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Transcript: Republican VP Nominee Paul Ryan

The GOP VP nominee’s remarks to AARP members

Jane Pauley: Thank you, Congressman Ryan. We have got hundreds of questions and I wonder if you could take a few before you leave us. The first one comes from Mitchell, Indiana — I’m from Indiana — from Donna, who asks, “Why are Social Security and Medicare the first thing people look at when deciding to balance the budget?”  She says, “Aren't there other areas of the budget that can be restructured to enable savings?”

Congressman Ryan: It's a good question. First of all, it is not what is used to balance the budget in the early decades, in the beginning. You have to cut spending in other areas of government. You have to grow the economy to get revenues to come in, but in the future, it's these programs that become the primary drivers of our debt. Let me explain. By the year 2025, according to the Congressional Budget Office, three programs — Medicare, Social Security and Medicaid — plus interest consume 100 percent of all federal revenues.

Now, why is that? It's really because of demographics and health inflation. What do I mean when I say that? We are going from approximately 40 million seniors to 80 million seniors in one generation. And don't forget that these programs are pay-as-you-go programs. Current workers pay current taxes for current retirees. I pay my FICA taxes for my mom’s Medicare benefits. And when you have a 100 percent increase in your retirement population, but only about a 17 percent increase in the tax-paying population to pay for those benefits and the cost of health care, of Medicare goes up about 8 percent a year, therein lies your problem. That is why you need to put in place these kinds of reforms that get at the root cause of health inflation. 

So it's not about balancing the budget early. That's not what you do to balance a budget.  That's not what we propose. But it's about putting the kinds of reforms in for my generation so that we don't have a debt crisis, so that Medicare and Social Security is there for my generation when we retire.

The point we are trying to make is this: Let's not have a European crash or debt crisis on our hands. Because you know what happens then, when the bond markets turn on you? Real cuts for real people in real time. That's what they’re doing. They’re slashing health and retirement benefits for current seniors. Cranking up taxes, slowing down the economy, young people can't get jobs.

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