. We want to reapply those policies to the times so we can get the kind of growth we need.

STEPHANOPOULOS: You and Governor Romney have argued that your tax cuts will be paid for by closing loopholes for the wealthy. But President Clinton took dead aim at that argument on Wednesday. Take a look.

(BEGIN VIDEO CLIP)

CLINTON: If they stay with this $5 trillion tax cut plan, they'll have to eliminate so many deductions, like the ones for home mortgages and charitable giving, that middle-class families will see their tax bills go up. Or, two, they'll have to cut all the programs that help to empower middle-class families and help poor kids.

(END VIDEO CLIP)

STEPHANOPOULOS: How do you make the math work without eliminating the big deductions that middle-class families rely on?

RYAN: Well, first of all, that -- those claims have been pretty discredited. There have been five different studies --

STEPHANOPOULOS: How have they been discredited?

RYAN: -- that show -- that this -- that this plan works. So the analysis you're citing wasn't even an analysis of the Romney plan.

But here's the point I am trying to make here, George. We think the secret to economic growth is lower tax rates for families and successful small businesses by plugging loopholes.

Now the question is, not necessarily what loopholes go, but who gets them. High-income earners use most of the loopholes. That means they can shelter their income from taxation. But if you take those loopholes, those tax shelters away from high-income earners, more of their income is subject to taxation. And that allows us to lower tax rates on everybody -- small businesses, families, economic growth.

Here's where the president wants to take the country. He wants to add a job-killing small-business tax increase on top of the current code, add even more loopholes and deductions to the code, more Washington picking winners and losers. That will crush jobs.

You have to remember, George, that most of our small businesses, they pay their taxes as individuals. Most of our jobs come from these successful small businesses. So we've shown -- look, the Princeton study, the Harvard analysis, they have shown that you can lower tax rates, broaden the tax base, and, yes, there is still room left for broad-based policies that the middle class enjoy so that nobody has a tax increase. We just stop picking winners and losers in the tax code.

STEPHANOPOULOS: But, Congressman, as you know --

RYAN: When Reagan did this, it worked --

STEPHANOPOULOS: -- many say it's difficult --

RYAN: Go ahead, George.

STEPHANOPOULOS: -- to accept your word if you're not going to specify which tax loopholes you're willing to close. Don't voters have a right to know which loopholes you're going to go after?

RYAN: So Mitt Romney and I, based on our experience, think the best way to do this is to show the framework, show the outlines of these plans, and then to work with Congress to do this. That's how you get things done. The other thing, George, is--

STEPHANOPOULOS: Isn't that a secret plan?

RYAN: -- we don't want to -- no, no. No, no. What we don't want is a secret plan. What we don't want to do is cut some backroom deal like ObamaCare, and then hatch (ph) it (ph) to the country.

STEPHANOPOULOS: But why not specify the --

RYAN: We want to do this --

STEPHANOPOULOS: -- loopholes now?

RYAN: -- out in the open --

STEPHANOPOULOS: Why not say right now --

RYAN: -- because we want to do this --

(CROSSTALK)

RYAN: -- we want to have this -- George, because we want to have this debate in the public. We want to have this debate with Congress. And we want to do this with the consent of the elected representatives of the people, and figure out what loopholes should stay or go and who should or should not get them.

And our priorities are high-income earners should not get these kinds of loopholes. And we should have broad-based policies that go to middle-class taxpayers, to make sure we can advance things that we care about, like charities. But that is a debate we shouldn't cut in a back room, shouldn't hatch a secret plan like ObamaCare. We should do it out in the public view where the public can participate.

STEPHANOPOULOS: That's exactly what I'm suggesting, having it in public before the election so voters can have that information before they make up their minds.

RYAN: We think the best way to get -- look, I've been in Congress a number of years. I've been on the Ways and Means Committee for 12 years. And we think the best way to do this is to get this framework in place, and then negotiate, work with Democrats, work with people across the aisle, have these kinds of hearings, have this conversation to get this objective.

STEPHANOPOULOS: President Clinton also took aim at the savings you do propose in Medicaid -- $800 billion, the largest specific savings in your plan. That's about a 35 percent reduction over the next decade.

And the president argued that it's going to be devastating for seniors who rely on Medicaid for nursing home care, middle-class families challenged by disabilities, children with autism. How can you squeeze that much money of a program, $800 billion, without cutting benefits or restricting eligibility?

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?

RYAN: So -- oh, I think -- I think that's a great success. I would beg to differ that his record is not very good with respect to Iran. But to your Afghanistan question, we've always said that we agree with the 2014 deadline. We've always agreed with where we are headed on Afghanistan on 2014.

But where we've taken issue is making sure that the generals on the ground get the resources they need throughout the entire fighting season so that they can keep our soldiers safe and operating counterinsurgency strategy. And I fear that this is not what's happening. I fear that there have been more political decisions made in troop strengths during this fighting season.

And so we beg to differ with the president on parts of his Afghanistan policy. But we support the 2014 deadline.

STEPHANOPOULOS: Finally, I want to ask you a question about the debates. You're about to have the biggest debate of your life coming up in October. I know you're going to be preparing for it tomorrow. And I want to show you part of a FOX News debate from the Republican primaries and get you to respond. Here it was.

(BEGIN VIDEO CLIP)

BRET BAIER, FOX NEWS HOST: Say you had a deal, a real spending cuts deal, 10:1, as Byron said, spending cuts to tax increases.

Speaker, you're already shaking your head.

But who on this stage would walk away from that deal? Will you raise your hand if you feel so strongly about not raising taxes, you'd walk away on the 10:1 deal?

(END VIDEO CLIP)

STEPHANOPOULOS: If you had been on that stage, would you have raised your hand?

RYAN: You know, it depends on the quality of the agreement. It depends on the quality of the policy. Our negotiators in the super committee offered higher revenues through tax reform. John Boehner did as well. So George, what really matters to me is not ratios, but what matters is the quality of the policies.

STEPHANOPOULOS: So you wouldn't walk away from that deal?

RYAN: I would put in pro-growth economic policies.

STEPHANOPOULOS: You wouldn't walk away from that deal, then?

RYAN: I could -- I - there's no deal to walk away from. The point is, you're not giving me a deal to look at. You're giving me ratios. Here's -- let me say this. Our problem is not that we are overtaxed. We are overtaxed. Our problem is we spend too much money.

During the Obama years, we borrowed almost 40 cents of every dollar government was spending. Half of that borrowing came from other countries, namely China. It's unsustainable. We can't keep asking other countries to cash flow our government.

And so the problem is not that we need to take more money from the hard-working taxpayers of America, from families and small businesses, and spend it in Washington. That doesn't work.

The problem is we have to get our spending under control. We have to reform our entitlement programs so we can keep the promise of Medicare and Social Security for current seniors. And we need pro-growth economic policies that get people back to work. Economic growth, spending cuts, entitlement reforms, that's the recipe that works. That's what will trigger prosperity and get us back to growing the economy like we know we can.

STEPHANOPOULOS: But just to be clear, I just want to pin this down. If you get the kind of entitlement reforms you're talking about, you're willing to raise more revenues.

RYAN: Look, I believe that we will get more revenues through tax reform and stronger economic growth. But I don't want to chase some revenue line which compromises economic growth, and I also don't want to take my eye off the ball, which is spending is the problem.

The problem with President Obama and his budgets are you add up all of his tax increases, George, all those tax increases he's promising will come in January, they don't even pay for a fifth of his proposed deficit spending. So that it's taking more money from small businesses and families and spending it. That doesn't work. It's bad economics. It doesn't help our debt crisis.

We want economic growth. We want real fiscal discipline. And we believe, with the right kind of economic growth policies, with the right kind of tax reform, we will get people going from an unemployment line to working and paying taxes. And that will give us higher revenues.

STEPHANOPOULOS: Congressman Ryan, thanks very much for your time this morning.

RYAN: You bet, George. Good to be with you.

STEPHANOPOULOS: And well be right back with our powerhouse roundtable in just 60 seconds.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PAUL: This explosion of debt is unconscionable and unsustainable. Mr. President, we will not let you bankrupt this country.

BOOKER: When your country is in a costly war and our nation is facing a debt crisis at home, being asked to pay your fair share isn't class warfare. It's patriotism.

(END VIDEO CLIP)

STEPHANOPOULOS: Rand Paul and Cory Booker fired up their respective conventions. They join our roundtable this morning. Kentucky Senator Rand Paul joins us, also author of a new book called Government Bullies. Newark Mayor Cory Booker also...

BOOKER: Is that a book about Jersey politics?

(LAUGHTER)

STEPHANOPOULOS: The debate is already beginning. Cory Booker of Newark, also the co-chair of the Democratic Platform Committee. Joining George Will, Cokie Roberts, Paul Krugman of the New York Times and Princeton.

And George, let's talk about Paul Ryan first, I'm going to get to the conventions later, but you saw him jump right on that jobs report. Probably the best news Republicans had in a couple of weeks.

WILL: The two numbers he stressed deserve stressing again. 368,000 dropped out of the job market, which means that for every job created, four people quit looking for jobs.

This means that if the work force participation rate today were what it was in June 2009, when the recovery began, we would have an unemployment rate 11.2 percent. If you add in the involuntarily unemployed, you're approaching 19 percent, which is why I should think from here on in, on the basis of these numbers, the Romney campaign slogan should be the title of Paul Krugman's book which is, End This Depression Now, because these are depression level numbers. And if the Republican Party cannot win in this environment, it has to get out of politics and find another business.

KRUGMAN: I think the thing that you need to bear in mind is that this is not President Obama's policies at work, right. Last year Obama had a bill, the American Jobs Act that independent analysts said would have added 1.2 million, 1.3 million jobs by now. It was of course got nowhere in Congress. So you have got this amazing two-step, where the Republican Party blocks all of Obama's proposed policies and then says look his policies aren't working. That's a hell of a...

PAUL: Fundamental disagreement where we should put the money in the productive sector, which is the private sector, or put it in the non-productive sector, the government sector. Those who want to have government stimulus, they don't understand what Milton Friedman said. Milton Friedman said something that is so true, "nobody spends someone else's money as wisely as they spend their own. So there's an efficient sector to the economy, which is the private sector. That's where you want the money if you want growth.

(CROSSTALK)

STEPHANOPOULOS: But isn't it true right now that the private sector is creating jobs and the public all the jobs cuts...

ROBERTS: One of the places where the public sector is -- a private second -- the public sector is losing jobs big time is in education and that really is so shortsighted I can't even begin and end with it. If we're not educating our kids, then our future economic growth is really at risk. And so it's just dumb.

BOOKER: And let me echo that, I mean, look, the Eisenhower campaign, Republican, with Eisenhower Highway Act, those were great jobs, they produce a return on investment that our trucking companies and other businesses are still using right now. And that's an unfair characterization of the numbers. I dropped out of the workforce. I dropped out of the labor force when I was 18, because I went to Stanford University and went to college. People are dropping out of the labor force not only because of going to college...

(CROSSTALK)

ROBERTS: Some of it is also aging. Some of it is also...

(CROSSTALK)

BOOKER: This is a president who created 4.5 million jobs, 30 straight months of jobs creation. We are on the road of recovery. Please do not forget that we were losing 750,000 jobs when this guy entered the office.

PAUL: Roads don't create business success, it's the other way around, business success allows us to build roads. But building more roads doesn't...

BOOKER: I'm not arguing with that. We need both.

STEPHANOPOULOS: Paul and then George.

KRUGMAN: Right now, Mitt Romney has an ad blitz where he's accusing Obama of cutting defense spending, which is actually, you know, that's not really true, but and then he says and the reason this is terrible is it because it will eliminate jobs. So the Romney campaign's position is government spending can't create jobs unless it goes to defense contractors in which case it's the lifeblood of the economy...

PAUL: And that's an inconsistency. That's an inconsistency.

KRUGMAN: It's pretty major.

PAUL: And it's wrong. They are accepting Keynes with regard to military spending...

KRUGMAN: Weaponized Keynesianism.

PAUL: ... but not with regard to domestic spending.

STEPHANOPOULOS: George Will?

WILL: With regard to the education cuts, for several decades now, we have been expanding education employment -- and that's not just teachers, there's an enormous administrative overhead, as you know. We've been expanding them much faster than enrollment has been expanding. Therefore there is room for some cutting back, even in education.

Second, Bill Clinton took 50 minutes, because he needed every one of them, to give all of the excuses as to why these programs haven't worked. Someone once said, Paul, Trotsky, proof of Trotsky's far-sightedness is that none of his predictions have come true yet.

(LAUGHTER)

And all of Mr. -- I mean, Mr. Obama gave a lot of hostages to fortune with his predictions of how his stimulus would work, and fortune shot the hostages.

KRUGMAN: It was one -- you know, one document that was released by his economists without a lot of thought early on, that has been -- but, no, the fact of the matter is, all of us who are serious about the numbers, me, for example, warned from the beginning that this one was going to be inadequate.

This has come out pretty much the way that the analysis that underlay the program said it was going to turn out. And, as I say, you know, Obama had a filibuster-proof majority for a few months in 2009. Ever since -- before and after he has faced scorched-earth opposition.

ROBERTS: But there's a reasons that they lost in 2010, which is the people weren't happy with what was going on.

KRUGMAN: Well, but then you...

ROBERTS: And, so, you know, you can't...

KRUGMAN: But you cannot run and say this...

(CROSSTALK)

ROBERTS: But it is also true that the reason -- one of the reasons that we're seeing this slowdown is that businesses are not sure what is going happen because of this fiscal cliff that we are facing.

KRUGMAN: But who created that cliff?

ROBERTS: And that -- exactly. And that is...

(CROSSTALK)

PAUL: ... understand is you are arguing that the government sector is struggling. Are you arguing that there are fewer government employees under Obama than they were under Bush?

KRUGMAN: That's a fact.

(CROSSTALK)

PAUL: No, the size of both -- of government is enormous under President Obama.

KRUGMAN: If government employment had grown as fast under Obama as it did under Bush, we would have a million-and-a-half more people employed right now, directly.

(CROSSTALK)

PAUL: Are there less people employed or more people employed now by government?

BOOKER: I want to attack this idea, the certainty for small businesses. This is a president who has cut taxes on small businesses 18 different times. He has done enough to target incentives to small businesses, everything, to hire our men and women coming home in addition to the fact to giving them breaks for investment.

So I disagree with (INAUDIBLE). But I think it's more important, and I really want to call the question that Paul Ryan left wide open, is, how can you call for $5 trillion worth of tax cuts, give us no specifics?

This is Paul Ryan who used to be a man of substance, who put up plans, I may disagree with some of them, but with great levels of specificity. Now they have said they're going to cut $5 trillion in taxes, increase spending in the military, and somehow not dig us into a deeper deficit budget...

(CROSSTALK)

ROBERTS: This is Bill Clinton and arithmetic. That was a good one.

KRUGMAN: I'm going to disagree, respectfully, he was never a man of substance. This is who he always was. That was always an illusion.

STEPHANOPOULOS: But how about the question, Senator Paul, let me bring this to you. Governor Bob McDonnell of Virginia said -- told The Washington Post today, the final strategy for Romney/Ryan is bolstering the credibility of their plan. Can they do that without more details?

PAUL: Well, I think it ultimately comes down to who do you think is better attuned to help business in this country to grow and get more jobs? And I would think that would be someone who created jobs like Governor Romney.

But I think what we're seeing now, I just finished reading Amity Shlaes's "The Forgotten Man." And she talks about how business was terrified of the president. Benjamin Anderson was another writer about the Great Depression.

And in that, he said the continuing disquieting utterances of presidents, that's what we have as a president who so vilifies business that business is afraid to do anything.

BOOKER: No, I'm sorry. I'm sorry. You can't have a president that's going to get elected on just "trust me." You need to see the facts. And right now they have given no facts, but we're going to cut loopholes.

Well, if I'm an American sitting back right now, I'd say, well, wait a minute, are you going to cut loopholes on carried interest and other things that are indefensible in corporate and Wall Street? Or are you going to cut my home mortgage deduction? Or are you going to cut my Earned Income Tax Credit? Who is going to get these tax loophole cuts?

That's the question they should be answering. They're not giving specifics on their plans.

ROBERTS: Well, because it never works. You know, when you start to get into those kind of tax deductions, there's a reason that they're still there, which is that any time that you start to tax them, the public goes crazy. And it's not just big lobbyists in Washington, it is individuals who have home mortgage deductions. It's even Universities and other charitable institutions who would get them.

BOOKER: Right. So are you going to help the middle class or are you going to help -- are we going to have tax cuts that are going to be benefiting the wealthy? And that's the question.

WILL: There is an argument that one of the reasons the New Deal failed at its great objective of putting the country back to work, unemployment never came below 14 percent until we geared up to be the arsenal of democracy, was that capital went on strike, as the senator said, because of uncertainty.

But there is uncertainty surrounding the Romney/Ryan tax cut plan, because they have not specified the deductions that will be closed. And we know where the big money is: mortgage interest deductions, charitable deductions, taxing that's compensation, which it is, employee-provided health insurance, and state and local taxes.

All of those, you either hit only the rich, in which case you don't get much money, or you hit the middle class.

(CROSSTALK)

PAUL: You know, during the Great Depression, we raised taxes five years in a row, and it was a disaster, and it extended the Great Depression, made the recession into a Great Depression because we kept raising taxes.

What does President Obama want to do? Raise taxes. Take money out of the productive economy and give it to the non-productive economy.

(CROSSTALK)

BOOKER: ... GDP, in the '80s, when we had aggressive tax cuts, and of course in the Bush years, debt as percentage of GDP went way up. This is a record we've heard over and over again, $5 trillion worth of tax breaks, let's increase military spending, oh, we're going to get out of this.

No, this is the thinking that got us in the problem in the first place.

STEPHANOPOULOS: We've got to take a break. Thank you all very much, lots more to come for our powerhouse "Roundtable."

(COMMERCIAL BREAK)

STEPHANOPOULOS: And there's lots more "Roundtable" after this from our ABC stations.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ANNOUNCER: Ladies and gentlemen, please welcome former Congresswoman Gabrielle Giffords.

GABRIELLE GIFFORDS, FRM. CONGRESSWOMAN: "I pledge allegiance to the flag of the United States of America and to the republic, for which it stands, one nation, under god, indivisible, with liberty and justice for all.

(END VIDEO CLIP)

STEPHANOPOULOS: Gabrielle Giffords, the surprise moment at the Democratic convention. We're here to talk about all with our roundtable again.

And George Will, let me come to you, I guess one of the other surprise were the reviews of President Obama's speech. I kind of thought the sober tone was appropriate to the moment, but a lot of reviewers saying it was flat, uninspiring.

WILL: And some people are saying that's because the White House gets the day before the jobs numbers so he knew what was coming to deflate him. George, the big difference in American politics in a generation is this, in 1988, Michael Dukakis left the Democratic convention with a huge bounce, 17 points ahead of George Herbert Walker Bush. On election day he lost by seven points. That's a 24-point swing. It's inconceivable that in today's electorate you could have that volatility.

That matters, because I think what the Republicans are counting on is undecideds to break, as they usually do, against the incumbent. But how many undecideds are there?

ROBERTS: Well, actually, it's interesting to see in comparing the 2008 exits with the 2012 average ABS polls. The groups of people who have gone off Barack Obama, moderates, Midwesterners, people 18-29, people with less than $50,000, they haven't gone on to Romney and that is exactly what -- they're still getting what McCain got. He's getting what McCain got there.

Those are the groups of people he has to get. But look, I think in fact that the jobs numbers don't mean anything in this election. I think, everybody's factored that in already. We know that story is there. And what the Democrats are trying to do, and I think probably will succeed at doing, is putting together blocs of voters. And so, you know, you have women and minorities, gays -- this convention, over and over and over again the speeches that were not on the air, were talking about gay rights, minority rights, immigration the DREAM Act, all of that.

And I think that the Republicans have made a tremendous mistake here. In 1992, when it was the economy, stupid. The minority vote was 12 percent. In 2008, it was 26 percent. It's expected to be 28 percent in this election. And if that's true, Obama, you know can get 80 percent of the nonwhite vote he can win with only 38 percent of the white vote.

STEPHANOPOULOS: Senator Paul, I think one of the things that Governor Romney is trying to do is to fire up his base to counter that You write in your book that it's not enough for Republicans to elect a Republican, it's got to be the right kind of republican. Has Governor Romney done enough to quiet the doubts among his base?

PAUL: I think so.

And one of the big things that I think has energized the base, one of the big things that energized the Tea Party was opposition to Obamacare. So the silver lining of the Supreme Court actually upholding Obamacare as conservatives know that now it is a political decision. The only way to overturn Obamacare would be electing Governor Romney. I think that has brought his base together and will help him.

As far as inclusive, though, you know with Democrat Convention, they do include a lot of groups, except for the one group like the people who believe in god had a little bit of trouble, you know, at the convention. I thought -- they said images are worth a thousand words, but when the images of people booing god, I mean, that's a tough image to overcome.

STEPHANOPOULOS: You're the co-chair of the platform committee.

(CROSSTALK)

BOOKER: This is actually kind of cheap shot politics we need to get away from. I mean, seriously, because at the end of the day, people look at the platform before it was there: faith, religion, clergy, all of that was in there a couple dozen times, all of those words were in there. This was one phrase that got left out by error of omission.

If you want to talk about omissions this is the platform committee, it's not the president. When the president found out about it, he changed it. You want to talk about omissions, Mitt Romney...

STEPHANOPOULOS: Somebody decided to take out (inaudible) god-given abilities.

BOOKER: Look, I was the co-chair of the platform committee. It was an error of omission that when the president of the United States found out about it, he changed it. But let me tell you, Romney, he found about changes that he didn't agree with and didn't make those changes. And if you talk about omissions, this is why I think cheap shot politics, Romney failed to mention the war in Afghanistan in his entire thing.

So what I'm saying to you is these are the small issues we all...

(CROSSTALK)

KRUGMAN: And when Romney asked why the war in Afghanistan wasn't there. He said, well, you talk about things that you think are important.

BOOKER: That's at the end of the day. The president is a man of faith who believes in god. Mitt Romney definitely cares about the troops in the field. Let's stop with these descriptions of stupidity on our candidates. These are both intelligent men. The reality is that the real differences between the two platforms: one believes in abortion under no circumstances -- rape, incest, the life of the mother. The other one says, hey, a woman has a right to choose, especially in those circumstances.

ROBERTS: You took out on the show of abortion, you took out language from previous platforms that said it should be safe, legal and rare. And I think this Democratic Convention was really over the top in terms of abortion. Every single speaker talked about abortion. And you know at some point you start to alienate people. 30 percent of Democrats are pro-life.

BOOKER; Hold on. Stop for a second. We had leaders of the Catholic Church -- of the Catholic faith, in our convention. I'm every single speaker, I was one of them, I didn't mention abortion at all. What we didn't mention was that we don't think we should be gutting family planning. We don't think we should be attacking Planned Parenthood.

If you want to make abortion safe, legal, and rare, support women's rights.

(CROSSTALK)

ROBERTS: You took that out of the platform.

BOOKER: But those -- you're worried about those three words, I'm worried about really substantive policies like access to health planning for families. That's what I'm interested in.

One candidate says we should gut family planning, we should gut Planned Parenthood. Another candidate says we should support those things, because at the end of the day not only does it make economic sense, but it makes moral sense as well.

WILL: Taking god out may have been an act of omissions, the act of...

(CROSSTALK)

ROBERTS: Hold on, god was in there, religion was in there, faith was in there, clergy was in there.

WILL: God will take care of himself.

BOOKER: You take a little sound bite and you can extrapolate. God can take care of himself.

WILL: But removing the capital of Israel was an act of commission. You go out on the street of any American city, you go out in Newark, stop someone and say what is the capital of Delaware, Vermont and Israel. Some people are going to know, Dover, some are going to know Montpelier, everyone except the American State Department will knows that the capital of Israel is Jerusalem.

BOOKER: George -- this is, because I have a lot of respect and a long friendship with you, George, so I'm not going to let you get away with this. The platform committee may have done it, but when the president of the United States found out about it, he could have just left it be, he intervened. What Romney has done, when he has found out there were differences between him and his platform, he simply just tried to stiff-arm them like a good football game and distanced himself from his platform that doesn't agree with him.

We have a party right now, where our president and our platform are beautifully aligned. And when we found changes, we went through the process to change them.

Let's talk about substantive differences now between platforms, not this rhetorical stuff that's being used to bash and distract people from real economic...

KRUGMAN: There are two striking things actually comparing the two conventions. One is that Romney is still trying to shore up his base, and Obama is not. He seems quite confident. The other is that the Democrats...

STEPHANOPOULOS: You don't think the Democrats were trying to shore up their base?

KRUGMAN: I think they didn't have to make extraordinary efforts. He was able to do things, he was able change the platform in ways that some of the base didn't like, because he was sure he didn't have that problem whereas Romney was afraid to do that.

And the second point is that the Democrats are on the offense on values issues. At this point on social issues the Democrats are the ones who are pushing the vote for us, because we share the values. And I think they're right.

STEPHANOPOULOS: I want to pick up on that, because the Democrats also on offense on foreign policy and national security issues which is a big switch from past conventions. And take a look at Joe Biden Thursday night.

(BEGIN VIDEO CLIP)

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: It is not worth moving heaven and earth and spending billions of dollars just to catch one person. He was wrong. Because if you understood that America's heart had to be healed you have done exactly what the president did and you would move heaven and earth to hunt him down and to bring him to justice.

(END VIDEO CLIP)

STEPHANOPOULOS: George Will, this is a big switch.

WILL: Since the riotous convention of 1968 and then but four years later, the nomination of George McGovern by the Democratic Party, the Democrats have been on defense on the issue of defense. That is, they've been perceive as weak.

This year there's a complete turnaround. It is the Democrats who want to talk about foreign policy in part because they are liquidating two unpopular wars. And in point of fact, there is not so far as I can see a dime's worth of difference between Mr. Romney and Mr. Obama on Afghanistan going forward. They both subscribed to the end of 2014 timetable.

STEPHANOPOULOS: I think that's right, although -- let me bring in Senator Paul on this, because you all tried, you and your father both, tried to spark more of a debate inside your party on foreign policy.

PAUL: Well, and this is one area that Cory and I are aligned. I heard his speech, and he said he wants to come home from Afghanistan. I sent a letter with one other Republican and many Democrats saying, yes, come home, by all means, the sooner the better.

But you know, in the area of Afghanistan and Pakistan, one area of bin Laden that hadn't been discussed enough is, you know, somehow this doctor's name got leaked, who is now being held in prison over there, and President Obama has rewarded Pakistan by giving them an extra $1 billion in foreign aid. And when I get back, I'm going to ask that there be no more aid sent to -- foreign aid sent to Pakistan until he's released. This doctor helped us to get bin Laden. And this is important that he be released, and we shouldn't be spending good money after bad to Pakistan.

And this is a difference. This is something I think Governor Romney ought to jump on. Foreign aid is very unpopular. You talk about, one, to build roads? How to build roads and bridges in our country? Let's quit sending it overseas and bring it back home.

(CROSSTALK)

BOOKER: This is a real difference, again. I looked at the Ryan budget. There were cuts to support services for veterans when they come home. This is one area there's a big difference. We cannot shirk on supporting. If we're going to call ourselves the home of the brave, when our men and women come home, we should make sure they are (inaudible). These are the kinds of investments that are not only about wars abroad, but when we people come home, we should be there and take care of them as a government. I'm happy to see the Obama campaign talking about doing more, from tax incentives as well as other programs.

STEPHANOPOULOS: It does seem, Cokie, that this is not a debate that the Republican ticket wants to emphasize.

ROBERTS: No, they don't. They don't have a real position that, first of all, that is different from the Democrats. But also, it's so sort of un-Republican to be in this place, where there is a feeling that they do want to disengage, and that hasn't been the Republican attitude. And I think that, as I say, with President Obama, that part of what we're dealing with here is when we talk about foreign policy, and particularly Osama bin Laden, it gives him the credibility as president. You know, who conducts foreign policy? The president and the State Department. And so, he gets to wear his presidential mantle as he talks about foreign policy in a way that the Republicans can't.

STEPHANOPOULOS: Much more forceful. One of the things that's happening -- I want to move more to the politics now, going forward to the next 58 days I guess we have left. It's remarkable if you look at it. I want to put a map up showing where Governor Romney is airing new ads. With a lot of -- with the money he has. Nevada, Colorado, Iowa, Wisconsin, Ohio, Virginia, North Carolina, Florida and New Hampshire. That's it. That is the entire presidential election right now, being fought in those states, and we have seen Romney lay out millions of dollars in ads just this weekend, state-specific ads. Here's one for Ohio.

(BEGIN VIDEO CLIP)

ROMNEY: This president can ask us to be patient. This president can tell us that it was someone else's fault. But this president cannot tell us that you're better off today than when he took office.

UNIDENTIFIED FEMALE: Here in Ohio, we're not better off under President Obama. His failed economic and trade policies with China have destroyed thousands of jobs.

(END VIDEO CLIP)

ROBERTS: Actually in Ohio, they are better off. That's a funny --

(CROSSTALK)

KRUGMAN: The industrial Midwest has made a huge comeback under Obama.

ROBERTS: And that was one of the things at the Democratic convention that was really striking, was how often they talked about the auto bailout.

(CROSSTALK)

ROBERTS: And the auto bailout, which of course affects Ohio tremendously.

WILL: In this sprint to November 6th, the Republicans are going to talk economics; the Democrats are going to think demographics.

ROBERTS: Right. Exactly right.

WILL: For the reason you talked about. In particularly Hispanics. In North Carolina, where the Democrats convened, there are 830,000 Hispanics in a state that was won with 14,000 votes last time. It used to be this was a matter of the gateway states of California and Texas, still about 47 percent live there, but it's all over the country now, including in all those states --

(CROSSTALK)

ROBERTS: And this is where Republicans have made a major mistake. I did a story in the 1980s, a naturalizing ceremony in California. Hispanics and Asians came out and signed up with the Republican Party. Why? I kept asking them. Because the Republicans are winners. They are the people who -- they represent the people who make it. We came to this country to make it.

Proposition 187 comes up, which was against illegal immigrants, but people heard it as immigrants. Hispanics went 180 off of the Republican Party. And now that's happening nationwide, and I believe that the Republicans have made a mistake with immigration, and now with voting rights, that will last for a generation with Hispanics, at least, the way civil rights has -- has with blacks.

PAUL: You know, I think if we tied immigration to work requirements and I think if we expanded working permits and working visas and visas for people who have education and degrees, I'm all for that. But it should be about work and it shouldn't be about bringing people into the country and immediately putting them onto welfare, and that's the problem.

WILL: The Democratic wager is that they can get Hispanics to turn out. Arizona is a third Hispanic. The turnout there is only 12 percent Hispanic. But the Republicans have 20 debates in the primary competing to see who could pledge to build the longest, thickest, tallest, most lethally electrified fence, and Hispanics said, I detect some hostility here.

(CROSSTALK)

WILL: And it's going to take a long time to undo that.

(CROSSTALK)

BOOKER: -- if there's a kid in this country, who's only pledged allegiances to one country, who's been there he's six, seven months old, who's been educated in our schools, who now is contributing to our economy, we shouldn't be kicking these people out to countries that they don't know. And so this is the practical aspects of the Democratic Party right now that are speaking to Latinos, who are not going to get carried away by whims (ph) and cold rhetoric. They want to know who's going to present a better pathway for success. And right now, for Latinos especially, it's being offered by Democrats.

ROBERTS: And I (inaudible), the Louisiana Republican Party was all blacks, because of Abraham Lincoln. And when you looked at the convention then, you see Louisiana, it was black faces.

(CROSSTALK)

ROBERTS: But the civil rights bills.

(CROSSTALK)

KRUGMAN: -- Republican in Texas. Because we had George H.W. Bush in his house once. But that's -- that party has given up on these people.

ROBERTS: But civil rights changed that, and as far as we know, has changed it--

WILL: In 1884, a prominent Republican described the Democratic Party as the party of rum, Romanism, and rebellion. It took a century for the Republican Party to win the Catholic vote.

ROBERTS: And actually, during this convention, there was a woman there who -- LDS for Obama. Mormons were always Democrats, because the Morrill Act of 1862, which was the Land Grant College Act, also outlawed polygamy, and that was a Republican Congress, of course in 1852 (ph)--

(CROSSTALK)

BOOKER: Why the Democratic Party is ahead of history. When you talk about equal citizenship, this is (inaudible). When you say Latinos, this is the party for you, and that's a growing demographic. When it talks about gays and lesbians in this country, that we're not going to denigrate you and push you into a second-class citizenship, which denies you equal Social Security rights, equal medical rights, equal immigration rights -- this is a party that's basically saying we're going to create a pathway to economic success. But we're also going to do it in a way that includes everybody in America, and that's why demographically, if demographics are destiny, the Democratic Party is going to continue pushing forward--

(CROSSTALK)

ROBERTS: Regardless of the jobs numbers.

KRUGMAN: It's not a matter of individual speeches or strategic positioning. The Republican Party is where it is because that's where the base is. And you watched that whole primary process, Republican candidates had to appeal to their base, which is by and large elderly white people arguing with empty chairs. And they could not -- they could not reach out to the growing demographic--

(CROSSTALK)

UNIDENTIFIED MALE: There is a big chair vote, though.

STEPHANOPOULOS: (inaudible) paid a visit to the Iowa -- the Iowa delegation at the convention. Everybody here is talking about how the Republican Party breaks out from its current base, expands its current base. What is the strategy for that?

PAUL: You know, I have been talking to a lot of the national leaders in the Republican Party, is -- there are certain parts of the country we have given up on. The whole West Coast and New England, so what I keep telling them is, maybe we need some libertarian type Republicans who might be popular in those areas, maybe a less aggressive, more socially tolerant, but still fiscally conservative policy that may be more libertarian might do better in California, might do better in Oregon, Washington, New England. I think if we had that, it would be a great strategy. Our problem in the presidential election is we have given up 150 electoral votes before we get started.

ROBERTS: It's true. And Mayor Booker, you're visited, and we think (inaudible) visiting New Jersey outside of Newark.

(LAUGHTER)

BOOKER: Look, at the end of the day, I went around to all the -- to six or seven different states, from Florida to Iowa, and all those states kind of get it. The more we can open up our tent demographically, the more this can be the party of inclusion, the more successful we're going to be. At the end of the day, America is the United States of America. We the people, e pluribus unum. And the only way -- there's an old African saying -- if you want to go fast, go alone. If you want to go far, go together. America will continue to go far and go together.

STEPHANOPOULOS: I have to put in, not only did you go to Iowa, you went to the Iowa delegation and said you were a proud grandson of Iowa--

(CROSSTALK)

BOOKER: I'm going to claim whatever -- every state I went to, I tried to claim my connection. But my grandmother grew up in Des Moines. She came to Buxton, coal-mining family. And I had a lot of fun with the Iowa delegation (ph).

STEPHANOPOULOS: But, George, it's something that still happens at conventions, but there's a lot of talk around these conventions, already cut back to three nights, people wondering again whether they serve any useful purpose, and whether they should be radically changed?

WILL: I'm still stunned by the idea that you went to the Iowa caucus. Do we have to start thinking about--

(CROSSTALK)

WILL: We need a little data on who watches these conventions and what effect they have. Because, you know, conventions are a government program, and there is an enormous amount of tax dollars that goes into this. And like all government programs, they are immortal and they go on forever. Maybe we should terminate these.

KRUGMAN: I thought the two conventions were enormously informative. A lot of people who normally catch politics in snippets on the news, got to see extended laying out of positions on both sides. And a lot happened. Right? We saw -- we saw the implosion of Paul Ryan, you know, extraordinary dissent and reputation, because people got to see him speaking at length on national TV. We saw Bill Clinton laying out a case in more detail than most people would ever get to see. These were -- I'm not sure that conventions don't decide anything in terms of who gets nominated, but they turn out to be extremely effective educational programs.

ROBERTS: Yeah, I think they have purpose.

PAUL: Well, I think conventions are great. And there is some information to be gathered some. But I agree with George we should get rid of the government funding of them. In fact, I have been proposing in the senate what we should is once a week all of the senators should come to the floor and we should have a real debate, not just speeches, two minute speeches, but debate back and forth and have sort of be mandatory that you have to show up, because if you've ever seen the Senate floor or the House floor there's one person talking to an empty camera. More discussion would be beneficial and people could make more important...

STEPHANOPOULOS: I would love to have more time, but we're out of time. Thanks to all of you. Conversation is going to continue online. Mayor Booker, Senator Paul are going to answer your questions on Twitter @corybooker and @senatorrandpaul. Just use the hashtag #thisweek. And check out excerpts from Senator Paul's new book Government Bullies on our website abcnews.com/thisweek.

Your Voice This Week is coming right up, but first, three moments from This Week history?

What year was it?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Senators, what how say you? Is the respondent William Jefferson Clinton or not guilty?

(END VIDEO CLIP)

STEPHANOPOULOS: President Clinton on trial in the Senate.

The Dow broke a barrier.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: An historic day on Wall Street today, the Dow Jones Industrial Average went over 10,000 and it stayed there through the market close.

STEPHANOPOULOS: And.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Goal!

(END VIDEO CLIP)

STEPHANOPOULOS: Brandi Chastain wowed at the World Cup.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Brandi, why did you rip off your shirt?

BRANDI CHASTAIN, USWNT PLAYER: There are some questions that just have no answers, Dan, I don't know. Just like overwhelmed by the moment.

(END VIDEO CLIP)

STEPHANOPOULOS: Was it 1997, 1998 or 1999? We'll be right back with the answer.

(COMMERCIAL BREAK)

STEPHANOPOULOS: So what year was it? When did the Dow first break 10,000, America's women take the world cup. the American women took the World Cup? 13 years ago, 1999.

And now, we honor our fellow Americans who serve and sacrifice.

This week, the pentagon released the names of five soldiers and marines killed in Afghanistan.

Finally, Your Voice This Week, today's question comes from Randy Richmond.

Has George Will ever considered running for president? He'd get my vote.

Well, that is a start, but George's response a polite thanks but no thanks. Here's what he told us.

"One, I could not measure up to the only president with whom I fully agreed, Calvin Coolidge. Two, remember the rule, anyone who will do what you have to do to become president should not be allowed to be president. And three, being president would cut into my baseball time."

No one would want that.

That's all for us today, thanks for sharing part of your Sunday with us. Watch World News with David Muir tonight.

Also a shoutout to our friend Katie Couric. Her new talk show starts tomorrow afternoon. It's sure to be provocative and newsy. Check it out on our ABC stations.

I'll see you tomorrow on GMA.

END

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