Mitt Romney
Mitt Romney

When: Tonight, Tuesday, April 12th at 7PM ET

Where: CNBC’s “The Kudlow Report

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with former Massachusetts Governor Mitt Romney tonight on “The Kudlow Report” at 7pm ET. All references must be sourced to CNBC.

LARRY KUDLOW, host: Here now for a first on CNBC, exclusive interview, is the presumed front-runner for the 2012 Republican nomination, former Massachusetts governor Mitt Romney. Governor Romney, welcome back to the show.

Mr. MITT ROMNEY: Thanks, Larry. Good to be with you.

KUDLOW: All right. Thank you very much. Now, in your exploratory announcement yesterday--and we're very grateful you came on today, incidentally--you were very critical of team Obama on jobs and the economy, and in particular you said they have no private sector experience, nobody there has worked at a business. OK. You were a CEO, you've run a whole bunch of ventures in your time. Let me ask you this. If they're getting it wrong and you were in there, whose head should roll? Right now, who would you fire?

Is it Bernanke for inflating gasoline prices; is it Tim Geithner for no business tax cuts; is it Lisa Jackson, the head of the EPA, who's stopping the production of oil and gas? Whose head would roll if Mitt Romney were running the White House now?

Mr. ROMNEY: President Barack Obama's head would roll. The--it starts at the top. It starts at the top. He's chosen people around him who he's comfortable with. He's got a new--Daley, and I'm sure Mr. Daley is providing some perspective from the private sector. But overwhelmingly, his people come from academics and from politics. He doesn't--he doesn't have the confidence in the private sector people that you need to give him the help on the economy that he needs. Look, when it comes to the economy, the president has been incompetent. He just hasn't done what is necessary to get Americans back to work. You've got roughly 20 million Americans who stopped looking for jobs or can't find work, and that's inexcusable in a nation that's as productive and innovative as this nation.

KUDLOW: All right. Very good response, OK, very clever, and I can't say I didn't see that coming. But I want to go then, what kind of job is Ben Bernanke doing right now, the guy that's depreciating the dollar, we're seeing this huge inflation of energy prices, including gasoline prices at the pump. What do you think of Ben Bernanke?

Mr. ROMNEY: Well, you know, I think Ben Bernanke is a student of monetary policy. He's doing as good a job as he thinks he can do in the--in the Federal Reserve. But, look, I'm not going to spend my time going after Ben Bernanke. I'm not going to take my effort and focus on the Federal Reserve. I'm going to focus my effort on the administration.

KUDLOW: Yeah, but the falling dollar is absolutely crucial to many of the things that ail us.

Mr. ROMNEY: No, no...

KUDLOW: You know, the consumer price index is jumping.

Mr. ROMNEY: No question about it.

KUDLOW: People are furious at the rise of gasoline.

Mr. ROMNEY: No question about it.

KUDLOW: It's not all Bernanke, but a lot of it's Bernanke.

Mr. ROMNEY: You're seeing enormous squeeze for people...

KUDLOW: Right.

Mr. ROMNEY: the middle class of Americans--of America, you're seeing higher and higher commodity prices, from gasoline to food to commodities of all kinds. At the same time, they're seeing no increase in their wages. And the reason they're not seeing an increase in their wages is because America is not as competitive as we need to be globally. And that's the responsibility of the president, to put America back to work, to make this the most attractive place in the world for enterprise to grow and to thrive and to invest. Sure, you know, I'm not wild about seeing the dollar getting weaker and weaker. A weak dollar is not the answer to growing America's economy.

KUDLOW: Yeah. What about this gal running the EPA, Lisa Jackson? Now, we need to drill, drill, drill, don't we? Oil prices fell a little bit today, but the fact is they're over $100. Gasoline prices, we found a couple gas pumps last night, $5 a gallon. Is the EPA part of the problem here?

Mr. ROMNEY: Well, the administration's policy is to look for some answer to provide energy for America other than the answers that we have right before us. Unfortunately--or fortunately, as the case may be--carbon is the source of energy that drives our automobiles and a lot of our energy needs.


Mr. ROMNEY: And we simply--even though I love solar and love wind, like most people do, I like the renewable sources, they alone are not going to get America energy independent. We spend almost a half a trillion dollars a year buying energy from other people. That's money that should be invested in our own economy. So yeah, should we drill? Sure. Should we also be using our natural gas resources? We just had this extraordinary gift given to us by finding technology that frees up about 100 years of natural gas. Let's use the resources we have and use those resources at a time when we're developing some sustainable sources of energy that can help us further down the road.

KUDLOW: All right. Speaking of jobs and the economy, though, staying on that, look it, how in the world--I never understood this--you wrote an op-ed in the USA Today, December 13th last year. You opposed the bipartisan deal to renew and extend the Bush tax cuts, 80 percent of which would have gone to middle-class families. So many people, including myself, felt if those tax rates went up we'd a had a double-dip recession. And since the tax rates were renewed, the unemployment rate fell. Now, why did you oppose the lower tax rates?

Mr. ROMNEY: I wanted to make them permanent. I made it very clear in the--in the op-ed piece I wrote, I said, look, we just elected a Republican Congress. I don't just want a two-year deal that this was. As Charles Krauthammer said, that was--I think he called it the swindle of the year. They got two years of extension. These tax policies should be made permanent. And they're...

KUDLOW: But what if they'd gone on for two years?

Mr. ROMNEY: Well, I...

KUDLOW: What if they'd gone on for two years?

Mr. ROMNEY: I don't want them to go on for two years.

KUDLOW: Eighty percent of the people, middle class...

Mr. ROMNEY: Hey, Larry, Larry, between--Larry...

KUDLOW: that tax cut went to the middle class.

Mr. ROMNEY: Larry...

KUDLOW: Governor, you sent all the wrong statement on tax policy.

Mr. ROMNEY: It might--no, no, no, no, no. If my choice were two years or nothing, I'd rather have two years.

KUDLOW: But wasn't that the choice?

Mr. ROMNEY: But that wasn't our choice.

KUDLOW: No. There was a third option.

Mr. ROMNEY: The choice--well, of course there was. We just elected a Republican Congress, and my view was go in and fight for a permanent tax reduction because employers are investing in the future, that are deciding where to build a plant, where to add a facility. They don't just look at tax policy, they look at five and 10 years of tax policy. We needed permanent policies to encourage investment in this country so we can get more jobs.

KUDLOW: All right.

Mr. ROMNEY: The right answer was a permanent tax reduction, not a temporary one.

KUDLOW: Well, sometimes the good should never be the enemy of the perfect. I mean...

Mr. ROMNEY: Well...

KUDLOW: ...if you were president and you had to make a deal, you could be president but you might have a divided Congress. You might have to compromise, sir. Compromising for lower tax rates seemed like the right idea to a lot of us.

Mr. ROMNEY: You know, I'm glad you think so. My view was that we were in a stronger position--we were in a stronger position than was suggested by that deal. My view was make it a permanent reduction as opposed to a two-year deal...

KUDLOW: All right.

Mr. ROMNEY: ...which gives the president a stimulus, which is like throwing a little gasoline on a fire. I want to instead put some logs in the fire, long-term investment in American productivity and jobs.

KUDLOW: All right. Where are you on tax policy? Let me ask you this generic one.

Mr. ROMNEY: Yeah.

KUDLOW: Do you have a Reaganesque pro-growth message? Lower tax rate reform, spending limitations, regulatory limitations and the aforementioned sound money? Do you have a real growth agenda, get this economy going at 4, 5 percent a year after it's been in the doldrums for, really, over 10 years?

Mr. ROMNEY: Larry, I spent my whole life in the private sector, 25 years in the private sector. I understand that when government takes more money out of the hands of people, it makes it more difficult for them to buy things. If they can't buy things, the economy doesn't grow. If the economy doesn't grow, we don't put Americans to work. The right answer for American growth is exactly as you describe: try and keep our tax rates as low as possible; put a cap on federal spending; make sure that the private sector is able to invest in the--in the future, building new facilities, hiring more people, put folks back to work. That's...

KUDLOW: Cap on federal spending? Let's just pick that up.

Mr. ROMNEY: Pardon?

KUDLOW: Twenty percent of GDP, cap on federal spending or?

Mr. ROMNEY: Well, historically it's been 18.8 percent has been what the federal government has taken.

KUDLOW: Mm-hmm.

Mr. ROMNEY: That'd be the right cap. But if it has to be a little higher, as you say, comprising, that's something--or excuse me, compromising, that's something you have to consider. But I would cap the amount of federal spending and the amount of federal taxation. You don't do that, and you're going to find the liberals taking more and more of the American dollar and then--and spending in things they believe in, and that will slow down growth and cause America to have the same kind of high unemployment that you've seen in Europe.

KUDLOW: Let's knock out the others. First of all, flat tax reform, Art Laffer, Dick Armey, Steve Forbes and so forth, get those top rates down, get rid of the loopholes. That is on the table in Washington. Are you for flat tax reform?

Mr. ROMNEY: Well, I'd love to see much flatter tax rates. I'd like to see us get rid of the special breaks. But one thing I can also say is I don't--I'm not looking for a way to take the top 1 percent of earners and have them pay a smaller share of the total burden. I want to make sure that the reduction is focused on the middle class. And I also want to make sure that every reduction we put in place creates the incentive for individuals to invest in the future, to build new jobs, to get good education, to go back to work.

KUDLOW: But would you--some people think President Obama tomorrow night is going to suggest that we go back to the pre-Bush tax rates on well-to-do people and take away deductions and credits and so forth. Are you for that? That's a revenue raiser.

Mr. ROMNEY: Well, I haven't seen what his proposal is. But raising tax rates on sub S corporations...

KUDLOW: Mm-hmm.

Mr. ROMNEY: not a good idea.

KUDLOW: The small businesses.

Mr. ROMNEY: On small business.

KUDLOW: Right.

Mr. ROMNEY: Sub S corporations are where--are companies that are taxed at the individual rate. Those small businesses are where the great majority of new jobs are created in America. Right now, you've got a president focused on taxing people. The real issue is to say how do you get people back to work.


Mr. ROMNEY: The American people I talk to don't spend every moment thinking, `How can I tax my neighbor more than they're being taxed?' They say, `How can I get a good job? How can my kids get good jobs? How can seniors have a confidence in their future when they know that Social Security, Medicare and Medicaid are bankrupt?' So the focus here is don't raise taxes, increase growth, and do the things necessary to get the economy running again.

KUDLOW: Let's do the--trade and competitiveness is a big issue. I want to ask you, is it time to get tough with China? These guys steal our technology, they pirate our property rights, they counterfeit our goods and services, they have these joint ventures where they have to have a majority of the ownership of the company to do business in China. Is it time to really go after China and get tough? They're not fair and they're not reciprocal free trade.

Mr. ROMNEY: If someone isn't fair then we shouldn't treat them as if they are fair. We enter into agreements with other nations, oftentimes, I think, out of a desire to show what nice people we are as opposed to saying...

KUDLOW: What would you do? What would you do with China? It's a big topic right now.

Mr. ROMNEY: Well, you know, last time when I ran for office--and I continue to think this is a good idea--I proposed that we put in place a higher level of free trade organization than even the WTO...


Mr. ROMNEY: ...and that America and our friends around the world say, you know what, if you want to be part of this extraordinarily free trade agreement that we have, you have to agree to protect our intellectual property. You have to agree to let your currency float in market rates. You can't do the special deals that are being done by the Chinese to protect their economy. We have to say, if you want to have real trade with America and with our friends around the world, you need to abide by a higher standard.

KUDLOW: All right. Let me go on. Everybody talks about Romneycare and Obamacare, as you know. In fact, I guess today there's birthday parties going up among Democrats for the anniversary of Romneycare back in 2006. Governor Pawlenty, on this show and elsewhere, has said his support of cap and trade years ago was a mistake. Are you going to, in this campaign, acknowledge that Romneycare in Massachusetts was a mistake?

Mr. ROMNEY: Well, it wasn't perfect. The nature of all experiments, as it was, is that you have things that worked well and things that didn't work well, and that's true of what we did in Massachusetts. But I'm also going to recognize that that's the nature of our--of our free society, in a constitutional society, which is federalist, which says, look, let states experiment, find out what works and what doesn't, take the things that are good and build on them.

KUDLOW: Did the mandate work, Governor? Because that's the big sticking point. It's also the subject of the various court protests going on right now, which may overturn Obamacare.

Mr. ROMNEY: Well, we--what...

KUDLOW: The mandate, was that your biggest mistake in this?

Mr. ROMNEY: One thing I learned--one thing I learned is this, which is that you don't take ideas from a state and try and impose them on the whole nation. Our nation is too different, too diverse to say that what works in Massachusetts is somehow going to be grabbed by the federal government, usurping the power of states and imposing a one-size-fits-all plan on the nation. That will not work. And I'm very happy that the Democrats are celebrating the fact that we put in place a health care proposal in Massachusetts, an experiment. And I have one question for them. Why didn't any one of them or the president ever call me and say, `What worked? What didn't?'

KUDLOW: The president...

Mr. ROMNEY: In your experiment--yeah.

KUDLOW: The president said you were his muse for Obamacare.

Mr. ROMNEY: Yeah, yeah. Great. Well, so why didn't he pick up the phone?

KUDLOW: Do you want to be his muse?

Mr. ROMNEY: Why didn't he pick up the phone?

KUDLOW: I never talk--I don't talk to him.

Mr. ROMNEY: Not one Democrat called me and said, OK, `Of what you did in Massachusetts, what would you do again? What would you differently? What things worked? What things didn't work?'


Mr. ROMNEY: And I would have told them this, I'd have said, `What you're putting in place at the nation is not only unconstitutional, it's bad law, it will not work. And even if it were perfect, which it's not, it's expensive.

KUDLOW: Right.

Mr. ROMNEY: And the federal government cannot afford more spending.

KUDLOW: So if elected--and will you campaign, if elected, on repealing Obamacare...?

Mr. ROMNEY: Absolutely, absolutely.

KUDLOW: That is your position?

Mr. ROMNEY: I have said on day one, if I were elected president of the United States, on day one I will direct the secretary of health and human services to grant a waiver to each one of all the 50 states from Obamacare so that we can go back to the constitutional notion that states...

KUDLOW: But that isn't exactly repeal, is it?

Mr. ROMNEY: Oh, that's step one. Step one is to do that because it takes usually some months to get a repeal in place.

KUDLOW: Mm-hmm.

Mr. ROMNEY: Then you put in place a repeal. And then we'll put in place a bill that does the things that...does.

KUDLOW: Are you saying a waiver comes first? You can do that right away. You can do that right away.

Mr. ROMNEY: The waiver you can do--you can do day one. Then it takes time to get the repeal. And then step three, of course, is to have legislation that makes sure, for instance, that people with pre-existing conditions aren't refused the ability to get insurance and that people have access to coverage.

KUDLOW: All right. Some politics here towards the end. You've been great, appreciate it. New poll today from CNN that's running on Politico. Donald Trump is running first, with Governor Huckabee 19 percent each. You've dropped down to third with Newt Gingrich. Let me ask you this. Is Donald Trump becoming your biggest competitor for the nomination?

Mr. ROMNEY: You know, he's a new face and new voice in the process. My view is come on in, the water's fine. The more, the merrier.

KUDLOW: Is he Republican? People have questioned his party credentials. Do you welcome--is he good for the Republican Party?

Mr. ROMNEY: Well, I think he's good for the process if he wants to get in, and I presume he's a Republican. I think he's been a Republican all his life. But, you know, I'll take him at his word. I haven't asked him that question.

KUDLOW: Now, he has made a fetish, really, an obsession over questioning President Obama's citizenship and the birth certificate from Hawaii. Let me ask you on that subject, first of all, do you agree with Trump that Obama should be questioned on this? Do you feel that Mr. Obama has passed all the citizenship tests?

Mr. ROMNEY: I think the citizenship test has been passed. I believe the president was born in the United States. And there are real reasons to get this guy out of office. And the number one reason is he doesn't understand how the economy works and how to create jobs in the private sector. You got 20 million people who are suffering as a result of that, in part. He also has made extraordinary mistakes internationally, globally. The man needs to be taken out of office, but his citizenship isn't the reason why.

KUDLOW: All right. Governor Mitt Romney, we welcome you back. Thank you, sir. All the best of luck on the campaign trail. We appreciate it.

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