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CNBC Transcript: Speaker of the House John Boehner Sits Down One-on-One With Larry Kudlow Tonight on CNBC

When: Tonight, Wednesday, March 6th

Where: CNBC's "The Kudlow Report"

Following is the unofficial transcript of a CNBC interview with Speaker of the House John Boehner (R-Ohio) tonight, Wednesday, March 6th on "The Kudlow Report" at 7PM ET.

All references must be sourced to CNBC.

LARRY KUDLOW: Speaker John Boehner, as always, we welcome you back to "The Kudlow Report."

SPEAKER JOHN BOEHNER: Nice to see you.

LARRY KUDLOW: You're back. And we're going to take a quick break later and complete the interview with Mr. Boehner if you'd please stay with us. Sir, allow me to begin with this. Just a few days after the sequester order to cut spending was signed, the stock market goes to an all-time high, okay? So maybe the rest of the country believes that lower spending and limited government is good for economic growth, rather than all the pessimism here in Washington.

SPEAKER JOHN BOEHNER: We've got a structural spending problem that has to be addressed. The president sequester-- is in effect, and it will be in effect-- until there is an agreement on cuts and reforms that put us on a path to balance the budget over the next ten years.

LARRY KUDLOW: I was going to ask you to ca-- I want to come back to the issue of spending, 'cause President Obama sometimes says spending's not the problem. But just right now, today, you all are voting on a continuing resolution. Two questions, sir: number one, will that keep the government open through the end of the fiscal year?

SPEAKER JOHN BOEHNER: Yes.

LARRY KUDLOW: And secondly, will that include the lower level of spending from the sequester?

SPEAKER JOHN BOEHNER: Yes, it will. Our goal here is to cut spending. It's not to shut down the government. And-- keeping the government open after March 27th-- is our goal. We're going to add the appropriation bill for the Department of Defense and military construction and the VA-- in this bill. And we'll hopeful-- that the Senate will not load up the bill, not put extraneous items in the bill. The president the other day indicated-- his willingness and desire-- to see the government funded after March 27th. So I'm hopeful that Senate Democrats-- will work with us to make sure that there's no threat of government shutdown.

...but the idea that we're going to shut down tours at the White House-- during-- the Easter season-- when-- Washington's overrun with visitors-- is-- it's just silly. And I want to know who's being laid off at the White House. Is this what's going on? All I can say is the Capitol is open-- to visitors. We welcome the American people to come to their Capitol. We've been preparing for the president's sequester for months. And so we didn't have to go through this-- this big reduction in spending because frankly, we've been planning for it since last October.

LARRY KUDLOW: But this is politics, it seems to me. I mean, I-- as I understand it, the president is not going to roll out-- you can call it campaigning, you can call it politics, whatever. Dire consequences, 750,000 lost jobs-- no meatpacking inspection, even though the Department of Agriculture is holding conferences far and wide around the country with wine tastings and other pleasantries. And it's all because of the big, bad Republicans. It's all your fault. Mr. Speaker. That's the Obama line, because you wouldn't agree to another tax-- hike. You want to defend rich people and their loopholes rather than allow the rest of the country--

SPEAKER JOHN BOEHNER: Larry--

LARRY KUDLOW:--to benefit. That's what the president--

SPEAKER JOHN BOEHNER: The president--

LARRY KUDLOW: --thinks. How do you react to that?

SPEAKER JOHN BOEHNER:--demanded the sequester. You go back to summer of 2011-- there was an agreement between Senator Reid, Senator McConnell, and myself-- to-- do-- the cuts in discretionary spending. But the president wanted more. He wanted no chance of having to deal with the debt limit before-- a second time before his reelection and demanded that we put the sequester in place. And we've known the sequester was going to be in place for the last 16 months. And yet the president-- nor … democrats passed any plan to replace the sequester. House Republicans-- and here in the House, we passed a bill twice last year to replace-- these cuts with what I would call smarter cuts. And the sequester is-- it's a way to cut spending, but it's not the smartest way to cut spending. Nor does it address the real structural spending problem that we have, and that's on the mandatory spending cuts--

LARRY KUDLOW: Why does he say-- why does the president then say-- okay, he's going to blame you, I want to get back to that. But he said it again in his news conference on Friday, "Spending is not the problem. We have a healthcare cost problem, but spending is not the problem." You've got a couple of hundred economists around the country who don't agree with that--

SPEAKER JOHN BOEHNER: 170 economists telling me that spending is hurting our economy--

LARRY KUDLOW: Why does he-- why does he keep saying that? What's that mean? Is he signaling to you? What's up with that?

SPEAKER JOHN BOEHNER: I think he believes it. He told me directly, "We don't have a spending problem. We have a healthcare problem." All right, I'll agree that healthcare spending is in fact a problem for the government. But we've got a spending problem much bigger-- than just healthcare.

LARRY KUDLOW: All right. So he also-- he also says that you agree to another $800 billion loophole-closing exercise and that you renege. But Bob Woodward reports that in fact, "That moves the goalpost because the original Obama sequester had nothing to do with tax revenues." So who's right and who's wrong?

SPEAKER JOHN BOEHNER: I had $800 billion on the table of new revenue out of reforming our tax code. Which means more growth, a more efficient tax code, of bringing rates down for all Americans. After we have an agreement, the president came back and said, "No, I need $400 billion more." I said, "Mr. President, we have-- we have an agreement. You know I can't put a dime more on the table." He insisted on it and then that's why we ended up with the sequester--

LARRY KUDLOW: But he's saying even right now, after the election, you came in with an $800 billion revenue increase ala tax reform. You wanted no rate hikes, as I recall--

SPEAKER JOHN BOEHNER: That's correct.

LARRY KUDLOW: --but you'd go for $800 billion. So his point to you, and he's repeating this again and again, trying to clobber you I guess politically, he's saying, "What happened to John Boehner's $800 billion revenue hike?"

SPEAKER JOHN BOEHNER: Because the president never agreed to real spending reforms. You know, a year and a half ago, we had changes to Medicare or Medicaid that would've saved-- the federal government about $150 million off the table in December. We had changes-- to Medicare, especially on the eligibility issue off the table in December. And so the things that he was for in the summer of 2011, all of a sudden in December of 2012, he wasn't for anymore. And-- without real cuts and reforms, they'll put us on the path to balance the budget in ten years. There was going to be no revenue. But since then, he's gotten his revenue increases. He got his tax hikes on the 1st of the year. There were no spending cuts in there. It's time to deal with Washington's spending problem.

LARRY KUDLOW: So he says again, I saw this in the Friday news conference, he says it constantly two entitlement changes, and I'll get your take on this, see if there's a possible deal. Number one, President says he will accept a lower cost-of-living adjustment, the so-called Chain C.P.I. A lower cost-of-living adjustment. Two, he says he will accept means testing on Medicare. Which means the wealthier Medicare recipients would get less. Are those two entitlement points on the table? Would you do business with them? Would you compromise on that? Is such a thing possible?

SPEAKER JOHN BOEHNER: No, no. The-- those issues are clearly on the table. But we've got to do more than that if we're going to put these programs on a sustainable path. They're not sustainable in their current form. We've got 10,000 baby boomers like me retiring every year. At seven-- I mean, every day. 70,000 this week, 3.5 million this year. And this is just year three of a 25-year demographic bubble. And it's not like there's money in the social security trust fund or money in the Medicare trust fund, it's all been spent. And so we've got to get serious about our structural spending problem. And until we do, we're going to live under the sequester--

LARRY KUDLOW: But you don't think-- m-- literally-- I don't think anybody knows what's the black box here. In the continuing resolution, and in the discussion on the budget, which is coming with Paul Ryan's-- budget soon next week, or whenever. COLA adjustments for social security and-- benefit adjustments, means testing for Medicare. Could those two points serve as the basis for a larger deal?

SPEAKER JOHN BOEHNER: Oh, absolutely. I mean, the-- they're going to be on the table. They should be part of the agreement. But there's a lot more that needs to be done-- if we're going to put these programs-- start them on a path that-- where they're sustainable for the long term--

LARRY KUDLOW: So you're open to that?

SPEAKER JOHN BOEHNER: Oh, absolutely.

LARRY KUDLOW: All right, question then. The is presently your relationship to President Obama? What is it like? What's the good point? Where can it be improved? You're going to have to deal with him-- I know you want to work through the committee process, I respect that-- I worked in Washington myself. How do you get along with Obama and can you do business with him?

SPEAKER JOHN BOEHNER: Oh, I get along with him fine. We have a very pleasant relationship. We have-- we have very different thoughts about the appropriate role of the federal government in our society. And we have, obviously, big dis-- disagreements-- over the size of the spending problem that we have here. But I learned a long time ago there's a way to disagree without being disagreeable.

And-- so I continue to-- I work with the president and I'll certainly talk to the president. But when it comes to actually doing something-- it-- it's time for the Congress to be engaged in this process as well-- both the House and the Senate. And going through the committee of process, moving bills across the floor, letting members participate, I think is an important part of this process if we're going to get to a successful outcome--

LARRY KUDLOW: So no more big, top-down deals? No more Obama-Boehner, top-down deals?

SPEAKER JOHN BOEHNER: We--

LARRY KUDLOW: Or really--

SPEAKER JOHN BOEHNER: --those haven't worked very well--

LARRY KUDLOW: In the--

SPEAKER JOHN BOEHNER: --if you've watched over the last two years.

LARRY KUDLOW: Well, I understand. But hope springs eternal. I mean--

SPEAKER JOHN BOEHNER: But--

LARRY KUDLOW: --a lot of people would like a deal out there.

SPEAKER JOHN BOEHNER: Yeah, but I don't think it's the way to get to one. Because you don't have enough member buy-in. Listen, two people-- hiding behind closed doors-- doesn't replicate the 535 members of Congress, or the wisdom of 535 members of Congress or for that matter, 300 million Americans. This really ought to be done out in the open, members-- have a chance to participate. And I think that we need to grow this organically-- through the House and the Senate.

LARRY KUDLOW: All right. You mentioned the other day HR1, big tax reform bill. I guess that's personal and corporate taxes?

SPEAKER JOHN BOEHNER: Yes, it is.

LARRY KUDLOW: Some people think-- reforming the corporate tax code for large and small business would be a huge growth measure. Are you going to push this? Is there any chance this could go through? Is there any Democratic cooperation? Sometimes the president mentions tax reform. Where is this?

SPEAKER JOHN BOEHNER: There-- we've spent a lot of time-- preparing-- to do tax reform this year. It's a big undertaking. I understand Max Baucus, the Senate-- Finance Chairman, Democrat from Montana, is interested in doing tax reform as well. So you're going to see a big effort on our part-- to try to take on this big job. You know, make our economy-- more competitive. It'll help spur more economic growth in America, it will help create more jobs in our country and increase wages for middle class Americans--

LARRY KUDLOW: That-- is that the Republican message you want to promote? Is it an economic growth message? You have your critics, not you personally, but the G.O.P. has its critics inside the party that says, "What is the G.O.P.-- what is the Republican message? Where do we go after that election in 20-- '12"--

SPEAKER JOHN BOEHNER: We're serious--

LARRY KUDLOW: Is it a growth message? Is that what it is?

SPEAKER JOHN BOEHNER: If we're serious about solving-- America's problems and getting-- our economy on a more solid foundation, two things that we have to do. We have to-- address the long-term spending problem that we have, and that we need to fix our ca-- tax code to promote more economic growth. We can't cut our way to prosperity, nor can we tax our way to prosperity. We need to do both of these things-- if we're really going to help the average American-- be able to lift their lives. So they all know, they have to balance their budget-- every week. They expect Washington to live within its means as well.

LARRY KUDLOW: All right. So you said to a bunch a people-- "You need this job like a hole in the head." You said a couple interviews, I think you might of just said it over the past weekend, but I've seen it in interviews. Let me ask you. How long is your tenure going to be as speaker? Are you going to go one more term? Is this your last term? What are you thinking about? You don't want holes in your head--

SPEAKER JOHN BOEHNER: I-- I've--

LARRY KUDLOW: What are you thinking--

SPEAKER JOHN BOEHNER: I've been-- I've been on a mission-- to address America's biggest problems: spending and growth. And I expect to lead that effort as Speaker of the House.

LARRY KUDLOW: For at least another term?

SPEAKER JOHN BOEHNER: I'll be here for a while.

LARRY KUDLOW: You'll be here for a while. Speaker John Boehner, we appreciate it as always, coming back on CNBC's "The Kudlow Report." Thank you, sir.

SPEAKER JOHN BOEHNER: Thank you.


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