Ted Simons: Good evening and welcome to "Horizon." I'm Ted Simons. He's a six-term Arizona congressman who is making a run for the senate. Congressman Jeff flake represents Arizona's sixth congressional district which covers much of the East Valley. He's here tonight to talk about news from capitol hill and other current events. Thanks for joining us.
Jeff Flake: Thanks for having me Ted.
Ted Simons: Let's start with the senate candidacy. Why are you running?
Jeff Flake: Well, I think we've been well represented with senator Kyl. He's been a great senator for a number of years and there will be a great void when he leaves. I think we need somebody who appreciates the fiscal shape in the country and who will get our fiscal situation in control and also somebody who will work for Arizona. We have a lot of needs here. We have a lot of public land issues and other things that other states don't have or understand and you need someone who will work those issues.
Ted Simons: I want to talk about the fiscal issues. But back to the candidacy. What kind of candidate will you be? Because right now, in the Republican party you've got conservatives and Tea Partyers and moderates. A lot of folks in the mix. Where are you?
Jeff Flake: I hope to be the lonely candidate. I'm the only one in the race right now. And that would be nice if it stays that way. But I think people know my record. I'm a fiscal conservative and I believe that the federal government is too big and taxes and regulates too much.
Jeff Flake: What do you think about the tea party?
Ted Simons: Think it's been helpful in terms of getting people energized about being involved in the political process and benefited Republicans in particular, because the Tea Party, the mainstay is the fiscal conservatism and they have identified that as a issue and worked and organized in that regard and it's been very helpful for conservatives.
Ted Simons: For those who say it's fracturing the Republican party, you say?
Jeff Flake: To the extent it focuses on fiscal discipline, it's been very, very helpful and elections last year bore that out.
Ted Simons: Last question on the candidacy. Would you be the kind of senator -- I ask this because we hear a lot of this coming from Capitol Hill, that we need more folks going across the aisle. But others say, no, no, now is the time to stick to your guns. Where do you stand?
Jeff Flake: I think there are some issues you have to work across the aisle on and you should and Arizona faces issues that will only be solved with a bipartisan mix, and there's some issues where you should stick to principles and hope the other side comes to your direction. I think it's a mix of both and I have a record of working on the other side of the aisle if I need to. If it's an issue that I believe is important and one that -- is important and one that you can stick to your principles and work on both sides.
Ted Simons: Let’s ask some specific issues here. The U.S. debt ceiling, will you vote to raise the debt ceiling?
Jeff Flake: Only if it's coupled with cut, caps and reforms. We've got to have that. It's irresponsible to vote to raise it again unless we send the signal we're serious about getting ahold of our debt and deficit. Not just sending a signal, but we put in place mechanisms to ensure we do that.
Ted Simons: Does it have to be an equal balance? Raise the ceiling this much and cuts this much?
Jeff Flake: You need first cuts in the year you're in. F.Y. '12, significant cuts, more so than in F.Y. '11. That was not significant. Second, cuts, for the medium term, you need caps that will ensure that if congress fails to hit its spending targets, which believe me, we will, then there are automatic decisions across the board that ensure we stay under certain levels. And three, we've got to have reforms in the long term. A balanced budget amendment is what I prefer. Things that will ensure that the federal government has a fiscal straight jacket on and we're not in the situation again.
Ted Simons: Critics of the Republican party say, we keep hearing cuts, we have to have cuts equal to if not greater than the ceiling limit being. What kind of cuts? The military, cuts to pension fund? What?
Jeff Flake: Across the board. Anyone who says we can't cut the military isn't looking hard enough. $700 billion budget, if you can't find cuts there, like I said, you're not looking far enough. Entitlement spending, we've got to reform, in particular, Medicare. That's where the real money is. If you look out 75 years, our unfunded liabilities total about $90 trillion. 80 trillion is healthcare related so you’ve got to have significant entitlement reform as well.
Ted Simons: The idea of -- you like the idea of turning it into a voucher system.
Jeff Flake: It's not a voucher system. What we propose is premium support. It's like I have as a member of congress. For those in retirement or nearing retirement, anyone near 55, the system stays the way it is and if we act now, we can do that. For those under 55, like me, then we'll have a system where, like members of congress, where the federal government will make the contribution and allow you to shop for your own policy with that contribution. They will support the system you pay. You've got to have a system like that if you make Medicare solvent for the long term. For those who say the Republicans are changing Medicare as we know it, it's changing, it's going to be gone under the current system unless we reform it and we're trying to do it that's sustainable for the long term.
Ted Simons: So for those who say these options are not good for the elderly, necessarily, or for those who are sick, because maybe family members aren't there to advise. I know, I'm healthy and I -- the whole issue is absolutely staggering and confounding. For those not feeling well or not in the best of shape, how can they be expected to make the best decision?
Jeff Flake: I think to say that only the government can make decisions for families is demeaning. Individuals can make those decisions and under the current system, we have a system that's simply unsustainable. The average couple pays into Medicare about $114,000 throughout their lifetime and draws more than $300,000 in benefits. When you have only three workers for every retiree, that's not a system that can last long. You have to change it, reform it, that improves quality and controls cost and using the market to the extent you can, you'll never have a full free market when you have a third party, government, or somebody else paying part of the cost. To the extent you can, you've got to use what you can to control cost and we aren’t doing that now.
Ted Simons: Newt Gingrich, no shrinking violet when it comes to those issues, says those ideas you talked about, are too big of a jump and smacks too much of social engineering.
Jeff Flake: Those are things that Newt Gingrich has been proposing for years. It seems odd that he's at odds with it so I’ll just leave it at that.
Ted Simons: He and other critics of the idea say it's better to have folks voluntarily migrate instead of this kind of quick change.
Jeff Flake: This is no quick change. It wouldn't effect anyone over the age of 55. You have another decade or so before it affects anybody. We've got to do that, if we keep the current system in place, Medicare will be completely insolvent within 10 years or so. We ought to act now.
Ted Simons: I want to get back to the debt limit and the idea that -- I think we hit it today.
Jeff Flake: We did.
Ted Simons: We've got until August now.
Jeff Flake: We bumped up against it and hope it knocks sense into us, finally.
Ted Simons: But Tim Geithner, the secretary of the treasury, says that lawmakers are playing chicken. If default even approaches, even becomes a possibility, it would be catastrophic. And there are quotes from Ronald Reagan who said the exact same thing, that interest rates would skyrocket and the market go crazy and even getting close to talking about default is not a good thing.
Jeff Flake: Look at it this way, if we fail to send the signal we're serious about our debt, we'll have a treasury auction and no buyers for our debt. It's gonna be default that way or if we get serious and put in place provisions that ensure we have cuts and caps and some kind of balance that will settle the markets and let them know that we are serious about getting hold of our debt, the catastrophe that people predict will come if we simply raise the debt limit, no strings attached and say business as usual. We cannot continue on this road. I don't know how else to say it. But we will soon have a treasury auction and have the Chinese or others buying our debt say it's enough, we’ve already been downgraded.
Ted Simons: And for those who say now is the time to increase revenue, you say --
Jeff Flake: You bet. But you shouldn't do it by increasing tax rates. Here's the thing -- those who are talking about, you know, the easiest way to get out is to just raise taxes, if you look at the lowest margin -- sorry, the highest marginal tax rate we’ve had over the last 50 years it’s about 91%, just before Reagan came in. The lowest high marginal rate was about 28% in 1988, I believe. You would think with those variations in the top marginal rate, you'd have wide variations in revenue coming into government but they only go from 15-21%, so no matter where you put that marginal rate so the government is going to take in about the same amount of revenue. It's the spending you have to look at. But if you can derive more revenue by lowering rates and flattening the base, getting rid of tax breaks and exemptions, I'm for that. That's part of the Ryan rate, but don't raise tax rates.
Ted Simons: Farm subsidies?
Jeff Flake: Oh, get rid of them, you can believe it, one of the most egregious examples. We subsidize cotton heavily here. Went we went to the last farm bill we said and we're subsidizing too much to fulfill our international trade obligations, agreements. Sure enough, the Brazilians sued us and our response was not to cut our cotton subsidies but subsidize the Brazilians cotton for the tune of 146 thousand, sorry million just to keep them from suing us. That's one example of the out of control subsidies.
Ted Simons: One more issue and this will no doubt come up in your campaign. That's immigration reform. You're seen as someone looking at comprehensive solutions and reforms in the past. Kind of came out and said that was a dead end.
Jeff Flake: It is.
Ted Simons: Have you changed your mind on that?
Jeff Flake: Any one of us who have been involved in this issue for the last 10 years -- myself, senator McCain and senator Kyl -- have understood until we have better border security than we have now, until the Tucson sector looks more like the Yuma sector in terms of enforcement on the border, no one is going to trust the federal government -- until you have better border security, those of us who beat our head against the wall for a decade back there have come to the realization we'll not get it until we have better border security.
Ted Simons: We hear that a lot. It's a major topic and securing the border is always mentioned. What does that mean? The president actually made a joke. Some didn't find it funny. That the target keeps moving and no one can figure out when the border will be secure enough to get the comprehensive reform going.
Jeff Flake: The president speaks where he says some want a MOAT, some want alligators in the MOAT. That was just flat demeaning. We had a rancher killed a year ago, for them to be holding out for alligators and a MOAT is demeaning. What I consider better border security is what I said before. In the Yuma sector, you have operational control, where if an illegal alien crosses the border you have a reasonable expectation of catching him or her. You don’t have anything approximating that in the Tucson sector -- the figures for every person apprehended, three go free and for the president or secretary Napolitano to say border parole is done, or something approximating that doesn't square with reality.
Ted Simons: If the Tucson sector looks more like the Yuma sector, whenever that bar is reached. We'll discover that nearly half of those here illegally don't sneak across the border. They came legally on a visa and overstayed. You gotta do interior enforcement. Better enforcement of the workplace and deal with those here illegally right now, in some fashion, some 12 million or so. There's a lot still to do but we can't move forward until we have better security on the border. Plus, if you look at Mexico right now, you could have a situation after the next elections in Mexico where the new government in Mexico decides to cut a deal with the cartels rather than fight them and then you have a situation where you've got to have better border security. We need it now and we'll need it more then.
Ted Simons: What about the dream act?
Jeff Flake: It needs to be part of comprehensive reform. We need to get to that, but only after we secure the border.
Ted Simons: All right. Congressman, good to see you.
Jeff Flake: Thanks for having me.