Money & Politics with Larry Kudlow

Ron Paul: Forget Tax Hikes, Trigger $1.2 Trillion in Spending Cuts

Republican congressional leaders trying to hash out a deficit-cutting dealare better off letting the $1.2 trillion spending cut trigger occur than agreeing to raise taxes, GOP presidential candidate Ron Paul told Larry Kudlow Wednesday.

Congressman Ron Paul (R-TX)
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“It would be better than doing what it looks like they might do—raise taxes—and pretend that they’re going to get more cuts,” he said. “That’s not going to happen, that’s been tried before and the cuts never come about.”

The 12-member bipartisan “super committee” has until November 23 to come up with a plan that would cut $1.2 trillion over 10 years. If Washington fails to act, automatic spending cuts totalling $1.2 trillion would kick in, falling equally on military and domestic programs.

But even the automatic across-the-board spending cuts won't be enough, Paul said, because it’s over a long period of time and doesn’t really address the major problems.

The Texas Congressman said if he’s elected president, he would make about the same amount of spending cuts in just one year’s time.

”I have proposed … that we ought to cut $1 trillion out of the first year’s budget in order to tell the world and the financial markets that we’re serious and we’re not going to just drive ourselves into this sovereign debt crisis that the rest of the world is involved in already,” he said.

Those cuts are part of his broader plan on reforming the government.

“We need to dramatically change our approach to government,” he said. “Not so much that you get rid of waste and fraud, which I think we should, [but] it’s bigger than that. It’s the role of government.”

His message appears to be catching on with Iowans, who hold their presidential caucuses January 3. A new Bloomberg poll shows Paul in a four-way dead heat with Herman Cain, Mitt Romney and Newt Gingrich.

“I’m very pleased … but I think I’m very cautious also,” he said. “One thing I do feel good about is when we do get supporters, they are pretty solid … and they’ll stick with me and that to me is encouraging.”

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