'This Week' Transcript: Rand Paul, Rep. Mike Pence and David Stockman

PENCE: Well, look, Republicans have put on the table -- and continue to put on the table -- our commitment to change the fiscal direction of Washington, D.C., to put our national government on a pathway toward a balanced budget. The president yesterday called for a spending freeze. Well, we -- we think we ought to go back to pre-stimulus, pre-bailout levels and freeze there -- there's been an 84 percent increase in domestic spending since this administration took office. We've got to roll back there. That will save $100 billion in the first year. How about a net hiring freeze on Capitol Hill? And let me anticipate -- David makes the point -- absolutely, for Americans under the age of 40, we've got to put everything on the table in the area of Medicare, Medicaid, Social Security. We have got to reform these entitlement programs. They are threatening the fiscal vitality of future generations of Americans.

AMANPOUR: Is that enough?

STOCKMAN: Well, no, not nearly enough. The point is, we're now in real-world governance. And you don't get 100 times at bat. The Republicans have been at bat for 30 years, and they've whiffed on everything. Social Security needs to be means-tested right now, not for benefits in 2030, right now, for the top one-third of beneficiaries who have private income that they've earned over their lifetime. We need to drastically scale back Medicare. And the Republicans expanded it. And I appreciate what Mike is saying, but there's no track record of a willingness to take on the doctors, the pharmaceutical companies, the scooter chair manufacturers, who are everywhere. So we need to take on defense, OK? We are now at the point where this -- we're kind of at the, you know, sundown as an imperialist power. And we can't have credit card imperialism. We can't be the policemen of the world anymore because we can't afford it. We're going to have to cut defense drastically. And that isn't just fraud, waste and abuse. It's force structure, fewer divisions.

PENCE: But let me...

(CROSSTALK)

AMANPOUR: Tell me...

(CROSSTALK)

STOCKMAN: And even if we do all that, we still have to raise revenue.

AMANPOUR: OK. Would -- you know, you heard Rand Paul say it wasn't a revenue problem, but you -- and you've also heard some economists saying that perhaps right now extending and -- and -- and increasing taxes in this crisis right now, immediately, might not be the most wise thing. What are you saying?

STOCKMAN: The crisis will be with us for the next 5 to 10 years. We've had a debt spree for 30 years. The economy has been badly injured. It is sunk under the weight of $50 trillion of debt that we've created publicly and privately. The recovery is over. It was weak; it was tepid. What we have now is day-to-day, 1 percent to 2 percent growth, if we're lucky. And so therefore government has to focus on paying its bills and not micromanaging or simulating the economy.

PENCE: But the way we're going to put our fiscal house in order is you have to cut spending now. Everything has to be on the table. I've been battling against runaway spending under both political parties throughout my 10 years in Congress. That's a given. But you can't balance the budget on 9.6 percent unemployment. You can't balance the budget on a struggling economy. The last thing we should do is allow a tax increase on job creators in this country to take effect in January or, as David suggests, a tax increase on every American. And let me take one point...

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