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CNBC EXCLUSIVE: CNBC TRANSCRIPT: CNBC’S LARRY KUDLOW SPEAKS WITH SPEAKER OF THE HOUSE JOHN BOEHNER TONIGHT ON CNBC’S “THE KUDLOW REPORT”

Jennifer Dauble
Thursday, 7 Jun 2012 | 3:48 PM ET

WHEN: TONIGHT, THURSDAY, JUNE 7TH AT 7PM ET

WHERE: CNBC’S “THE KUDLOW REPORT

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Speaker of the House John Boehner tonight on CNBC’s “The Kudlow Report” at 7PM ET. All references must be sourced to CNBC.

LARRY KUDLOW, host: Speaker John Boehner, welcome back to THE KUDLOW REPORT, sir. Thank you.

Representative JOHN BOEHNER: Good to be with you.

KUDLOW: All right. Let me just jump right in. In fact, Ben Bernanke talked about what's Congress going to do on fiscal policy today in his testimony. Everybody wants to know about the fiscal cliff, the tax cliff, are we going to have a recession? You were one of the first, maybe the first, to say, `Let's extend the tax cuts before the election and the chaos of the lame duck.' What can you tell us now? Where do you stand?

Rep. BOEHNER: Well, the House is going to act. You know, the president's policies have failed. As a matter of fact, his policies have made things worse. Instead of working with Republicans to fix our problems, you know, he's been out campaigning every day. But the House has already passed 30 bills; today, it'll be 31 bills. Over in the United States Senate, they're sitting there. Maybe the president can call Harry Reid and say, `Hey, why don't you start looking at some of these bills.' They all passed with bipartisan support in the House. Next month, we will move a bill to extend all of the current tax rates for a year.

KUDLOW: And that's going to be the income tax?

Rep. BOEHNER: Income tax...

KUDLOW: The payroll tax cut for a year?

Rep. BOEHNER: No. Income tax rates, all of them go up. We're going to continue all of those. The capital gains rate of 15 percent, tax on dividends of 15 percent, continue the fix for the alternative minimum tax, and all of the '01 and '03 tax cuts.

KUDLOW: Estate tax? Will you do anything with the estate tax?

Rep. BOEHNER: We'll extend the current, the current estate tax plan for one year. And we will also work to outline our principles for reforming the tax code. The reason this isn't permanent is that--and only for a year--is that we really do want to fix our tax code, both the corporate code and the personal code, bring down tax rates, get rid of all the excess deductions and credits and all the carve-outs and nonsense that we have in the code today.

KUDLOW: So you'll have a tax reform outline as part of this legislation?

Rep. BOEHNER: An outline. Because we believe it's the only way we're going to achieve real economic growth is we've got to fix our tax plan. And we've got to stop the regulatory nonsense coming out of Washington, DC.

KUDLOW: All right. So let's look at this. I guess you got Bill Clinton on your side, I guess, at least that was his first instinct. And I think he's a pretty sly fox.

Rep. BOEHNER: He was before it before he was against it.

KUDLOW: That is true, and I think...

Rep. BOEHNER: But whether it's Larry Summers, whether it's Kent Conrad this morning, Peter Orszag, there's a chorus of Democrats now agreeing that we need to extend all of these current tax rates because of the economic uncertainty. Now, listen, I used to be a small employer. And when there was this much uncertainty out there, I sat on my hands. I put the cash in the bank.

KUDLOW: Yeah. And business may have stopped hiring because of this.

Rep. BOEHNER: They may...

KUDLOW: It's very possible. So let me just ask you now, you've got Clinton and you've got Summers and you've got Peter Orszag and you have Kent Conrad. You've got all these leading Democrats.

Rep. BOEHNER: I wouldn't be surprised if the president doesn't come out and...

KUDLOW: But you don't have the president yet.

Rep. BOEHNER: I wouldn't be surprised.

KUDLOW: That's where I'm going.

Rep. BOEHNER: But I wouldn't be surprised if the president doesn't come out and say...

KUDLOW: But yesterday, he...

Rep. BOEHNER: ...`In spite of everything I said, we need to extend these.'

KUDLOW: But he issued a clear statement yesterday. He said only the middle class tax cuts, not the upper end tax cuts. He's still bashing rich people. He said he won't go there. Speaker Boehner, what are you going to do about that?

Rep. BOEHNER: Listen, the president's policies have failed. As a result, he's turned to the politics of envy and divide. Listen, the American people are going to vote with their wallets. The election's going to be a referendum on the president's economic policies. And--but he has to make the election about everything other than that because he can't run on his record. Listen, we've already moved a bill to replace the sequester that's supposed to go into effect on January the 2nd.

KUDLOW: The automatic cuts.

Rep. BOEHNER: The automatic cuts...

KUDLOW: Right.

Rep. BOEHNER: ...because of the failure of the super committee. We've done the responsible thing to replace those with cuts and mandatory spending. We're going to move the extension of all the current tax rates in July to try and get as much of this done before the election is possible. But, you know, we've got a crisis in Europe. They're in a deep recession. It's affecting our economic growth. And I suspect the problems in Europe get bigger before they get smaller.

KUDLOW: But the end...

Rep. BOEHNER: And as a result, there ought to be a conversation and a negotiation now...

KUDLOW: Right.

Rep. BOEHNER: ...to deal with all of these issues. If we're truly serious about helping small businesses and helping investors create more jobs in our economy, we need to take the uncertainty away because, in addition to all of that, we've got another increase in the debt ceiling staring us in the face at the end of the year.

KUDLOW: So at the end of the day with all these issues, aren't you going to have to sit down with President Obama? And what a lot of people want to know is, A, when might that happen; and, B, is it going to be a repeat of what happened last year where all the chaos and uncertainty--you had a deal, you didn't have a deal, you had a deal, you didn't have a deal--hurt the stock market, hurt the economy? You going to sit down with him? How's this going to work? Is there a compromise in the works?

Rep. BOEHNER: There's nothing in the works, nothing. President's been campaigning full-time. He's not around to sit down and have a conversation with, a serious conversation. And they've shown no inkling of attempting to address this before the election.

KUDLOW: No inkling at all? It didn't make it last year. That great New York Times magazine story, I went through it, and I guess there was a tax hike at the end that stopped it out.

Rep. BOEHNER: The president lost his courage. We had an agreement. Eric Cantor and I were in the Oval Office with the president of the United States. There was an agreement. And two days later, the president comes along and wants a $400 billion tax hike. I said, `Mr. President, you know it's not going to happen. We've talked for months. You know, I'm not going to put another dime on the table. I've already put revenue on the table. But only if you're willing to have real reform of our entitlement programs.' And he walked away from it. It's sad, really sad.

KUDLOW: The best-selling book on The New York Times book list today, last two weeks, is called "The Amateur," and it's about Barack Obama. Do you think President Obama is an amateur? When it comes to compromising, to leadership, to making that deal, is he an amateur?

Rep. BOEHNER: Well, I don't want to--I don't want to use derisive terms to talk about the president, but here's the challenge. The president's a nice enough guy, just never done anything. You know, he's never created a job, never run a business. You know, he was, you know, a professor and a community organizer. And I think that's why his economic policies have not worked. They've not attempted to work with us to change their economic policies. That's why the election in November's going to be a referendum on his handling of the economy.

KUDLOW: Let me--I interviewed yesterday former Florida Governor Jeb Bush, OK, and he's talking about how both sides are going to have to make a compromise of some sort. Now, he said--he was asked a question in the--with the House Budget Committee. He said, `Would you take 10-to-1? Would you take $10 of spending cuts for $1 revenue increase,' and he said, yes, he would. And I want to raise a second point. I've heard Governor Chris Christie a couple of times say that, look, politics is about compromise. You can compromise without giving up your principles. That's called leadership. I want to ask you, would you prepared to compromise in a deal with President Obama?

Rep. BOEHNER: I was last summer willing to find common ground. I don't think compromise is the right word.

KUDLOW: What is the right word?

Rep. BOEHNER: I don't--I don't--finding common ground. I didn't expect the president to walk away from his principles, and I don't think the president expected me to walk away from my principles. But having said that, the American people expect us to find enough common ground to address the problems in our country. And there was--there was a lot of common ground that was being discussed. But I do believe it's important for leaders to look for that common ground and to move and to act. What we need here in Washington are more leaders with more courage, courage of their--and conviction to do what the American people want. If you look at what happened in Wisconsin the other night...

KUDLOW: Right.

Rep. BOEHNER: ...Scott Walker, the new governor, took bold action to try to do what the people in his state needed and was rewarded for his courage. And I've always believed that while there's some really tough things that we have to do, that if we do them and we do them correctly, that the American people will reward us for our courage. And there is no--I told the president, `There's no place I won't go, Mr. President, to work with you if I think it's in the best interests of our country.' And I will.

KUDLOW: You see some polls, 38 percent of union households voted for Scott Walker, 38 percent of union households. Do you think the Reagan blue-collar Democrats who may be just as worried about fiscal bankruptcy and social values as anybody, do you think they're coming back to the Republican Party?

Rep. BOEHNER: I certainly think they're available, yeah. The American people will vote with their wallets. And whether it's a union household or a non-union household, they're getting squeezed. Gasoline prices higher, grocery prices higher, health care costs higher, and their incomes are flat, if they have a job.

KUDLOW: Listen, what does Mitt Romney have to do to get those blue-collar households? That could be the swing factor in this election.

Rep. BOEHNER: I think he's got to continue to talk about his plan to fix our economy. It's--it is the issue and he needs to talk about it all day long.

KUDLOW: Is he specific enough so far, to your satisfaction?

Rep. BOEHNER: I think so.

KUDLOW: What he said, he gave an interview to Time magazine, and he was talking about this whole year end extending the tax cuts. Now, Romney agreed with you. He basically said, `Let's just have an extension of everything but not go into a grand design or grand bargain, not go through entitlement reform and tax reform until he is sworn in. And so you may have a new Senate as well. So, do you agree with that? In other words, is extension enough or are you going to go to the White House and negotiate something that actually Mitt Romney might think is not a good idea?

Rep. BOEHNER: Well, extending the tax rates is--it provides certainty for small business people across the country. When it comes to the debt, the deficit and the debt limit and the sequester, those conversations, the sooner we deal with this the better. But again, I don't see any inclination on the part of the White House to do that. And it's clear that the election's going

to have some impact on this because, more than likely, it will not be done before the election. And then depending upon the election, we're going to have to make a decision...

KUDLOW: So we're going for chaos. We're going for chaos. Markets are going to look at chaos, business is going to stay frozen.

Rep. BOEHNER: Larry, it's the debt and Washington's unwillingness to deal with our spending problems.

KUDLOW: But it's also the tax rates.

Rep. BOEHNER: It is.

KUDLOW: You're a supply sider, you know that.

Rep. BOEHNER: (Unintelligible)

KUDLOW: If businesses see taxes going up, if they fear it, if there's all this uncertainty, the unemployment rate probably going to go up. You'll be accused of wanting to have a bad economy. The White House will say that.

Rep. BOEHNER: I didn't go down to Pete Peterson's debt summit and give a very detailed speech about the challenges that we face because I want to root for a bad economy.

KUDLOW: Mm-hmm.

Rep. BOEHNER: What I'm trying to do is prod Washington to do the big things that we need to do.

KUDLOW: All right, last one. It's a bit of a retrospective. You and I had breakfast with some people in New York just before the 2010 election. And I asked you what your goals were, and you sort of laughed. But you did--it was interesting--you said, `Stop the bad stuff. That's really the first thing, stop the bad stuff, on taxes, on spending, on regulation and other things.' How are you doing? Do you think, two years later, you've stopped the bad stuff?

Rep. BOEHNER: Well, clearly, you know, the president got everything he wanted from Democrats in his first two years in office, whether it was Obamacare, cap and trade, $800 billion stimulus bill and hordes of other spending. All of that nonsense has stopped. And the House has listened to the American people, we've focused on the economy and jobs for a year and a half; and, legislatively, we've stopped all the bad stuff.

KUDLOW: Mm-hmm.

Rep. BOEHNER: Obviously, the administration and all of the agencies of government are--continue to be in overdrive implementing Obamacare and the Dodd-Frank financial services rules and the EPA being out of control. It's going to take an election to solve that problem.

KUDLOW: But you're not optimistic about getting a tax extension deal before the election. So we're going to be in for some rough, some rough sledding.

Rep. BOEHNER: Could be. But the House is going to do its job. I can't control what the Senate does or can't control what the White House does. I would hope that they would understand that if they're serious about economic growth and putting the American people back to work, extending all of the current tax rates would be the first big step in the right direction.

KUDLOW: And if the president calls you, do you answer the phone, go down there and talk some more?

Rep. BOEHNER: Absolutely! Absolutely!

KUDLOW: And for a one-year extension for the taxes?

Rep. BOEHNER: Yes, sir.

KUDLOW: All right. Speaker John Boehner, thank you very much. We appreciate it.

Rep. BOEHNER: Thank you.
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