Minority Whip Bashes Obama's Small Business Plan

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David Greene speaks with Senate Minority Whip Jon Kyle of Arizona about last week's primaries and the debate over extending the Bush-era tax cuts.


The chatter here in Washington this week is about Tea Party politics and how to jump-start the economy. In Delaware on Tuesday, Christine O'Donnell ruffled the GOP establishment with Tea Party support. She beat nine-term Republican Congressman Mike Castle to win the nomination for Senate.


Meantime, in Congress, the talk is all about the economy, namely tax cuts and jobs. Yesterday, the Senate passed a bill to create a $30 billion small business lending fund. I talked to a key Senate leader today. Senator Jon Kyle of Arizona is the Republican whip. Kyle joined most other Republicans in opposing that small business bill.

Senator JON KYLE (Republican, Arizona; Senate Minority Whip): The primary reason that I voted against it is that it is the kind of approach which I don't think helps. It's another TARP program. It has the U.S. government taking an equity position - in other words, an ownership position in banks. And then, those banks have to lend to certain groups in our society. Small businesses are the focus of this particular legislation.

It would be far more helpful to small businesses simply to tell them right now we're not going to raise your taxes. That's what they're waiting to hear. It's the raising of their taxes that creates the uncertainty and the harmful conditions to their economic growth.

GREENE: And I did want to get to taxes because I wonder if you could help us understand something. You have expressed some real concern about the ballooning deficit, the size of the national debt. But like other Republicans, you want to keep the Bush-era tax cuts for the wealthiest Americans in place. And I just want to offer some numbers to our listeners. If you extend those tax cuts to the wealthiest Americans, that adds some $700 billion to the national debt over the next decade. That's the argument that's been presented by some Democrats. And could you respond to that?

Sen. KYLE: You bet.

GREENE: Why not...

Sen. KYLE: You bet. First of all, because Democrats would not agree that the tax cuts in 2001 and 2003 should be permanent, they expire at the end of this year.

GREENE: Right.

Sen. KYL: So if action isn't taken, we're going to see the largest tax increase in the history of the country. What's being proposed is that taxes would be raised on certain Americans but not on others.

GREENE: By letting those tax cuts expire, you're saying.

Sen. KYL: That's right. And you say, well, what about the impact on the deficit then? Well, a couple of points. First of all, it is twice as expensive to extend the current tax rates to the so-called middle class, the three lower income tax brackets.

But the more important point is the money doesn't belong to Washington, it belongs to the taxpayers. And if Congress makes the decision that we want to extract less money from all Americans or from any particular group of Americans, it shouldn't have to make up that revenue to the U.S. Treasury.

The philosophy that the government always has to take a certain amount of money, and if you ever decide you want to reduce those taxes, you have to somehow raise taxes somewhere else, is an assumption that the government can never be shrunk. I think that's a bad policy.

GREENE: Senator, I want to move on. I know our time is limited to politics because it's been an interesting week for Republicans on the political front. Let me just ask: What is the Tea Party's place in the GOP?

Sen. KYL: Well, technically, there is no single Tea Party. There are groups of Americans all over the country who have organized, but it's really more of a movement than it's certainly not a political party, as I know your listeners know.

GREENE: It sounds like you're downplaying the movement a little bit.

Sen. KYL: No, I'm not at all. In fact, I would do just the opposite. It is an incredible movement. It is an energy that we haven't seen in a long time. My point is to say that it's not monolithic. It's not a political party.

And the second point I would make is it's not for the Republican Party to somehow try to control it. The Republican Party should be in synch with the Tea Party in the sense that it is a movement that embodies the feelings of millions of Americans.

GREENE: I want to play just a few seconds of tape from a powerful conservative voice in the country, Rush Limbaugh. This is what he had to say this week.

Mr. RUSH LIMBAUGH: When voters are clearly frightened of where the hell the country is headed, vote for the most conservative Republican in the primary, period.

GREENE: That's the new Limbaugh rule, Rush Limbaugh says. What's your reaction to that?

Sen. KYL: Well, I'd actually put it slightly differently. I subscribe to the William F. Buckley rule. His rule was vote for the most conservative candidate who can win. And I subscribe to that theory.

GREENE: Can Christine O'Donnell win that Senate seat in Delaware?

Sen. KYL: I don't know. We will see. That race has just started. Her general election race is two days old now.

GREENE: But you said it makes life harder for Republicans to have her there and not Mike Castle.

Sen. KYL: I think the conventional wisdom all along has been that Mike Castle clearly was an electable person, and I suspect that most Democrats wrote that seat off: If Mike Castle were the Republican nominee, that he would win.

It is not that clear with respect to Christine O'Donnell. I haven't seen any polls, but she doesn't have the same track record and will probably have a more difficult time winning than Mike Castle would have had.

GREENE: So the Tea Party perhaps has made life harder for the party.

Sen. KYL: In that particular race, the nominee I think will have a more difficult time winning than Mike Castle would have had.

GREENE: Senator Kyl, thank you so much for your time today.

Sen. KYL: You're very welcome.

GREENE: That's Jon Kyl of Arizona, the Senate Republican whip.

(Soundbite of music)

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