The following is the actual transcript from last weeks debate between Newt Gingrich and Herman Cain. I live-blogged it here.
The debate opens up with moderator, Iowa Congressman Steve King who thanks the debate organizers and proceeds lay out details about the national debt crisis.
GINGRICH: If we are stupid enough to do nothing about the debt, we will be bankrupt like Greece. Paul Ryan would fundamentally change Medicare by getting younger Americans into a premium support model — I do not favor a mandatory premium support model. I want us back into the habit of giving Americans a range of choices so people have those choices in the free market that would beat out the bureaucratic system. They need to go to something because it is better for them not because the government forced them. Americans are not going to let politicians impose things on them.
We have to come up with solutions that are actually BETTER than what the government would force on you. Look at WalMart, people shop there because they think they will get a good deal. We need to defeat so many entrenched elements of the Left that we have to convince Americans that we represent a better future than the Left does.
We have to get to a better health system before we get to an affordable health system.
Look at Stop Paying the Crooks and read it.
Medicare pays between $70-120 billion a year to crooks…like dentists who file 982 procedures a day. The Super Committee is not looking at this, because it requires thinking about Government…and getting people in Washington to THINK is a very big challenge.
CAIN: I am supposed to have a minute to disagree with Gingrich, but I don’t disagree with anything. So I would like to instead to add a historical perspective, since Gingrich and I can change the rules as we go. I remember talking about Medicare when I first went to Godfather’s pizza. Things inside the company were easier to control outside. Medicare started in 1965 and our government told us it would cost $6 billion to rollout, and we were told that by 1990 it would cost $12 billion. But in 1990, it actually cost $109 billion. IT WAS A 900% MISS.
How many businesses can survive missing a target like this. Long term government projections about cost have never been right. NAME ONE.
That being said, I believe as Speaker Gingrich believes that we can’t reshuffle Medicare or Medicaid, we must RESTRUCTURE. A guiding principle in the Ryan Plan that I love is that if you want to solve a problem, you must go to the source closest to the problem. It is not Washington DC…it is the states…it is the patients. Allowing Medicare accounts for younger workers is an option.
Another thing we have learned for decades is that people spend other people’s money more recklessly than they spend their own money. Let it be their money and they will spend it better. Get it out of Washington DC.
Politicians have over promised for decades. We have got to get real because we are headed off a cliff.
What to do about rising healthcare costs…services, x-rays, etc…going up 17% regardless of the economy in a market of their own. Why does it occur and how do we deal with this? CAIN: We have the best healthcare in the world.
We have a healthcare cost problem, you are absolutely right. In order to solve the healthcare cost problem, we must use market driven patient centered approaches. Talk to doctors. Here again, you cannot micromanage healthcare costs out of DC. Every program we have had out of DC has failed. What we have to do is unravel the system with market driven ideas. HR3000 — introduced by Rep. Price in Georgia, used to be HR3400 — open healthcare savings accounts, allow association health plans. At the Restaurant Association we wanted a plan to customize to our workforce. Under the current structure, we couldn’t do that. Another thing doctors would like is loser-pay laws at the state and federal level. That’s what’s driving up malpractice insurance. A loser pays law is a big step in health reform.
GINGRICH: I think that the mess of the health system is an everything problem. It is federal, state, doctor, patient problem. You can go back to 1943 wage price control decisions which was a gimmick in WWII, but what happens in a third party payer system. The person receiving services isn’t paying so they don’t value it. The person writing the checks thinks the doctor is a crook.
Think about McDonalds. You show up and ask for a quarter pounder. They give it to you. You give them money. Everyone’s happen. But if you pay them and you don’t get the quarter pounder, there’s a problem. This is not silly, it’s basic, and this does not happen with healthcare.
We need to be in these non-30 second debates because there is a lot of material that needs to be talked about…common sense regardless of what the national establishment thinks is acceptable. Cain and I are the two most radical candidates in this because we are willing to talk common sense, when most in Washington think that does not count.
I am the only Speaker in modern history to balance the budget in 4 years. We reformed an entitlement, we reformed Medicare very carefully and had AARP neutral in a presidential election year. If you are serious about real health reform, you must abolish the Congressional Budget Office because it lies.
Every hospital will tell you that if you get the family and patient involved, it is better and less expensive. The Congressional Budget Office refuses to see this as a savings. It wants more bureaucracy and less patient involvement.
CAIN: If you go back to Ryan’s plan, first of all if you are 55 or older or you are already on Medicare you will not be affected so don’t allow the Left to use scare tactics on you. For the younger workers, if they take that option of the Medicare account they will treat it as their own money.
Initially it would be about $11,000 and you would have to buy a Medicare approved plan. When you treat it like it is your money that is how you wean people off expecting that someone else will pay for it and it will be someone else’s money.
GINGRICH: I wrote a book in 2002 called Saving Lives and Saving Money, and I outlined what to do. Washington will do three stupid things instead of one smart thing.
I just put on the table trillions of dollars that would be saved by not paying crooks. Why is it so hard to not penalize good people before you stop paying crooks. You can take existing IBM technology and use it to stop paying crooks.
Why is it so hard to say you can turn this around and pass a bill to contract out to American Express, VISA, and IBM to handle Medicare payments and in 60 days you would save a TRILLION DOLLARS.
Anyone who currently prefers to go to a premium support system should do it next year. Tom Price has a great bill that says if you want to contract out for healthcare let’s give you more freedom. Medicare is more restrictive than the British system.
When you get the government in the business of defining what you should have, the government will say you don’t need this or that when you do.
Prostate Example — Medicare says not to test for prostate cancer, when lives can be saved if detected quickly. No one who is a urologist or cancer specialist is making these decisions. It is just bureaucrats. You need to move to a place where people get help buying insurance but the family, the patient, and the doctors make the primary decisions on keeping you healthy. Just imagine if there was government approval on IPhones or computers…bureaucrats would stop innovation and would say that 1960 model is just fine for you.
CAIN: I will make this brief. In the private sector for decades now they have been making the change from defined benefits plans to define contributions plans. It is your money. And so what the Ryan plan does with Medicare accounts is that they have individual names on it with defined contributions where everyone will have an account and own it and spend more responsibly. GINGRICH: I want to ask Cain what happened at Godfather’s regarding the encroaching of government when CEOs are faced with the out of control bureaucracy.
My advice to them is something I realized when I first became CEO in 1986. If I did not get involved in these issues then the entire free market system would be collapsed. Don’t stand back and play it safe. Get involved with the solution. I want to congratulate the Tea Party for putting these talks together and educating people. Better informed people will change this country. You are all becoming better involved. The Tea Party movement is real and growing. The Left is calling people racists to scare them away. My advice to CEOs and business people is to get involved and not sit on the sidelines. You can’t stop it with expensive lobbyists down the road.
My question to Speaker Gingrich is that you spent a lot of distinguished years in Congress and then you left Congress and started other ventures and you were thinking outside the Washington bubble…what are three things you realized outside that bubble.
GINGRICH: As a business, you don’t get to stay in business unless you wake up every day thinking about how to keep customers. If you don’t earn your pay in business, a business won’t pay you. We need to apply LEAN Sigma Six principles to government.
In every aspect of the private sector someone is doing something brilliant that could be applied to government to reduce costs…but the Left and the media block this. If you found Best Practices across the country, you would be amazed at how quickly you could balance the budget and resolve the deficit.
When I left office as Speaker, there was a swing of 5 TRILLION dollars and we had a balanced budget.
CEOs set big goals with tight deadlines, delegate smartly, and don’t let any so call experts in the room. Social Security Reform….
CAIN: Social Security….I am a firm believer in solving problems. Old ideas have prolonged the problem. I am a strong proponent of an idea that Bush introduced, these optional personal retirement accounts. 30 countries have optional personal retirement accounts. Look at the Chilean model and I ask why can’t we do that? We can do it if we fight the demagoguery and fight all those who don’t want the current system to change. We need to educate the public so they understand this.
30 years ago, Chile had a social security system like we do. The workers got to 27% of every dollar earned going into this and the system was broken. When they gave people the option — within 3 years, 90% of people said we want the option because it became their money on an account with their name on it and they don’t have the problems we have dealing with social security.
If older Americans who have paid into the system, they have a choice to continue on, or they can take the option of controlling it yourself. If you are close to retirement,your benefits will keep being paid. For younger people, they will have an option to control that benefit yourself. I have asked young workers if they would want to start investing and controlling their own retirement…I have not found one person who would rather keeping things as they are. Investing conservatively will work better than the current system.
I am about fixing the problems. Payroll tax is the biggest tax that most people pay. We should be invited back to talk about the economy at another time. We have to change the tax code. It is one of the reason that healthcare costs keep going up. It makes no sense. It promotes the idea that this is all someone else’s money and not the employee’s.
The payroll tax would be eliminated in 9-9-9 we would setup those optional accounts with that money that people could control themselves.
GINGRICH: I am going to sidestep the opportunity to talk about 9-9-9. Sean Hannity has asked us to spend an hour in this format with him and I think we should do that. Here in Texas, there is the Galveston System where they discovered that if you put in about half as much money in the private sector you would get twice as much as you would giving it to government.
Any candidate who is not prepared to give younger Americans the right to choose has not serious plan for social security. Everyone who is currently on it, it won’t be touched, so don’t let the LEFT and AARP lie to you.
First of all, with growth, you go back to where we were when I left the Speakership, you can’t look at the current static model from the CBO and see anything…it’s amazing what 10-15 extra million Americans working does to social security.
Lyndon Johnson scored a cheap political point by sucking social security into the budget to try to show a balanced budget. Johnson began the problems of giving people the idea that they could steal this money. Senior citizens should not be scared like this.
Get social security out of the budget and make it a freestanding retirement account again.
If you want to stay in the current system, and let politicians like Barack Obama scare you that they are going to take your money away from you, then you can stay in the system.
If you have your own personal social security savings account and you want to retire early why would Congress tell you not to…or if you were like Andy Rooney and stayed active until age 92, why should Congress tell you that you can’t. Let’s get back to allowing Americans to control own lives.
CAIN: We as a nation are not short on good ideas of how to fix social security. What we are short on is the ability to educate people on the solutions. CEOs can help educate and inform their workers on what is truth and what is garbage. I believe the businesses in America could provide a service of changing the paradigm of DC and inform the employees on what is fact and what is not.
One of the big advantages in this election cycle is the Tea Party, and the Internet. More people are smart and informed today. The President needs to be a communicator in chief informing and educating people, not scaring them.
GINGRICH: Let’s talk about Herman’s role in turning around Godfather’s pizza. He came in and totally transformed that business. Let’s also talk about the Green Bay Packers and their leadership. I became a leader in Congress just like Herman did in business because I was willing to tell the truth and talk directly to people.
The current president is as accurate and honest as Bernie Madoff in what he tells the American people.
It is a fraud and a lie the way that Congress deals with social security. The American people have put money into a trust fund. It is not hidden. It is there. But every politician in Washington wants to find a gimmick to balance the budget off the backs of working Americans.
If you take it off budget, you could solve social security. You take what’s in that fund, and you model it on what’s in Chile, you find with a few modest cuts in spending you get to a stable retirement program.
Since Johnson, we have been hiding the real size of our budget deficit by obscuring it with social security. We need to be honest and separate these two things and deal with them.
CAIN: This is what we have to be honest about, it is going to take a long time to work ourselves out of this mess that has been created for decades. We can’t deal with unfunded liabilities, we have to deal with a bill that says starting from now all social security contributions will go towards social security benefits only. What the money is collected for, let’s put it towards that only.
GINGRICH: The private sector money in a personal social security account goes into the private sector. There will be a 1% increase in economic growth just because of the amount of capital that would be saved. In Chile they now have savings in their social security accounts that equal 76% of their capital. That is breathtaking and longterm and stable. We need to have separate money between social security and what would be in the private savings account.
CAIN: In the private sector, most companies have moved to a defined contributions account. The company will make a contribution along with the employee. The employee selects from several options on how to invest. You can declare yourself a low risk, a medium, or a high risk investor. You can do the same thing with personal retirement accounts. Parking the money is never the problem. Yanking it out of the federal budget is the problem.
Next topic: Medicaid
CAIN: I absolutely agree with block granting to states. IN order to solve the problem, the states know better how to use their resources to provide the greatest amount of help to their citizens. Medicaid has gotten states hooked on it like crack. We have to break the crack habit with block grants. The states over time will have more flexibility. We should not cut them off cold turkey, but we need to start to end the dependency of states on Washington bureaucracy. We need to end the mandates to the states and let the states decide.
GINGRICH: Let’s look at Obamacare. Go to Newt.org for the proposed 21st Century Contract with America. First step is to repeal Obamacare.
I strongly support Paul Ryan’s approach to block granting Medicaid. Block grant all remaining welfare programs. Give the states the power to deal with the poor using innovation and money savings.
We are going to have a real national debate on all this. I do not believe you solve problems under the Left’s policy of people being helpless. Read THE TRAGEDY OF AMERICAN COMPASSION. We need to rethink Medicaid much the way we rethought welfare reform. Governor Bush in Florida had a program where people who took care of themselves and didn’t go to the emergency room got a Christmas bonus. To the shock of academics, poor people were aware of money and strived to get that bonus by not abusing the emergency rooms. If you had the ability to triage and send people to minute clinics, then the hospital wouldn’t charge emergency room rates. If you track someone who abuses the system there should be a consequence for that.
We have to start distinguishing between the taxpayer who is concerned with charitable care and taxpayers who are suckers and are being exploited.
CAIN: One of the principles I believe in is going from an entitlement society to an empowerment society. Help people to help themselves.
No entitlement programs…teach people to fish, not give them fish.
I would support a voucher system but not if a voucher would pay all the costs. People need skin in the game, otherwise they will ask how much more the government will give them.
GINGRICH: We need genuine block grants so states can decide how best they should handle matters. The whole purpose of getting back to 50 states is to have 50 laboratories of experimentation since Washington can’t fix things. We’ve seen this.
We need to think of all of these things being integrated into one human being.
Public Housing — if we give people a place to live, they need to help clean it, paint it, and fix it so they have skin in the game. The Left’s Model: people are weak, helpless, and stupid and need government to tell them what to do…but who does the Left think the government hires to run the bureaucracy?
CAIN: You need to block grant responsibility as well as money. You need the states to adhere to rules, and to have responsibility for making decisions at the state level. Right now they are too caught up in bureaucracy.
GINGRICH: I believe in health information technology. We need to have the same security and ease of information that we have in using ATMs. You can walk up to a machine in a foreign country, you put in a code, and you can get money out in the local currency anywhere in the world. The center for Medicare and Medicaid uses only paper. It is 40 years behind the times. It stops us from getting into a better future.
CAIN: We need to have standards and not make it easy for people to cheat on things. You can’t get on an airplane without showing a valid ID. Why should we allow people to do other things without IDs. Photo IDs are needed and should be required to vote to end fraud. WHY NOT?
People who are fighting to require voter ID are people who want cheating to continue in the voting process. There is much more cheating going on than people want to admit.
GINGRICH: There is a big gap in rational thinking between the government and private sectors. We have technology that allows you to track a package with FedEx with remarkable accuracy. One of my proposals is to send people a package to determine if they are here illegally…(laughter)…but it’s funny but making a point about where we are. We should be able to identify everyone who gets emergency aid and every state should sue the federal government every year for every cent spent on illegals who should not be in the United States.
That is the federal government’s responsibility.
How to address the 72 entitlement programs:
CAIN: We need to change entitlement to empowerment programs. You need to prove you are looking for a job or are taking classes to get a better job. Means testing will help but you need to make people take ownership and WANT to get off those programs. I would block grant all entitlement programs back to the states and give them the flexibility on how to modify the programs and stretch those dollars.
GINGRICH: You must start with the question on whether or not means testing requires people to stay below. We have the most effective food stamp president in history right now and that is not a good thing.
Do you want to rise above the point where you would be means tested? You create a discouragement — read the book LOSING GROUND – you are teaching people to be dependent and fail. You need to rethink the idea that people are getting something for nothing, because that’s not how it works. If someone is an able bodied person who is getting something for nothing than we are stupid for giving it to you.
We need to fundamentally change unemployment compensation. We need to require training. 99 weeks of unemployment sitting doing nothing could be turned into an associate’s degree. I think that each state needs to have primary responsibility for most of these domestic issues.
CAIN: Let me round this out. We have talked about the biggest elephant in the room, entitlement programs. As you can see, Speaker Gingrich and I are not afraid to talk about this. The government has been intellectually dishonest about these programs for 50 years.
Ultimately, all these programs work together and what we come back to is that education and a job are the two best things that get people off these programs. We need to look at how to get people back to work, want to get off it, and there will be a few people who are lazy and they don’t want to help themselves….that’s their little boogiewoogie as my grandmother used to say.
CAIN: I would restructure unemployment so that if you got 26 weeks unemployment one time, then next time you would only get 13 weeks…then 7.5 weeks so that you are encouraged to get and keep a job.
GINGRICH: I would connect the unemployed to the jobs we can’t fill. We have an older workforce who is not trained to do the new jobs we can’t fill. From Day One, you need to get trained as fast as possible to get a full time job because these people will need to do something every single day in order to get a penny. Cain and Gingrich ask each other a question now — not playing Gotcha! one time all night — Gingrich goes first:
GINGRICH: You have had a terrific life. We fought Hillarycare together years ago, what’s been the biggest surprise to you in running for president?
CAIN: The nitpicketyness of the media. I did not realize the fly speaking nature of the media when you move up in the polls….because if there is a journalistic standard, they don’t follow it, and too many people give out misinformation. I thought that — and I did not study political correctness in school — too many people in the media are dishonest and do a disservice to the American people.
CAIN: Mr. Speaker, if you were Vice President of the United States (applause and laughter from crowd) what would you want me to assign you to do first?
GINGRICH: Having studied Dick Cheney, I would not go hunting.
Newt Gingrich and Herman Cain Debate – Texas Tea Party Patriots Hosting (video)