WHEN: Today, Wednesday, February 22, 2023
WHERE: CNBC's "Squawk Box"
Following is the unofficial transcript of a CNBC interview with former Vice President Mike Pence on CNBC's "Squawk Box" (M-F, 6AM-9AM ET) today, Wednesday, February 22nd. Following is a link to video on CNBC.com: https://www.cnbc.com/video/2023/02/22/mike-pence-were-looking-at-a-debt-crisis-over-the-next-25-years-thats-driven-by-entitlements.html.
All references must be sourced to CNBC.
JOE KERNEN: We're starting this hour with a special guest Mike Pence, former Vice President of the United States and you think about the what would be fair game to talk about and it's like this, but this is "Squawk Box" so we're like this. We got 20 minutes. We're not going to finish what I want to talk about but most of it, we're going to stay in our lane in terms of money, spending, inflation, recessions. That sound good?
MIKE PENCE: That's why we love "Squawk Box." Good to see you, Joe. Good to see you.
ANDREW ROSS SORKIN: Good to see you.
KERNEN: Thank you for coming in.
SORKIN: And no blazer? He's playing along with us.
KERNEN: Because we're gonna solve— it's a working breakfast. It's a working "Squawk" breakfast. The debt ceiling, front and center. Both sides seem to be entrenched. I understand both sides. I think during the Trump administration, Democrats voted for clean raises from time to time they say why not do that now? That's what the President wants, but I can see where Speaker McCarthy says when do we get a chance to really, you know, focus on these huge debt issues that we have. Now's the time to do it or we'll get another Omnibus bill in December that we can't control. Who's right and how does it get reconciled?
PENCE: Well, I mean, the Constitution requires that we maintain the full faith and credit of the United States and the Congress is going to figure that out. But I commend Speaker McCarthy for saying that we we ought to make a down payment on on fiscal discipline that in a very real sense, but the issue is spending. As I travel all across this country, families are hurting. Inflation ignited to a 40 year high after the Democrat Congress two years ago spent $1.9 trillion in unnecessary Covid spending, another another trillion nearly at the end of that democrat majority. So I'm glad to see the Republican majority saying we need to use this debt ceiling to start us back in the direction of fiscal discipline. But look, we all know where the real issue is in terms of long-term debt for the United States and that is that while I respect the speaker's commitment to take Social Security and Medicare off the table for the debt ceiling negotiations, we've got to put them on the table in the long term. And right now, President Biden's policy is insolvency. I mean, we're looking at a debt crisis in this country over the next 25 years that is driven by entitlements and nobody in Washington DC wants to talk about it. I've been going around the country. I'm going to continue to try and do my part for the American people.
SORKIN: Are you talking about entitlements? What would you do about entitlements?
PENCE: Well, I think first and foremost you have to explain to people what's going on. We got a $32 trillion national debt right now, Andrew, having a national debt the same size as our nation's economy is unsustainable. Last time that happened was right after World War II.
SORKIN: Well I don't disagree with you. I'm just curious what's on the table for you on entitlements. What's on the table?
PENCE: Well, I think it begins with education. It begins with having the American people understand that it doesn't stop at 32 trillion. I mean, when you look at the deficits that are projected over the next 30 years and Social Security and Medicare and other areas, it's about another $120 trillion. I mean, literally, I just had two granddaughters born two weeks ago in two days. Our family's incredibly blessed. Looking down to those little girls, I think of their 30th year. We could have $150 trillion in debt in this country. And if we wait to deal with it—
SORKIN: Would you mean Social Security, would you I mean, I think when you get down to the brass tacks, that's the complicated part of what is on the table in terms of—
KERNEN: You're going to have to do something but Jim Bullard just called it the third rail. How long has it been the third rail of American, it's always been the third rail. You've never seen two parties run for it more quickly than we just saw again. All President Biden has to say is they're going to do something with Social Security, Medicare, and then all of a sudden the Republicans get scared, oh, no, no, no, we never would. So that's not helping anyone and we're never going to address it. There's an election every two years.
PENCE: What you need is presidential leadership and the fact is that that President Biden is abdicating his opportunity to provide real leadership and say first, Andrew, and I'm not I'm not dodging at all. There's lots of good ideas to solve this. That are common sense that don't impact people at the point of the need that don't affect anybody that's gonna retire in the next 25 years. I mean, you could phase in just like, just like Ronald Reagan and Tip O'Neill did 50 years ago. They raised the retirement age to 67. They, they made Social Security solvent until 2009. The things that you could do in personal savings accounts in the long term, allowing younger Americans to get a higher rate of return which you all talk about the great American economy every day. But these are all ideas but the first job is to be straight, the second job is get everybody at the table.
SORKIN: The natural follow I think for either a critic or just anybody, sort of playing devil's advocate would say, you know, during the time that you were in office and President Trump was in office with you, this was not something that was either accomplished or even attempted. Why?
PENCE: Yeah, well, when we came into office, we've just gone through the slowest economic recovery since the Great Depression. Our first objective was to get the economy moving again and cutting taxes, rolling back regulation, unleashing American energy. It all worked. We negotiated the largest trade deal in American history in the US, Mexico, Canada agreement. So we got the economy moving again. Then history showed up. History showed up in the form of Covid. And but I want to stipulate to you Andrew, I don't think we did nearly enough. I think the next President of the United States has got to square with the American people and we've got to take decisive and visionary steps to put our—
KERNEN: I think we did 8 trillion in deficits in four years with Trump and then we did another 8 trillion in two years now. So there's enough blame to go around. This is the Wall Street Journal today.
PENCE: But—
KERNEN: Can I show you—
PENCE: Remember 5 trillion of that was Covid. I think it's one of the reasons—
KERNEN: I understand. For both, for both administrations.
PENCE: Budgets ultimately is because as I just said before, history shows up. You've got to have the financial foundations to—
KERNEN: Respond to this. Respond to this Mr. Vice President. This is "How the US Can Prevent a Debt Spiral" and this this struck me because it did sort of sum up that this is this is a bipartisan problem we have here. The U.S. is in this sorry state for three main reasons: Democrats spend money when they don't raise taxes; Republicans cut taxes when they don't cut spending," which you guys didn't. You cut taxes and you spent like like drunken sailors just like like Democrats almost correct?
PENCE: Well, look, we didn't cut spending at a significant level but revenue still went up Joe.
KERNEN: Okay.
PENCE: Revenues.
KERNEN: And then the next one, "The aging population exerts steady upward pressure on Social Security and Medicare." There's no way to get around these things, but neither party seems to hit, they're both feckless it seems like in addressing these things for the for the American people.
PENCE: Well, I think, look, use whatever terms you want to use. I mean, what we have is an establishment in Washington, DC that is walking away from this problem, but they're whistling past the graveyard. And we're gonna we're gonna drop that and I want to, I'm gonna put that number out to your viewers again because I don't think it's widely known. I mean, if we just stay on the trajectory we're on based on CBO, based on reasonable projections of revenues, spending and deficits, we could have $150 trillion national debt in 30 years, and at that point, every choice is bad. Every choice that the—
SORKIN: Oh I don't disagree with you. The question is, how do you do it?
KERNEN: And GDP, you can't grow—
PENCE: In 30 years, you either double payroll taxes—
KERNEN: Lose money on anything else.
PENCE: In taxation system, or cut benefits people that really need them. Now we could bring about common sense reforms that would never impact anybody at the point of the need, and it would would phase in the kind of changes that frankly, can I just say to you, you know, who had the best idea about social security reform?
KERNEN: No, who?
PENCE: Franklin Delano Roosevelt. You go back in that at the time that FDR signed Social Security into law, and you may not even know this, he said this will begin as a public program. He said then it will eventually become a public and private program, but eventually a good way to do a private annuity. He actually said that Social Security would eventually give way to a private annuity to personal savings accounts that we'd facilitate that for America. We've never done it. It's remained a public program funded by payroll taxes and the fact that we didn't introduce this idea back when when President Bush introduced it in 2005, I think was a profound missed opportunity because back then we had money in the trust fund, right, in ways that we don't now but we we it's still it's an idea, I believe, whose time will come and but, Andrew, I'm telling you, if we sit people down at the table, people of goodwill, you're straight with the American people, we can figure this thing out.
KERNEN: I want to go to one of your favorite—
SORKIN: What's that? I know where you're going. It's just three letters. Three letters is where he's going.
KERNEN: It does have three letters. You wrote, you weighed in on on ESG and some of the, you know, you tried, the best laid plans we know where good intentions lead, and they're leading us there in your view in terms of ESG.
PENCE: Well, we, it was a year ago spring I weighed in to the Wall Street Journal on this issue. We we picked up that that, you know, while while while you saw the battle with certain famous companies, particularly in Florida advancing political correctness, that actually this through this environmental social governance investing by the big firms here in Washington, we're going to wake up and and literally, these leftward policies would be being advanced in every corporate boardroom in America so we called them out. We called on states around the country to take steps to to to protect their public pension funds. Many states have done that, but this this is an incredibly important fight. It's one we're going to the airwaves in Arizona and in Montana with our policy—
SORKIN: What did you think of what DeSantis did though with Disney in Florida because there's sort of two ways to look at it. One is to say Disney spoke out on a political or social issue. But then there clearly was retribution politically against them. I think it's it's empirical what happened. He said as much when he did it. And so people talking about canceled culture. Some people say, well, you know, they're canceling on one side. The other side, well look, DeSantis used his political power to cancel them.
PENCE: Well, I would say to you two things. Number one is I fully supported Florida's initiative to protect kids and protect parental rights. I was just in Iowa last week where literally there's a school Linn-Mar community school will allow a student to get a gender transition plan without parental notification or approval. So I fully support what Florida did about protecting kids under the third grade, but I have concerns about the follow on. Look, Disney stepped into the fray they lost, but then the taxing authority. You know, that was that was beyond the scope of what I as a conservative limited government Republican would be prepared to do.
SORKIN: Interesting.
KERNEN: You at this point think, where do you place the blame for for oil prices being as high as they are. ESG had something to do with that, I think but a couple of years ago fracking companies stopped fracking because it wasn't economically feasible. The oil, the majors can't get workers right now because the supply chain issues there's a lot of things going on. But I guess the Biden administration and forces from ESG kind of would you say embolden Putin to be able to hold Europe hostage and and that probably had something to do with with him feeling, feeling like he could get away with this.
PENCE: But Joe, there's a lot of that question. I just, I would tell you first and foremost, the Biden administration remember about a year ago was blaming high gasoline prices at the pump on the war in Ukraine but gasoline prices had gone up 50% before the first shot was fired. Gasoline prices went up because of the Biden administration's war on energy. I was I was in New Mexico campaigning with a candidate for governor last year and they told me that literally in those two years, two wells had been approved as the Biden administration has been slow walking the permitting process, were literally off lining public lands—
KERNEN: They disagreed with that. They pushed back on that and said—
PENCE: I know they do, but I'm just talking about the reality on the ground. The American people know it, they feel it in and so I ask the same question about that. But also this ESG business of saying that funds are going to flow away from traditional fossil fuels, the investment in fossil fuels. What we saw happen in Exxon with the election of a board member, look, you know, you guys are the corporate experts, but I think corporations have a fiduciary duty to maximize profits under the law and anytime some other agenda comes into that, working Americans lose and ESG is impacted by gasoline prices as well.
SORKIN: How do you feel about in the Inflation Reduction Act obviously there's a huge subsidy for clean tech which you're seeing a lot of automobile makers take advantage of, you're seeing them build, hoping to build out some kind of electric infrastructure, is that a good thing? Is that a bad thing? By the way, some of the numbers suggest that it's gonna be so successful in certain ways that it's actually going to cost the government, you know, three or four times what was originally projected.
PENCE: Well, I look, number one, that second bill another nearly trillion dollars in spending was only pouring gasoline on the fire of inflation and the struggling economy and didn't have to happen I have to back up for one second. The 1.9 trillion that Congress passed on a party line vote was deeply disappointing to me because one of the things I was proud of during that pandemic was that everything we did in Congress was bipartisan. Everything. Helped the families, helped the businesses, rescue plan, everything that we did. And then the Democrats come into the majority, new administration comes in, first thing they do as a party line vote for $1.9 trillion. The second bill was just more of the same but advancing a climate agenda. What I worry about in that bill, frankly, is massive subsidies for electric cars. I mean 80% of the battery market in the world today is China in a very real sense as we continue through incentives and, and, and frankly through mandates that you're seeing in places like California, is we, it's it's the China Full Employment Act. And and I'm all for diversification of energy. I'm an all of the above energy guy. Electric vehicles great love to see domestic companies but let's have a battery. Let's have battery manufacturing here. Let's do innovation here. And not further subsidizing the largest and most authoritative nation in the world.
KERNEN: Andrew, are you okay if we take an exit ramp off our lane into 2024? And—
SORKIN: We should, we should talk about that.
KERNEN: Let's, number one, what happened in 2022. I mean, given the right way, right track wrong track. People thought that the Republicans could win 70 seats, something something a wrong turn at Albuquerque, something happened in 2022. Is it gonna happen again in 2024 and what do you attribute it to why the Republicans didn't do better given maybe some of the backdrop that most people saw—
PENCE: Well look, I, I was one of those people are hoping for a red wave.
KERNEN: What happened?
PENCE: And pockets or red wave came, Joe. They really—
KERNEN: You know, you know where I'm going.
PENCE: No I know exactly where you're going. I'm going to concede your point.
KERNEN: Some people say Former President Trump, we lost a couple of elections. Do you want him as the nominee in the Republican Party.
PENCE: Well, let me get to that in one second.
KERNEN: Or do you want yourself?
PENCE: I'll keep you posted.
KERNEN: Okay.
PENCE: Well look, I think when you look at the '22 election cycle, it's it's an affirmation that elections are about the future. I mean, our candidates who were focused on the issues affecting Americans today, and solutions for the future did very well governor. They really did, governors around the country you think actually think Florida you think they think Georgia Governor Brian Kemp. Our candidates that were focused on the past particularly on relitigating the last election did not do well, including in areas that we should have done very well.
KERNEN: Do you say we need someone else in 2024. You're on record saying that.
PENCE: I've said we, I think we're gonna have better choices.
KERNEN: Than former President Trump.
PENCE: I think we're gonna better choices.
SORKIN: So by the way, Vivek Ramaswamy, you probably follow him a little bit. He's a friend of yours.
KERNEN: But okay, Nikki Haley, Tim Scott, I mean Brian Kemp, who knows, obviously the elephant in the room, Governor DeSantis but you get enough of them then perhaps a former vice or the sorry, the former president can do what happened in 2016 and win with 30% 35%, because there's so many candidates.
PENCE: Yeah, but you're leaving somebody out of the equation there.
KERNEN: Mike Pence. I already said you.
PENCE: No not just Mike Pence.
KERNEN: Who else?
PENCE: The American people.
KERNEN: Yes.
PENCE: Look, I don't think anybody could have defeated Hillary Clinton other than Donald Trump in 2016 and I didn't realize that in the beginning. I endorsed Ted Cruz in the Indiana primary. But, but Republican voters were right, what we needed in that fight. And I just trust Republican voters as I've traveled around the country. I hear a great deal of appreciation for what the Trump Pence administration accomplished, the record that we generated, but I honestly hear people talking to me very regularly about wanting to get back to the policies, but wanting to return to the kind of politics that makes it possible for us to take on some of these long-term intractable problems and that means more civility, I think it means—
SORKIN: So what do you think of people like like Marjorie Taylor Green then, as members of this party, or were or Santos or people like that—
KERNEN: Or, or—
SORKIN: Hey I get to ask the question.
KERNEN: And I do too.
PENCE: It's a free country.
SORKIN: And you say, but but but there are there they're part of your party. Do you say this is a good thing for the party, a bad thing for the party?
PENCE: I think I think freedom of speech, a rousing debate in the Congress is all good. You can have people on every end of the spectrum, every level of credibility and but at the end of the day, what we need in this country is leadership, okay. And under under our Constitution, under our form of government ultimately, I mean Alexander Hamilton said, our constitution contemplates an energetic executive. I know what that looks like. I serve next to one.
SORKIN: But isn't the complicated part about leadership—
PENCE: We need an energetic executive, China is China is common economically. It is the greatest strategic challenge the United States of America faces we got to step up to that in a very real way and and, and that's how we, that's how we ensure our prosperity and peace in the future. This national debt issue Andrew, we talked about it we got to have leadership, these cultural issues, parental rights, respect for life, these are all things the American people need leadership on. and it's what we think about as a family about what role we could play, based on my experience in the Congress, my experience as a governor and as Vice President.