Avoiding a debt-crisis

the photo ops and all the messages, a very serious debate: austerity vs. growth. And this is not just a debate in Europe. This is very much a part of the U.S. economy . What do you do to get the economy growing again? Do you have to slash budgets here in the U.S. if you're going to get the economy to grow or not? That's going to be a fight for the campaign and a fight for the fall as well as we wonder whether they'll be another debt debacle like we saw last summer. That's where I want to begin with my guests this morning. Joining me, Assistant Majority Leader and Democrat of Illinois Senator Dick Durbin and Chairman of the House Budget Committee Paul Ryan , Republican of Wisconsin . Welcome to both of you this morning.

SEN. DICK DURBIN (D-IL): Thanks. Good to be with you .

REP. PAUL RYAN (R-WI): Good morning, Gregory . Good morning, Dick .

MR. GREGORY: Chairman Ryan , let me start with you. This question of austerity in Europe. They had failing economies, nearly depressed economies, the answer throughout the region was to slash their budgets. Has it failed?

REP. RYAN: Well, no, David , I would say they've also raised taxes, they have -- this is a cautionary tale of what happens when politicians who make a lot of empty promises end up running out of the ability to borrow money at cheap rates and now they're broken promises. It's a cautionary tale of what will happen to us if we stay on the path we are on. What we're saying is let's get on growth and prevent austerity . The whole premise of our budget is to pre-empt austerity by getting our borrowing under control , having tax reform for economic growth , and preventing Medicare and Social Security and Medicaid from going bankrupt. That pre-empts austerity . The president, his budget , the fact the Senate hasn't done a budget in three years, puts us on a path towards Europeanlike austerity . That's what we're trying to prevent from happening in the first place .

MR. GREGORY: So this is the problem, Senator, whether if the president's message to European leaders is your approach hasn't worked. He wants a pro-growth agenda. What does that mean? More taxes? More spending? More stimulus? Is that his answer for the U.S. economy as well?

SEN. DURBIN: No, Paul , David , I can tell you that Paul and I agree on the basic premise. We are facing serious deficit and debt challenge in this country. Our approaches are different. President Obama , and I agree with his position, thinks that we ought to make certain that we're strong coming out of this recession, that we are creating good jobs and growing businesses. Secondly, focusing on the working people, middle-class Americans, who have been struggling, falling behind when it comes to their income. And making certain that the programs that we preserve as we cut spending are critical programs like education and innovation and infrastructure. When I take a look at Paul Ryan 's budget and see $150,000 in income tax cuts for the wealthiest Americans , that is not consistent with those goals. If we really want to bring this deficit down, stick to the Simpson-Bowles Commission approach. Put everything on the table, but first get this economy on its feet and moving forward.

MR. GREGORY: But I just want to go back to this point about what Europe is going through and the lessons from Europe because they seem to be very much be part of our political debate, as well, which is can you cut government spending and create economic growth or not?

SEN. DURBIN: Well, I think you have to do some cuts in spending, that's part of it, for sure.

REP. RYAN:

SEN. DURBIN: But don't -- what the president says and I agree with this, don't eliminate the basic things that middle-income Americans need to succeed. We're talking about an opportunity to own a home, to have an education for your children. These are things, unfortunately, cut by Paul 's budget in the House of Representatives . That is not the approach to grow the economy and tame the deficit.

MR. GREGORY: Chairman:

REP. RYAN: Well, it's as if our approach is Draconian or something like that. What our budget does, David , is it grows spending on average by 3 percent a year for the next 10 years vs. President Obama 's approach, which was to grow spending by 4 1/2 percent over the next 10 years. So we're actually not even really cutting spending, we're simply slowing the rate of increase. But to your earlier question, can you cut spending without jeopardizing the economy? I think answer -- the answer clearly is yes because if we fix the programs that are the drivers of our debt, then we'll reduce a debt crisis likelihood. Then we actually bring borrowing down, which opens up certainty for investors. And more to the point, we should budget to fix this problem. Dick and the folks over in the Senate , they haven't passed a budget in three years, David . How can you send signals to investors, to entrepreneurs, to families, to the American economy that we're going to prevent a debt crisis, prevent Europeanlike austerity if we're not even willing to pass a budget to deal with these issues for three years?

MR. GREGORY: Chairman Ryan , what about your own budget ?

REP. RYAN: The president, he gave us a budget , but unfortunately his budget doesn't address these things.

MR. GREGORY: Well, what about your own budget and the fact that there are a good many Republicans who don't support your vision of how to deal with the budget deficit ? So don't you have a problem within your own party?

REP. RYAN: Not in the least. We've -- we had 41 votes in the Senate alone just the other day. I think the Toomey budget got 42 votes, a budget very similar to ours. We passed it with a very comfortable vote margin in the House . What we did is we showed the American people specifically how we think we can save Medicare from bankruptcy, improve Medicaid , get this debt under control by balancing the budget , by getting spending under control . And what we're saying about taxes is take the tax shelters and the loopholes away from, from the well connected and the well off so we can lower tax rates for everybody so we can allow small businesses to grow and compete. Most of our businesses file their taxes as individuals. President Obama is content with bringing their top tax rate to as high as almost 45 percent in January when our competitors, even in Europe , have an average tax rate of about 25 percent on their businesses. We think that's a recipe for economic stagnation.

MR. GREGORY: But...

REP. RYAN: Mitt Romney is showing a different path forward and that, that's -- we, we put our ideas on the table. Unfortunately, the Senate isn't even trying.