CNBC Transcript of 'Your Money, Your Vote' Republican Presidential Debate
HUNTSMAN: And third, we need to close the gap on the uninsured without a costly mandate, letting the free market work and bringing people together with truly affordable insurance.
BARTIROMO: That's time.
We want to get each of your comments on what the plan is.
Ron Paul?
PAUL: We need to get the government out of the business, and we do need to have the right to opt out of "Obama-care." But we ought to have the right to opt out of everything. And the answer to it is turn it back over to the patient and the doctor relationship with medical savings accounts.
So I would say that we have had too much government. I have been in medicine, it has gone downhill. Quality has gone down. Prices have skyrocketed because of the inflation. So you need to get a market force in there, a medical savings account.
But this mess has been created -- it's a bipartisan mess. So it has been there for a while. So what we need is the doctor-patient relationship and medical savings account where you can deduct it from your taxes and get a major medical policy. Prices then would come down.
BARTIROMO: Thirty seconds, Governor Perry?
PERRY: Obviously on the Medicare side, you have to have an insurance type of a program where people have options of which -- give them a menu of options of which they can choose from. I think you have to have the doctors and the hospitals and the other health care providers being given incentives on health care rather than "sick care."
And then on Medicaid, it is really pretty simple, just like Jon and Mitt both know, you send it back to the states and let the states figure out how to make Medicaid work, because I will guarantee you we will do it safely, we will do it appropriately, and we will save a ton of money.
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BARTIROMO: Mr. Cain. CAIN: The legislation has already been written. H.R. 3000. In the previous Congress it was H.R. 3400. And what that does -- it has already been written. We didn't hear about it in the previous Congress because "Princess Nancy" sent to it committee and it stayed there. It never came out.
(LAUGHTER)
CAIN: H.R. 3000 allows the decisions to be with the doctors and the patients, not with the bureaucrat in Washington, D.C. The legislation has already been written.
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BARTIROMO: Governor Romney?
ROMNEY: Health care in 30 seconds is a little tough. But let me try. Number one, you return to the states the responsibility for caring for their own uninsured. And you send the Medicaid money back to the states so they can craft their own programs. That's number one.
Number two, you let individuals purchase their own insurance. Not just getting it through their company. But buy it on their own if they want to, and no longer discriminate against individuals who want to buy their insurance.
Number three, you do exactly what Ron Paul said. I don't always say that. But I have got to say it right now.
(LAUGHTER)
ROMNEY: And that is, you have to get health care to start working more like a market. And for that to happen, people have to have a stake in what the cost and the quality as well as of their health care. And so health savings account, or something called co- insurance, that's the way to help make that happen.
And finally, our malpractice system in this country is nuts. We have got to take that over and make sure we don't burden our system with it.
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BARTIROMO: Mr. Speaker?
GINGRICH: Well, I just want point out, my colleagues have done a terrific job of answering an absurd question. To say in 30 seconds...
BARTIROMO: You have said you want to repeal "Obama-care," correct?
GINGRICH: I did. Let me finish, if I may. To say in 30 seconds what you would do with 18 percent of the economy, life and death for the American people, a topic I've worked on since 1974, about which I wrote about called "Saving Lives and Saving Money" in 2002, and for which I founded the Center for Health Transformation, is the perfect case of why I'm going to challenge the president to seven Lincoln- Douglas style three-hour debates with a timekeeper and no moderator, at least two of which ought to be on health care so you can have a serious discussion over a several-hour period that affects the lives of every person in this country.
BARTIROMO: Would you would like to try to explain...
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BARTIROMO: Would you like to -- would you like to try to explain in simple speak to the American people what you would do after you repeal the president's health care legislation?
GINGRICH: In 30 seconds?
BARTIROMO: Take the time you need, sir. Take the time you need.
GINGRICH: I can't take what I need. These guys will gang up on me...
(CROSSTALK)
BARTIROMO: Do you want the answer the question tonight on health care or no?
(CROSSTALK)
BARTIROMO: Do you want to try to answer the question tonight, Speaker?
GINGRICH: Let me just say it very straight. One, you go back to a doctor-patient relationship and you involve the family in those periods where the patient by themselves can't make key decisions. But you re-localize it.
Two, as several people said, including Governor Perry, you put Medicaid back at the state level and allow the states to really experiment because it's clear we don't know what we are doing nationally.
Three, you focus very intensely on a brand-new program on brain science because the fact is the largest single out-year set of costs we are faced with are Alzheimer's, autism, Parkinson's, mental health, and things which come directly from the brain.
GINGRICH: And I am for fixing our health rather than fixing our health bureaucracy because the iron lung is the perfect model of saving people so you don't need to pay for federal program of iron lung centers because the polio vaccine eliminated the problem. That's a very short (inaudible).
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BARTIROMO: Congresswoman.
BACHMANN: The main problem with health care in the United States today is the issue of cost. It's just too expensive. And President Obama said that's what he would solve in Obamacare, we'd all save $2,500 a year in our premiums.
Well, we have Obamacare, but we didn't have the savings. So what I would do to replace it is to allow every American to buy any health insurance policy they want anywhere in the United States, without any federal minimum mandate. Today there's an insurance monopoly in every state in the country. I would end that monopoly and let any American go anywhere they want. That's the free market.
Number two, I would allow every American to pay for that insurance policy -- their deductible, their co-pay, their pharmaceuticals, whatever it is that's medical-related -- with their own tax-free money.
And then, finally, I'd have true medical malpractice liability reform. If you do that, it's very simple. People own their own insurance policies, and you drive the costs down, because what we have to get rid of is government bureaucracy in health care. That's all we bought in Obamacare, was a huge bureaucracy. That has to go away.
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BARTIROMO: Senator?
SANTORUM: This is, I think, the difference between me and a lot of the candidates here. I heard a lot of responses, but I haven't -- I haven't seen a lot of consistency in some of -- some of those responses on the last few questions.
When it comes to health care, back in 1992, I introduced the first health savings account bill that everybody up here said was the basis for consumer-driven health care. I was leading on that before anyone else was even talking about it. Secondly, I was someone who proposed a block grant for Medicaid way back in 1998 with Phil Gramm, again, leading on this issue. Same thing, reforming the Medicare program back in the 1990s, again, I led on these issues.
I was always for having the government out of the health care business and for a bottom-up, consumer-driven health care, which is different than Governor Romney and some of the other people on this panel.
Number two -- and I didn't get a chance to answer any of the housing questions. I was on the banking housing committee in -- in the United States Senate. I was one of 24 people who wrote a letter to Harry Reid saying, please let us bring up this housing legislation, which I voted for in the committee, that would have put curbs on Fannie and Freddie. I -- I was out there before this bubble burst saying this was a problem. I -- I was in Scranton, Pennsylvania, the other day, and I had one of a -- a home-builder, who was a head of the association, came up to me and said, Rick, I'm here to apologize. We came here to push you so you would oppose, you know, putting caps on Fannie and Freddie. You were right; we were wrong.
Time and time again, Wall Street, the Wall Street bailout, five of the eight people on this panel supported the Wall Street bailout. I didn't. I know that we saw problems best from the bottom up, not the top down and government intervention in the marketplace.
BARTIROMO: Governor Romney, you have 30 seconds to respond.
ROMNEY: That's -- that's fine. I believe very deeply in the functioning of markets. The work I've done in health care, actually worked as a consultant to the health care industry, to hospitals and various health institutions. I had the occasion of actually acquiring and trying to build health care businesses. I know something about it, and I believe markets work.
And what's wrong with our health care system in America is that government is playing too heavy a role. We need to get our markets to work by having the consumer, the patient have a stake in what the cost and quality is of health care, give them the transparency they need to know where the opportunities are for lower cost and better quality, to make sure that the providers offer them the broadest array of options that they could have.
And once we have that happening, you'll see us -- 18 percent of our GDP is spent on health care. The next highest nation in the world is 12 percent. It's a huge difference. We have to get the market...
BARTIROMO: Time.
ROMNEY: ... to work to make sure that we get the kind of quality and value that America deserves.
HARWOOD: But, Governor, let me ask you about health care, because Congressman Paul said, put it back to the doctor and the patient. You said a few moments ago that you thought states should have the responsibility for insuring the uninsured. And, of course, in Massachusetts, you enacted an individual mandate and subsidies to have people who didn't have insurance get it. So you think there's a pretty large role for government in this area.
ROMNEY: Well, I think that people -- that people have a responsibility to receive their own care, and the doctor-patient relationship is, of course, where that -- where that exists -- where that exists.
HARWOOD: But the government has the responsibility to force them?
ROMNEY: I -- I didn't know whether Ron Paul was saying we're going to -- he's going to get rid of Medicaid. I would not get rid of Medicaid. It's a health program for the poor.
What I said was I would take the Medicaid dollars that are currently spent by the federal government, return them to the states so that states can craft their own programs to care for their own poor, rather than having the federal government mandate a one-size- fits-all plan in the entire -- entire nation. Obamacare is wrong. I'll repeal it. I'll get it done.
(APPLAUSE)
(UNKNOWN): John?
HARWOOD: Congressman?
PAUL: My plan of cutting the budget by a trillion dollars does deal with Medicaid. And that is that it preserves it, and there is a transition period, with the goal that eventually we would hope to move that back into the economy. But right now, it would be too much to do it in one year.
You know, finding a trillion dollars was a job and a half, and getting rid of five departments.
So, yes, my budget takes into consideration health care for the elderly, health care on Medicaid, as well as child health care. At the same time, we deal with the bailouts, the banks, and all the benefits that they get from the financial system, because what we're facing today is the crisis in this housing crisis.
If I could just have one second on that.
We face a housing crisis once again because it's price-fixing. They're fixing the prices of these mortgages too high, and this is why nobody will buy them.
This is why you have to get rid of Fannie Mae and Freddie Mac, sell all of that into the marketplace. And the reason they do this is to prop up the banks, because the banks have invested in Europe, they've invested in Fannie Mae and Freddie Mac, and these credit defaults swaps.
They're in big trouble, and that is why they're getting bailed out. And that's why they are not allowing these mortgages to go down, and that is why we will most likely bail out Europe, which will be a real tragedy.
(APPLAUSE)
HARWOOD: Congressman, thank you for that. It's time for a quick break.
LIESMAN: Hold it, John. I wanted to give them 15 seconds each to solve the deficit problem.
(LAUGHTER)
BARTIROMO: We'll come back to the deficit.
HARWOOD: When we return, balancing the budget, cutting the deficit, making college education more affordable.
BARTIROMO: Plus, a little lesson on Social Security.
You're watching CNBC's "Your Money, Your Vote: The Republican Presidential Debate."
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NARRATOR: Next, we tackle the issues of Social Security, a spiraling deficit, and so much more, when "Your Money, Your Vote: The Republican Presidential Debate" continues in 90 seconds.
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HARWOOD: And welcome back. Joining us for this portion of the debate, Rick Santelli, CNBC's on-air editor...
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... and Sharon Epperson, our personal finance correspondent.
Now, we'll get to them in a moment, but, first, Senator Santorum, you were known as a tough partisan fighter in the Senate, but look where partisan fighting got us this summer, gridlock and a debt-rating downgrade. The American people don't much like it, and neither does Doug Oberhelman, the CEO of Caterpillar. Let's take a listen.
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OBERHELMAN: Most people think our politicians are not helping the country get back on its feet. The last two presidents made promises to work across party lines, and both failed. How will you put our country ahead of your political party and solve the issues that are so critical for Americans? Be specific, please. These are promises.
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HARWOOD: And, Senator, let me ask you about -- to set up that question. If everyone on this stage rules out any tax increases, even at a 10-to-1 ratio of spending cuts, as you have done, what could you possibly offer Democrats to get them to go along and compromise with you on the things that Republicans want? SANTORUM: You create -- you create a platform that they can buy into, because they see advantages of your -- of your plan. For example, one of the reasons that I -- I've put forward this manufacturing plan is because folks here in Michigan, Democrats and Republicans will vote for it.
I was at the New Hampshire House of Representatives the other day and spoke to a bipartisan group, talked about the -- the tax plan, not just the manufacturing, but the broad-based plan that I have. And I had two Democratic House members go over to -- to my chairman, Dan Tamburello, and said, hey, I want him to come to my district and talk about this. We can support it.
So when you put together a plan -- look, if the Republican Party is just about keeping the top rate, you know, lower or cutting taxes, we're not going to be reaching people. We've got to look at plans that bring people together. That's why I focused on this sector. I understand, John, that the Wall Street Journal won't like that I'm picking one sector over another. I don't care.
What I need to do is bring America together, find a plan that can work, that can be implemented right away. It may not be the boldest plan in the world, but it's one that will work. It'll put people back to work. It will give the ability of people to rise in our society. It's help with the jobs out in rural America, where the manufacturing loss has been the greatest and the employment rate is the highest.
You put a plan like that together, you'll get Democrats and Republicans, and we'll create jobs in the country, and we'll get things done.
HARWOOD: Governor Romney, you've shown that you can work with Democrats. When you were governor, of course, you collaborated with Ted Kennedy on the health care plan that you enacted. You raised fees to balance the budget, and you used that as an argument to get the credit rating of your state upgraded. Independent voters might like that. Should Republican primary voters be nervous about it?
ROMNEY: Thanks for reminding everybody.
(LAUGHTER)
You know, what I found is, in a state like mine where there are a few Democrats in the legislature -- 85 percent of my legislature was Democrat -- to get anything done -- I was always in an away game, if you will. And to get something done, I had to see if there were Democrats who cared more about the state than they cared about their re-election or their party, and there were.
And right now, America faces a crisis. I think people on both sides of the aisle recognize that this is no longer a time just for worrying about the next election. This is a time to worry about America.
GINGRICH: You deal with Social Security as a free-standing issue. And the fact is, if you allow younger Americans to have the choice to go to a Galveston or Chilean-style personal Social Security savings account, the long-term effect on Social Security is scored by the Social Security actuary as absolutely stabilizing the system and taking care of it.
The key is there is $2.4 trillion in Social Security which should be off budget, and no president of the United States should ever again say because of some political fight in Washington, I may not be able to send you your check. That money is sitting there. That money is available. And the country ought to pay the debt it owes the people who put the money in there.
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HARWOOD: Governor Romney, if I could follow up, Speaker Gingrich just said he is not prepared to raise taxes on the American people in the middle of a slow economy like this. That's what would happen if the payroll tax cut is not extended.
Do you agree with him, and would you also support, when it comes down to it, an extension of the payroll tax cut?
ROMNEY: I don't want to raise taxes on people in the middle of a recession. Of course not.
HARWOOD: So you're for it?
ROMNEY: And that's one of the reasons why we fought so hard to make sure the Bush tax cuts weren't taken away by President Obama.
But, look, this issue of deficits and spending is not about just dollars and cents. It's a moral issue. It's a moral imperative.
We can't continue to pass on massive debts to the next generation. We can't continue to put at risk the greatest nation in the history of the Earth because of the profligate spending that's going on in Washington, D.C.
HARWOOD: But to clarify, you agree with President Obama the payroll tax cut should be expanded?
ROMNEY: I want to keep our taxes down. I don't want to raise any taxes anywhere. Let me tell you, I'm not looking to raise taxes. What I'm looking to do is to cut spending. And that's why this last week I put out a plan that dramatically cuts spending in Washington, that gets us to a 20 percent cap, and makes sure that we have a balanced budget thereafter. And how do I do it? I have three major steps.
Number one, cut programs. Get rid of programs we don't have to have like Obamacare.
Take a lot of programs that we have at the state level, number two -- excuse me, at the federal level -- and send them back to the states where they can be better run with less fraud and abuse.
And number three, finally, bring some productivity and management expertise to the federal government. I would cut the workforce by 10 percent and -- I want to say one more, and that is this -- I want to make sure we link the compensation of our federal bureaucrats to that which exists in the private sector. People who are public servants shouldn't get more money than the taxpayers that they're serving.
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HARWOOD: Does any candidate on this stage disagree? Does any candidate disagree and oppose an extension of the payroll tax cut?
BACHMANN: Say that again.
HARWOOD: Does any candidate disagree with the Speaker and Governor Romney and oppose the extension of the payroll tax cut?
(UNKNOWN): Yes.
HARWOOD: You oppose it?
BACHMANN: I do. I opposed it when it was first proposed, because I knew that it would blow a hole of $111 billion in the Social Security trust fund.
President Obama clearly did this for political reasons. That's why he did it. And so I had made that warning then, because we actually have already run Social Security in the red. We aren't just about to, we already have, six years ahead of time.
Now, consider the context. We have baby boomers in their peak earning years. This is when money should be flooding into the Social Security trust fund. Instead, we're already in the red.
When we talked this evening about how much trouble we are in with spending, we are in a tremendous amount of trouble with spending. Just consider we pay a lot of taxes in this country, $2.2 trillion is what we send into Washington. The problem is, we spent at the government level $3.7 trillion. Your started out tonight talking --
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HARWOOD: Out of time, Congresswoman. Governor Huntsman?
HUNTSMAN: Thank you. It's getting a little lonely over here.
SANTELLI: Our federal government still owns 500 million shares of GM stocks, guarantees trillions -- trillions with a "T" -- dollars of mortgages. They are basically the lender doing 90 percent of all the mortgage origination right now. And you consider the Federal Reserve, the Federal Reserve has purchased $2.62 trillion -- again, with a "T" -- of treasury securities, agency securities, and mortgage securities.
If you were president, how would your administration and would your administration reverse these obligations?
HUNTSMAN: I would clean up the balance sheet. And let me tell you what I worry about as much as anything else.
We talk about failed leadership. We certainly have failed leadership.
President Obama had two years to get this economy going and to move us toward an environment that speaks to job growth, and he's failed miserably. But along with that, we have a real trust crisis in this country.
Between the American people and our institutions of power, Congress, the executive branch, Wall Street as well, there is no trust. We are running on empty. And when a democracy begins to run on empty because of government holdings and bailouts and being involved in ways that are absolutely inappropriate, based on constitutional and where we should be, that results in a diminution of trust by the American people. We've got to raise that trust.
So let me just tell you what I think needs to be done, in terms of bringing our economy up. We've heard about all these great tax plans. I think I'm the only one on this stage who's actually delivered a flat tax. And I did that as governor of my state.
I put forward a proposal that I think is right for this country and getting it back on its feet. The Wall Street Journal has come out -- the most respected editorial page economically, maybe in the entire world -- has come out and endorsed my plan, said it's the very best of the bunch.
And it very simply calls out just as I did as governor. So I'm not sitting here talking about academic theory. I stand here as a practitioner. I've done it before. I want to phase out the loopholes and the deductions on the individual side, phase out corporate welfare and subsidies on the corporate side, and lower the rates, make us more competitive. That's the kind of work that is realistic. It can get done in Congress and fire the engines of growth that are so desperately needed to boost trust in this country.
(UNKNOWN): Sharon Epperson?
EPPERSON: I want to turn the attention to why we're here on this campus and what many students are very interested in, and that is the fact that, Congressman Paul, right now, we are looking at student loan debt that is near $1 trillion. Americans owe more on student loans right now than credit cards, and the average debt for a college senior right now is over $25,000. It's obviously a very hot topic right here on this campus and with students across the country. Just listen to what they have to say.
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(UNKNOWN): Tuition rates have increased roughly three times that of inflation over the last three decades.
(UNKNOWN): More students have to take out loans or forego college.
(UNKNOWN): My generation is graduating with student debt levels at an unprecedented level.
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EPPERSON: So, Congressman Paul, you've already talked about the fact that you want to get rid of the Department of Education. You've said that you want to get rid of federal student loans. So how would you make college more accessible, more affordable for these students and students around the country?
PAUL: Well, I think you proved that the policy of student loans is a total failure. I mean, a trillion dollars of debt?
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And it's going to be dumped on the taxpayer? And what have they gotten? A poorer education and costs that have skyrocketed because of inflation, and they don't have jobs. There's nothing more dramatically failing than -- than that program.
So, no, there's no authority in the Constitution for the federal government to be dealing with education. We should get rid of the loan programs. We should get rid of the Department of Education and give tax credits, if you have to, to help people.
But the inflation is the big problem. It's three times the rate that the government admits that inflation is, and that is natural and normal. When governments inflate the currency, it goes in the areas that the government gets involved in, housing, high prices, stock market, skyrocketing prices, medical care, skyrocketing, education...
EPPERSON: But how do they pay for it? How do they now pay for college, if they're not...
PAUL: The way -- the way you pay for cellphones and computers.
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You have the marketplace there. There's competition. Quality goes up. The price goes down. Can you imagine what it would have been like if the Department of Homeland Security was in charge of finding one person or one company to make the cellphones? I mean, it would have been a total disaster. So when the government gets involved in the delivery of any service -- whether it's education, medical care, or housing -- they cause higher prices, lower quality, create bubbles, and they give us this mess that we're in. That's why we have to eventually get our -- we have to wise up.
And look at where the bubbles come from. It's from the Federal Reserve. And we should start by auditing the Fed, and then we should end the Fed.
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EPPERSON: Thank you, Congressman.
Speaker Gingrich, Congressman Paul just talked about a bubble. And there are many that are concerned that, unlike other types of debt, student loan debt does not have the same type of consumer protections. It cannot be wiped out in bankruptcy by law. There's really little way to refinance it. Are you worried about student loan debt becoming the next government bailout?
GINGRICH: You know, this is a good place to talk about the scale of change we're about to live through. We're at the end of the welfare state era of dependency, debt, distortion, and dishonesty.
The student loan program began when Lyndon Johnson announced it, I think, with a $15 million program. It's an absurdity. What does it do? It expands the ability of students to stay in college longer because they don't see the cost. It actually means they take fewer hours per semester on average. It takes longer for them to get through school. It allows them to tolerate tuitions going up absurdly. By 2014, there will be one administrator for every teacher on college campuses in the United States.
Now, let me give you a contrast that's very startling. The College of the Ozarks is a work-study college. You cannot apply to it unless you need student aid, and they have no student aid.
You have to work 20 hours a week during the year to pay tuition and books. You work 40 hours a week during the summer to pay for room and board. Ninety-two percent of the students graduate owing no debt, the eight percent who owe debt owe $5,000 because they bought a car.
Now, that is a model so different, it will be culture shock for the students of America to learn we actually expect them to go to class, study, get out quickly, charge as little as possible, and emerge debt free by doing the right things for four years.
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BARTIROMO: Governor Perry, name the top programs that you would cut in terms of long-term deficit reduction. Include Medicare, Medicaid, Social Security, and defense spending in the order you see fit.
PERRY: Well, every one of those -- and by the way, that was the Department of Energy I was reaching for a while ago.
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PERRY: So here what's we have to look at as Americans. And it's the entitlement programs that are eating up this huge amount of money that's out there.
And it's also the spending, Congressman Paul. And when you look at Medicaid, Medicare, Social Security, and those unfunded liabilities, I think are over $115 trillion just in those three programs. Those are the places where you go where you have to make the really hard decisions in this country.
BARTIROMO: So what is your order? And you didn't mention defense spend.
PERRY: Well, obviously, Social Security is one of those where we either can go to a blended type of a program where we blend price and wages, and come up with a program, and can save billions of dollars there. But the people who are on Social Security, they need to understand something today. It's going to be there for them.
Those that are working their way towards Social Security, we've made a pledge to them. Those individuals are going to have those dollars there for them.
But the young people out there, who is going to stand up for the young people in this country, those that are at the workforce today, and stand up and say, we are going to transform this program so it's going to be there for you? I will do that. I will stand up for the young people in this country and put a program into place that will be there for them.
HARWOOD: Speaking of young people, a quick answer. Do you agree with Congressman Paul that we should kill the federal student loan program?
PERRY: I happen to think there are a substantial number of ways. As a matter of fact, I've called for a $10,000 graduate program --
HARWOOD: But would you kill the federal student loan program?
PERRY: I don't think the federal government should be in the business of paying for programs and building up huge debt out there. I think we need to look at, how do you --
HARWOOD: So get rid of it?
PERRY: -- force these universities to be efficient? And one of the ways is that the governors who appoint the trustees, they step in and they basically say, listen, you are going to have graduation rates that are moving upwards, you're going to have tuition that is moving down. You have to have control over those boards of regents, of that's how you do that, or the legislature has to have control.
But the bottom line is, we have to put powerful economic forces into place. And one of those is using our technology --
HARWOOD: Thank you, Governor.
PERRY: -- to be able to let our kids have the opportunity to get an education through long distance learning, for instance.
BARTIROMO: That's time.
HARWOOD: Thank you, Governor.
BARTIROMO: We're going to take one more quick break. When we return, final questions to the candidates.
HARWOOD: Our CNBC's Republican Presidential Debate will be right back.
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BARTIROMO: Welcome back to CNBC's "Republican Presidential Debate."
HARWOOD: Mr. Cain, let me ask you a question, under a Republican governor, the state of California hired a company in China to build major portions in the new San Francisco-Oakland Bay Bridge, creating thousands of jobs in China. And California did that because it was cheaper. Is that smart, purchasing by government in a global economy, or is there something wrong with that?
CAIN: There's something wrong that, which is why I have proposed a bold plan, 999...
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CAIN: ... and allow me to explain how on the 999 that that company would be more inclined to keep the business here. On the first 9, you take sales minus purchases, net exports, and capital, it levels the playing field between goods produced here in the United States and the rest of the world.
It makes the United States much more competitive and businesses won't be tempted to build overseas and send jobs overseas. The tax code is what sends jobs overseas. The tax code is what caused them to buy the articles from the Chinese. It starts with replacing the tax code.
HARWOOD: Governor Romney, was it a mistake for Governor Schwarzenegger to hire the firm in China to build portions of that bridge?
ROMNEY: Well, that's a -- a long answer to that, because what China is doing is not playing fairly by the rules that exist in our -- in the WTO and the world. China is, on almost every dimension, cheating. And we've got to recognize that. It is good for America...
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ROMNEY: It is good for America to have free trade. It is good for us to be able to send our goods and services around the word and vice versa.
HARWOOD: So a good decision to build the bridge over there?
ROMNEY: That is normally a good thing. But China is playing by different rules. One, they are stealing intellectual property. Number two, they're hacking into our computer systems, both government and corporate. And they are stealing, by virtue of that as well, from us.
And finally, they are manipulating their currency, and by doing so, holding down the price of Chinese goods, and making sure their products are artificially low-priced. It's predatory pricing, it's killing jobs in America.
If I'm president of the United States, I'm making it very clear, I love free trade. I want to open markets to free trade. But I will crack down on cheaters like China. They simply cannot continue to steal our jobs.
(APPLAUSE)
BARTIROMO: But how do you crack down? How do you crack down, Governor? Are you talking about new tariffs? How are you cracking down?
ROMNEY: I'm sorry, pardon?
BARTIROMO: How would you crack down on China?
ROMNEY: Well, number one, I would do something this president should have done a long time ago, which is to label China a currency manipulator. And then I would bring in action at the WTO level, charging them with being a currency manipulator.
Number three, where they have stolen intellectual property, where they have hacked into computers, and where their artificial pricing is causing their goods to have predatory levels of pricing, I would apply, if necessary, tariffs to make sure that they understand we are willing to play at a level playing field.
We want -- we have to have free trade. That's essential for the functioning of a strong economy. But we cannot allow one nation to continue to flaunt the rules and kill our jobs by allowing them continue as they have.
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BARTIROMO: Speaker, in addition to that, so many companies -- multinational companies, want to try to get a foothold in China and sell to the billion-and-a-half people there. They can only do joint ventures. They're not getting a fair shake in terms of selling to that 1.5 billion person population. How would you move the needle?
GINGRICH: Well, there are two things here. And let me say in advance that I would yield in part to Governor Huntsman, because he speaks fluent Chinese, he has worked in China, and he's been the ambassador. And I'd be curious to get his reaction.
But there are two different parts here. The problem with building the bridge is simple. What -- what is it about American regulations, American taxation, American labor cost and attitudes that makes it cheaper to go to China than to go to the United States? Now, we...
(APPLAUSE)
... first of all, you've got to decide, how are we going to be more competitive and how are we going to be the lowest cost? And there's a new Boston consultant (ph) that says, by 2015, South Carolina and Alabama will be cheaper than the Chinese coastal provinces to manufacturing.
Second, in terms of dealing with China strategically, I think we're going to have to find ways to dramatically raise the pain level for the Chinese cheating, both in the hacking side, but also on the stealing and intellectual property side. And I don't think anybody today has a particularly good strategy for doing that.
BARTIROMO: Time. Thirty seconds. Jon Huntsman, you were the ambassador to China, 30 seconds to respond.
HUNTSMAN: Thirty seconds? For Heaven's sake. Let me just say that we've had a 40-year relationship with China. It's a -- it's a troublesome and problematic relationship, very, very complicated.
But the bottom line is, I mean, you can give applause lines and you can kind of pander here and there. You start a trade war if you start slapping tariffs randomly on Chinese products based upon currency manipulation. That's not a good idea.
But longer term, we're just going to have to keep doing business the way we've always done, is sit down, you find solutions to the problems, and you move forward. It isn't easy. It isn't glamorous. It's grinding it out the way we've done for 40 years. And for 40 more years, we're going to have to do it the same way.
HARWOOD: Are you saying Governor Romney's pandering?
HUNTSMAN: I'm saying that you can throw out applause lines and you can say that you're going to slap on tariffs. You know, that doesn't work...
(CROSSTALK)
HARWOOD: But you're suggesting it. He's standing right here. Would you say that he's pandering on this issue?
HUNTSMAN: Well, I've said it before. I think that -- that that policy is one of simply pandering, just throwing a tariff on for the sake of an artificially valued currency, which is, in fact, the case.
But here's what they do in response. They say, you have an artificially valued currency, too, with those quantitative easing programs. You, too, are manipulating you're -- and we're going to slap something on your products. And before long, you have a trade war.
But let me tell you longer...
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HARWOOD: Governor Romney, are you pandering?
ROMNEY: Look, I've been in business all my life, 25 years. I consulted to businesses around the world. I've been in business where we competed around the world. I understand free trade; I like free trade. I know that America can compete with anyone in the world. Newt is right about -- about our capacity to manufacture and compete heads-on versus the Chinese.
But I've also seen predatory pricing. I've seen people price their goods at an artificial level for an extended period of time, such that they can drive other people out of business. And then when the other people are out of business, they can raise their prices. That's what China's doing, by holding down the value of their currency.
Let the currencies float. If the U.S. currency, for instance, is being inflated, let it float. Let us float. Let us have a market mechanism determine the value of our respective currencies, as opposed to the Chinese government continuing to put an advantage to their -- their producers. This -- this is no longer a time for us just to sit back and say we're going to let them steal our jobs.
BARTIROMO: Congresswoman Bachmann, weigh in here. How do you open the markets in China for American companies?
BACHMANN: Well, the Chinese have been bad actors. Recently we found out that they dumped counterfeit computer chips here in the United States. We're using some of those counterfeit computer chips in the Pentagon in some of our weapons systems. This has national security implications.
We also found out that the Chinese just finished building 3,000 miles of underground tunnels where they are housing some nuclear weapons. There's some very real consequences to the United States overspending to such an extent that we're in hock to them over a trillion dollars.
We've sent so much interest money over to the Chinese to pay our debts off that we effectively built their aircraft carrier. And by 2015, we will be sending so much interest money over, we will be paying for the entire People's Liberation Army of China, the number- one employer of the -- of the world.
What we need to do is stop enriching China with our money. And we do that by stop borrowing from them, by stop spending money that we don't have.
(APPLAUSE)
CRAMER: Mr. Cain, I want to go to you with this question. This does not lend itself to 9-9-9 or any other number.
CAIN: Sorry, I didn't hear the first part.
CRAMER: This question does not lend itself to 9-9-9 or any other thing. This is our final word, OK? And it comes from our viewers. And it is all about restoring trust and faith in our markets and in our way of life. I'm going to be quoting Joanne Kornbly (ph). She e- mails us.
She says, "Our stock market has turned into a casino with high- frequency computerized trading comprising 70 percent of all transactions and hedge fund speculation resulting in market swings. Before privatizing Social Security, how would you make the stock market safer for individual investors?
And Mr. Cain, just simple, how do we restore faith in the markets for the little guy?
CAIN: The first thing we do is restore faith in business by providing certainty so businesses can grow. A lot of the volatility is being driven by uncertainty.
Businesses are uncertain about what the health care rules are going to be, they don't know what the tax rules are going to be. All of the uncertainty has this economy stagnated.
So, the way you restore that, grow this economy. That's job one.
Many of the things we talked about up here today starts with growing the economy. And that's why we have got to use a bold plan -- I won't mention it -- in order to grow the economy.
(LAUGHTER)
CRAMER: When the economy was going great, sir, there was no trust. When the economy was going great, people were getting ripped off and there was insider trading. When the economy was going great, people were getting hurt in the stock market.
Forget the economy. Talk about the way the market is regulated.
CAIN: Jim, I feel your pain. Look, here is what I'm saying.
CRAMER: How about the 90 million people that got --
(CROSSTALK) CAIN: Jim, you've got to provide certainty in this environment so businesses will grow. They have been in a mode of survive. They need to be in a mode of growth. That's where we have got to do first.
And I agree with some of the others who have said we have got to repeal Dodd/Frank. There's three big things wrong with Dodd/Frank, which is why it needs to be a top priority to repeal.
Number one, it doesn't provide oversight for Fannie Mae and Freddie Mac. And we all agree that that was a catalyst for the meltdown in 2008.
The two other biggest problems with Dodd/Frank, Dodd and Frank.
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BARTIROMO: Governor Perry, same question to you. The same question to you and Congressman Ron Paul.
How do you restore faith in the public markets?
PERRY: Well, we have the regulations in place, and we had the regulations in place well before the meltdowns occurred. We have a culture in Washington, D.C., where these corporate lobbyists have these cozy relationships with the people that they are regulating. And we have to have leadership in this country that not only recognizes that, but demands that those individuals who are working for us are in those agencies, whether it's in the stock market or whether it's Fannie Mae or Freddie Mac.
And when there are individuals who are breaking the laws, who are pushing the bounds, that there are clear efforts that are made to take those people either out of those jobs or prosecute them for criminality. One of the two, that has to happen.
And you can pass legislation like you said until the world looks level. But you have got to have men and women who are committed to the laws of this country and a president that will push his administration to make sure that they're done.
HARWOOD: Congressman Paul, Governor Perry was just talking about the culture of Washington. His critics in the state of Texas -- you're a congressman from Texas -- say crony capitalism is what he practices as governor. Are they right?
PAUL: I haven't analyzed it enough to call him a crony or not. So, no, I don't know the details of that. But there is a lot of crony capitalism going on in this country.
And that has to be distinguished from real capitalism, because this occupation stuff on Wall Street, if you're going after crony capitalism, I'm all for it. And those are the people who benefit from contracts from government, benefits from the Federal Reserve, benefits from all of the bailouts. They don't deserve compassion, they deserve taxation, or they don't -- they deserve to have all their benefits removed. But crony capitalism isn't when somebody makes money and they produce a product. That is very important. We have to distinguish the two.
And unfortunately, I think some people mix that. But this, to me, is so vital, that we recognize what crony -- what capitalism is versus crony capitalism. And believe me, when you have an inflationary environment, and all this speculation, and all the bailouts due to monetary system, believe me, you get a majority of crony capitalism, and that's why we're facing this crisis today.
BARTIROMO: We want to thank all of you tonight. That is all the time we have for CNBC's Republican Presidential Debate.
We thank all the candidates for being here tonight and spending the time and putting their plans forward.
We hope you now have a better understanding of where each of them stand on the economy, jobs, and your money.
HARWOOD: We would also like to thank our partners, the Michigan Republican Party, and all of the Grizzlies of Oakland University.
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