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Pence: We've Got To Undo Years Of Runaway Spending

The lame duck Congress goes back to "work" next week and the House GOP is getting ready for the gavel. We are learning more and more each day on what the Republicans plan to do in the 2011 Congress. But with a Democratic majority in the Senate and a President armed with a veto pen, can the GOP effectively execute their initiatives?

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Later this month, Representative Mike Pence (R-IN), the Chairman of the House Republican Conference, will be explaining in detail his plan on limited government and fiscal discipline at the Detroit Economic Club.

Pence recently announced he is stepping down as chairman of the conference, sparking the rumor that he might run for President in 2012 or Governor of Indiana. In the meantime, the race for Pence's chairman seat is heating up, with Representatives Michelle Bachmann, a Tea Party favorite, and Representative Jeb Hensarling, Chairman of the Republican Study Committee, being talked about as potential candidates. Pence addresses all these concerns and issues with me.

LL: Americans have spoken and are looking for the GOP to turn this country's economic situation around. Will the GOP be able to do that with a Democratic lead Senate and Democratic President?

MP: House Republicans are committed to lowering taxes, reducing the size of government, getting federal spending under control and repealing ObamaCare. Whether President Obama and congressional Democrats join us in this effort remains to be seen. In the meantime, I believe we should pursue whatever means necessary to accomplish these goals.

LL: We have a huge deficit—specifically where will you make the big cuts?

MP: A few examples, to start, are:

1. Cut discretionary spending levels to fiscal year 2008, saving $925 billion.

2. End the on-going taxpayer funded bailouts of Fannie Mae and Freddie Mac

3. Defund Planned Parenthood

4. Freeze Government hiring

5. Cut the federal travel budget

6. Eliminate subsidy to Corporation for Public Broadcasting.

LL: The Bush Tax Cuts are expiring this year. Do you think Congress should extend them?

MP: Higher taxes aren’t going to get anyone hired. With unemployment hovering near 10 percent, tax increases could not come at a worse possible time. Congressional Democrats put politics before prosperity, and the American people rejected such actions. Congress must not adjourn the 111th Congress without an up or down vote on extending the current tax rates for every American. Republicans will do everything possible to prevent these tax increases from going into effect.

LL: Many small businesses have said they will be greatly affected if the Bush Tax Cuts are not extended. What do you say to them?

MP: These tax hikes will adversely impact the 75 percent of small business owners that file taxes at individual rates—the same small business owners responsible for nearly two-thirds of private sector job creation.

The National Federation of Independent Business (NFIB) reported that optimism among small businesses, “is dismal, capital expenditures are at 35-year lows and small businesses are still cutting more jobs than they are adding.” The NFIB also said that Congress must act quickly to ensure no tax increases for business owners in January. The latest unemployment report should be a wake-up call to Democrats that we need to act swiftly to ensure that no American sees a tax increase.

LL: Should there be separate tax cuts specifically for small businesses?

MP: America’s small businesses are absolutely critical to the economic health of our nation and our potential for growth in the future. However, I think there is broad agreement that what is needed is not targeted, piecemeal changes to the tax code to benefit some specific constituency.

Rather, we need a wholesale reform of our overly complex tax regime with a much simpler, more efficient tax structure put in place—one that treats all individuals and business owners fairly with low, predictable rates on income (corporate or personal), capital gains, and dividends. I believe that this kind of tax reform would empower more individuals, particularly small business owners, to prosper economically and contribute to the vitality of our great nation.

LL: Will both sides come to the middle and work together in the next Congress?

MP: I don’t believe the American people care as much about what we do in the next Congress as much as what we undo. That means undoing the years of runaway federal spending and growth of government under both political parties. In addition, I believe the last Republican Congress didn’t suffer from too little compromise, it suffered from too much. Republicans lost their majority because of too much compromise on spending, deficits and debt. If Democrats will work to reduce the size of government, spending and repeal ObamaCare, then we can work together.

LL: Is the U.S. economy fairing worse under the leadership of President Obama?

MP: Since the Democrats’ stimulus was approved in February 2009, the nation’s unemployment rate reached a 27-year high of 10.2 percent. The unemployment has been above 9 percent for 18 consecutive months and above 9.5 percent for 15 consecutive months. Federal spending is out of control and the American people know it.

According to the Congressional Budget Office, this year’s annual deficit will reach $1.3 trillion, with another trillion of red ink added in 2011, making three straight years of annual deficits that surpass $1 trillion. Washington Democrats have spent more than $6 trillion since President Obama took office. The total amount of spending by the Obama Administration is higher than the first 20 months of the administrations of presidents Clinton and Bush (43) combined.

LL: How would you characterize the U.S. Economy?

MP: The American people are continuing to struggle in this difficult economy. Unemployment is at 9.6 percent nationally. The percentage of Americans living in poverty rose to 14.3 percent, the highest percentage since 1994. Nearly 44 million people, or 1 in 7, were in poverty last year.

Additionally, 50 million Americans were uninsured in 2009, and the percentage of people with private insurance was the lowest since the government began keeping records in 1987. (Census Dept, 9-16-10)

LL: Civilian federal employees continue to get raises while millions of Americans are either out of work, working two to three jobs to make ends meet or working without having gotten a raise in years. Will the GOP put a stop to that?

MP: Thousands of public services employees work hard for the government every day, and we appreciate their dedication and service. However, like families, small businesses, and family farms across America, the public sector needs to do more with less. Republicans should impose a net hiring freeze on non-security federal employees and ensure that the public sector no longer grows at the expense of the private sector.

Government has grown too much in the last few years and if that growth is not checked, it will only add fuel to the fire of our fiscal problems, which are already threatening American prosperity.

LL: Entitlement Reform is greatly needed in this country. What will the GOP do to make sure the blank check is ripped up in Washington?

MP: Republicans are committed to changing the fiscal direction of Washington, D.C., and to setting our national government on a pathway toward a balanced budget. While the president has called for a spending freeze, we think we ought to go back to pre-stimulus, pre-bailout levels and freeze there. There's been an 84 percent increase in domestic spending since this administration took office. For Americans under the age of 40, we have to put everything on the table in the areas of Medicare, Medicaid and Social Security. We must reform these entitlement programs because they are threatening the future for the next generations of Americans.

LL: You are stepping out onto the National stage when you address the Detroit Economic Council on November 29th. What will you be highlighting?

MP: With the economy struggling and unemployment hovering near ten percent, I will set forth my vision for economic growth, prosperity, and job creation with a plan focused on a renewal of the free market, smaller government, tax relief and reform, spending restraint, increased trade and more.

LL: Will you run for President?

MP: We've been very humbled by the encouragement we've received back in Indiana and around the country. We're intent on taking the coming weeks to really prayerfully consider that, to wait on the Lord, to seek counsel. After the first of the year, we'll make a decision.

LL: What is your message to Wall Street?

MP: As I’ve said before, the freedom to succeed must include the freedom to fail, and I truly believe that no institution should be too-big-to-fail.

I recognize the critical importance that the financial industry plays in our system of free market capitalism—banks and the investment industry provide the lifeblood of capital that allow entrepreneurs to take risks and create jobs via business loans or to restructure inefficient companies and create new markets via mergers and acquisitions. But there remains an important role for government in this industry to ensure that rules are fairly enforced and that consumers are properly protected.

It is the job of the government to be vigilant in enforcing the laws and to execute smart regulation that does not stifle innovation and inhibit market discipline. Only by moving away from the uncertainty and permanent bailouts of Dodd-Frank, and restoring balance to the relationship between Wall Street and Main Street, will we be able to achieve fairness and efficiency in the financial sector that is so vital to our economic growth.

LL: Representative Bachmann tossing her hat into the ring for the House Republican Conference Chairmanship is adding a bit of drama to the race. Minority Whip Eric Cantor and yourself are endorsing Jeb Hensarling. What do you think about Bachmann's run for the job?

MP: I respect Michele Bachmann greatly and believe she brings a wealth of valuable experience to our conference.

LL: How will the Tea Party influence the GOP party?

MP: The Tea Party movement and the people who have attended town hall meetings and rallies over the last year-and-a-half have sent a deafening message to Washington, D.C. that enough is enough. They want to see us get back to the practice of fiscal responsibility, personal responsibility and government reform.

They want to see us get government spending under control and get this economy moving again, and they want to see us do all of that in a way that’s grounded in the freedom and limited government traditions of this country. We owe it to the American people that are standing up and saying “we can do better” to give them better, and in the long-term the Tea Party will help to make sure that happens.

LL: Will any Tea Party-backed candidates be in any leadership positions in committees?

MP: Those decisions are left to the House Republican Conference’s Steering Committee.

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A Senior Talent Producer at CNBC, and author of "Thriving in the New Economy:Lessons from Today's Top Business Minds."