CNBC Transcript of 'Your Money, Your Vote' Republican Presidential Debate
CNBC's "Your Money, Your Vote: The Republican Presidential Debate" Live from Oakland University in Rochester, MI ...
BARTIROMO: And good evening, everyone. I'm Maria Bartiromo.
HARWOOD: I'm John Harwood.
And welcome to CNBC's Republican Presidential Debate.
BARTIROMO: Tonight, we are here in the great state of Michigan for a debate that will focus almost exclusively on the economy and how to fix the financial problems of our country.
On the stage tonight from left to right: Senator Rick Santorum.
BARTIROMO: Congresswoman Michele Bachmann.
BARTIROMO: Speaker Newt Gingrich.
BARTIROMO: Governor Mitt Romney.
BARTIROMO: Mr. Herman Cain.
BARTIROMO: Governor Rick Perry.
BARTIROMO: Congressman Ron Paul.
BARTIROMO: And Governor Jon Huntsman.
HARWOOD: The candidates will have 60 seconds to respond to questions, 30 seconds for follow-ups and rebuttals. Those will be at the discretion of the moderators.
We also want you, the candidates, to help us out a little bit, by answering the questions as directly and specifically as you can. I know you want to. You have proven that. But just in case you get off topic, maybe by accident, we may have to interrupt you.
BARTIROMO: Throughout the evening tonight we will be joined by an all-star lineup of the smartest people on CNBC.
First up tonight, Jim Cramer, the host of "Mad Money."
CRAMER: Thank you, Maria.
HARWOOD: And we also want to hear your voice. Go to our Web site, Debate.CNBC.com, and tweet us at CNBCDebate.
All night we'll be showing your tweets on the bottom of the screen, so all of the candidates will have even more of a motive to impress.
BARTIROMO: In the interest of time, the candidates have agreed to forego opening and closing statements tonight. So let's get started.
And we begin with you, Mr. Cain. I want to begin with what we saw today, another rough day for our money, for our 401(k)s. Once again, we were all impacted by the news that the Dow Jones Industrial Average dropped 400 points today. The reason, Italy is on the brink of financial disaster.
It is the world's seventh largest economy. As president, what will you do to make sure that their problems do not take down the U.S. Financial system? It is the world's seventh largest economy.
As president, what will you do to make sure their problems do not take down the U.S. financial system?
CAIN: Let's start with two things. First, we must grow this economy. We have the biggest economy in the world. And as long as we are stagnant in terms of growth in GDP, we impact the rest of the world. We must do that.
But we're not going to be able to do that until we put some fuel in the engine that drives economic growth, which is the business sector. This administration has done nothing but put stuff in the caboose, and it's not moving this economy. We must grow this economy, number one.
Number two, we must assure that our currency is sound. Just like a dollar must be dollar when we wake up in the morning, just like 60 minutes is in an hour, a dollar must be a dollar. If we are growing this economy the way it has the ability to do and at the same time we are cutting spending seriously, we will have things moving in the right direction in order to be able to survive these kind of ripple effects.
BARTIROMO: So, to be clear, focus on the domestic economy, allow Italy to fail?
CAIN: Focus on the domestic economy or we will fail, so, yes, focus on the domestic economy first. There's not a lot that the United States can directly do for Italy right now, because they have -- they're really way beyond the point of return that we -- we as the United States can save them.
BARTIROMO: Governor Romney, should we allow Italy to fail? Should we have a stake in what's going on in the eurozone right now?
ROMNEY: Well, Europe is able to take care of their own problems. We don't want to step in and try and bail out their banks and bail out their governments. They have the capacity to deal with that themselves. They're a very large economy.
And there will be, I'm sure, cries if Italy does default, if Italy does get in trouble. And we don't know that'll happen, but if they get to a point where they're in crisis and banks throughout Europe that hold a lot of Italy debt will -- will then face crisis and there will have to be some kind of effort to try and uphold their financial system.
There will be some who say here that banks in the U.S. that have Italian debt, that we ought to help those, as well. My view is no, no, no. We do not need to step in to bail out banks either in Europe or banks here in the U.S. that may have Italian debt. The right answer is for us...
BARTIROMO: But -- but the U.S. does contribute to the International Monetary Fund, and the IMF has given $150 billion to the eurozone. Are you saying the U.S. should stop contributing to the IMF?
ROMNEY: I'm happy to continue to participate in world efforts like the World Bank and the IMF, but I'm not happy to have the United States government put in place a TARP-like program to try and save U.S. banks that have Italian debt, foreign banks doing business in the U.S. that have Italian debt, or European debt. We're just -- banks there.
There's going to be an effort to try and draw us in and talk about how we need to help -- help Italy and help Europe. Europe is able to help Europe. We have to focus on getting our own economy in order and making sure we never reach the kind of problem Italy is having.
If we stay on the course we're on, with the level of borrowing this administration is carrying out, if we don't get serious about cutting and capping our spending and balancing our -- our budget, you're going to find America in the same position Italy is in four or five years from now, and that is unacceptable. We've got to fix our -- our deficit here.
CRAMER: Congressman Paul...
(inaudible) to say, and I really get that. But I'm on the frontlines of the stock market. We were down 400 points today. We're not going to be done going down if this keeps going on, if Italy keeps -- the rates keep going up. Surely you must recognize that this is a moment-to-moment situation for people who have 401(k)s and IRAs on the line and you wouldn't just let it fail, just go away and take our banking system with it?
PAUL: No, you have to let it -- you have to let it liquidate. We've had -- we took 40 years to build up this worldwide debt. We're in a debt crisis never seen before in our history. The sovereign debt of this world is equal to the GDP, as ours is in this country. If you prop it up, you'll do exactly what we did in the depression, prolong the agony. If you do -- if you prop it up, you do what Japan has done for 20 years.
So, yes, you want to liquidate the debt. The debt is unsustainable. And this bubble was predictable, because 40 years ago we had no restraints whatsoever on the monetary authorities, and we piled debt on debt, we pyramided debt, we had no restraints on the spending. And if you keep bailing people out and prop it up, you just prolong the agony, as we're doing in the housing bubble.
PAUL: Right now, Fannie Mae and Freddie Mac are demanding more money because we don't allow the market to determine what these mortgages are worth. If you don't liquidate this and clear the market, believe me, you're going to perpetuate this for a decade or two more, and that is very, very dangerous.
(inaudible) Italy's too big to fail. It's great. I'd love it if we were independent. It would be terrific to say, "It's your fault. It's your fault. It's your problem." But if this goes, the world banking system could shut down. Doesn't that involve our banks, too?
HUNTSMAN: So we wake up this morning, and we find that the yield curve with respect to Italy is up, and prices are down. So if you want a window into what this country is going to look like in the future if we don't get on top of our debt, you are seeing it playing out in Europe right now.
You are seeing the metastasy (ph) effect of the banking sector. And what does it mean here? What am I most concerned about, Jim? I'm concerned that it impacts us in way that moves into our banking sector where we have got a huge problem called "too big to fail" in this country.
We have six banks in this country that combined have assets worth 66 percent of our nation's GDP, $9.4 trillion. These institutions get hit. They have an implied bailout by the taxpayers in this country, and that means that we are setting ourselves up for disaster again.
Jim, as long as we have banks that are "too big to fail" in this country, we are going to catch the contagion and it's going to hurt us. We have got to get back to a day and age where we have properly sized banks and financial institutions.
HARWOOD: Thank you, Governor.
Governor Romney, I want to switch...
HARWOOD: ... to the bailout drama that we lived through in this country, and no state understands it better than the state of Michigan. I'm going to talk a little bit about your record on that. Four years ago when you were running for the Republican nomination and the auto industry was suffering, you said, where is Washington? After the election, when the Bush administration was considering financial assistance for the automakers, you said, no, let the Detroit go bankrupt.
Now that the companies are profitable again, after a bailout supported by your Republican governor here in Michigan, you said, well, actually, President Obama implemented my plan all along -- or he gravitated to my plan.
With a record like that of seeming to be on all sides of the issue, why should Republicans be confident in the steadiness of your economic leadership?
ROMNEY: John, I care about this state and about auto industry like -- I guess like no one else on this stage having been born and raised here and watched my parents make their life here. I was here in the 1950s and 1960s when Detroit and Michigan was the pride of the nation.
I have seen this industry and I've seen this state go through tough times. And my view some years ago was that the federal government, by putting in place CAFÉ requirements that helped foreign automobiles gain market share in the U.S., was hurting Detroit. And so I said, where is Washington? They are not doing the job they ought to be doing.
My view with regards to the bailout was that whether it was by President Bush or by President Obama, it was the wrong way to go. I said from the very beginning they should go through a managed bankruptcy process, a private bankruptcy process.
We have capital markets and bankruptcy, it works in the U.S. The idea of billions of dollars being wasted initially then finally they adopted the managed bankruptcy, I was among others that said we ought to do that.
And then after that, they gave the company to the UAW. They gave General Motors to the UAW and they gave Chrysler to Fiat. My plan, we would have had a private sector bailout with the private sector restructuring and bankruptcy with the private sector guiding the direction as opposed to what we had with government playing its heavy hand.
HARWOOD: Governor, let me follow up, because...
HARWOOD: ... the auto bailout is part of a larger issue facing your candidacy, as you know. Your opponents have said you switched positions on many issues. It is an issue of character, not personal, but political, you seemed to encapsulate it in the last debate when you said, "I'm running for office, for Pete's sake."
What can you say to Republicans to persuade them that the things you say in the campaign are rooted in something deeper than the fact that you are running for office?
ROMNEY: John, I think people know me pretty well, particularly in this state, in the state of Massachusetts, New Hampshire that's close by, Utah, where I served in the Olympics. I think people understand that I'm a man of steadiness and constancy.
I don't think you are going to find somebody who has more of those attributes than I do. I have been married to the same woman for 25 -- excuse me, I will get in trouble, for 42 years.
ROMNEY: I have been in the same church my entire life. I worked at one company, Bain, for 25 years. And I left that to go off and help save the Olympic Games. I think it is outrageous the Obama campaign continues to push this idea, when you have in the Obama administration the most political presidency we have seen in modern history.
They are actually deciding when to pull out of Afghanistan based on politics. Let me tell you this, if I'm president of the United States, I will be true to my family, to my faith, and to our country, and I will never apologize for the United States of America. That's my belief.
(CHEERING AND APPLAUSE)
HARWOOD: Governor Perry, I want to ask you about this, because you have raised this issue yourself about Governor Romney. And you are running as a politician with strong convictions.
HARWOOD: From the flip side, Ronald Reagan raised taxes when the deficit got too big, George W. Bush supported TARP and the auto bailout when he thought we might face a great depression -- second great depression. Does that -- examples like that tell you that good, effective leaders need to show the kind of flexibility that Governor Romney has shown on some issues?
PERRY: The next president of the United States needs to send a powerful message not just to the people of this country, but around the world, that America is going to be America again, that we are not going to pick winners and losers from Washington, D.C., that we are going to trust the capital markets and the private sector to make the decisions, and let the consumers pick winners and losers. And it doesn't make any difference whether it's Wall Street or whether it's some corporate entity or whether it's some European country. If you are too big to fail, you are too big.
BARTIROMO: Speaker Gingrich, Federal Reserve Chairman Ben Bernanke has called unemployment in this country a national crisis due to the amount of days people are out -- months that people are out of work and the number of people out of work. Many of you have come up with tax reform plans. Why is tax reform the path to job creation? And if it's not the only path, what else can you implement to get people back to work?
GINGRICH: Well, first of all, I think Ben Bernanke is a large part of the problem and ought to be fired as rapidly as possible.
GINGRICH: I think the Federal Reserve ought to be audited and we should have all the decision documents for 2008, '09 and '10 so we can understand who he bailed out, why he bailed them out, who he did not bail out, and why he did not bail them out.
GINGRICH: So, I'm glad that Ben Bernanke recognizes some of the wreckage his policies have led to.
The reason we follow -- I think most of us are for tax policies that lead to jobs is because we have had two cycles in my lifetime, Ronald Reagan, and the Contract with America, both of which had the same policy: lower taxes, less regulation, more American energy, and have faith in the American job creator as distinct from the Saul Alinsky radicalism of higher taxes, bigger bureaucracy with more regulations, no American energy, as the president announced again today in his decision on offshore, and finally class warfare.
So I would say that all of us on the stage represent a dramatically greater likelihood of getting to a paycheck and leaving behind food stamps than does Barack Obama.
BARTIROMO: Congresswoman Bachmann, same question to you. How can you create jobs as quickly as possible?
BACHMANN: Well, I think one thing that we know is that taxes lead to jobs leaving the country. All you need to know is that we have the second highest corporate tax rate in the world.
And if you go back to 1981, and you look around the world, we had a lot of high corporate tax countries. It was 47 percent on average on a lot of countries across the world.
But if you look today in the United States, we have an effective rate if you average in state taxes, with federal taxes, of about 40 percent. But the world took a clue, because capital is mobile, and capital went to places where corporate tax rates went to 25 percent and falling.
We're still stuck in a 1986 era of about a 40 percent tax rate. We have to lower the tax rate because it's a cost of doing business, but we have to do so much more than that.
Our biggest problem right now is our regulatory burden. The biggest regulatory problem we have is Obamacare and Dodd/Frank. I will repeal those bills. I have written those bills to repeal those bills that have got to go. But beyond that --
BACHMANN: But beyond that, we have to legalize American energy. And here is something else that we have to do that will help the economy. We have to build the fence on America's southern border and get a grip on dealing with our immigration problem.
HARWOOD: Senator Santorum, you proposed a zero tax on manufacturing businesses.
SANTORUM: I have.
HARWOOD: I understand the sentiment behind that. And the state of Michigan has lost hundreds of thousands of manufacturing jobs over the last few decades. Isn't that the kind of distortion in the tax code that people want to get away from in order to get rates down: flatter, simpler, fairer?
SANTORUM: I think getting the rate down to zero is down -- is pretty far down. That's good.
HARWOOD: But it's down for the manufacturing industry, as opposed to people doing other things. Isn't that picking winners and losers?
SANTORUM: It's down for a sector of the economy, not picking an individual winner or loser. It's down for an entire sector of the economy that we are getting our hat handed to us by losing jobs.
We see that here in Michigan, we see it across this country. And the reason is government has made us uncompetitive.
We need to compete on taxes. We need to compete on regulations. We need to repeal Obamacare. We need to -- I've said I'm going the repeal every single Obama-era regulation that cost businesses over $100 million. Repeal them all. We'll -- we'll send a very clear message out to manufactures in this country and all over the world that America will compete.
Some have suggested we need to go into a trade war with China and have tariffs. That just taxes you. I don't want to tax you. I want to create an atmosphere where businesses and manufacturers can be profitable. We'll lower taxes, repatriating funds, 0 percent tax if you repatriate those funds and invest them in plant and equipment.
And then, of course, an energy policy that everyone on this stage is going to agree with that says, we are going to produce energy in this country. I'm different than many of them, that I'm going to cut all the subsidies out and let the market work, as opposed to creating incentives for different -- different forms of energy that the government supports.
BARTIROMO: You have all said that -- that you will repeal the president's health care legislation. We will get into that, because we want to know, then what? What is the plan once you repeal Obamacare?
But, first, Mr. Cain, the American people want jobs, but they also want leadership. They want character in a president. In recent days, we have learned that four different women have accused you of inappropriate behavior. Here we're focusing on character and on judgment.
You've been a CEO.
CAIN: Yes. BARTIROMO: You know that shareholders are reluctant to hire a CEO where there are character issues. Why should the American people hire a president if they feel there are character issues?
CAIN: The American people deserve better than someone being tried in the court of public opinion based on unfounded accusations. That's...
And I value my character and my integrity more than anything else. And for every -- one person that comes forward with a false accusation, there are probably -- there are thousands who would say none of that sort of activity ever came from Herman Cain.
You're right. This country's looking for leadership. And this is why a lot of people, despite what has happened over the last nine days, are still very enthusiastic behind my candidacy. Over the last nine days...
Over the last nine days, the voters have voted with their dollars, and they are saying they don't care about the character assassination. They care about leadership and getting this economy growing and all of the other problems we face.
HARWOOD: Governor Romney, when you were at Bain Capital, you purchased a lot of companies. You could fire the CEO and the management team or you could keep them. Would you keep a CEO -- are you persuaded by what Mr. Cain has said? Would you keep him on if you bought his company?
ROMNEY: Look, look, Herman Cain is the person to respond to these questions. He just did. The people in this room and across the country can make their own assessment. I'm not...
HARWOOD: Governor Huntsman, let me switch back to the economy. The...
Many Republicans have criticized the Occupy Wall Street movement, but we had an NBC News-Wall Street Journal poll this week that showed a large proportion of the American people -- 76 percent -- said they believe there's something wrong with our economy that tilts toward the wealthy at the expense of others. Do you consider something wrong with the structure of our economy in the income inequality that it produces? Is that something government should do something about? And if so, what?
HUNTSMAN: Let me just say that I want to be the president of the 99 percent. I also want to be the president of the 1 percent. This nation is divided, and it's painful, and it is unnatural for the most optimistic, blue-sky people this world has ever known. We are problem-solvers.
When I hear out the people who are part of the Wall Street protests, I say, thank goodness we have the ability to speak out. I might not agree with everything they say. I don't like the anti- capitalism messages. But I do agree that this country is never again going to bail out corporations. I do agree...
Thank you. I do agree that we have blown through trillions and trillions of dollars with nothing to show on the balance sheet but debt, and no uplift in our ability to compete, and no addressing our level of unemployment.