Democratic Rep. Kaptur Embarrasses Herself on CNBC

'Squawkbox' Smackdown

February 13, 2012

KAPTUR: The most important step we can take to assure all of our social insurance programs and earned benefit programs are solvent in perpetuity is to get people back to work. Our focus has to be on economic growth and investment in this country. President Obama has laid out a road map for that. I'm anxious to walk down that road, because here in Ohio, northern Ohio, from Cleveland through Lorain to Toledo, we see the results of the automotive industry recovering. It is magnificent. Let me tell you, it's lifting revenues in all accounts, in order to help us fund our school systems.

ANCHOR: Congresswoman, hold on a sec. David Walker, is she correct? Could we grow enough so Medicare would become solvent? At what rate would the United States have to grow?

WALKER: As a former trustee of Social Security and Medicare and knowing something about the government's finances, I can tell you there's no way that will work. You would have to grow the economy by double-digit real GDP growth, achieve full employment for decades and that still--that's not going to happen. That's just not going to happen. There's a simple four-letter word Washington needs to understand--it's called math. The math doesn't work. We need more revenues but we're going to have to renegotiate the social insurance contract and health care is a much bigger problem than social security but it has to get renegotiated, too.

ANCHOR: Ma'am, is your party ready to renegotiate the social welfare contract?

KAPTUR: I think what President Obama did with the affordable health care plan was to put us on a track for prevention and to save some of the costs that are burdening us as an economy on the health care side. Those changes are going to lock in. In terms of Social Security, which is an earned benefit, as well as Medicare, if we can lift people's economic lives, where they're working again and paying into those funds, believe me, you'll see growth and you'll see security in those funds. But when you have so many people sitting on the sidelines, we've got to have programs to put people back to work, building bridges, here in Ohio--having idle people doesn't help the economy grow. We have to keep our shoulder to the wheel, and invest and create jobs in this country.

SORKIN: We need to get the economy back in order, there's no question. Having said that, as David just said, the math doesn't work. Ultimately, you have to somehow fix the safety net, and what it means probably is making the safety net a little less safe.

KAPTUR: I'll tell you if we didn't have the trade deficits that are wiping out most of our GDP growth we would have more job creation in this country, so I respectfully disagree with the gentleman.

ANCHOR: You believe that with job creation...we could pay for Medicare?


ANCHOR: Glad we have have you on the record on that.

WALKER: Based on realistic assumptions, Medicare is underfunded $37 trillion and Social Security is underfunded $9.2 trillion, and those numbers go up 2 trillion to 3 trillion a year on autopilot because of the power of compounding. That's where we're at and Congress better start doing its job, because Greece is not far off.

KAPTUR: We need investment in this country, sir, if so many jobs hadn't been outsourced more people would be working and, if we could open more of the closed markets of the world, we could sell more of our goods to China and Japan. Why does a Cherokee cost $85,000 in China? If we could manufacture...

SORKIN: Ma'am, I apologize, the issue, it's not an either/or.

ANCHOR: Andrew lost his mike so we're having a 'squawkward' moment here.

SORKIN: That is the longest mike. Sorry, the point is it's not an either/or proposition, it's a combination and that ultimately is where we're going, congresswoman, with this question. Everything you said you could agree or disagree with, depending on where you are politically, but we need to grow the economy, but the other issue is dealing with these entitlements. It sounds like you're not prepared to deal with them.

KAPTUR: My primary focus is putting people back to work, because I understand the drag that this level of unemployment puts on this economic growth, and from what I'm hearing you say you don't have much of an interest to reemploy the Americans sitting on the sidelines and want to work.

ANCHOR: No, that's completely false. The spirit of our question was whether or not you are interested in talking about entitlement reform in a way that would ultimately help the budget in the long-term. There's nothing in any of the requests we suggested here that we don't want people to get back to work.

KAPTUR: I'm glad to hear that.

WALKER: Actually, I do believe we need more investment but if we don't start dealing with structural deficits we have bigger economic, much bigger unemployment, much bigger underemployment problems in the future.