[captioning performed by national captioning institute] [captions copyright national on "newsmakers," the new chairman of the republican study committee steve sca lease from louisiana. thank you for being here. two reporters to help us this morning. russell bermen with the hill newspaper. heidi. you have the first question. >> you had your first meeting with the president with the republican conference in nearly three years this week. do you feel that you're any closer on policy or at least in terms of warmer relations?

>> we had a frank conversation with the president. it probably lasted a little over an hour. i thought it was important to have an honest dialogue and clearly we have some very big differences on how we approach some of these. but there's also area for common ground where we can really get some solutions and things done to solve these big problems and we talked about that. again, it was very frank and candid conversation. but we put out a lot of ideas that we conservatives have and i think there are going to be some areas that the president is serious with working on us, then we can get things done and start addressing some of these problems that we have. >> what are the specific areas? >> i think if you look at the budget in general, we just unveiled our budget this past week. we actually balance our budget in ten years. the president has said clearly his nt rest is not balancing in the next ten years. he hasn't filed his budget yet but when it does he made it clear it won't balance but we

show the american people who balance their own budget that we are going to control spending but focus on getting the economy back on track. and we talk about specifics. i mentioned to the president that if you want to start today and actually create good job energy is a really good place to start. greenlight the key stone pipeline. with one stroke of the pen the president could create thousands of jobs. i represent southeast louisiana. there are a lot of opportunities to create tens of thousands of good high-paying jobs in the energy industry where not will you create high school jobs, a high school graduate could make over 55,000, but you bring in treasury revenue that will reduce our deficit. you allow our country to become energy independent so we don't have to buy so much oil from middle eastern countries who don't like us. we'll see in the next few beeks if the president is serious with working with us. >> where did the president say i agree with you?

>> i specifically mentioned to the president on spending and the president kind of famously said he is going to close the white house to tours and school groups can't go into the white house. and i said instead of these kind of things instead of closing off the white house and threatening to lay off food inspectors how about working with us on real specific waste in government that his own agency through the g.a.o. and other reports have identified as real waste? instead of laying off the food inspectors work with us to eliminate the 26 billion in fraud that's been identified in the food stamp program for example. so there's very specific examples not just things republicans have come up with but even federal agencies have identified as waste in government. let's cut that instead of trying to make sequester cuts harmful for families. and he seemed open to that. again, the proof is going to be in the pudding if he is willing to work with us and get that done we'll find out in the next few weeks. >> were you satisfied specifically with his response

on the keystone pipeline? we're told that he didn't give a specific date for when he might decide whether to approve that or not. what was your reaction to what he said? >> i still would like to see the president say yes to keystone. this is a yes or no question. it's not what would be the route? it's whether or not canada can cross the united states border. and that's the only question the state department has. each state has the authority to regulate where the pipeline would go. but all the president needs to do is say yes you can cross the border. again that's 1 million barrels a day of energy from canada who is good friend of ours that we don't have to be getting from the middle eastern countries. i would have liked him to say yes to it. he did say he is close to an answer, which is at least an improvement. this has been on his desk for more than 2 years. everybody has said this is a no brainer. we ought to do the keystone pipeline. 25,000 american jobs. >> is there anything that congress can do on this

keystone pipeline? if he were to say no, can congress try to get around this? >> sure. we're moving forward. i'm a cosponsor of a bill by lee terry which actually greenlight it is key stope pipeline. we passed legislation through congress. and this is a bipartisan issue. we're not talking about republicans against democrats here. people might think those are the only battles. the bills we have had to say greenline the key stone pipeline have had tremendous democrat support. not only republican support. so really the only people standing in the way right now is the president of the united states. and he can greenlight that himself. but we're going to try legislatively to do it. but at the end of the day he's got the legal authority and we're just trying to push him to get this done. >> there's a new report out that most of the oil that would come from alberta would actually be sent overseas. is there any merit to kind of looking at restricting exports here? if this is really about shoring up u.s. energy security? >> some of the things we have seen is that if keystone is

green lighted, it's going to create tremendous construction jobs. the president likes to talk about shovel ready. this is a shovel ready that the private sector will fund. there's probably about $5 billion ready to go right now to start building that pipeline. those would be american jobs. the energy security we will get by bringing 1 million barrel as day from our friend in canned dafment you've got tankers every day coming through south louisiana that goes into the loop and throughout the rest of the country and to our refine riss. those 1 million barrels now don't need to come from these minch countries that don't like us. and when that gasoline is made here there's a world market but it will lower the price of gas at the pump because again it's a stable source of oil from a friend of ours. our country uses 21 million barrel as day. we have to get it from somewhere. do we get it from a middle eastern country? and look at the turmoil. how about working with a friend in canada where we can get a stable source of energy.

by the way, china wants that oil. so either china is going to get the jobs and the oil or america will. we ought to say yes to those american jobs. >> back to the budget for a minute. the republican study committee last year introduced its own competing alternative to the ryan budget. you said before the ryan budget came out this week that you would wait to see what the house republican budget would look like. now that you've got a chance to see it is the republican study committee going to go ahead and introduce its own budget? >> we will be filing a budget amendment to the ryan budget. we will be debating all of that in the days ahead. and hopefully by the end of next week we'll have baunlt passed out of the house. i don't think anything we do is undermining the budget. we actually build on some of the thing that is paul has worked on. we've worked closely with his committee. many of the budget committee members are rc members so we want to promote the rc budget and we're ultimately going to vote for the house budget. >> can you describe the key

differences between the rfc budget and the ryan budget? and specifically how soon would it balance? >> is the ryan budget which will become probably the house budget balances in ten years. that was the big objective that conservatives have pushed for to get a budget that balances in a 10 year window. i don't think it's asking too much that we balance our federal budget before kids graduate from high school. that was an important point. in the budget the way cbo scores it will balance in four years. so there's things that we do and one is dealing with medicare. we are working both the house budget and the rc budget to save medicare from bankruptcy. it goes bust right now in 11 years. so we support the premium support concept but we're implementing premium support for people aged 59 or younger and paul's it's 55 or under. i don't think that's a big difference because at the end of the day we're both saving it from bankruptcy. president obama doesn't save it from bankruptcy at all.

in fact obama care expedites the bankruptcy. so we're both working to save it we yust do it differently but what we're doing is building upon some of the very foundations that paul set out in a really strong budget that balances in ten years. >> paul ryan's budget this week is coming under criticism for using fuzzy math repeals obama care but then uses the revenue that it would generate. he uses revenue from unspecified tax reform and doesn't identify single loophole in there that you would close. how is this honest accounting and how does this help lend legitimacy to the budget process that many americans feel has become kind of a farce? >> there are no budget gimmicks. in fact it's not our numbers that we're using. there's an independent referee that scores everybody's budget. they score our budget, the president's budget which doesn't exist yet but when he files it they will score that. in our budget they actually score the house budget to balance in ten years. and what paul does, a budget doesn't actually implement tax

reform. it calls for tax reform. it calls on the various committees of jurisdiction to do certain things. we'll be calling on our natural resources and energy and commerce committee to increase energy production for example. that doesn't say exactly how to do it. that's what those committees do. so the ways and means committee will be called upon to implement tax reform and what we mean by tax reform is to close loop holes not in the the president's example to spend more in washington. we close loopholes to lower overall rates. we do it for families, corporations. we have the highest corporate tax rate in the world right now and makes america uncompetitive. so what we're saying is instead of a 35% rate, let's go down to a 25%. let's say fair tax systems for families so they know what the rules of the game are. if they want to stay in the current system they are able to do that. but if they want a better system that's fair or flatter they're also going to be able to have that option too. tand details would be worked out with the ways and means committee but it would have to be done in a revenue neutral

way. you can't raise taxes in the end of the day. and that gives us economic growth. >> as you know in order to get the amount of ref new to lower rates you have to go after the big cups, the mortgage interest deduction, the charitable contributions. why can't republicans be more specific and say paul ryan is bold and gets all this praise for being bold. come out and say which one of those you would do away with? >> no budget document actually writes the specific details of each of the components that the document lays out. it lays out a vision. a budget is a vision. the specifics are done by the kess so the ways and means committee right now is doing what you're talking about. it's having hearings, dave camp is the chairman of the committee and has a great group of people right now that are combing through and looking at the best way to put a fair system in place that closes the loopholes and lower rates for families and businesses. if we have two options if you have your mortgage interest and you want to continue using the current system, you're able to do that. but if you want a fair system

where you actually pay less, in tax rates, you're going to have that option, too. so i think that's a good option for families to say let's look at the code and see how it works best for me and let the families make that decision, not the federal government. >> that's a little known part of the ryan budget that republicans flagged to me and that is the assumption of 19.1% of revenues. are republicans quietly saying that we support staying at this revenue level of 19% of g.d.p.? because if so that seems to be a bit of movement on revenue. >> the current baseline which the cbo score says that our current revenues are at 19.1% and they keep that but they put a fairer system in place that reduces rates. in the budget we actually go down to 18.7% of g.d.p. in revenues so a little bit of a difference there. but at the end of the day we both call for real tax reform that actually lowers rates so that families can actually have certainty and a code that makes sense where they don't need to

hire c pmb as and accountents just to do a basic tax filing but also, it leads to job creation. every expert will tell you every economist will tell you if you have a fair code it actually will allow people to grow jobs and our economy. and america can be competitive again. we're really not competitive in the world right now. it's one of the reasons so many companies move jobs overseas because we have the highest corporate tax rate. let's bring those jobs back to america. >> the house has under speaker boehner's leadership in the last couple of months brought three bills to the floor that passed with majority democratic support that does not have the majority of the republican conference. some conservatives colleagues of yours have expressed concerns about that. how concerned are you about that and would you support efforts that some have talked about to block bills that do not have a majority republican support from coming to the floor? >> i've expressed my concerns to our leadership about that. the general idea what you're talking about i've actually

voted against all three of those bills that you mentioned. i think it dealt with the fiscal cliff. a few other bills. but in general, what we've talked to our leadership about is let's work to get majorities for legislation using working with conservatives, uniting our confreps. and then submit those ideas and those bills over to the senate and make the senate actually do their job for once. the senate hasn't produce add budget in four years. legally they're required every year by april 15th to pass a budget. they haven't done that not once in the last four years through the no budget no pay act which was support bid conservatives, we actually shamed the senate into now having to do a budget. so they're going to do one and we'll be able to contrast our budget with theirs. i think you'll see our budget pass not only with a majority of republicans but it will show that we're serious about getting our fiscal house in order. >> staying with our premise. why do you have your own budget? why does the republican study committee have their own budget if you want to united front get

behind paul ryans budget. >> if you look during the last two years specifically where we've been in the majority where paul ryan's been chairman of the budget committee not only has there been a house budget paul ryan's budget there's always been an rc budget as well. and if you look at the votes, the rc members that vote for the rc budget have turned around and most every one of them has voted for the house budget as well because both documents are much better in great vision force our country but much better than we currently are in our budgeting process. i think we're continuing to show that there are a lot of different ways to run this country and get our fiscal house in on the other hand. that's what the budget documents are about. paul's is a good document. we like ours as well. but i'm kind of a yes-yes person. i'm happy to vote for both of them because i think they both advance the not om the freedoms that we all believe in but they also help get our economy moving. >> back on revenues for a moment. republicans say we just did a

big tax increase as part of the fiscal cliff but you look at the sum of debt reduction so far that's been done. we reduced the debt by a ratio of about 4:1 spending cuts to revenue and yet every major bipartisan group that has looked at this issue has done a ratio more of 3:1. so why is the revenue discussion closed at this point? >> if you look, the president ran on raising taxes, we ran on cutting taxes. he won and we won. now, in the fiscal cliff deal he was able to get his time. he got -- tax hikes. he wanted to raise taxes on millionaires and become nares. it wasn't just them. he got that that's 600 billion in new taxes. let's not forget about obama care. obama care which was the president's signature that raises taxes over $1 trillion. over 20 of those new tax hikes in obama care hit middle class fam lifments we want to repeal obama care but also those

middle class taxes that he includes there. and so if you look at it he's gotten almost $2 trillion in new taxes in the last four years and we said enough is enough. raising taxes has never balanced the federal budget. and it hurts our economy. the president even admitted that raising taxes in a bad economy kills jobs so why would you can't to continue raising taxes? let's control spending. washington spending is in the highest level in the history of our country. there's not a tax ref new problem. there's a spending problem. it's not only hurting washington and our ability to balance the budget. it's hurting our economy. and people in the country are going wait a minute. we manage to live within our means. why can't washington figure this out? >> we're at record low levels in terms of discretionary spending. we haven't had it this low since the eisenhower administration. so where does that come from? because as you know, democrats are not going to touch those entitlement programs unless you are willing to touch revenue. do you think we can really cut more? >> it's going to have to be

addressed one way or another. mandatory spending is the biggest part hasn't been addressed by congress. obama care is part of mandatory spending. every report of obama care each report says it's going to cost more money and add more to the deficit than the prior report. we've got to address that problem. if you look at medicare, medicare right now scheduled to go bankrupt. people say don't touch medicare. well don't touch medicare means let it go bust. that's not right for seniors. it's not responsible for my generation and my kids. and so we've got a plan to actually save it from bankruptcy so for current seniors there would be no changes to medicare except for the fact that it won't go bust. but for people of my generation health care would work more like the plan members of congress get. i don't think we've got a bad deal. so my wife has a lot of options that she chooses from and we pay a price as a family if we want a better plan. but ultimately we've got options. i think seniors should have those options, too. and one of the option business the way would be traditional medicare. >> mr. r republicans done with

discretionary at this point? is there an appreciation that at this point we are risking cutting very critical investments? >> let's keep in mind when the president goes around the country kind of threatening people about the sequester and how draconian it is going to be, federal spending has grown dramatically since he took office. the sequester was an $85 billion cut. we have got a 2.5 trillion budget of revenue that's coming in. we have a 3.5 federal budget. so federal spending is still high for a lot of these departments here you're literally flat lining the growth. so in washington, somehow a cut in growth equates to a cut. i think people realize when you've got spending at those high levels and you don't have as much money coming in, you've got 1 trillion more than you're spending than you have coming in you've got to fix the spending problem. >> one followup. we haven't got a discussion now about the continuing resolution to keep the government going. as you know, your proposal would allow the pentagon to have more flexibility in

implementing those cuts and senate democrats say they want more flexibility for domestic agencies as well. >> if they're willing to work with us, the first premise has to be that we are going to have real cuts in spending because washington has a spending problem. they've got to admit that this is a problem. and then we can work to fix it. personally, i would rather see going into targeted areas and cut things that don't work and the thing that is are working that make sense that the federal government should be doing you continue doing those things. and if they are willing to work with us and have an adult conversation with us that's fine. but six months ago we tried to bring this up before it was a crisis and we passed a bill out of the house to do what you're talking about and the senate didn't take it up for six months. the president hasn't talked about it until literally a week before the crisis. and so people are tired of washington living from crisis to crisis. shouldn't we have fixed this six months ago when we tried to? i'm glad the senate is finally

engaged. we'll be willing to work with them but it's late in the game for them to be talking about it after it happened instead of trying to fix this before it happened. >> do you think there's enough common ground on this concept that we don't have to worry about a government shutdown we're going to come together and do the cr and give everybody flexibility? >> we made it clear we want to lock in these new lower levels of spending and we will be willing to continue funding the government at that lower level which is a more responsible approach. by the way, that's the approach the president came up with a year and half ago. people in washington already identified sequester was the president's idea and then he backed away from it when he saw real cuts would happen. we've gt to hold him to his word and that is going to happen. it's happening right now. so if the senate wants to work with us on targeted cuts we're significant here ready to go. it's a little late in the game ut better late than never. >> switching gears to

immigration. where do you stand on that? are you open to a comprehensive bill that would provide a path patted to citizenship for the approximately 12 million undocumented immigrants? speaker boehner said he is open to it. are you open to a big deal? where dow you stand on that? >> i'm glad we're having a conversation about immigration reform. if you look at rc specifically, a number of our members are actually engaged in this debate. bob glat is the chairman where this will go through in the house. rall lamb dor got on the committee to be in part of the debate probably most articulate spokespeople on this issue is very actively engaged in helping work on and draft legislation and try to find some good conservative solutions to this problem. you need to start with the broken legal system of immigration. i think everybody recognizes our legal system my great grandparents came here from

italy. we had a working function and it helped make our country great. it's broken down over the years. both republicans and democrats, we need to fix the legal part of our system and obviously you've got parts of the illegal immigration system that are broken as well and we need to address all of those. could be something we do individually if we can get consensus on some things we ought to move those things. if there is a comprehensive agreement then let's take a look at that and move it too. but i'm glad that we've got some really good smart members of the rfc and are working on this problem. >> you specifically on this big question in the center of this debate is the path to citizenship. the conventional wisdom is it would have a very hard time getting through the conservative block in the house of which you lead. so where do you stand on that central question? >> and this has been probably the area where some of the talks have broken down in the past. it's not just been republicans. frankly, a lot of labor unions, which really drive a lot of the

agenda of liberals in washington, the labor unions have opposed any immigration reform as well. we ought to put that on the table too. but we're willing to talk about that and say first of all it's not fair i don't think for somebody who is here illegally to be able to jump ahead of line for those people playing by the rules and waiting in line right now for the legal system. that's why we need to fix the legalsome so not does it work for the people in line but they can see wait i can play by the rules and still have a path to come here. and i think we ought to start with the premise of the american dream. in years past people came to america to seek out the american dream. and that should still be the case. we just passed legislation in the house to say for our young people who are here in america who have come here as immigrants to learn in our educational system and they get good science and technology degrees our law makes them leave the country and go compete against us when they want to stay here and create jobs in america. we actually passed a bill out of the house to fix that problem. >> so you're not going to take

a position? >> i want to see our smart members on the judiciary committee that are working on this, i think they're going to be able to come up with really ood solutions. congressman, thank you for being on "newsmakers." >> it's great to be with you. >> back with our reporters. heidi, russell, i'm going to begin with you. so we heard from steve the chairman of the republican study committee this past week the house budget chairman paul ryan puts out a 10-year budget senate democrats put out their 10-year budget the president goes to capitol hill in search of this grand bargain. when and how does that sort of thing come together? >> well, they've obviously gone through a lot of rounds over the last couple of years on these fiscal negotiations. and what they're looking at now is going back to basics, back to what they call the regular order process where the house would pass its budget, the senate would pass its budget and then they would go to a

conference committee and see if they can narrow the differences enough to get a deal. now, even the president whose always talked about how optimistic he is even he is saying that the gap might be too wide for them to get a deal on the budget. but if they did, that right now seems to be the most likely avenue where it would be through that formal process. and of course the white house would be involved. and that would happen over the next few months. there's the next big deadline is not until the debt ceiling comes up again which would be sometime between may and the summer based on the last legislation they passed. obviously the president is refusing of course to negotiate again on the debt ceiling. >> so if they came together and got some sort of grand bargain in the budget process, does that avoid deadlines like the debt ceiling? does it all get wrapped in there and does it deal with sequestration? >> that would be the idea to

finally resolve these issues at least for the next several years that would include finding spending cuts. the president also wants revenue to replace the sequestration a as well as extend the debt limit for a period of time at least as the president wants it so he doesn't have to deal with it again at least in the next couple of years and perhaps the rest of his term. >> all right. heidi, the hearing now debating a continuing resolution which funds the government keeps the government running. what is the difference between that and what russell was just talking about? >> since we have not had budgets we've been running on this stop gap system assembly line here of confrontations every six months between democrats around republicans over these so-called continuing resolutions which keep the government running. now, over the past two years we've seen this circus of arguments between the two sides over extracting additional spending cuts in exchange for these continuing resolutions. now, the one interesting thing that i saw from the congressman

is that it looks like maybe we're going to see an end to that and maybe the house will be able to accept what the senate has done in their continuing resolution which is both sides really are just concerned about the sequester right now and it looks like house republicans are mostly concerned about the pentagon and giving the pentagon flexibility to implement those cuts. senate democrats are most concerned about the domestic agencies transportation education and being able to allow those departments to the flexibility to implement those cuts and it looks like maybe they can come together on an agreement and will avoid another government shutdown. >> so the senate democrats and house republicans do a quick conference on this continuing resolution. it gets passed and you avoid a government shutdown. >> that's correct. >> the way to look at it almost as if they're taking baby steps. they're not fighting as much over the day-to-day funding which is what we started with couple of years ago when the republicans took the majority in the house.

so now that they're starting to work together a little better they're turning their attention and seeing if they could extend that to the medium term and long term budget impass. >> steve, the new chairman of the republican study committee, represents the conservative part of the conference of the republican conference. years past the freshman tea party they came in there seems to be faction within the party. do you see less of that or will we see more of it as we go forward? >> i think that there was a sense in this latest agreement over the fiscal cliff that perhaps the tea party had been muted a bit. after all, they voted for a tax increase, they got a tax increase through the house and like russell asked the congressman about the hastert rule which was basically that john boehner has shown willingness to bring to the floor legislation that is not support bid a majority of the his party. that said, now