'This Week' Transcript: Stephanie Cutter and Kevin Madden

In short, if nothing is done, our national debt poses a clear and present danger to the United States.

And, yes, politicians have been warning about the nation's debt for decades, but already this year, we've seen economies destroyed by debt -- overseas in Greece, Italy and Spain. And here at home, with Stockton, California; San Bernardino.

So the big question -- are we next? is the U.S. headed toward bankruptcy?

(END VIDEO TAPE)

TAPPER: So with that, let's start with our first topic, which will be entitlement spending, specifically, can we fix the nation's finances without cutting entitlement benefits?

That's Social Security, Medicare and Medicaid, other mandatory spending programs.

Kim, can we?

KIMBERLEY STRASSEL, COLUMNIST AND EDITORIAL BOARD MEMBER, "THE WALL STREET JOURNAL": No, we can't. You know, we talk all the time about -- have fights over highway bills and farm bills, all this discretionary spending. Those things that you just mentioned, they are 60 percent of the federal budget. And we are already facing a huge problem. Medicare could go bust in as little as eight or nine years. We're already paying out more for Social Security than we're taking in.

And one of the problems here is that what we have to decide is -- is how we are going to rein in the costs.

TAPPER: OK, so let's pick one of these entitlement programs. Let's pick Medicare, since there's been so much discussion of Congressman Paul Ryan's Medicare program.

Specifically, let's talk about what his proposal would do.

First of all, you have the government allocating a fixed amount of money for each senior.

And the question, of course, is, will that competition keep costs down or will health care costs continue to outpace inflation?

And then the second part of the -- the Ryan plan, seniors will be able to use money for traditional Medicare or for private insurance.

And the question, of course, will this leave Medicare with only the seniors private insurers don't want?

Senator Toomey?

what this plan does is it says we're going to have competition -- starting 10 years from now, mind you...

TAPPER: Right. This is for...

TOOMEY: -- anybody (INAUDIBLE) future seniors...

Jake Tapper: Anyone...

TOOMEY: -- who are less than 55...

TAPPER: -- under 55 years old. Right.

TOOMEY: -- everybody is currently -- who's currently getting Medicare gets exactly what they're getting now and that doesn't change.

But what happens is for someone such as myself, who's 50, when I reach retirement age, I'm going to have a range of choices. And the government isn't going to have a specified dollar amount, it's going to require insurers to compete. And it will set the dollar amount based on that competition, ensuring that I will always be able to receive from the government a premium necessary to buy a plan that's equivalent to current Medicare.

So the risk of escalating costs are not carried by the seniors. They're still going to be carried by the government. But we think this is a much better model, because the competition of the various private sector plans, I think, will inevitably discover better and more efficient ways to deliver services, much as some have already discovered this.

TAPPER: OK. And Congressman Van Hollen, you are going to be playing Paul Ryan in the debate preparation for Vice President Biden. So I'm sure that you're familiar -- I'm sure you're familiar with his work anyway, but now you're especially familiar with it.

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