CNBC’s “Your Money, Your Vote: The Republican Presidential Debate” Live from Oakland University in Rochester, MI …

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BARTIROMO: And good evening, everyone. I’m Maria Bartiromo.

HARWOOD: I’m John Harwood.

And welcome to CNBC’s Republican Presidential Debate.

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BARTIROMO: Tonight, we are here in the great state of Michigan for a debate that will focus almost exclusively on the economy and how to fix the financial problems of our country.

On the stage tonight from left to right: Senator Rick Santorum.

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BARTIROMO: Congresswoman Michele Bachmann.

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BARTIROMO: Speaker Newt Gingrich.

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BARTIROMO: Governor Mitt Romney.

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BARTIROMO: Mr. Herman Cain.

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BARTIROMO: Governor Rick Perry.

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BARTIROMO: Congressman Ron Paul.

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BARTIROMO: And Governor Jon Huntsman.

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HARWOOD: The candidates will have 60 seconds to respond to questions, 30 seconds for follow-ups and rebuttals. Those will be at the discretion of the moderators.

We also want you, the candidates, to help us out a little bit, by answering the questions as directly and specifically as you can. I know you want to. You have proven that. But just in case you get off topic, maybe by accident, we may have to interrupt you.

BARTIROMO: Throughout the evening tonight we will be joined by an all-star lineup of the smartest people on CNBC.

First up tonight, Jim Cramer, the host of “Mad Money.”

Jim, welcome.

CRAMER: Thank you, Maria.

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HARWOOD: And we also want to hear your voice. Go to our Web site, Debate.CNBC.com, and tweet us at CNBCDebate.

All night we’ll be showing your tweets on the bottom of the screen, so all of the candidates will have even more of a motive to impress.

BARTIROMO: In the interest of time, the candidates have agreed to forego opening and closing statements tonight. So let’s get started.

And we begin with you, Mr. Cain. I want to begin with what we saw today, another rough day for our money, for our 401(k)s. Once again, we were all impacted by the news that the Dow Jones Industrial Average dropped 400 points today. The reason, Italy is on the brink of financial disaster.

It is the world’s seventh largest economy. As president, what will you do to make sure that their problems do not take down the U.S. Financial system? It is the world’s seventh largest economy.

As president, what will you do to make sure their problems do not take down the U.S. financial system?

 

CAIN: Let’s start with two things. First, we must grow this economy. We have the biggest economy in the world. And as long as we are stagnant in terms of growth in GDP, we impact the rest of the world. We must do that.

But we’re not going to be able to do that until we put some fuel in the engine that drives economic growth, which is the business sector. This administration has done nothing but put stuff in the caboose, and it’s not moving this economy. We must grow this economy, number one.

Number two, we must assure that our currency is sound. Just like a dollar must be dollar when we wake up in the morning, just like 60 minutes is in an hour, a dollar must be a dollar. If we are growing this economy the way it has the ability to do and at the same time we are cutting spending seriously, we will have things moving in the right direction in order to be able to survive these kind of ripple effects.

BARTIROMO: So, to be clear, focus on the domestic economy, allow Italy to fail?

CAIN: Focus on the domestic economy or we will fail, so, yes, focus on the domestic economy first. There’s not a lot that the United States can directly do for Italy right now, because they have — they’re really way beyond the point of return that we — we as the United States can save them.

BARTIROMO: Governor Romney, should we allow Italy to fail? Should we have a stake in what’s going on in the eurozone right now?

ROMNEY: Well, Europe is able to take care of their own problems. We don’t want to step in and try and bail out their banks and bail out their governments. They have the capacity to deal with that themselves. They’re a very large economy.

And there will be, I’m sure, cries if Italy does default, if Italy does get in trouble. And we don’t know that’ll happen, but if they get to a point where they’re in crisis and banks throughout Europe that hold a lot of Italy debt will — will then face crisis and there will have to be some kind of effort to try and uphold their financial system.

There will be some who say here that banks in the U.S. that have Italian debt, that we ought to help those, as well. My view is no, no, no. We do not need to step in to bail out banks either in Europe or banks here in the U.S. that may have Italian debt. The right answer is for us…

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BARTIROMO: But — but the U.S. does contribute to the International Monetary Fund, and the IMF has given $150 billion to the eurozone. Are you saying the U.S. should stop contributing to the IMF?

ROMNEY: I’m happy to continue to participate in world efforts like the World Bank and the IMF, but I’m not happy to have the United States government put in place a TARP-like program to try and save U.S. banks that have Italian debt, foreign banks doing business in the U.S. that have Italian debt, or European debt. We’re just — banks there.

There’s going to be an effort to try and draw us in and talk about how we need to help — help Italy and help Europe. Europe is able to help Europe. We have to focus on getting our own economy in order and making sure we never reach the kind of problem Italy is having.

If we stay on the course we’re on, with the level of borrowing this administration is carrying out, if we don’t get serious about cutting and capping our spending and balancing our — our budget, you’re going to find America in the same position Italy is in four or five years from now, and that is unacceptable. We’ve got to fix our — our deficit here.

CRAMER: Congressman Paul…

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(inaudible) to say, and I really get that. But I’m on the frontlines of the stock market. We were down 400 points today. We’re not going to be done going down if this keeps going on, if Italy keeps — the rates keep going up. Surely you must recognize that this is a moment-to-moment situation for people who have 401(k)s and IRAs on the line and you wouldn’t just let it fail, just go away and take our banking system with it?

PAUL: No, you have to let it — you have to let it liquidate. We’ve had — we took 40 years to build up this worldwide debt. We’re in a debt crisis never seen before in our history. The sovereign debt of this world is equal to the GDP, as ours is in this country. If you prop it up, you’ll do exactly what we did in the depression, prolong the agony. If you do — if you prop it up, you do what Japan has done for 20 years.

So, yes, you want to liquidate the debt. The debt is unsustainable. And this bubble was predictable, because 40 years ago we had no restraints whatsoever on the monetary authorities, and we piled debt on debt, we pyramided debt, we had no restraints on the spending. And if you keep bailing people out and prop it up, you just prolong the agony, as we’re doing in the housing bubble.

PAUL: Right now, Fannie Mae and Freddie Mac are demanding more money because we don’t allow the market to determine what these mortgages are worth. If you don’t liquidate this and clear the market, believe me, you’re going to perpetuate this for a decade or two more, and that is very, very dangerous.

CRAMER: Governor…

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(inaudible) Italy’s too big to fail. It’s great. I’d love it if we were independent. It would be terrific to say, “It’s your fault. It’s your fault. It’s your problem.” But if this goes, the world banking system could shut down. Doesn’t that involve our banks, too?

 

HUNTSMAN: So we wake up this morning, and we find that the yield curve with respect to Italy is up, and prices are down. So if you want a window into what this country is going to look like in the future if we don’t get on top of our debt, you are seeing it playing out in Europe right now.

You are seeing the metastasy (ph) effect of the banking sector. And what does it mean here? What am I most concerned about, Jim? I’m concerned that it impacts us in way that moves into our banking sector where we have got a huge problem called “too big to fail” in this country.

We have six banks in this country that combined have assets worth 66 percent of our nation’s GDP, $9.4 trillion. These institutions get hit. They have an implied bailout by the taxpayers in this country, and that means that we are setting ourselves up for disaster again.

Jim, as long as we have banks that are “too big to fail” in this country, we are going to catch the contagion and it’s going to hurt us. We have got to get back to a day and age where we have properly sized banks and financial institutions.

HARWOOD: Thank you, Governor.

Governor Romney, I want to switch…

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HARWOOD: … to the bailout drama that we lived through in this country, and no state understands it better than the state of Michigan. I’m going to talk a little bit about your record on that. Four years ago when you were running for the Republican nomination and the auto industry was suffering, you said, where is Washington? After the election, when the Bush administration was considering financial assistance for the automakers, you said, no, let the Detroit go bankrupt.

Now that the companies are profitable again, after a bailout supported by your Republican governor here in Michigan, you said, well, actually, President Obama implemented my plan all along — or he gravitated to my plan.

With a record like that of seeming to be on all sides of the issue, why should Republicans be confident in the steadiness of your economic leadership?

ROMNEY: John, I care about this state and about auto industry like — I guess like no one else on this stage having been born and raised here and watched my parents make their life here. I was here in the 1950s and 1960s when Detroit and Michigan was the pride of the nation.

I have seen this industry and I’ve seen this state go through tough times. And my view some years ago was that the federal government, by putting in place CAFÉ requirements that helped foreign automobiles gain market share in the U.S., was hurting Detroit. And so I said, where is Washington? They are not doing the job they ought to be doing.

My view with regards to the bailout was that whether it was by President Bush or by President Obama, it was the wrong way to go. I said from the very beginning they should go through a managed bankruptcy process, a private bankruptcy process.

We have capital markets and bankruptcy, it works in the U.S. The idea of billions of dollars being wasted initially then finally they adopted the managed bankruptcy, I was among others that said we ought to do that.

And then after that, they gave the company to the UAW. They gave General Motors to the UAW and they gave Chrysler to Fiat. My plan, we would have had a private sector bailout with the private sector restructuring and bankruptcy with the private sector guiding the direction as opposed to what we had with government playing its heavy hand.

HARWOOD: Governor, let me follow up, because…

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HARWOOD: … the auto bailout is part of a larger issue facing your candidacy, as you know. Your opponents have said you switched positions on many issues. It is an issue of character, not personal, but political, you seemed to encapsulate it in the last debate when you said, “I’m running for office, for Pete’s sake.”

What can you say to Republicans to persuade them that the things you say in the campaign are rooted in something deeper than the fact that you are running for office?

ROMNEY: John, I think people know me pretty well, particularly in this state, in the state of Massachusetts, New Hampshire that’s close by, Utah, where I served in the Olympics. I think people understand that I’m a man of steadiness and constancy.

I don’t think you are going to find somebody who has more of those attributes than I do. I have been married to the same woman for 25 — excuse me, I will get in trouble, for 42 years.

(LAUGHTER)

ROMNEY: I have been in the same church my entire life. I worked at one company, Bain, for 25 years. And I left that to go off and help save the Olympic Games. I think it is outrageous the Obama campaign continues to push this idea, when you have in the Obama administration the most political presidency we have seen in modern history.

They are actually deciding when to pull out of Afghanistan based on politics. Let me tell you this, if I’m president of the United States, I will be true to my family, to my faith, and to our country, and I will never apologize for the United States of America. That’s my belief.

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HARWOOD: Governor Perry, I want to ask you about this, because you have raised this issue yourself about Governor Romney. And you are running as a politician with strong convictions.

 

HARWOOD: From the flip side, Ronald Reagan raised taxes when the deficit got too big, George W. Bush supported TARP and the auto bailout when he thought we might face a great depression — second great depression. Does that — examples like that tell you that good, effective leaders need to show the kind of flexibility that Governor Romney has shown on some issues?

PERRY: The next president of the United States needs to send a powerful message not just to the people of this country, but around the world, that America is going to be America again, that we are not going to pick winners and losers from Washington, D.C., that we are going to trust the capital markets and the private sector to make the decisions, and let the consumers pick winners and losers. And it doesn’t make any difference whether it’s Wall Street or whether it’s some corporate entity or whether it’s some European country. If you are too big to fail, you are too big.

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BARTIROMO: Speaker Gingrich, Federal Reserve Chairman Ben Bernanke has called unemployment in this country a national crisis due to the amount of days people are out — months that people are out of work and the number of people out of work. Many of you have come up with tax reform plans. Why is tax reform the path to job creation? And if it’s not the only path, what else can you implement to get people back to work?

GINGRICH: Well, first of all, I think Ben Bernanke is a large part of the problem and ought to be fired as rapidly as possible.

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GINGRICH: I think the Federal Reserve ought to be audited and we should have all the decision documents for 2008, ’09 and ’10 so we can understand who he bailed out, why he bailed them out, who he did not bail out, and why he did not bail them out.

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GINGRICH: So, I’m glad that Ben Bernanke recognizes some of the wreckage his policies have led to.

The reason we follow — I think most of us are for tax policies that lead to jobs is because we have had two cycles in my lifetime, Ronald Reagan, and the Contract with America, both of which had the same policy: lower taxes, less regulation, more American energy, and have faith in the American job creator as distinct from the Saul Alinsky radicalism of higher taxes, bigger bureaucracy with more regulations, no American energy, as the president announced again today in his decision on offshore, and finally class warfare.

So I would say that all of us on the stage represent a dramatically greater likelihood of getting to a paycheck and leaving behind food stamps than does Barack Obama.

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BARTIROMO: Congresswoman Bachmann, same question to you. How can you create jobs as quickly as possible?

BACHMANN: Well, I think one thing that we know is that taxes lead to jobs leaving the country. All you need to know is that we have the second highest corporate tax rate in the world.

And if you go back to 1981, and you look around the world, we had a lot of high corporate tax countries. It was 47 percent on average on a lot of countries across the world.

But if you look today in the United States, we have an effective rate if you average in state taxes, with federal taxes, of about 40 percent. But the world took a clue, because capital is mobile, and capital went to places where corporate tax rates went to 25 percent and falling.

We’re still stuck in a 1986 era of about a 40 percent tax rate. We have to lower the tax rate because it’s a cost of doing business, but we have to do so much more than that.

Our biggest problem right now is our regulatory burden. The biggest regulatory problem we have is Obamacare and Dodd/Frank. I will repeal those bills. I have written those bills to repeal those bills that have got to go. But beyond that –

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BACHMANN: But beyond that, we have to legalize American energy. And here is something else that we have to do that will help the economy. We have to build the fence on America’s southern border and get a grip on dealing with our immigration problem.

BARTIROMO: OK.

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HARWOOD: Senator Santorum, you proposed a zero tax on manufacturing businesses.

SANTORUM: I have.

HARWOOD: I understand the sentiment behind that. And the state of Michigan has lost hundreds of thousands of manufacturing jobs over the last few decades. Isn’t that the kind of distortion in the tax code that people want to get away from in order to get rates down: flatter, simpler, fairer?

SANTORUM: I think getting the rate down to zero is down — is pretty far down. That’s good.

HARWOOD: But it’s down for the manufacturing industry, as opposed to people doing other things. Isn’t that picking winners and losers?

 

SANTORUM: It’s down for a sector of the economy, not picking an individual winner or loser. It’s down for an entire sector of the economy that we are getting our hat handed to us by losing jobs.

We see that here in Michigan, we see it across this country. And the reason is government has made us uncompetitive.

We need to compete on taxes. We need to compete on regulations. We need to repeal Obamacare. We need to — I’ve said I’m going the repeal every single Obama-era regulation that cost businesses over $100 million. Repeal them all. We’ll — we’ll send a very clear message out to manufactures in this country and all over the world that America will compete.

Some have suggested we need to go into a trade war with China and have tariffs. That just taxes you. I don’t want to tax you. I want to create an atmosphere where businesses and manufacturers can be profitable. We’ll lower taxes, repatriating funds, 0 percent tax if you repatriate those funds and invest them in plant and equipment.

And then, of course, an energy policy that everyone on this stage is going to agree with that says, we are going to produce energy in this country. I’m different than many of them, that I’m going to cut all the subsidies out and let the market work, as opposed to creating incentives for different — different forms of energy that the government supports.

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BARTIROMO: You have all said that — that you will repeal the president’s health care legislation. We will get into that, because we want to know, then what? What is the plan once you repeal Obamacare?

But, first, Mr. Cain, the American people want jobs, but they also want leadership. They want character in a president. In recent days, we have learned that four different women have accused you of inappropriate behavior. Here we’re focusing on character and on judgment.

(BOOING)

You’ve been a CEO.

CAIN: Yes. BARTIROMO: You know that shareholders are reluctant to hire a CEO where there are character issues. Why should the American people hire a president if they feel there are character issues?

CAIN: The American people deserve better than someone being tried in the court of public opinion based on unfounded accusations. That’s…

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And I value my character and my integrity more than anything else. And for every — one person that comes forward with a false accusation, there are probably — there are thousands who would say none of that sort of activity ever came from Herman Cain.

You’re right. This country’s looking for leadership. And this is why a lot of people, despite what has happened over the last nine days, are still very enthusiastic behind my candidacy. Over the last nine days…

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Over the last nine days, the voters have voted with their dollars, and they are saying they don’t care about the character assassination. They care about leadership and getting this economy growing and all of the other problems we face.

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HARWOOD: Governor Romney, when you were at Bain Capital, you purchased a lot of companies. You could fire the CEO and the management team or you could keep them. Would you keep a CEO — are you persuaded by what Mr. Cain has said? Would you keep him on if you bought his company?

(BOOING)

ROMNEY: Look, look, Herman Cain is the person to respond to these questions. He just did. The people in this room and across the country can make their own assessment. I’m not…

(CROSSTALK)

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HARWOOD: Governor Huntsman, let me switch back to the economy. The…

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Many Republicans have criticized the Occupy Wall Street movement, but we had an NBC News-Wall Street Journal poll this week that showed a large proportion of the American people — 76 percent — said they believe there’s something wrong with our economy that tilts toward the wealthy at the expense of others. Do you consider something wrong with the structure of our economy in the income inequality that it produces? Is that something government should do something about? And if so, what?

HUNTSMAN: Let me just say that I want to be the president of the 99 percent. I also want to be the president of the 1 percent. This nation is divided, and it’s painful, and it is unnatural for the most optimistic, blue-sky people this world has ever known. We are problem-solvers.

When I hear out the people who are part of the Wall Street protests, I say, thank goodness we have the ability to speak out. I might not agree with everything they say. I don’t like the anti- capitalism messages. But I do agree that this country is never again going to bail out corporations. I do agree…

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Thank you. I do agree that we have blown through trillions and trillions of dollars with nothing to show on the balance sheet but debt, and no uplift in our ability to compete, and no addressing our level of unemployment.

 

HUNTSMAN: And I do agree that we have institutions, banks that are too big to fail in this country. And until we address that problem — we can fix taxes. We can fix the regulatory environment. We can move toward energy independence. So long as we have instant banks (ph) that are too big to fail, we are setting ourselves up for long-term disaster and failure.

HARWOOD: So, Governor, you agree with Governor Romney that the bailout that Governor Snyder supports in Michigan was a mistake?

HUNTSMAN: The bailout here in the auto sector, $68 billion worth, we are going to end up footing a bill — Governor Snyder knows that — of probably $15 billion when all is said and done. I don’t think that’s a good use of taxpayer money.

Instead, there ought to be some way of taking the auto sector through some sort of reorganization, get them back on their feet. The people in this country are sick and tired of seeing taxpayer dollars go toward bailouts, and we’re not going to have it anymore in this country.

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CRAMER: Governor Romney, do you believe public companies have any social responsibility to create jobs, or do you believe, as Nobel Laureate Milton Friedman, the most important, most influential conservative economist of the 20th century held, that corporations should exist solely to create maximum profit for their shareholders?

ROMNEY: This is a wonderful philosophical debate. But you know what? We don’t have to decide between the two, because they go together.

Our Democratic friends think when a corporation is profitable, that’s a bad thing. I remember asking someone, “Where do you think profits go? When you hear that a company is profitable, where do you think it goes?” And they said, “Well, to pay the executives their big bonuses.”

I said, “No, actually, none of it goes to pay the executives. Profit is what is left over after they have all been paid.”

What happens with profit is that you can grow the business. You can expand it. You have working capital and you hire people.

The right thing for America is to have profitable enterprises that can hire people. I want to make American businesses successful and thrive.

What we have in Washington today is a president and an administration that doesn’t like business, that somehow thinks they want jobs, but they don’t like businesses. Look, I want to see our businesses thrive and grow and expand and be profitable. I want to see more –

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CRAMER: Governor Perry, 30 seconds to you.

Do you think that companies can both be profitable and be able to create jobs? Do you think it’s a dichotomy? Do you think they can do it?

PERRY: There better be. And that’s the reason the tax plan that I laid out, a 20 percent flat tax on the personal side and a 20 percent corporate tax rate, that will get people working in this country. We need to go out there and stick a big old flag in the middle of America that says “Open for business again.”

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CRAMER: Mr. Speaker, how about to you, can corporations do both?

GINGRICH: Sure. Look, obviously, corporations can and should do both. And what is amazing to me is the inability of much of our academic world and much of our news media and most of the people on Occupy Wall Street to have a clue about history.

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GINGRICH: In this town, Henry Ford started as an Edison Electric supervisor who went home at night and built his first car in the garage. Now, was he in the 99 percent or the one percent?

Bill Gates drops out of college to found Microsoft. Is he in the one percent or the 99 percent?

Historically, this is the richest country in the history of the world because corporations succeed in creating both profits and jobs, and it’s sad that the news media doesn’t report accurately how the economy works.

(APPLAUSE)

BARTIROMO: Mr. Speaker — I’m sorry, but what is the media reporting inaccurately about the economy?

GINGRICH: What?

BARTIROMO: What is the media reporting inaccurately about the economy?

(LAUGHTER)

GINGRICH: I love humor disguised as a question. That’s terrific.

I have yet to hear a single reporter ask a single Occupy Wall Street person a single rational question about the economy that would lead them to say, for example, “Who is going to pay for the park you are occupying if there are no businesses making a profit?”

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CRAMER: Senator Santorum, I want to talk about a high-quality problem our country has.

I just came back from North Dakota. We have made the largest oil discovery in a generation there. Not only is it a — the find a big step toward creating energy independence, it stands to create as many as 300,000 jobs. But what the guys tell me up there is that they can’t handle the rush without federal help.

Would you favor incentives, incentives to get workers and businesses to where the jobs are to support this boom?

 

SANTORUM: No, because we have done it in Pennsylvania. Pennsylvania has Marcellus Shale. It took a while for us to ramp up, but we’re drilling 3,000 to 4,000 wells.

The price of natural gas, because of Marcellus Shale, which is the second largest natural gas find in the world, has gone from $12 to $3.65. And we let the marketplace work. So, no, we didn’t have the federal government come in and bail us out.

I want to make the point about manufacturing jobs again, because if you’re — if you’re talking about creating jobs that trickle down, I agree with Newt. We have folks who have innovators. But he always — he talked about innovators that — that created jobs for blue- collar workers. The unemployment rate among non-college-educated is well into the double digits in America. It’s 4 percent or 5 percent for people who have college degrees.

The reason I put forth this manufacturing plan is not just so we can say “Made Here in America,” that we can create opportunities for everyone in America, including those that don’t have that college skill set, people who built this country, like my grandfather, who was a coal miner. So — so that is a very important part that Republicans, unfortunately, are not talking about.

We need to talk about income mobility. We need to talk about people at the bottom of the — of the income scale being able to get necessary skills and rise so they can support themselves and a family. And that’s what manufacturing does, and that’s why I’m laser-beam focused on it.

(APPLAUSE)

BARTIROMO: Let’s get back to tax reform. Mr. Cain, let’s talk fairness in taxation. Ever since this country started taxing income 100 years ago, our system charges those people who make more money a higher rate than those people who make less money. Governor Perry has said he doesn’t believe in that approach, and your 9-9-9 plan suggests you don’t, either.

Why now, when the higher income group is doing better than the rest of America, is the time to switch to the same rate for all of us?

CAIN: My proposal is the only one that solves the problem by throwing out the current tax code, which has been a mess for decades, and we need to put in something different that I proposed, 9-9-9. It satisfies five simple criteria. It is simple. The complexity costs us $430 billion a year. It is transparent. People know what it is. There are thousands of hidden sneak-a-taxes in the current tax code. That’s why I want to throw it out.

It is fair. The reason it’s fair is because of the definition in Webster which says everybody gets treated the same. All businesses get treated the same, not having Washington, D.C., pick winners and losers. This is why I have proposed a bold plan of 9-9-9, 9 percent business flat tax, 9 percent tax on personal income, and a 9 percent national sales tax. It treats everybody the same. And it will boost this economy.

BARTIROMO: How do you ensure that, when the government needs more revenue, that the sales tax doesn’t go up and that plan doesn’t turn in 19-19-19?

CAIN: Tax codes do not raise taxes. Politicians do.

(APPLAUSE)

And as long as (inaudible) the people will hold the politicians’ feet to the fire. It’s not the code that raises taxes. It’s the politicians, because the code — because the approach, 9-9-9, would be very visible, the American people are going to hold the rates at 9.

HARWOOD: Governor Romney, Mr. Cain’s got a flat tax. Rick Perry’s got a flat tax. Congresswoman Bachmann is talking about a flat tax. You don’t have a flat tax. You’re proposing to preserve the Bush-era tax rates. What is wrong with the idea that we should go to one rate? Why do you believe in a progressive tax system?

ROMNEY: Well, I would like to see our tax rates flatter. I’d like to see our code simpler. I’d like to see the special breaks that we have in the code taken out. That’s one of the reasons why I take the corporate rate from 35 down to 25, is to take out some of the special deals that are there.

With regards to our tax code, what I want to do is to take our precious dollars as a nation and focus them on the people in this country that have been hurt the most, and that’s the middle class. The Obama economy has really crushed middle-income Americans.

This president has failed us so badly, we have 26 million people out of work, working part-time jobs that need full-time work, or stopped looking for work altogether. Median incomes have dropped 10 percent in the last three years. At the same time, gasoline prices are up, food prices are up, health care costs are up.

And so what I want to do is help the people who’ve been hurt the most, and that’s the middle class. So what I do is focus a substantial tax break on middle-income Americans. Ultimately, I’d love to see — see us come up with a plan that simplifies the code and lowers rates for everybody. But right now, let’s get the job done first that has to be done immediately. Let’s lower the tax rates on middle-income Americans. HARWOOD: Congresswoman Bachmann, Governor Romney is accepting the premises of the Democratic argument that you have to have a fair approach to taxation that preserves different rates for different people. Why is he wrong?

BACHMANN: Well, I would say President Obama is the one that’s wrong, because President Obama’s plan for job creation has absolutely nothing to do with the true people who know how to create jobs. He should really be going to job-creators if he wants to know how to create jobs. Instead, he continues to go to a General Axelrod in Chicago to look for his orders to figure out how to deal with the economy. That won’t work.

We know what needs to be done. We have a real problem. When you have 53 percent of Americans paying federal income taxes, but you have 47 percent of Americans who pay no federal income taxes, you have a real problem.

And that’s why in my tax plan, I have everyone paying something because everyone benefits by this magnificent country. So even if it means paying the price of two Happy Meals a year, like $10, everyone can afford to pay at least that.

And what it does is create a mentality in the United States that says that freedom is free. But freedom isn’t free. We all benefit. We all need to sacrifice. Everybody has to be a part of this tax code.

BARTIROMO: Congressman Ron Paul…

(APPLAUSE)

BARTIROMO: … you have said you want to close down agencies. Tell us about your tax plan as well as closing agencies — federal agencies. Where do those jobs go?

PAUL: Well, eventually they go into the private sector. Then don’t all leave immediately when the plan goes into effect. But what my plan does is it addresses taxes in a little different way.

We are talking about the tax code. But that’s the consequence, that’s the symptom. The disease is spending. Every time you spend, spending is a tax. We tax the people, we borrow, and then we print the money and the prices go up, and that is a tax.

So you have to address the subject of spending. That is the tax. That is the reason I go after the spending. I propose in the first year cut $1 trillion out of the budget in five departments.

(CHEERING AND APPLAUSE) PAUL: Now the other thing is that you must do if you want to get the economy going and going again is you have to get rid of price- fixing. And the most significant price-fixing that goes on, that gave us the bubble, destroyed the economy, and is preventing this from coming out, is the price-fixing of the Federal Reserve, manipulating interest rates way below market rates.

You have to have the market determine interest rates if you want a healthy, viable economy.

BARTIROMO: So you think the economy would be stronger if interest rates were higher right now?

PAUL: You would have more incentive. You would take care of the elderly. They get cheated. They get nothing for their CDs. Why cheat them and give the banks loans at zero percent? And then they loan it back to the government at 3 percent. They are ripping us off at the expense of those on fixed incomes and retirees.

BARTIROMO: Even though higher interest rates would make it much more expensive to borrow, mortgages.

 

PAUL: But you want is the market to determine this. Whoever thought that one person, the Federal Reserve Board chairman, knows what the money supply should be? Just in the past six months, M1 has gone up at the rate of 30 percent. That spells inflation. That spells lower standard of living and higher prices and watch out. They are coming.

(CHEERING AND APPLAUSE)

BARTIROMO: We are just getting started tonight. When we return, how will the candidates breathe new life into the lifeless housing market?

HARWOOD: Plus, the view of the economy from the corner office.

(BEGIN VIDEO CLIP)

(UNKNOWN): I think we are in serious trouble. Business people are struggling.

(UNKNOWN): The problems in the economy didn’t arrive in 20 minutes and they won’t be resolved in 20 minutes.

(UNKNOWN): The most important economic issue of concern to me is lack of leadership in government, and the lack of any focus on building confidence both with consumers and the business community.

(END VIDEO CLIP)

HARWOOD: So how are the candidates going to turn things around? CNBC’s “Republican Presidential Debate” will be right back. Stay with us.

(CHEERING AND APPLAUSE)

(COMMERCIAL BREAK)

BARTIROMO: Welcome back to be CNBC’s Republican Presidential Debate.

With us for this portion of the program, CNBC’s senior economic reporter, Steve Liesman.

Welcome, Steve.

LIESMAN: Great to be here, Maria. Thank you. BARTIROMO: Most economists agree that there can be no economic recovery without a recovery in housing. American families have lost some $7 trillion in home value in the last five years. Right now, four million people are behind on their mortgage or in foreclosure, 25 percent of homeowners owe more to the banks than their house is actually worth.

Governor Romney has said that the government should let the foreclosure process play out so that the housing market can recover and the free markets can work.

Speaker Gingrich, is Governor Romney right?

GINGRICH: We, he’s certainly right in the sense that you want to get through to the real value of the houses as fast as you can, because they’re not going to rise in value as long as you stay trapped, as Japan has done now for 20 years. But I think there are two specific steps you have got to understand in terms of housing.

To pick up on something Congresswoman Bachmann said, if the Republican House next week would repeal Dodd/Frank, and allow us to put pressure on the Senate to repeal Dodd/Frank, you would see the housing market start to improve overnight. Dodd/Frank kills small banks, it kills small business. The federal regulators are anti- housing loan, and it has maximized the pain level.

You could also change some of the rules so it would be easier to do a short sale where the house is worth less than mortgage than it is to do a foreclosure. Today, the banks are actually profiting more by foreclosing than encouraging short sales.

But in the long run, you want the housing market to come back? The economy has to come back.

When you are at four percent unemployment, you suddenly have a dramatic increase in demand for housing. When you’re at nine percent- plus unemployment, it’s hard to get the housing market to come back.

BARTIROMO: Governor Romney, respond in 30 seconds. Not one of your 59 points in your economic plan mentions or addresses housing. Can you tell us why?

ROMNEY: Yes, because it’s not a housing plan. It’s a jobs plan. And the right way to get –

(APPLAUSE)

ROMNEY: The best thing you can do for housing is to get the economy going, get people working again, seeing incomes, instead of going down, incomes coming up so people can afford to buy homes. The things the Speaker just indicated are excellent ideas as well. You have to let the market work and get people in the homes again, and the best way for that to happen is to allow this economy to reboot.

What we know won’t work is what this president has done, which is to try and hold off the foreclosure process, the normal market process, to put money into a stimulus that failed, and to put in place a whole series of policies from Obamacare to Dodd/Frank that it made it hard for this economy to get going. You want to get America’s economy going? We know how to do it. Just do almost the exact opposite of what President Obama has done.

(APPLAUSE)

LIESMAN: Governor Romney, we have created 2.7 million jobs since February, 2010. Over that period of time, the housing market has continued to decline. We are at 2003 price levels now.

 

LIESMAN: If we keep going the way we are going, in four or five years, we’ll be at 1999 price levels. The $7 trillion figure that Maria mentioned could almost double.

Are you willing to let that happen in America?

ROMNEY: And exactly what would you do instead? Would you decide to have…

LIESMAN: I’m asking you.

ROMNEY: … well, to have the federal government go out and buy all the homes in America? That’s not going to happen in this country. Markets work. When you have government play its heavy hand, markets blow up and people get hurt.

And the reason we have the housing crises we have is that the federal government played too heavy a role in our markets. The federal government came in with Fannie Mae and Freddie Mac, and Barney Frank and Chris Dodd told banks they had to give loans to people who couldn’t afford to pay them back.

(APPLAUSE)

And so — and so our friends — our friends in Washington today, they say, oh, if we’ve got a problem in housing, let’s let government play a bigger role. That’s the wrong way to go. Let markets work. Help people get back to work. Let them buy homes. You’ll see home prices come back up if we allow this market to work.

(APPLAUSE)

LIESMAN: But, Governor — Governor Perry, every quarter I get to report the GDP figures, and it’s a negative number for housing, and we’ve lost some 2 million construction jobs. Housing creates jobs, as well, doesn’t it?

PERRY: Not a negative number in Texas. And one of the reasons is because we have put policies into place that follow my plan to get America back working again.

LIESMAN: OK, so translate that plan to America.

PERRY: When — when you look at what I’ve laid out, whether it — the energy side and getting the energy industry going — and Rick Santorum is absolutely correct on that, is let’s get our energy industry freed up, federal lands, federal waters, pull back all of those regulations. Everybody on this stage understands it’s the regulatory world that is killing America.

(APPLAUSE)

The tax side of it, yeah. Have a flat tax. Have a corporate flat tax in there, as well. But the real issue facing America are regulations. It doesn’t make any difference whether it’s the EPA or whether it’s the federal banking — the Dodd-Frank or Obamacare. That’s what’s killing America.

And the next president of the United States has to have the courage to go forward, pull back every regulation, since 2008, audit them for one thing: Is it creating jobs, or is it killing jobs? And if that regulation is killing jobs, do away with it.

(APPLAUSE)

HARWOOD: Congresswoman Bachmann, in one of the last debates, you were asked what you would do about foreclosures, and you told moms to hang on. But your advice, as your colleagues have mentioned, was let the economy recover. So you agree with Governor Romney that the way to fix the housing market is to let the foreclosure process proceed more rapidly?

BACHMANN: Well, what I agree with is that we have got to stop what we’re doing now. When we had the financial meltdown, 50 percent of the homes are being financed by Fannie and Freddie. Today it’s 90 percent of the homes. In other words, the government is the backer of the homes.

Well, let’s take a look, an analysis of what a great, brilliant job Freddie and Fannie are doing. They just applied this week for another $7 billion bailout because they’re failing. The other one applied for a $6 billion bailout because they’re failing.

But what did they do? They just gave bonuses of almost $13 million to 10 top executives. This is the epicenter of capital — crony capitalism. That’s what’s wrong with Washington, D.C.

For these geniuses to give 10 of their top executives bonuses at $12 million and then have the guts to come to the American people and say, “Give us another $13 billion to bail us out just for the quarter,” that’s lunacy. We need to put them back into bankruptcy and get them out of business. They’re destroying the housing market.

(APPLAUSE)

HARWOOD: Since — since you mentioned Fannie and Freddie, Speaker Gingrich, 30 seconds to you, your firm was paid $300,000 by Freddie Mac in 2006. What did you do for that money?

GINGRICH: Were you asking me?

HARWOOD: Yes.

GINGRICH: I offer them advice on precisely what they didn’t do.

(LAUGHTER)

Look — look, this is not — this is not…

HARWOOD: Were you not trying to help Freddie Mac fend off the effort by the Bush administration…

(CROSSTALK)

GINGRICH: No. No, I do — I have never…

HARWOOD: … and the — to curb Freddie Mac.

GINGRICH: I have — I assume I get a second question. I have never done any lobbying. Every contract was written during the period when I was out of the office, specifically said I would do no lobbying, and I offered advice.

And my advice as a historian, when they walked in and said to me, “We are now making loans to people who have no credit history and have no record of paying back anything, but that’s what the government wants us to do,” as I said to them at the time, this is a bubble. This is insane. This is impossible.

 

GINGRICH: It turned out, unfortunately, I was right and the people who were doing exactly what Congresswoman Bachmann talked about were wrong. And I think it’s a good case for breaking up Fannie Mae and Freddie Mac and getting much smaller institutions back into the private sector to be competitive and to be responsible for their behavior.

(APPLAUSE)

LIESMAN: Mr. Cain, government-sponsored entities Fannie Mae and Freddie Mac, as Congresswoman Bachmann said, now underwrite or guarantee 90 percent of the home financing in this country. What would you do with these — with Fannie Mae and Freddie Mac? Would you shut them down even though it could mean higher interest rates for America? Does it make it even harder than it is right now for Americans to get home loans?

CAIN: You don’t start there. You start with fixing the real problem, which is growing this economy, which is why I have put a bold solution on the table, 9-9-9.

Secondly, then you get the regulators off of the backs of the banks like someone mentioned. Get the regulators out of the way, such that the small banks and the medium-sized banks aren’t being forced out of the business.

They would then be in a better position, and they might develop a desire in order to help homeowners reset their mortgages if they were able to see, number three, some certainty. Uncertainty is what’s killing this economy. And until we throw out the tax code, and put in something bold, get government out of the way by reducing the regulatory environment, we are going to still have our housing problem.

LIESMAN: I’m sorry, Mr. Cain, but you would come into office and Fannie Mae and Freddie Mac would be there. The question was, what would you do with them?

CAIN: OK. After I did those three things that I outlined, then deal with Fannie Mae and Freddie Mac.

You don’t start solving a problem right in the middle of it. So we’ve got to do that first.

I would also turn those GSEs into private entities. The government does not need to be in that business. I would find a way to unwind Fannie Mae and Freddie Mac, such that the marketplace can determine the future of the housing market.

(APPLAUSE)

HARWOOD: Governor Huntsman, I want to go back to the issue that you raised before about too big to fail. If anything, that problem has gotten worse since the financial crisis than before. The 10 biggest bank holding companies in this country now hold nearly 90 percent of all the assets in the banking system, up from 75 percent in 2006.

So, what would you do? Would you break up the banks to remove the risk, or diminish the risk for American taxpayers?

HUNTSMAN: Let me just say, on the housing discussion here, lost in all of this debate is the fact that there are people tuning in tonight who are upside down in terms of the financing of their homes. They are feeling real pain. People who probably heard today that they lost a job.

These issues are very real. They are complicated. For us to say that there is an easy solution to housing, that’s just not right, and that’s not fair. The economy does have to recover in order for the housing market to pick up its slack and for us to get on to housing starts, which ought to be 15 percent of our nation’s GDP, and today it’s two percent.

With respect to the banks that are too big to fail, you know today we’ve got, as I mentioned earlier, six institutions that are equal to 60, 65 percent of our GDP, $9.4 trillion. They have an implied guarantee by the taxpayers that they will be protected. That’s not fair, that’s not right for the taxpayers.

HARWOOD: So you break them up?

HUNTSMAN: I say we need to right-size them. I say, in the 1990s, you had Goldman Sachs, for example. That was $200 billion in size. By 2008, it had grown to $1.1 trillion in size. Was that good for the people of this country, or –

HARWOOD: Well, how would you accomplish that? How would you right-size that?

(CROSSTALK)

HUNTSMAN: I think we ought to set up some sort of fund. I think we ought to charge some sort of fee from the banks that mitigates the risk that otherwise the taxpayers are carrying. There has got to be something that takes the risk from the taxpayers off the table so that these institutions don’t go forward with this implied assumption that we’re going to bail them out at the end of the day. That’s not right, and it’s not fair for the taxpayers of this country.

BARTIROMO: Let’s stay on regulation for a moment. You have all said that you will repeal President Obama’s health care legislation.

Down the line, 30 seconds, if you repeal Obamacare, what’s the answer?

Jon Huntsman?

HUNTSMAN: I would say — and I would meet with the 50 governors of this country, and I would say, I did health care reform in my state, it took us three years to get it done. We delivered an insurance connector that was not a costly mandate.

You can sit down with the 50 governors and you can address cost containment. This is a $3 trillion industry, half of which any expert will tell you is totally nonsense and superfluous spending.

How do you get costs out of the system? How do you empower patients to better understand what they are getting when they go into the doctor’s office?

Number two, we need to do a better job in harmonizing medical records so that we can pull up on a consistent basis the most efficacious course of treatment for patients.

 

HUNTSMAN: And third, we need to close the gap on the uninsured without a costly mandate, letting the free market work and bringing people together with truly affordable insurance.

BARTIROMO: That’s time.

We want to get each of your comments on what the plan is.

Ron Paul?

PAUL: We need to get the government out of the business, and we do need to have the right to opt out of “Obama-care.” But we ought to have the right to opt out of everything. And the answer to it is turn it back over to the patient and the doctor relationship with medical savings accounts.

So I would say that we have had too much government. I have been in medicine, it has gone downhill. Quality has gone down. Prices have skyrocketed because of the inflation. So you need to get a market force in there, a medical savings account.

But this mess has been created — it’s a bipartisan mess. So it has been there for a while. So what we need is the doctor-patient relationship and medical savings account where you can deduct it from your taxes and get a major medical policy. Prices then would come down.

BARTIROMO: Thirty seconds, Governor Perry?

PERRY: Obviously on the Medicare side, you have to have an insurance type of a program where people have options of which — give them a menu of options of which they can choose from. I think you have to have the doctors and the hospitals and the other health care providers being given incentives on health care rather than “sick care.”

And then on Medicaid, it is really pretty simple, just like Jon and Mitt both know, you send it back to the states and let the states figure out how to make Medicaid work, because I will guarantee you we will do it safely, we will do it appropriately, and we will save a ton of money.

(APPLAUSE)

BARTIROMO: Mr. Cain. CAIN: The legislation has already been written. H.R. 3000. In the previous Congress it was H.R. 3400. And what that does — it has already been written. We didn’t hear about it in the previous Congress because “Princess Nancy” sent to it committee and it stayed there. It never came out.

(LAUGHTER)

CAIN: H.R. 3000 allows the decisions to be with the doctors and the patients, not with the bureaucrat in Washington, D.C. The legislation has already been written.

(APPLAUSE)

BARTIROMO: Governor Romney?

ROMNEY: Health care in 30 seconds is a little tough. But let me try. Number one, you return to the states the responsibility for caring for their own uninsured. And you send the Medicaid money back to the states so they can craft their own programs. That’s number one.

Number two, you let individuals purchase their own insurance. Not just getting it through their company. But buy it on their own if they want to, and no longer discriminate against individuals who want to buy their insurance.

Number three, you do exactly what Ron Paul said. I don’t always say that. But I have got to say it right now.

(LAUGHTER)

ROMNEY: And that is, you have to get health care to start working more like a market. And for that to happen, people have to have a stake in what the cost and the quality as well as of their health care. And so health savings account, or something called co- insurance, that’s the way to help make that happen.

And finally, our malpractice system in this country is nuts. We have got to take that over and make sure we don’t burden our system with it.

(APPLAUSE)

BARTIROMO: Mr. Speaker?

GINGRICH: Well, I just want point out, my colleagues have done a terrific job of answering an absurd question. To say in 30 seconds…

BARTIROMO: You have said you want to repeal “Obama-care,” correct?

GINGRICH: I did. Let me finish, if I may. To say in 30 seconds what you would do with 18 percent of the economy, life and death for the American people, a topic I’ve worked on since 1974, about which I wrote about called “Saving Lives and Saving Money” in 2002, and for which I founded the Center for Health Transformation, is the perfect case of why I’m going to challenge the president to seven Lincoln- Douglas style three-hour debates with a timekeeper and no moderator, at least two of which ought to be on health care so you can have a serious discussion over a several-hour period that affects the lives of every person in this country.

BARTIROMO: Would you would like to try to explain…

(APPLAUSE)

BARTIROMO: Would you like to — would you like to try to explain in simple speak to the American people what you would do after you repeal the president’s health care legislation?

GINGRICH: In 30 seconds?

BARTIROMO: Take the time you need, sir. Take the time you need.

GINGRICH: I can’t take what I need. These guys will gang up on me…

(CROSSTALK)

BARTIROMO: Do you want the answer the question tonight on health care or no?

(CROSSTALK)

BARTIROMO: Do you want to try to answer the question tonight, Speaker?

GINGRICH: Let me just say it very straight. One, you go back to a doctor-patient relationship and you involve the family in those periods where the patient by themselves can’t make key decisions. But you re-localize it.

Two, as several people said, including Governor Perry, you put Medicaid back at the state level and allow the states to really experiment because it’s clear we don’t know what we are doing nationally.

Three, you focus very intensely on a brand-new program on brain science because the fact is the largest single out-year set of costs we are faced with are Alzheimer’s, autism, Parkinson’s, mental health, and things which come directly from the brain.

GINGRICH: And I am for fixing our health rather than fixing our health bureaucracy because the iron lung is the perfect model of saving people so you don’t need to pay for federal program of iron lung centers because the polio vaccine eliminated the problem. That’s a very short (inaudible).

(APPLAUSE)

BARTIROMO: Congresswoman.

BACHMANN: The main problem with health care in the United States today is the issue of cost. It’s just too expensive. And President Obama said that’s what he would solve in Obamacare, we’d all save $2,500 a year in our premiums.

Well, we have Obamacare, but we didn’t have the savings. So what I would do to replace it is to allow every American to buy any health insurance policy they want anywhere in the United States, without any federal minimum mandate. Today there’s an insurance monopoly in every state in the country. I would end that monopoly and let any American go anywhere they want. That’s the free market.

Number two, I would allow every American to pay for that insurance policy — their deductible, their co-pay, their pharmaceuticals, whatever it is that’s medical-related — with their own tax-free money.

And then, finally, I’d have true medical malpractice liability reform. If you do that, it’s very simple. People own their own insurance policies, and you drive the costs down, because what we have to get rid of is government bureaucracy in health care. That’s all we bought in Obamacare, was a huge bureaucracy. That has to go away.

(APPLAUSE)

BARTIROMO: Senator?

SANTORUM: This is, I think, the difference between me and a lot of the candidates here. I heard a lot of responses, but I haven’t — I haven’t seen a lot of consistency in some of — some of those responses on the last few questions.

When it comes to health care, back in 1992, I introduced the first health savings account bill that everybody up here said was the basis for consumer-driven health care. I was leading on that before anyone else was even talking about it. Secondly, I was someone who proposed a block grant for Medicaid way back in 1998 with Phil Gramm, again, leading on this issue. Same thing, reforming the Medicare program back in the 1990s, again, I led on these issues.

I was always for having the government out of the health care business and for a bottom-up, consumer-driven health care, which is different than Governor Romney and some of the other people on this panel.

Number two — and I didn’t get a chance to answer any of the housing questions. I was on the banking housing committee in — in the United States Senate. I was one of 24 people who wrote a letter to Harry Reid saying, please let us bring up this housing legislation, which I voted for in the committee, that would have put curbs on Fannie and Freddie. I — I was out there before this bubble burst saying this was a problem. I — I was in Scranton, Pennsylvania, the other day, and I had one of a — a home-builder, who was a head of the association, came up to me and said, Rick, I’m here to apologize. We came here to push you so you would oppose, you know, putting caps on Fannie and Freddie. You were right; we were wrong.

Time and time again, Wall Street, the Wall Street bailout, five of the eight people on this panel supported the Wall Street bailout. I didn’t. I know that we saw problems best from the bottom up, not the top down and government intervention in the marketplace.

BARTIROMO: Governor Romney, you have 30 seconds to respond.

ROMNEY: That’s — that’s fine. I believe very deeply in the functioning of markets. The work I’ve done in health care, actually worked as a consultant to the health care industry, to hospitals and various health institutions. I had the occasion of actually acquiring and trying to build health care businesses. I know something about it, and I believe markets work.

And what’s wrong with our health care system in America is that government is playing too heavy a role. We need to get our markets to work by having the consumer, the patient have a stake in what the cost and quality is of health care, give them the transparency they need to know where the opportunities are for lower cost and better quality, to make sure that the providers offer them the broadest array of options that they could have.

And once we have that happening, you’ll see us — 18 percent of our GDP is spent on health care. The next highest nation in the world is 12 percent. It’s a huge difference. We have to get the market…

BARTIROMO: Time.

ROMNEY: … to work to make sure that we get the kind of quality and value that America deserves.

HARWOOD: But, Governor, let me ask you about health care, because Congressman Paul said, put it back to the doctor and the patient. You said a few moments ago that you thought states should have the responsibility for insuring the uninsured. And, of course, in Massachusetts, you enacted an individual mandate and subsidies to have people who didn’t have insurance get it. So you think there’s a pretty large role for government in this area.

ROMNEY: Well, I think that people — that people have a responsibility to receive their own care, and the doctor-patient relationship is, of course, where that — where that exists — where that exists.

HARWOOD: But the government has the responsibility to force them?

 

ROMNEY: I — I didn’t know whether Ron Paul was saying we’re going to — he’s going to get rid of Medicaid. I would not get rid of Medicaid. It’s a health program for the poor.

What I said was I would take the Medicaid dollars that are currently spent by the federal government, return them to the states so that states can craft their own programs to care for their own poor, rather than having the federal government mandate a one-size- fits-all plan in the entire — entire nation. Obamacare is wrong. I’ll repeal it. I’ll get it done.

(APPLAUSE)

(UNKNOWN): John?

HARWOOD: Congressman?

PAUL: My plan of cutting the budget by a trillion dollars does deal with Medicaid. And that is that it preserves it, and there is a transition period, with the goal that eventually we would hope to move that back into the economy. But right now, it would be too much to do it in one year.

You know, finding a trillion dollars was a job and a half, and getting rid of five departments.

So, yes, my budget takes into consideration health care for the elderly, health care on Medicaid, as well as child health care. At the same time, we deal with the bailouts, the banks, and all the benefits that they get from the financial system, because what we’re facing today is the crisis in this housing crisis.

If I could just have one second on that.

We face a housing crisis once again because it’s price-fixing. They’re fixing the prices of these mortgages too high, and this is why nobody will buy them.

This is why you have to get rid of Fannie Mae and Freddie Mac, sell all of that into the marketplace. And the reason they do this is to prop up the banks, because the banks have invested in Europe, they’ve invested in Fannie Mae and Freddie Mac, and these credit defaults swaps.

They’re in big trouble, and that is why they’re getting bailed out. And that’s why they are not allowing these mortgages to go down, and that is why we will most likely bail out Europe, which will be a real tragedy.

(APPLAUSE)

HARWOOD: Congressman, thank you for that. It’s time for a quick break.

LIESMAN: Hold it, John. I wanted to give them 15 seconds each to solve the deficit problem.

(LAUGHTER)

BARTIROMO: We’ll come back to the deficit.

HARWOOD: When we return, balancing the budget, cutting the deficit, making college education more affordable.

BARTIROMO: Plus, a little lesson on Social Security.

You’re watching CNBC’s “Your Money, Your Vote: The Republican Presidential Debate.”

(APPLAUSE)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

NARRATOR: Next, we tackle the issues of Social Security, a spiraling deficit, and so much more, when “Your Money, Your Vote: The Republican Presidential Debate” continues in 90 seconds.

(COMMERCIAL BREAK)

HARWOOD: And welcome back. Joining us for this portion of the debate, Rick Santelli, CNBC’s on-air editor…

(APPLAUSE)

… and Sharon Epperson, our personal finance correspondent.

Now, we’ll get to them in a moment, but, first, Senator Santorum, you were known as a tough partisan fighter in the Senate, but look where partisan fighting got us this summer, gridlock and a debt-rating downgrade. The American people don’t much like it, and neither does Doug Oberhelman, the CEO of Caterpillar. Let’s take a listen.

(BEGIN VIDEO CLIP)

OBERHELMAN: Most people think our politicians are not helping the country get back on its feet. The last two presidents made promises to work across party lines, and both failed. How will you put our country ahead of your political party and solve the issues that are so critical for Americans? Be specific, please. These are promises.

(END VIDEO CLIP)

HARWOOD: And, Senator, let me ask you about — to set up that question. If everyone on this stage rules out any tax increases, even at a 10-to-1 ratio of spending cuts, as you have done, what could you possibly offer Democrats to get them to go along and compromise with you on the things that Republicans want? SANTORUM: You create — you create a platform that they can buy into, because they see advantages of your — of your plan. For example, one of the reasons that I — I’ve put forward this manufacturing plan is because folks here in Michigan, Democrats and Republicans will vote for it.

I was at the New Hampshire House of Representatives the other day and spoke to a bipartisan group, talked about the — the tax plan, not just the manufacturing, but the broad-based plan that I have. And I had two Democratic House members go over to — to my chairman, Dan Tamburello, and said, hey, I want him to come to my district and talk about this. We can support it.

So when you put together a plan — look, if the Republican Party is just about keeping the top rate, you know, lower or cutting taxes, we’re not going to be reaching people. We’ve got to look at plans that bring people together. That’s why I focused on this sector. I understand, John, that the Wall Street Journal won’t like that I’m picking one sector over another. I don’t care.

What I need to do is bring America together, find a plan that can work, that can be implemented right away. It may not be the boldest plan in the world, but it’s one that will work. It’ll put people back to work. It will give the ability of people to rise in our society. It’s help with the jobs out in rural America, where the manufacturing loss has been the greatest and the employment rate is the highest.

You put a plan like that together, you’ll get Democrats and Republicans, and we’ll create jobs in the country, and we’ll get things done.

HARWOOD: Governor Romney, you’ve shown that you can work with Democrats. When you were governor, of course, you collaborated with Ted Kennedy on the health care plan that you enacted. You raised fees to balance the budget, and you used that as an argument to get the credit rating of your state upgraded. Independent voters might like that. Should Republican primary voters be nervous about it?

ROMNEY: Thanks for reminding everybody.

(LAUGHTER)

You know, what I found is, in a state like mine where there are a few Democrats in the legislature — 85 percent of my legislature was Democrat — to get anything done — I was always in an away game, if you will. And to get something done, I had to see if there were Democrats who cared more about the state than they cared about their re-election or their party, and there were.

And right now, America faces a crisis. I think people on both sides of the aisle recognize that this is no longer a time just for worrying about the next election. This is a time to worry about America.

GINGRICH: You deal with Social Security as a free-standing issue. And the fact is, if you allow younger Americans to have the choice to go to a Galveston or Chilean-style personal Social Security savings account, the long-term effect on Social Security is scored by the Social Security actuary as absolutely stabilizing the system and taking care of it.

The key is there is $2.4 trillion in Social Security which should be off budget, and no president of the United States should ever again say because of some political fight in Washington, I may not be able to send you your check. That money is sitting there. That money is available. And the country ought to pay the debt it owes the people who put the money in there.

(APPLAUSE)

HARWOOD: Governor Romney, if I could follow up, Speaker Gingrich just said he is not prepared to raise taxes on the American people in the middle of a slow economy like this. That’s what would happen if the payroll tax cut is not extended.

Do you agree with him, and would you also support, when it comes down to it, an extension of the payroll tax cut?

ROMNEY: I don’t want to raise taxes on people in the middle of a recession. Of course not.

HARWOOD: So you’re for it?

ROMNEY: And that’s one of the reasons why we fought so hard to make sure the Bush tax cuts weren’t taken away by President Obama.

But, look, this issue of deficits and spending is not about just dollars and cents. It’s a moral issue. It’s a moral imperative.

We can’t continue to pass on massive debts to the next generation. We can’t continue to put at risk the greatest nation in the history of the Earth because of the profligate spending that’s going on in Washington, D.C.

HARWOOD: But to clarify, you agree with President Obama the payroll tax cut should be expanded?

ROMNEY: I want to keep our taxes down. I don’t want to raise any taxes anywhere. Let me tell you, I’m not looking to raise taxes. What I’m looking to do is to cut spending. And that’s why this last week I put out a plan that dramatically cuts spending in Washington, that gets us to a 20 percent cap, and makes sure that we have a balanced budget thereafter. And how do I do it? I have three major steps.

Number one, cut programs. Get rid of programs we don’t have to have like Obamacare.

Take a lot of programs that we have at the state level, number two — excuse me, at the federal level — and send them back to the states where they can be better run with less fraud and abuse.

And number three, finally, bring some productivity and management expertise to the federal government. I would cut the workforce by 10 percent and — I want to say one more, and that is this — I want to make sure we link the compensation of our federal bureaucrats to that which exists in the private sector. People who are public servants shouldn’t get more money than the taxpayers that they’re serving.

(APPLAUSE)

HARWOOD: Does any candidate on this stage disagree? Does any candidate disagree and oppose an extension of the payroll tax cut?

BACHMANN: Say that again.

HARWOOD: Does any candidate disagree with the Speaker and Governor Romney and oppose the extension of the payroll tax cut?

(UNKNOWN): Yes.

HARWOOD: You oppose it?

BACHMANN: I do. I opposed it when it was first proposed, because I knew that it would blow a hole of $111 billion in the Social Security trust fund.

President Obama clearly did this for political reasons. That’s why he did it. And so I had made that warning then, because we actually have already run Social Security in the red. We aren’t just about to, we already have, six years ahead of time.

Now, consider the context. We have baby boomers in their peak earning years. This is when money should be flooding into the Social Security trust fund. Instead, we’re already in the red.

When we talked this evening about how much trouble we are in with spending, we are in a tremendous amount of trouble with spending. Just consider we pay a lot of taxes in this country, $2.2 trillion is what we send into Washington. The problem is, we spent at the government level $3.7 trillion. Your started out tonight talking –

(CROSSTALK)

HARWOOD: Out of time, Congresswoman. Governor Huntsman?

HUNTSMAN: Thank you. It’s getting a little lonely over here.

SANTELLI: Our federal government still owns 500 million shares of GM stocks, guarantees trillions — trillions with a “T” — dollars of mortgages. They are basically the lender doing 90 percent of all the mortgage origination right now. And you consider the Federal Reserve, the Federal Reserve has purchased $2.62 trillion — again, with a “T” — of treasury securities, agency securities, and mortgage securities.

If you were president, how would your administration and would your administration reverse these obligations?

 

HUNTSMAN: I would clean up the balance sheet. And let me tell you what I worry about as much as anything else.

We talk about failed leadership. We certainly have failed leadership.

President Obama had two years to get this economy going and to move us toward an environment that speaks to job growth, and he’s failed miserably. But along with that, we have a real trust crisis in this country.

Between the American people and our institutions of power, Congress, the executive branch, Wall Street as well, there is no trust. We are running on empty. And when a democracy begins to run on empty because of government holdings and bailouts and being involved in ways that are absolutely inappropriate, based on constitutional and where we should be, that results in a diminution of trust by the American people. We’ve got to raise that trust.

So let me just tell you what I think needs to be done, in terms of bringing our economy up. We’ve heard about all these great tax plans. I think I’m the only one on this stage who’s actually delivered a flat tax. And I did that as governor of my state.

I put forward a proposal that I think is right for this country and getting it back on its feet. The Wall Street Journal has come out — the most respected editorial page economically, maybe in the entire world — has come out and endorsed my plan, said it’s the very best of the bunch.

And it very simply calls out just as I did as governor. So I’m not sitting here talking about academic theory. I stand here as a practitioner. I’ve done it before. I want to phase out the loopholes and the deductions on the individual side, phase out corporate welfare and subsidies on the corporate side, and lower the rates, make us more competitive. That’s the kind of work that is realistic. It can get done in Congress and fire the engines of growth that are so desperately needed to boost trust in this country.

(UNKNOWN): Sharon Epperson?

EPPERSON: I want to turn the attention to why we’re here on this campus and what many students are very interested in, and that is the fact that, Congressman Paul, right now, we are looking at student loan debt that is near $1 trillion. Americans owe more on student loans right now than credit cards, and the average debt for a college senior right now is over $25,000. It’s obviously a very hot topic right here on this campus and with students across the country. Just listen to what they have to say.

(BEGIN VIDEO CLIP)

(UNKNOWN): Tuition rates have increased roughly three times that of inflation over the last three decades.

(UNKNOWN): More students have to take out loans or forego college.

(UNKNOWN): My generation is graduating with student debt levels at an unprecedented level.

(END VIDEO CLIP)

EPPERSON: So, Congressman Paul, you’ve already talked about the fact that you want to get rid of the Department of Education. You’ve said that you want to get rid of federal student loans. So how would you make college more accessible, more affordable for these students and students around the country?

PAUL: Well, I think you proved that the policy of student loans is a total failure. I mean, a trillion dollars of debt?

(APPLAUSE)

And it’s going to be dumped on the taxpayer? And what have they gotten? A poorer education and costs that have skyrocketed because of inflation, and they don’t have jobs. There’s nothing more dramatically failing than — than that program.

So, no, there’s no authority in the Constitution for the federal government to be dealing with education. We should get rid of the loan programs. We should get rid of the Department of Education and give tax credits, if you have to, to help people.

But the inflation is the big problem. It’s three times the rate that the government admits that inflation is, and that is natural and normal. When governments inflate the currency, it goes in the areas that the government gets involved in, housing, high prices, stock market, skyrocketing prices, medical care, skyrocketing, education…

EPPERSON: But how do they pay for it? How do they now pay for college, if they’re not…

PAUL: The way — the way you pay for cellphones and computers.

(APPLAUSE)

You have the marketplace there. There’s competition. Quality goes up. The price goes down. Can you imagine what it would have been like if the Department of Homeland Security was in charge of finding one person or one company to make the cellphones? I mean, it would have been a total disaster. So when the government gets involved in the delivery of any service — whether it’s education, medical care, or housing — they cause higher prices, lower quality, create bubbles, and they give us this mess that we’re in. That’s why we have to eventually get our — we have to wise up.

And look at where the bubbles come from. It’s from the Federal Reserve. And we should start by auditing the Fed, and then we should end the Fed.

(APPLAUSE)

EPPERSON: Thank you, Congressman.

Speaker Gingrich, Congressman Paul just talked about a bubble. And there are many that are concerned that, unlike other types of debt, student loan debt does not have the same type of consumer protections. It cannot be wiped out in bankruptcy by law. There’s really little way to refinance it. Are you worried about student loan debt becoming the next government bailout?

 

GINGRICH: You know, this is a good place to talk about the scale of change we’re about to live through. We’re at the end of the welfare state era of dependency, debt, distortion, and dishonesty.

The student loan program began when Lyndon Johnson announced it, I think, with a $15 million program. It’s an absurdity. What does it do? It expands the ability of students to stay in college longer because they don’t see the cost. It actually means they take fewer hours per semester on average. It takes longer for them to get through school. It allows them to tolerate tuitions going up absurdly. By 2014, there will be one administrator for every teacher on college campuses in the United States.

Now, let me give you a contrast that’s very startling. The College of the Ozarks is a work-study college. You cannot apply to it unless you need student aid, and they have no student aid.

You have to work 20 hours a week during the year to pay tuition and books. You work 40 hours a week during the summer to pay for room and board. Ninety-two percent of the students graduate owing no debt, the eight percent who owe debt owe $5,000 because they bought a car.

Now, that is a model so different, it will be culture shock for the students of America to learn we actually expect them to go to class, study, get out quickly, charge as little as possible, and emerge debt free by doing the right things for four years.

(APPLAUSE)

BARTIROMO: Governor Perry, name the top programs that you would cut in terms of long-term deficit reduction. Include Medicare, Medicaid, Social Security, and defense spending in the order you see fit.

PERRY: Well, every one of those — and by the way, that was the Department of Energy I was reaching for a while ago.

(APPLAUSE)

PERRY: So here what’s we have to look at as Americans. And it’s the entitlement programs that are eating up this huge amount of money that’s out there.

And it’s also the spending, Congressman Paul. And when you look at Medicaid, Medicare, Social Security, and those unfunded liabilities, I think are over $115 trillion just in those three programs. Those are the places where you go where you have to make the really hard decisions in this country.

BARTIROMO: So what is your order? And you didn’t mention defense spend.

PERRY: Well, obviously, Social Security is one of those where we either can go to a blended type of a program where we blend price and wages, and come up with a program, and can save billions of dollars there. But the people who are on Social Security, they need to understand something today. It’s going to be there for them.

Those that are working their way towards Social Security, we’ve made a pledge to them. Those individuals are going to have those dollars there for them.

But the young people out there, who is going to stand up for the young people in this country, those that are at the workforce today, and stand up and say, we are going to transform this program so it’s going to be there for you? I will do that. I will stand up for the young people in this country and put a program into place that will be there for them.

HARWOOD: Speaking of young people, a quick answer. Do you agree with Congressman Paul that we should kill the federal student loan program?

PERRY: I happen to think there are a substantial number of ways. As a matter of fact, I’ve called for a $10,000 graduate program –

HARWOOD: But would you kill the federal student loan program?

PERRY: I don’t think the federal government should be in the business of paying for programs and building up huge debt out there. I think we need to look at, how do you –

HARWOOD: So get rid of it?

PERRY: — force these universities to be efficient? And one of the ways is that the governors who appoint the trustees, they step in and they basically say, listen, you are going to have graduation rates that are moving upwards, you’re going to have tuition that is moving down. You have to have control over those boards of regents, of that’s how you do that, or the legislature has to have control.

But the bottom line is, we have to put powerful economic forces into place. And one of those is using our technology –

HARWOOD: Thank you, Governor.

PERRY: — to be able to let our kids have the opportunity to get an education through long distance learning, for instance.

BARTIROMO: That’s time.

HARWOOD: Thank you, Governor.

BARTIROMO: We’re going to take one more quick break. When we return, final questions to the candidates.

HARWOOD: Our CNBC’s Republican Presidential Debate will be right back.

(APPLAUSE)

(COMMERCIAL BREAK)

BARTIROMO: Welcome back to CNBC’s “Republican Presidential Debate.”

HARWOOD: Mr. Cain, let me ask you a question, under a Republican governor, the state of California hired a company in China to build major portions in the new San Francisco-Oakland Bay Bridge, creating thousands of jobs in China. And California did that because it was cheaper. Is that smart, purchasing by government in a global economy, or is there something wrong with that?

CAIN: There’s something wrong that, which is why I have proposed a bold plan, 999…

(LAUGHTER)

CAIN: … and allow me to explain how on the 999 that that company would be more inclined to keep the business here. On the first 9, you take sales minus purchases, net exports, and capital, it levels the playing field between goods produced here in the United States and the rest of the world.

It makes the United States much more competitive and businesses won’t be tempted to build overseas and send jobs overseas. The tax code is what sends jobs overseas. The tax code is what caused them to buy the articles from the Chinese. It starts with replacing the tax code.

HARWOOD: Governor Romney, was it a mistake for Governor Schwarzenegger to hire the firm in China to build portions of that bridge?

ROMNEY: Well, that’s a — a long answer to that, because what China is doing is not playing fairly by the rules that exist in our — in the WTO and the world. China is, on almost every dimension, cheating. And we’ve got to recognize that. It is good for America…

(APPLAUSE)

ROMNEY: It is good for America to have free trade. It is good for us to be able to send our goods and services around the word and vice versa.

HARWOOD: So a good decision to build the bridge over there?

ROMNEY: That is normally a good thing. But China is playing by different rules. One, they are stealing intellectual property. Number two, they’re hacking into our computer systems, both government and corporate. And they are stealing, by virtue of that as well, from us.

And finally, they are manipulating their currency, and by doing so, holding down the price of Chinese goods, and making sure their products are artificially low-priced. It’s predatory pricing, it’s killing jobs in America.

If I’m president of the United States, I’m making it very clear, I love free trade. I want to open markets to free trade. But I will crack down on cheaters like China. They simply cannot continue to steal our jobs.

(APPLAUSE)

BARTIROMO: But how do you crack down? How do you crack down, Governor? Are you talking about new tariffs? How are you cracking down?

ROMNEY: I’m sorry, pardon?

BARTIROMO: How would you crack down on China?

ROMNEY: Well, number one, I would do something this president should have done a long time ago, which is to label China a currency manipulator. And then I would bring in action at the WTO level, charging them with being a currency manipulator.

Number three, where they have stolen intellectual property, where they have hacked into computers, and where their artificial pricing is causing their goods to have predatory levels of pricing, I would apply, if necessary, tariffs to make sure that they understand we are willing to play at a level playing field.

We want — we have to have free trade. That’s essential for the functioning of a strong economy. But we cannot allow one nation to continue to flaunt the rules and kill our jobs by allowing them continue as they have.

(APPLAUSE)

BARTIROMO: Speaker, in addition to that, so many companies — multinational companies, want to try to get a foothold in China and sell to the billion-and-a-half people there. They can only do joint ventures. They’re not getting a fair shake in terms of selling to that 1.5 billion person population. How would you move the needle?

GINGRICH: Well, there are two things here. And let me say in advance that I would yield in part to Governor Huntsman, because he speaks fluent Chinese, he has worked in China, and he’s been the ambassador. And I’d be curious to get his reaction.

But there are two different parts here. The problem with building the bridge is simple. What — what is it about American regulations, American taxation, American labor cost and attitudes that makes it cheaper to go to China than to go to the United States? Now, we…

(APPLAUSE)

… first of all, you’ve got to decide, how are we going to be more competitive and how are we going to be the lowest cost? And there’s a new Boston consultant (ph) that says, by 2015, South Carolina and Alabama will be cheaper than the Chinese coastal provinces to manufacturing.

Second, in terms of dealing with China strategically, I think we’re going to have to find ways to dramatically raise the pain level for the Chinese cheating, both in the hacking side, but also on the stealing and intellectual property side. And I don’t think anybody today has a particularly good strategy for doing that.

BARTIROMO: Time. Thirty seconds. Jon Huntsman, you were the ambassador to China, 30 seconds to respond.

HUNTSMAN: Thirty seconds? For Heaven’s sake. Let me just say that we’ve had a 40-year relationship with China. It’s a — it’s a troublesome and problematic relationship, very, very complicated.

But the bottom line is, I mean, you can give applause lines and you can kind of pander here and there. You start a trade war if you start slapping tariffs randomly on Chinese products based upon currency manipulation. That’s not a good idea.

But longer term, we’re just going to have to keep doing business the way we’ve always done, is sit down, you find solutions to the problems, and you move forward. It isn’t easy. It isn’t glamorous. It’s grinding it out the way we’ve done for 40 years. And for 40 more years, we’re going to have to do it the same way.

HARWOOD: Are you saying Governor Romney’s pandering?

HUNTSMAN: I’m saying that you can throw out applause lines and you can say that you’re going to slap on tariffs. You know, that doesn’t work…

(CROSSTALK)

HARWOOD: But you’re suggesting it. He’s standing right here. Would you say that he’s pandering on this issue?

HUNTSMAN: Well, I’ve said it before. I think that — that that policy is one of simply pandering, just throwing a tariff on for the sake of an artificially valued currency, which is, in fact, the case.

But here’s what they do in response. They say, you have an artificially valued currency, too, with those quantitative easing programs. You, too, are manipulating you’re — and we’re going to slap something on your products. And before long, you have a trade war.

But let me tell you longer…

(APPLAUSE)

HARWOOD: Governor Romney, are you pandering?

ROMNEY: Look, I’ve been in business all my life, 25 years. I consulted to businesses around the world. I’ve been in business where we competed around the world. I understand free trade; I like free trade. I know that America can compete with anyone in the world. Newt is right about — about our capacity to manufacture and compete heads-on versus the Chinese.

But I’ve also seen predatory pricing. I’ve seen people price their goods at an artificial level for an extended period of time, such that they can drive other people out of business. And then when the other people are out of business, they can raise their prices. That’s what China’s doing, by holding down the value of their currency.

Let the currencies float. If the U.S. currency, for instance, is being inflated, let it float. Let us float. Let us have a market mechanism determine the value of our respective currencies, as opposed to the Chinese government continuing to put an advantage to their — their producers. This — this is no longer a time for us just to sit back and say we’re going to let them steal our jobs.

BARTIROMO: Congresswoman Bachmann, weigh in here. How do you open the markets in China for American companies?

BACHMANN: Well, the Chinese have been bad actors. Recently we found out that they dumped counterfeit computer chips here in the United States. We’re using some of those counterfeit computer chips in the Pentagon in some of our weapons systems. This has national security implications.

We also found out that the Chinese just finished building 3,000 miles of underground tunnels where they are housing some nuclear weapons. There’s some very real consequences to the United States overspending to such an extent that we’re in hock to them over a trillion dollars.

We’ve sent so much interest money over to the Chinese to pay our debts off that we effectively built their aircraft carrier. And by 2015, we will be sending so much interest money over, we will be paying for the entire People’s Liberation Army of China, the number- one employer of the — of the world.

What we need to do is stop enriching China with our money. And we do that by stop borrowing from them, by stop spending money that we don’t have.

(APPLAUSE)

CRAMER: Mr. Cain, I want to go to you with this question. This does not lend itself to 9-9-9 or any other number.

 

CAIN: Sorry, I didn’t hear the first part.

CRAMER: This question does not lend itself to 9-9-9 or any other thing. This is our final word, OK? And it comes from our viewers. And it is all about restoring trust and faith in our markets and in our way of life. I’m going to be quoting Joanne Kornbly (ph). She e- mails us.

She says, “Our stock market has turned into a casino with high- frequency computerized trading comprising 70 percent of all transactions and hedge fund speculation resulting in market swings. Before privatizing Social Security, how would you make the stock market safer for individual investors?

And Mr. Cain, just simple, how do we restore faith in the markets for the little guy?

CAIN: The first thing we do is restore faith in business by providing certainty so businesses can grow. A lot of the volatility is being driven by uncertainty.

Businesses are uncertain about what the health care rules are going to be, they don’t know what the tax rules are going to be. All of the uncertainty has this economy stagnated.

So, the way you restore that, grow this economy. That’s job one.

Many of the things we talked about up here today starts with growing the economy. And that’s why we have got to use a bold plan — I won’t mention it — in order to grow the economy.

(LAUGHTER)

CRAMER: When the economy was going great, sir, there was no trust. When the economy was going great, people were getting ripped off and there was insider trading. When the economy was going great, people were getting hurt in the stock market.

Forget the economy. Talk about the way the market is regulated.

CAIN: Jim, I feel your pain. Look, here is what I’m saying.

CRAMER: How about the 90 million people that got –

(CROSSTALK) CAIN: Jim, you’ve got to provide certainty in this environment so businesses will grow. They have been in a mode of survive. They need to be in a mode of growth. That’s where we have got to do first.

And I agree with some of the others who have said we have got to repeal Dodd/Frank. There’s three big things wrong with Dodd/Frank, which is why it needs to be a top priority to repeal.

Number one, it doesn’t provide oversight for Fannie Mae and Freddie Mac. And we all agree that that was a catalyst for the meltdown in 2008.

The two other biggest problems with Dodd/Frank, Dodd and Frank.

(APPLAUSE)

BARTIROMO: Governor Perry, same question to you. The same question to you and Congressman Ron Paul.

How do you restore faith in the public markets?

PERRY: Well, we have the regulations in place, and we had the regulations in place well before the meltdowns occurred. We have a culture in Washington, D.C., where these corporate lobbyists have these cozy relationships with the people that they are regulating. And we have to have leadership in this country that not only recognizes that, but demands that those individuals who are working for us are in those agencies, whether it’s in the stock market or whether it’s Fannie Mae or Freddie Mac.

And when there are individuals who are breaking the laws, who are pushing the bounds, that there are clear efforts that are made to take those people either out of those jobs or prosecute them for criminality. One of the two, that has to happen.

And you can pass legislation like you said until the world looks level. But you have got to have men and women who are committed to the laws of this country and a president that will push his administration to make sure that they’re done.

HARWOOD: Congressman Paul, Governor Perry was just talking about the culture of Washington. His critics in the state of Texas — you’re a congressman from Texas — say crony capitalism is what he practices as governor. Are they right?

PAUL: I haven’t analyzed it enough to call him a crony or not. So, no, I don’t know the details of that. But there is a lot of crony capitalism going on in this country.

And that has to be distinguished from real capitalism, because this occupation stuff on Wall Street, if you’re going after crony capitalism, I’m all for it. And those are the people who benefit from contracts from government, benefits from the Federal Reserve, benefits from all of the bailouts. They don’t deserve compassion, they deserve taxation, or they don’t — they deserve to have all their benefits removed. But crony capitalism isn’t when somebody makes money and they produce a product. That is very important. We have to distinguish the two.

And unfortunately, I think some people mix that. But this, to me, is so vital, that we recognize what crony — what capitalism is versus crony capitalism. And believe me, when you have an inflationary environment, and all this speculation, and all the bailouts due to monetary system, believe me, you get a majority of crony capitalism, and that’s why we’re facing this crisis today.

BARTIROMO: We want to thank all of you tonight. That is all the time we have for CNBC’s Republican Presidential Debate.

We thank all the candidates for being here tonight and spending the time and putting their plans forward.

We hope you now have a better understanding of where each of them stand on the economy, jobs, and your money.

HARWOOD: We would also like to thank our partners, the Michigan Republican Party, and all of the Grizzlies of Oakland University.

(APPLAUSE)

URL: http://www.cnbc.com/id/45232734/

CNN LIVE EVENT/SPECIAL

Full Transcript CNN Western Republican Presidential Debate (08:00pm – 10:00pm)

Aired October 18, 2011 – 20:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANDERSON COOPER, CNN ANCHOR AND DEBATE MODERATOR: I’m Anderson Cooper in Las Vegas.

Tonight, the presidential candidates come here to win the West.

(BEGIN VIDEOTAPE)

NARRATOR: The west. From the mountain majesty of the Rockies, to the desert sands of the Mojave, the American frontier is a historic land of opportunity for Republicans.

GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: Believe in America.

NARRATOR: Tonight, the fight for the GOP presidential nomination comes here, to a region where Barack Obama made inroads four years ago, to a state that could be decisive in the primary season and the general election, to a city where dreams are made and crushed.

Stand by for a Las Vegas event, the Republican presidential contenders on stage and in depth after a dramatic reshuffling of the pack.

Herman Cain, now among the leaders surging in recent weeks.

PERRY: We put more boots on the ground.

NARRATOR: Rick Perry, trying to get back on track after a meteoric rise.

FORMER GOV. MITT ROMNEY (R-MA), PRESIDENTIAL CANDIDATE: Thanks for being here today.

NARRATOR: And Mitt Romney, steady, holding his place in the top tier.

They could have the most to win or lose. But Newt Gingrich, Michele Bachmann and Ron Paul could be wildcards. And Rick Santorum, eager to beat the odds.

The candidates facing tough questions about jobs and the economy, the immigration wars, and other issues that matter to westerners and voters across the nation.

Now, with nothing less than America’s future at stake, the presidential campaign goes West.

(END VIDEOTAPE)

(APPLAUSE)

COOPER: And welcome to the Sands Convention Center at the Venetian in Las Vegas, our host of the Western Republican Presidential Debate.

Tonight, seven contenders will be on this stage to convince you he or she should be the Republican nominee for the president of the United States.

I’m Anderson Cooper.

Welcome to our viewers in the U.S. and around the world.

Tonight’s debate is airing on CNN, CNN International, CNN en Espanol, and the American Forces Network.

We want to thank our cosponsors, the Western Republican Leadership Conference, representing 16 western states and territories. Western voters will play an active role in tonight’s debate. Voters here in our audience will have a chance to put questions directly to the candidates on this stage.

Let’s meet the 2012 Republican presidential contenders.

Joining us on stage, Minnesota Congresswoman Michele Bachmann.

(APPLAUSE)

COOPER: The former Speaker of the House, Newt Gingrich.

(APPLAUSE)

COOPER: Texas Governor Rick Perry.

(APPLAUSE)

COOPER: Former Massachusetts Governor Mitt Romney.

(APPLAUSE)

COOPER: The former president and CEO of Godfather’s Pizza, Herman Cain.

(APPLAUSE)

COOPER: Texas Congressman Ron Paul.

(APPLAUSE)

COOPER: And the former U.S. senator from Pennsylvania, Rick Santorum.

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COOPER: Ladies and Gentlemen, the Republican candidates for president of the United States.

(APPLAUSE)

COOPER: Well, the crowd is on its feet. Everyone, please remain standing. It’s time now for our national anthem performed tonight by Tony award-winner Anthony Crivello, starring as the Phantom in “Phantom Las Vegas,” the Las Vegas spectacular. Please stand for the national anthem.

(APPLAUSE)

CRIVELLO: (SINGING NATIONAL ANTHEM)

(APPLAUSE)

COOPER: I want to ask the candidates to please take your podiums. While the candidates are taking their podiums, I just want to tell you a little bit more about how tonight’s debate is going to work. I’ll be the moderator. I’ll ask questions on a wide range of issues. And I’ll work to make sure that each candidate is getting his or her fair share of questions.

Also, Western voters right here in the hall will be asking questions, as well, and viewers watching at home can participate, also. We’re accepting questions for the candidates on Twitter. If you send a question for the candidates on Twitter, make sure to include the hash tag #cnndebate, on Facebook at facebook.com/cnnpolitics, and on cnnpolitics.com.

Now, each candidate will have about one minute to answer the questions and 30 seconds for follow-ups and rebuttals. I’ll make sure candidates get time to respond if they’re singled out for criticism. There are no buzzers. There’s no bells. I’ll just politely inform the candidates when they need to wrap things up.

We want everyone watching to emerge from this debate more informed about the candidates, more able to judge who should be the next president of the United States.

Now that everyone is in place, it’s time for the candidates to introduce themselves to our audience. All the candidates are going to keep it short. Here’s an example. I’m Anderson Cooper. I’m usually anchoring “AC 360″ on CNN, but I’m honored to be here in Las Vegas at the Western Republican Presidential Debate. That will be my introduction.

(APPLAUSE)

So, Senator Santorum, you’re first. Let’s start with you.

FORMER SEN. RICK SANTORUM (R-PA), PRESIDENTIAL CANDIDATE: Thank you, Anderson. I’m Rick Santorum. My wife, Karen, and I are the parents of seven children. And my little girl, Isabella, 3 years old, had some surgery today. She’s doing fine. But I just wanted to send to her a little “I love you” and I will take the red eye home to be with you tomorrow and make sure that you’re feeling fine.

(APPLAUSE)

REP. RON PAUL (R-TX), PRESIDENTIAL CANDIDATE: I’m Congressman Ron Paul from Texas. I’m the champion of liberty. I am the only one that has offered a balanced budget in — in a sincere method. And also, I present the case for a free society as being the best defense for peace and prosperity.

(APPLAUSE)

HERMAN CAIN, PRESIDENTIAL CANDIDATE: I am businessman Herman Cain. I’ve been married to my wife, Gloria, for 43 years. And I’m a 42-year businessman, which means I solve problems for a living.

(APPLAUSE)

ROMNEY: I’m Mitt Romney. I was a businessman for 25 years. Then I had the fun of getting the chance to help run the Olympic Winter Games in Salt Lake City next door. And then I had the fun also of being governor of Massachusetts. I also solve problems, sometimes for a living, sometimes for other people to make things better. And I hope to be your president. Thank you.

(APPLAUSE)

PERRY: Good evening. I’m Texas Governor Rick Perry, a proven job-creator and a man who is about economic growth, an authentic conservative, not a conservative of convenience.

(APPLAUSE)

FORMER REP. NEWT GINGRICH (R-GA), PRESIDENTIAL CANDIDATE: I’m Newt Gingrich. And unlike President Obama, I’m glad to be in Las Vegas. I think it’s a great place to have a convention.

(APPLAUSE)

And — and when I am president, we’re going to replace class warfare with cooperation so all Americans can get off food stamps and onto paychecks.

(APPLAUSE)

REP. MICHELE BACHMANN (R-MN), PRESIDENTIAL CANDIDATE: Hi, my name is Michele Bachmann. I am thrilled to be able to be with you tonight in Las Vegas. And this is one night when I hope what happens in Vegas doesn’t stay in Vegas.

(APPLAUSE)

COOPER: All right. Let’s — time to begin. We’ll begin with actually a question in the hall.

QUESTION: This is for all candidates. What’s your position on replacing the federal income tax with a federal sales tax?

COOPER: I’ll direct that to Congresswoman Bachmann. You’ve been very critical of Herman Cain’s 9-9-9 plan, which calls for a 9 percent sales tax, a 9 percent income tax, and 9 percent corporate tax. In fact, you’ve said it would destroy the economy. Why?

BACHMANN: Well, I am a former federal tax litigation attorney. And also, my husband and I are job-creators.

One thing I know about Congress, being a member of Congress for five years, is that any time you give the Congress a brand-new tax, it doesn’t go away. When we got the income tax in 1913, the top rate was 7 percent. By 1980, the top rate was 70 percent. If we give Congress a 9 percent sales tax, how long will it take a liberal president and a liberal Congress to run that up to maybe 90 percent? Who knows?

What I do know is that we also have to be concerned about the hidden tax of the value-added tax, because at every step and stage of production, you’d be taxing that item 9 percent on the profit. That’s the worry.

In my plan — again, that’s a tax plan, it’s not a jobs plan — my plan for economic recovery is real jobs right now. I have a tax plan. I have a jobs plan. I have an energy plan and a plan to really turn this country around and create millions of high-paying jobs.

COOPER: Mr. Cain, a lot of prominent conservatives now are coming forward saying that your 9-9-9 plan would actually raise taxes on middle-class voters, on lower-income voters.

CAIN: The thing that I would encourage people to do before they engage in this knee-jerk reaction is read our analysis. It is available at hermancain.com. It was performed by Fiscal Associates. And all of the claims that are made against it, it is a jobs plan, it is revenue-neutral, it does not raise taxes on those that are making the least. All of those are simply not true.

The reason that my plan — the reason that our plan is being attacked so much is because lobbyists, accountants, politicians, they don’t want to throw out the current tax code and put in something that’s simple and fair. They want to continue to be able to manipulate the American people with a 10-million-word mess.

Let’s throw out the 10-million-word mess and put in our plan, which will liberate the American workers and liberate American businesses.

(APPLAUSE)

COOPER: Senator Santorum, will his plan raise taxes?

SANTORUM: Herman’s well-meaning, and I love his boldness, and it’s great. But the fact of the matter is, I mean, reports are now out that 84 percent of Americans would pay more taxes under his plan. That’s the analysis. And it makes sense, because when — when you don’t provide a standard deduction, when you don’t provide anything for low-income individuals, and you have a sales tax and an income tax and, as Michele said, a value-added tax, which is really what his corporate tax is, we’re talking about major increases in taxes on people.

He also doesn’t have anything that takes care of the families. I mean, you have — you have a situation where, under Herman’s plan, a single person pays as much in taxes as a — as a man and a woman raising three children. Ever since we’ve had the income tax in America, we’ve always taken advantage of the fact that we want to encourage people to — to have children and not have to pay more already to raise children, but also pay that additional taxes — we gave some breaks for families. He doesn’t do that in this bill.

And we’re going to — we’ve seen that happen in Europe. And what happened? Boom, birth rates went into — into the basement. It’s a bad tax for — again, it’s bold. I give him credit for — for starting a debate, but it’s not good for families, and it’s not good for low-income…

(CROSSTALK)

COOPER: I’m going to give you 30 seconds to respond. That 84 percent figure comes from the Tax Policy Center.

CAIN: That simply is not true. I invite people to look at our analysis, which we make available.

Secondly, the — the point that he makes about is a value-added tax — I’m sorry, Representative Bachmann — it’s not a value-added tax. It’s a single tax.

And I invite every American to do their own math, because most of these are knee-jerk reactions. And we do provide a provision, if you read the analysis, something we call opportunity zones that will, in fact, address the issue of those making the least.

COOPER: I want to bring in Congresswoman Bachmann since she was referenced by you.

BACHMANN: But Anderson, how do you not have a value-added tax? Because at every level of production you have a profit, and that profit gets taxed, because you produce one portion at one level, and then you take it to the next supplier or vendor at the next level, and you have an exchange. That is a taxable event.

And ultimately, that becomes a value-added tax. It’s a hidden tax. And any time the federal government needs revenue, they dial up the rate and the American people think that it’s — that it is the vendor that creates the tax, but it’s the government that creates the tax.

(APPLAUSE)

COOPER: Governor Perry, in your state, you have a 6.25 percent sales tax. Would taxpayers pay more under the 9-9-9 plan?

PERRY: No.

Herman, I love you, brother, but let me tell you something, you don’t need to have a big analysis to figure this thing out. Go to New Hampshire, where they don’t have a sales tax, and you’re fixing to give them one.

They’re not interested in 9-9-9. What they’re interested in is flatter and fairer. At the end of the week, I’m going to be laying out a plan that clearly — I’ll bump plans with you, brother, and we’ll see who has the best idea about how you get this country working again.

And one of the ways, right here in Nevada you’ve got 8-plus percent. You want nine cents on top of that, and nine cents on a new home — or 9 percent on a new home, 9 percent on your Social Security, 9 percent more?

I don’t think so, Herman. It’s not going to fly.

COOPER: Mr. Cain, 30 seconds.

(APPLAUSE)

CAIN: This is an example of mixing apples and oranges. The state tax is an apple. We are replacing the current tax code with oranges. So it’s not correct to mix apples and oranges.

Secondly, it is not a value-added tax. If you take most of the products — take a loaf of bread. It does have five taxes in it right now. What the 9 percent does is that we take out those five invisible taxes and replace it with one visible 9 percent.

So you’re absolutely wrong. It’s not a value-added tax.

Now one other quick thing.

COOPER: Your time’s up, I’m sorry.

CAIN: This whole thing about –

COOPER: You’ll have another 30 seconds. Trust me, they’re going to go –

CAIN: Tonight?

COOPER: Yes, I guarantee it. In about a minute.

Congressman Paul, you called his plan dangerous today.

PAUL: Oh, it is, because it raises revenues, and the worst part about it, it’s regressive. A lot of people aren’t paying any taxes, and I like that. I don’t think that we should even things up by raising taxes.

So it is a regressive tax. So it’s very, very dangerous. And it will raise more revenues.

But the gentlemen asked the question — he didn’t even ask what we’re talking about. He asked the question, what are you going to replace the income tax with? And I say nothing. That’s what we should replace it with.

(APPLAUSE)

PAUL: But I do want to make a point that spending is a tax. As soon as the governments spend money, eventually it’s a tax. Sometimes we put a direct tax on the people. Sometimes we borrow the money. And sometimes we print the money.

And then when prices go up, like today, the wholesale price index went up 7 percent rate, and if you look at the free market, prices are going up 9 and 10 percent. So that is the tax.

So, spending is the tax. That is the reason I offered the program, to cut $1 trillion out of the first year budget that I offer.

(APPLAUSE)

COOPER: Mr. Cain, in 30 seconds?

CAIN: Once again, unfortunately, none of my distinguished colleagues who have attacked me up here tonight understand the plan. They’re wrong about it being a value-added tax.

We simply remove the hidden taxes that are in goods and services with our plan and replace it with a single rate 9 percent. I invite every family to do your own calculations with that arithmetic.

COOPER: Governor Romney, you have your only 59-point plan. In the last debate, Mr. Cain suggested it was too complicated. Is simpler better?

ROMNEY: Oftentimes simpler is better. And I know we’re not supposed the ask each other questions, but if you permit.

Herman, are you saying that the state sales tax will also go away?

CAIN: No, that’s an apple.

ROMNEY: OK.

CAIN: We’re replacing a bunch of oranges.

ROMNEY: OK.

So, then Governor Perry was right that –

CAIN: No, he wasn’t. He was mixing apples and oranges.

ROMNEY: Well, but will the people in Nevada not have to pay Nevada sales tax and in addition pay the 9 percent tax? CAIN: Governor Romney, you’re doing the same thing that they’re doing. You’re mixing apples and oranges. You’re going to pay –

ROMNEY: I’m –

CAIN: No, no, no, no. You’re going to pay the state sales tax, no matter what.

ROMNEY: Right.

CAIN: Whether you throw out the existing code and you put in our plan, you’re still going to pay that. That’s apples and oranges.

ROMNEY: Fine. And I’m going to be getting a bushel basket that has apples and oranges in it because I’ve got to pay both taxes, and the people in Nevada don’t want to pay both taxes.

(CHEERING AND APPLAUSE)

ROMNEY: Now let me make this comment. Let’s just step back here. We’ve got a lot of people in America that are out of work. We’ve got a lot of people in this state, 13.4 percent of the people in this state out of work. We’ve got home prices going down. We’ve got to talk about how to get America growing again, how to start adding jobs, raising incomes, and tax is part of it.

I want to reduce taxes on our employers to make it easier to invest in America. I want to reduce taxes on middle income families. I like your chutzpah on this, Herman, but I have to tell you, the analysis I did, person by person, return by return, is that middle income people see higher taxes under your plan.

If it’s lower for the middle class, that’s great. But that’s not what I saw. I have to tell you, I want to get our burden down on our employers, on our people. I want to make sure our regulations work to encourage the private sector as opposed to putting a damper on it.

I want to get trade, opening up new markets for America. I want to also find a way to get our energy resources — and they’re all over the world, are all over this country, used for us. This is time to get America growing again. And that’s what this campaign ought to be about.

COOPER: Thank you, Governor.

Mr. Speaker…

(CHEERING AND APPLAUSE)

COOPER: Speaker Gingrich, you have said in recent days that Mr. Cain’s 999 plan would be a harder sell than he lets on. How so?

GINGRICH: Well, you just watched it.

(LAUGHTER) GINGRICH: I mean, look, there are — first of all, I think that Herman Cain deserves a lot of credit. He has had the courage to go out and take a specific very big idea at the right level.

(APPLAUSE)

GINGRICH: And he has us at least talking about something that matters as opposed to the junk that all too often is masquerading as politics in this country. So I think that’s important.

There are two parts to this. The first is, if you take his plan, and I think it’s in the interest of the whole country to have serious people take his plan and go through it step by step. There are much more complexities than Herman lets on. OK. I mean, 999, when you get into details like you pay it on a new product, you don’t pay it on an old product, et cetera, there’s a lot more detail here than he lets on.

Second, I favor very narrow, focused tax cuts such as zero capital gains, 100 percent expensing, because I think, as Governor Romney said, jobs are the number one challenge of the next two or three years. Get something you can do very fast. Change on this scale takes years to think through if you’re going to do it right.

COOPER: Congresswoman Bachmann, you said in the last debate that everyone should pay something. Does that mean that you would raise taxes on the 47 percent of Americans who currently don’t pay taxes?

BACHMANN: I believe absolutely every American benefits by this magnificent country. Absolutely every American should pay something, even if it’s a dollar.

(CHEERING AND APPLAUSE)

BACHMANN: Everyone needs to pay something in this country. That’s why with my tax plan, I take a page out of not theory but what’s provable and what works. What is provable and what works was the economic miracle that was wrought by Ronald Reagan in the 1980s. That’s the plan that I look at.

I also want to completely abolish the tax code. I want to flatten the tax for all of Americans, simplify that tax for all of Americans. And that creates job growth, which is exactly what we need to have.

Because to be able to fuel the fire for this economy, again, it is the tax code, but it doesn’t end with the tax code. It’s the regulatory burden that costs us $1.8 trillion every year, but it’s more than that cost. It’s jobs that are lost.

So we need to repeal “Obama-care,” repeal the jobs and housing destruction act known as Dodd-Frank. President Obama’s plan has been a plan for destruction of this economy and failure.

COOPER: Thank you.

BACHMANN: I plan to change that with real jobs right now at michelebachmann.com.

(APPLAUSE)

COOPER: We’ve been talking about Herman Cain’s plan. Let’s talk about Governor Romney’s plan.

Governor Perry, you have said that Governor Romney was an abject failure at creating jobs when he was governor of Massachusetts. If you’ve read his 59-point plan, has it changed your mind?

PERRY: Well, here’s the nine that we need to get focused on. And it’s not 999, it’s not 59. It’s that 9 percent unemployment in this country. And that’s where we’ve got to get focused in America, is how to create an environment where the men and women get back to work.

It’s the reason I laid out a plan, Newt, this last week to get this energy that’s under our feet. We’ve got 300 years of resources right under our feet in this country. Yet we’ve got an administration that is blockading our ability to bring that to the surface, whether it’s our petroleum, our natural gas, or our coal. And 1.2 million jobs could be put to work.

Americans who are sitting out there listening to this conversation tonight, somebody wants someone on this stage to say: Listen, we got an idea here how to get you to work and take care of your family and have the dignity of a job. And that’s exactly what I did with my plan, laid it out where Americans understand we don’t have to wait on OPEC anymore. We don’t have to let them hold us hostage. America’s got the energy. Let’s have American energy independence.

(APPLAUSE)

COOPER: Governor Romney, does Governor Perry have the answer?

ROMNEY: Well, he’s absolutely right about — about getting energy independence and taking advantage of our natural resources here. We’re an energy-rich nation that’s acting like an energy-poor nation. And that’s something I’ve been talking about for some time, as the governor has. He’s absolutely right.

But there are also a lot of good jobs we need in manufacturing, and high-tech jobs, and good service jobs, technology of all kinds. America produces an economy that’s very, very broad. And that’s why our policy to get America the most attractive place in the world for investment and — and job growth encompasses more than just energy. It includes that, but also tax policy, regulatory policy, trade policy, education, training and balancing the federal budget, and that starts with repealing Obamacare, which is a huge burden on this economy.

(APPLAUSE)

COOPER: Senator Santorum, does Mitt Romney have the answers for jobs? SANTORUM: I agree with — with all of what Governor Romney and both — and Governor Perry said. I would add the fact that — that I’ve put forward the plan that’s going to allow for income mobility. That’s a new term, but I’ve been using it for a long time, which is people at the bottom part of the income scale being able to rise in society.

Believe it or not, studies have been done that show that in Western Europe, people at the lower parts of the income scale actually have a better mobility going up the ladder now than in America. And I believe that’s because we’ve lost our manufacturing base. No more stamp “Made in America” is really hurting people in the middle.

And that’s why I focus all of the real big changes in the tax code at manufacturing. I cut the corporate rate for manufacturing to zero, repeal all regulations affecting manufacturers that cost over $100 million and replace them with something that’s friendlier, they can work with. We repatriate $1.2 trillion that manufacturers made overseas and allow them to bring it back here, if they invest in plants and equipment. They can do it without having to pay any — any excise tax.

The final point I would make to Governor Romney, you just don’t have credibility, Mitt, when it comes to repealing Obamacare. You are — you are — your plan was the basis for Obamacare. Your consultants helped Obama craft Obamacare. And to say that you’re going to repeal it, you just — you have no track record on that that — that we can trust you that you’re going to do that.

COOPER: Governor Romney, 30 seconds.

(APPLAUSE)

SANTORUM: You don’t.

ROMNEY: You know, this I think is either our eighth or ninth debate. And each chance I’ve — I’ve had to talk about Obamacare, I’ve made it very clear, and also in my book. And at the time, by the way, I crafted the plan, in the last campaign, I was asked, is this something that you would have the whole nation do? And I said, no, this is something that was crafted for Massachusetts. It would be wrong to adopt this as a nation.

SANTORUM: That’s not what you said.

ROMNEY: You’re — you’re shaking — you’re shaking your head.

SANTORUM: Governor, no, that’s not what you said.

ROMNEY: That happens — to happens to be…

(CROSSTALK)

SANTORUM: It was in your book that it should be for everybody.

ROMNEY: Guys… PERRY: You took it out of your book.

SANTORUM: You took it out of your book.

ROMNEY: Hey, his turn. His turn, OK, and mine.

(CROSSTALK)

ROMNEY: I’ll tell you what? Why don’t you let me speak?

(CROSSTALK)

SANTORUM: You’re allowed — you’re allowed to change — you’re allowed to change…

ROMNEY: Rick, you had your chance. Let me speak.

SANTORUM: You can’t change the facts.

ROMNEY: Rick, you had your chance. Let me speak.

SANTORUM: You’re out of time. You’re out of time.

COOPER: He ate into your time.

(BOOING)

Rick…

(CROSSTALK)

ROMNEY: I haven’t had a chance to respond yet, because you were interrupting the entire time I was trying to speak.

(CROSSTALK)

ROMNEY: Let me make it very clear.

COOPER: I’ll give another 20 seconds.

ROMNEY: And — look — look, we’ll let everybody take a look at the fact checks. I was interviewed by Dan Balz. I was in interviews in this debate stage with you four years ago. I was asked about the Massachusetts plan, was it something I’d impose on the nation? And the answer is absolutely not.

It was something crafted for a state. And I’ve said time and again, Obamacare is bad news. It’s unconstitutional. It costs way too much money, a trillion dollars. And if I’m president of the United States, I will repeal it for the American people.

(APPLAUSE)

COOPER: All right. Senator Santorum?

SANTORUM: Mitt, the governor of Massachusetts just is coming forward saying we have to pick up the job left undone by Romneycare, which is doing something about cutting health care costs.

What you did is exactly what Barack Obama did: focused on the wrong problem. Herman always says you’ve got to find the right problem. Well, the right problem is health care costs. What you did with a top-down, government-run program was focus on the problem of health care access. You expanded the pool of insurance without controlling costs. You’ve blown a hole in the budget up there. And you authored in Obamacare, which is going to blow a hole in the budget of this country.

COOPER: Governor Romney, I’m going to give you 30 seconds.

ROMNEY: I’m — I’m sorry, Rick, that you find so much to dislike in my plan, but I’ll tell you, the people in Massachusetts like it by about a 3-1 margin.

And we dealt with a challenge that we had, a lot of people that were expecting government to pay their way. And we said, you know what? If people have the capacity to care for themselves and pay their own way, they should.

Now, I can tell you this, it’s absolutely right that there’s a lot that needs to be done. And I didn’t get the job done in Massachusetts in getting the health care costs down in this country. It’s something I think we have got to do at the national level. I intend to do that.

But one thing is for sure. What Obama has done is imposed on the nation a plan that will not work, that must be repealed. And when it comes to knowledge about health care and how to get our health care system working, I may not be a doctor like this one right over here, but I sure understand how to bring the cost of health care down and how to also make sure that we have a system that works for the American people.

SANTORUM: It didn’t do it. It didn’t do it.

COOPER: Speaker Gingrich, you’ve also been very critical of Mitt Romney’s plan not only on Obamacare, but his plan to lower the capital gains tax only on those earning under $200,000.

GINGRICH: I want to say on health for a minute — OK, let’s just focus. “The Boston Herald” today reported that the state of Massachusetts is fining a local small business $3,000 because their $750-a-month insurance plan is inadequate, according to the bureaucrats in Boston.

Now, there’s a fundamental difference between trying to solve the problems of this country from the top down and trying to create environments in which doctors and patients and families solve the problem from the bottom up.

And candidly, Mitt, your plan ultimately, philosophically, it’s not Obamacare, and that’s not a fair charge. But your plan essentially is one more big government, bureaucratic, high-cost system, which candidly could not have been done by any other state because no other state had a Medicare program as lavish as yours, and no other state got as much money from the federal government under the Bush administration for this experiment. So there’s a lot as big government behind Romneycare. Not as much as Obamacare, but a heck of a lot more than your campaign is admitting.

(APPLAUSE)

COOPER: Governor Romney, 30 seconds.

ROMNEY: Actually, Newt, we got the idea of an individual mandate from you.

GINGRICH: That’s not true. You got it from the Heritage Foundation.

ROMNEY: Yes, we got it from you, and you got it from the Heritage Foundation and from you.

GINGRICH: Wait a second. What you just said is not true. You did not get that from me. You got it from the Heritage Foundation.

ROMNEY: And you never supported them?

GINGRICH: I agree with them, but I’m just saying, what you said to this audience just now plain wasn’t true.

(CROSSTALK)

ROMNEY: OK. Let me ask, have you supported in the past an individual mandate?

GINGRICH: I absolutely did with the Heritage Foundation against Hillarycare.

ROMNEY: You did support an individual mandate?

ROMNEY: Oh, OK. That’s what I’m saying. We got the idea from you and the Heritage Foundation.

GINGRICH: OK. A little broader.

ROMNEY: OK.

BACHMANN: Anderson?

COOPER: He still has time. Let him finish.

ROMNEY: I get a little time here.

Number two, we don’t have a government insurance plan. What we do is rely on private insurers, and people — 93 percent of our people who are already insured, nothing changed. For the people who didn’t have insurance, they get private insurance, not government insurance.

And the best way to make markets work is for people to be able to buy their own products from private enterprises. What we did was right for our state, according to the people in our state. And the great thing about a state solution to a state issue is, if people don’t like it, they could change it.

Now, there are a lot of things.

BACHMANN: Anderson?

COOPER: Congresswoman Bachmann.

BACHMANN: Anderson, I think it has to be stated that Obamacare is so flat-out unpopular, that even the Obama administration chose to reject part of Obamacare last Friday, when they tried to throw out the CLASS Act, which is the long-term care function.

Secretary Sebelius, who is the head of Health and Human Services, reported that the government can’t even afford that part and has to throw it out. And now the administration is arguing with itself.

When even the Obama administration wants to repeal this bill, I think we’re going to win this thing. We’re going to repeal it! And I will!

(APPLAUSE)

COOPER: We’ve got to take a quick break. We will continue this discussion on the other side.

We have a long way to go. We’ll be right back.

(COMMERCIAL BREAK)

COOPER: And welcome back to the continuing debate. We got a Twitter question. We ended talking about medicine, Obamacare. We actually have a Twitter question about it. It was a question left at CNN debate.

If Obama’s health plan is bad for the U.S., what is the alternative, and how will you implement it?

Congressman Paul, is there any aspect of Obamacare that you would like to keep, whether it’s keeping kids to stay on their parents’ insurance until they’re 26 or no pre-existing conditions?

PAUL: Really not, because he’s just adding on more government. There’s been a lot of discussion about medicine, but it seems to be talking about which kind of government management is best. Our problem is we have too much. We’ve had it for 30, 40 years. We have Medicare. We have prescription drug programs. We have Medicaid.

And what we need — I mean, there’s a pretty good support up here for getting rid of Obamacare, because it’s a Democratic proposal, and we want to opt out. I think we’d all agree on this.

But if you want better competition and better health care, you should allow the American people to opt out of government medicine. And… (APPLAUSE)

And the way to do this is to not de-emphasize the medical savings account, but let people opt out, pay their bills, get back to the doctor-patient relationship. There is inflation worked into it. When a government gets involved in an industry, prices always go up. We have tort laws to deal with. And we need more competition in medicine.

But the most important thing is letting the people have control of their money and getting it out of the hands of the third party. As soon as you go to the government, the lobbyists line up, the drug companies line up, these insurance companies line up. And even with Obamacare, the industries, the corporations get behind it and affect the outcome, and already insurance premiums are going up.

(APPLAUSE)

COOPER: Herman Cain, same question. Is there any aspect of so- called Obamacare that — that you would keep?

CAIN: No. I think we all agree that Obamacare must be repealed because it is a disaster. And the more we learn about it and the more time goes along, the more we see. We’re all in agreement with that.

But here’s where I would start in answering that question. It’s called H.R. 3400. This was introduced back in 2009, but you didn’t hear a lot of talk about it. Instead of government being imposed on — on our system, it imposes — it basically passes market-centered, market-driven, patient-centered sort of reforms to allow association health plans, to allow loser pay laws, to allow insurance products to be sold across state lines, and a whole list of other things. So that’s a great place to start.

It allows the patient and the doctors to make the decisions, not a bureaucrat. I’d start with HR-3400.

(APPLAUSE)

COOPER: Governor Perry, in the last debate, Governor Romney pointed out that Texas has one of the highest rates of uninsured children in the country, over one million kids. You did not get an opportunity to respond to that. What do you say? How do you explain that?

PERRY: Well, we’ve got one of the finest health care systems in the world in Texas. As a matter of fact, the Houston, Texas, Medical Center, there’s more doctors and nurses that go to work there every morning than any other place in America. But the idea that you can’t have access to health care, some of the finest health care in the world — but we have a 1,200-mile border with Mexico, and the fact is we have a huge number of illegals that are coming into this country.

And they’re coming into this country because the federal government has failed to secure that border. But they’re coming here because there is a magnet. And the magnet is called jobs. And those people that hire illegals ought to be penalized.

And Mitt, you lose all of your standing, from my perspective, because you hired illegals in your home and you knew about it for a year. And the idea that you stand here before us and talk about that you’re strong on immigration is on its face the height of hypocrisy.

(LAUGHTER)

COOPER: Governor Romney?

ROMNEY: Rick, I don’t think I’ve ever hired an illegal in my life. And so I’m afraid — I’m looking forward to finding your facts on that, because that just doesn’t –

PERRY: Well, I’ll tell you what the facts are.

ROMNEY: Rick, again — Rick, I’m speaking.

PERRY: You had the — your newspaper — the newspaper –

ROMNEY: I’m speaking. I’m speaking. I’m speaking.

(CROSSTALK)

ROMNEY: You get 30 seconds. This is the way the rules work here, is that I get 60 seconds and then you get 30 second to respond. Right?

Anderson?

PERRY: And they want to hear you say that you knew you had illegals working at your –

ROMNEY: Would you please wait? Are you just going to keep talking?

PERRY: Yes, sir.

ROMNEY: Would you let me finish with what I have to say?

(BOOING)

ROMNEY: Look, Rick –

COOPER: I thought Republicans follow the rules.

ROMNEY: This has been a tough couple of debates for Rick, and I understand that. And so you’re going to get testy.

(APPLAUSE)

ROMNEY: But let’s let — I’ll tell you what, let me take my time, and then you can take your time. All right?

PERRY: Great. Have at it.

ROMNEY: All right.

My time is this, which is I have in my state — when I was governor, I took the action of empowering our state police to enforce immigration laws. When you were governor, you said, I don’t want to build a fence. You put in place a magnet.

You talked about magnets. You put in place a magnet to draw illegals into the state, which was giving $100,000 of tuition credit to illegals that come into this country, and then you have states — the big states of illegal immigrants are California and Florida. Over the last 10 years, they’ve had no increase in illegal immigration.

Texas has had 60 percent increase in illegal immigrants in Texas. If there’s someone who has a record as governor with regards to illegal immigration that doesn’t stand up to muster, it’s you, not me.

(APPLAUSE)

COOPER: Governor Perry, you have 30 seconds.

PERRY: You stood here in front of the American people and did not tell the truth that you had illegals working on your property. And the newspaper came to you and brought it to your attention, and you still, a year later, had those individuals working for you.

The idea that you can sit here and talk about any of us having an immigration issue is beyond me. I’ve got a strong policy. I’ve always been against amnesty. You, on the other hand, were for amnesty.

COOPER: I’ve got 30 seconds, then we’ve got move on to another immigration question.

ROMNEY: OK.

You wrote an op-ed in the newspaper saying you were open to amnesty. That’s number one.

Number two, we hired a lawn company to mow our lawn, and they had illegal immigrants that were working there. And when that was pointed out to us, we let them go. And we went to them and said –

PERRY: A year later?

ROMNEY: You have a problem with allowing someone to finish speaking. And I suggest that if you want to become president of the United States, you have got to let both people speak. So first, let me speak.

(APPLAUSE)

ROMNEY: So we went to the company and we said, look, you can’t have any illegals working on our property. I’m running for office, for Pete’s sake, I can’t have illegals. It turns out that once question, they hired someone who had falsified their documents, had documents, and therefore we fired them. And let me tell you, it is hard in this country as an individual homeowner to know if people who are contractors working at your home, if they have hired people that are illegal. If I’m president, we’ll put in an E-Verify system, which you have opposed –

COOPER: Out of time.

ROMNEY: — to make sure that we can find out who’s here illegally and not, and crack down on people who come here illegally.

COOPER: All right. We’re going to stay on the topic of immigration.

(APPLAUSE)

COOPER: We’re going to stay on the topic of immigration. Everyone is going to get a chance to weigh in.

This is a question that was left at CNNPolitics.com. “As president, will you order completion of the physical border fence along the entire border between the U.S. and Mexico?” That’s from Marilyn L.

Herman Cain, let me start with you. Obviously, over the weekend, you got a lot of headlines by saying you would have an electrified fence. You then later said it was — you then later said it was a joke. And then last night, you said, “It might be electrified. I’m not walking away from that. I just don’t want to offend anyone.”

(LAUGHTER)

So…

(APPLAUSE)

So would you build an entire fence along the entire border, and would you have it be electrified?

(LAUGHTER)

CAIN: Allow me to give a serious answer. Yes, I believe we should secure the border for real, and it would be a combination of a fence, technology, as well as possibly boots on the ground for some of the more dangerous areas. I don’t apologize at all for wanting to protect the American citizens and to protect our agents on the border, no.

(APPLAUSE)

Secondly, the second thing that I would do — see, I believe in let’s solve the whole problem. We must shut the back door so people can come in the front door. Secondly, promote the existing path to citizenship by cleaning up the bureaucracy in Washington, D.C.

Thirdly, enforce the laws — the immigration laws that are already on the books. (APPLAUSE)

And here’s another one of these bold ideas by the non-politician up here. Empower the states to do what the federal government is not doing in terms of enforcing those laws.

(APPLAUSE)

COOPER: Governor Perry, you have — you have the — your state has the longest border with Mexico. Is it possible — to the question — is it possible to build a fence, an — across the entire border?

PERRY: Sure. You can — you can build a fence, but it takes anywhere between 10 and 15 years and $30 billion. There’s a better way, and that’s to build a virtual defense zone, if you will, along that border, which — not unlike what Herman’s talking about, and you can do it with strategic fencing in the obvious places where it matters.

But the way you really stop the activities along that border that are illegal, whether it’s the drug cartels or whether it’s bringing in illegal weapons or whether it’s illegal immigrants that are coming in, is to put boots on the ground.

I will tell you, Herman, you put a lot of boots on the ground. You use Predator drones that are being trained right up here at Creech Air Force Base in Nevada to use that real-time information to give those boots on the ground that information, and they can instantly move to those areas. And that is the way to shut that border down, to secure that border, and really make America safe from individuals, like those Iranians that are using the drug cartels to penetrate this country.

COOPER: Congresswoman Bachmann, do you agree with Governor Perry?

(APPLAUSE)

BACHMANN: Well, I think the person who really has a problem with illegal immigration in the country is President Obama. It’s his uncle and his aunt who are illegal aliens…

(APPLAUSE)

… who’ve been allowed to stay in this country, despite the fact that they’re illegal.

This last Saturday, I was the very first candidate that signed a pledge that said that, by a date certain, I will build a double-walled fence with — with an area of security neutrality in between. I will build that, because this is what we know. This is an economics issue and a jobs issue. Every year…

COOPER: You’re saying you would build a fence along the entire border? BACHMANN: I will build it on the entire border, and I’ll tell you why. Every year, it costs this country $113 billion in the costs that we put out to pay for illegal aliens. It costs the state and local government of that amount $82 billion. For every household of an American citizen, it costs us $1,000 a year. We are robbing the household of Americans who can’t afford that.

I will build the fence. I will enforce English as the official language of the United States government.

(APPLAUSE)

And every — every person who comes into this country will have to agree that they will not receive taxpayer-subsidized benefits of any American citizen…

COOPER: Time.

BACHMANN: Thank you.

COOPER: Governor Perry, does that — can you actually — does that make sense? She says she can build the — the fence along the entire border.

PERRY: As I said, you can build that fence, but by the time that fence gets built…

COOPER: She’s also talking about your taxpayer-subsidized benefits.

PERRY: But my — my point is that, by the time that fence gets built, there is a lot better way than to stand here and to — to play to some group of people somewhere and say, “We’re going to build a fence,” and then wipe our hands of it.

I’ve been dealing with this border for 10 years as the governor. And the reason that we have this issue is because the federal government has failed miserably to defend and secure that border.

BACHMANN: Which is why we build…

(CROSSTALK)

PERRY: You know, for someone that’s been in the United States Congress to — to lecture me on the issues that are going on, on that border is not right. Let me tell you, we’ve had to deal with that issue in the state of Texas. We’ve had to deal with the impact on our state. And I put $400 million on that border of Texas, taxpayers’ money, Texas Ranger recon teams there.

We know how to secure the border. I shared with you earlier how to do it. You put the boots on the ground, the aviation assets in the air, and you secure that border.

COOPER: Governor…

BACHMANN: Anderson, can I respond?

COOPER: He wasn’t talking about you directly.

BACHMANN: No, he did respond.

ROMNEY: Let’s step back. I think it’s important for us as Republicans on this stage to say something which hasn’t been said. And that is I think every single person here loves legal immigration. We respect people who come here legally.

(CHEERING AND APPLAUSE)

ROMNEY: And the reason we’re so animated about stopping illegal immigration is there are 4.5 million people who want to come here who are in line legally, we want that to happen in an orderly and legal process.

And in terms of how to secure the border, it’s really not that hard. You have a fence, you have enough Border Patrol agents to oversee the fence, and you turn off the magnets. And that’s employers that hire people who they know are here illegally.

That’s why you have an E-Verify system so they can know that. And, number two, you turn off the magnets like tuition breaks or other breaks that draw people into this country illegally. It is not that hard. We have to have the political will to get the job done.

And, Governor Perry, you say you have got the experience. It’s a bit like saying that, you know, the college coach that has lost 40 games in a row has the experience to go to the NFL.

But the truth is, California — I’ll say it again, California and Florida have both had no increase in illegal immigration and yours is up 60 percent…

COOPER: Time.

ROMNEY: … over the last 10 years.

COOPER: Governor Perry, 30 seconds to respond.

PERRY: Well, the bottom line is that we have a federal government that has failed. There is a clear problem here. And he hit the nail on the head a while ago. He said there was a magnet of people that will hire illegals. And you are number one on that list, sir.

And people need to understand that. You’re one of the problems, Mitt.

COOPER: I think we’ve been down that road.

ROMNEY: Yes…

(CROSSTALK)

ROMNEY: We’ve been down that road sufficiently. It sounds like the audience agrees with me.

COOPER: We are continuing on immigration. We have a question in the audience.

(CHEERING AND APPLAUSE)

ROBERT ZAVALA, LAS VEGAS RESIDENT: Good evening. Thank you for the opportunity to ask my question. We have 50 million Latinos and not all of us are illegal. What is the message from you guys to our Latino community?

COOPER: Speaker Gingrich? President Obama got I think 67 percent of the Latino vote last time around.

GINGRICH: Look, I think that there’s a very clear message to Americans of all backgrounds. Latinos, Korean-Americans, Vietnamese- Americans, there are hundreds of different groups who come to America.

As Governor Romney said, I think anybody who understands America has to be proud of our record as the country which has been the most open in history to legal immigration.

But the truth is most Latinos in the United States aren’t immigrants. Most Latinos in the United States now have been born in the United States. And the fact is they want virtually exactly what everyone else wants.

They want an economy that is growing. They want a job that has take home pay. They want access to health insurance that they can afford. They want a chance to get educated that is actually useful and worthwhile. They want to be able to know that their family is going to grow up in safety. And they want to have a chance that their country is going to work to give their children and their grandchildren a better future.

I think we have to have the same message for every American of every ethnic background that we want to make America work again. And you’ll know it’s working because you will have a job and you’ll have a chance to take care of your family.

(CHEERING AND APPLAUSE)

COOPER: Congressman Paul, there’s some Latino voters who believe that some of these strong anti-immigration laws — anti-illegal immigration laws are actually anti-Latino laws. What do you say to them?

PAUL: Well, I think some people do believe that. I think a fence is symbolic of that. And I can understand why somebody might look at that. But when we approach this immigration problem, we should look at the incentives and that — or the mandates from the federal government saying that you must educate, you must give them free education.

You have to remove these incentives. But I don’t think the answer is a fence whatsoever. But in order to attract Latino votes, I think, you know, too long this country has always put people in groups. They penalize people because they’re in groups, and then they reward people because they’re in groups.

But following up on what Newt was saying, we need a healthy economy, we wouldn’t be talking about this. We need to se everybody as an individual. And to me, seeing everybody as an individual means their liberties are protected as individuals and they’re treated that way and they’re never penalized that way.

So if you have a free and prosperous society, all of a sudden this group mentality melts away. As long as there’s no abuse — one place where there’s still a lot of discrimination in this country is in our court systems. And I think the minorities come up with a short hand in our court system.

COOPER: Herman Cain, the 14th Amendment allows that anybody born in the United States is an American citizen. Should that change?

CAIN: I want to go back and answer this question first, OK? And that is, my message to Latinos, blacks, whites, and all Americans is that we must first start with significantly boosting this economy, which is on life support.

This is why I have put forth a very bold plan, and I’m not afraid to try and sell it to the American people. I’m not afraid to fight for it when I become president of the United States of America. So that’s my message.

If we have this economy growing, people will be able to take care of their families and go after their American dream. And until we boost this economy, all of us are going to suffer for a long time.

COOPER: Then let me ask the question of Governor Perry.

Governor Perry, the 14th Amendment allows anybody. A child of illegal immigrants who is born here is automatically an American citizen. Should that change?

PERRY: Well, let me address Herman’s issue that he just talked about.

COOPER: Actually, I’d rather you answer that question.

PERRY: I understand that. You get to ask the questions, I get to answer like I want to. And Herman talked about –

COOPER: That’s actually a response, that’s not an answer, but go ahead.

PERRY: — the issue of how we get this country back working. And truly, the plan that I laid out last week, where we talk about the energy industry and this treasure trove that we have under this country, and we need to recognize that the administration that we have today is blocking mining that could be going on in the state of Nevada. I talked to Brian Sandoval before I came in here today. You have an administration that is killing jobs because they want to move us to a green energy. You have a secretary of energy who has basically said he wants to see gas prices up close to the European model. The president himself said electricity rates are necessarily going to skyrocket.

That’s what we’ve got to stop. That’s the reason we got to have a president of the United States that understands that if you get Americans working, and it addresses these issues that we have in this country, then the fastest way to do it is open up these federal –

COOPER: Time.

PERRY: — plants, to pull back those regulations, and get America working again.

COOPER: Time.

(COMMERCIAL BREAK)

COOPER: To the question on the 14th Amendment, do you support repealing the 14th Amendment?

PERRY: No.

COOPER: No, you do not?

PERRY: I do not.

COOPER: Congresswoman Bachmann, do you support it?

BACHMANN: I think there’s a very real issue with magnets in this country. And I think the issue that you’re referring to is the issue of anchor babies. And that’s an issue that — I was just in Arizona this last weekend, and the state is very concerned, because when someone comes illegally across the border, specifically for the purpose of utilizing American resources for having a baby here, then all of the welfare benefits then attach to that baby.

This is an issue that we don’t have to deal with the Constitution. This is an issue that we can deal with legislatively. And there are a lot of Americans that would like us to deal with this issue of anchor babies legislatively.

(APPLAUSE)

COOPER: Senator Santorum?

SANTORUM: I’d like to address the issue that the gentleman brought up, which is, what are we going to say to the Latino community? And not one person mentioned the issue of family, faith, marriage.

This is a community that is a faith-filled community, that family is at the center of that community. I disagree in some respects with Congressman Paul, who says the country is founded on the individual.

The basic building block of a society is not an individual. It’s the family. That’s the basic unit of society.

(APPLAUSE)

SANTORUM: And the Latino community understands that. They understand the importance of faith and marriage. They understand that bond that builds that solid foundation, and that inculcation of faith and religious freedom. And I think the Latino community knows that’s at stake in this country.

There’s a lot going on right now that’s eroding our religious freedom, that’s eroding the traditional values of marriage and family. And there’s one candidate up here who consistently sounds that theme.

Look, I’m for jobs, too. I have got an economic plan, and I agree with everything that’s been said. But we keep running roughshod over the fact that family in America and faith in America is being crushed by the courts and our government, and someone has stand up and fight for those institutions (ph).

(APPLAUSE)

COOPER: Time.

Congressman Paul, you were referenced directly. Thirty seconds.

PAUL: Well, I would like to explain that rights don’t come in bunches. Rights come as individuals, they come from a God, and they come as each individual has a right to life and liberty.

But I might add about the border control and the Latino vote, is we lack resources there. I think we should have more border guards on it, a more orderly transition, and run it much better. But where are our resources?

You know, we worry more about the border between Afghanistan and Pakistan. We need to bring the guard units home and the units back here so we can have more personnel on our border.

(APPLAUSE)

COOPER: We have a question in the audience.

QUESTION: My question for you is, do you support opening the national nuclear repository at Yucca Mountain?

COOPER: Speaker Gingrich, we’ll start with you.

(CROSSTALK)

COOPER: Sorry, go ahead.

GINGRICH: Look, we — we worked on this when I was speaker. I think that it has to be looked at scientifically. But I think at some point we have to find a safe method of taking care of nuclear waste. And today, because this has been caught up in a political fight, we have small units of nuclear waste all over this country in a way that is vastly more dangerous to the United States than finding a method of keeping it in a very, very deep place that would be able to sustain 10,000 or 20,000 and 30,000 years of geological safety.

COOPER: Is Yucca Mountain that place?

GINGRICH: I’m not a scientist. I mean, Yucca Mountain certainly was picked by the scientific community as one of the safest places in the United States. It has always had very deep opposition here in Nevada. And, frankly…

COOPER: You were for opening it in Congress, right?

GINGRICH: Huh?

COOPER: When you were in the Congress, you were…

(CROSSTALK)

GINGRICH: When I was in Congress, frankly, I worked with the Nevada delegation to make sure that there was time for scientific studies. But we have to find some method of finding a very geologically stable place, and most geologists believe that, in fact, Yucca Mountain is that.

COOPER: Congressman Paul, you oppose this?

PAUL: Yes. Yes, I’ve — I’ve opposed this. We’ve had votes in the Congress. There was a time when I voted with two other individuals, the two congressmen from Nevada. And I approach it from a state’s rights position. What right does 49 states have to punish one state and say, “We’re going to put our garbage in your state”? I think that’s wrong.

But I think it’s very serious. I think it’s very serious. But quite frankly, the government shouldn’t be in the business of subsidizing any form of energy. And nuclear energy, I think, is a good source of energy, but they still get subsidies. Then they assume this responsibility. Then we as politicians and the bureaucrats get involved in this. And then we get involved with which state’s going to get stuck with the garbage.

So I would say, the more the free market handles this and the more you deal with property rights and no subsidies to any form of energy, the easier this problem would be solved.

COOPER: Governor Romney, where do you stand on this?

(APPLAUSE)

ROMNEY: Congressman Paul was right on that.

(APPLAUSE) I don’t always agree with him, but I do on that. The — the idea that 49 states can tell Nevada, “We want to give you our nuclear waste,” doesn’t make a lot of sense. I think the people of Nevada ought to have the final say as to whether they want that, and my guess is that for them to say yes to something like that, someone’s going to have to offer them a pretty good deal, as opposed to having the federal government jam it down their throat.

(APPLAUSE)

And by the way, if — if Nevada says, “Look, we don’t want it,” then let other states make bids and say, hey, look, we’ll take it. Here’s a geological site that we’ve evaluated. Here’s the compensation we want for taking it. We want you electric companies around the country that are using nuclear fuel to compensate us a certain amount per kilowatt hour, a certain amount per ton of this stuff that comes.

Let — let the free market work. And on that basis, the places that are geologically safe, according to science, and where the people say the deal’s a good one will decide where we put this stuff. That’s the right course for America.

(APPLAUSE)

COOPER: Governor Perry?

PERRY: You know, from time to time, Mitt and I don’t agree. But on this one, he’s hit it, the nail, right on the head. And I’ll just add that when you think about France, who gets over 70 percent of their energy from nuclear power, the idea that they deal with this issue, that their glassification, and that the innovation — and, Congressman Paul, you’re correct when it comes to allowing the states to compete with each other. That is the answer to this.

We need to have a — a — a discussion in — in this country about our 10th Amendment and the appropriateness of it, as it’s been eroded by Washington, D.C., for all these many years, whether it’s health care, whether it’s education, or whether it’s dealing with energy. We don’t need to be subsidizing energy in any form or fashion, allow the states to make the decision. And some state out there will see the economic issue, and they will have it in their state.

COOPER: We’re going to move on to an issue very important here in the state of Nevada and throughout the West. We have a question from the hall.

QUESTION: Yeah, my question is, those of us who own property here in Nevada have been devastated by the real estate bubble. What would you do as president to help fix the overall problem of real estate and foreclosures in America?

COOPER: Senator Santorum, Nevada has the highest rate of foreclosure. SANTORUM: Yeah, I mean, it’s — it’s a situation right now where obviously the market’s in — has been decimated. And so now you’re looking at, how do you repair it? The problem is — in the first place, is that several people up here, the, quote, “businesspeople,” supported the TARP, supported the bailout. Governors Perry, Romney…

PERRY: Wrong.

SANTORUM: No, you wrote a letter on the day of the vote — you wrote a letter on the day of the vote, Governor, saying to vote for the plan. That’s what you — I mean, that — the letter’s been…

PERRY: No, I didn’t.

SANTORUM: Yes, you did, Governor. You sent…

COOPER: You’ll have a chance to respond. Let him finish.

SANTORUM: Joe Manchin signed it with you. So you — you supported it. Governor Romney and Herman Cain all supported the — the TARP program, which started this ball…

CAIN: Not all of it.

(LAUGHTER)

SANTORUM: I mean, I — I mean, you guys complain about Governor Romney flip-flopping. I mean, look at what’s going on here. I mean, the — the bottom line is, you all supported it, you all started this ball rolling, where the government injected itself in trying to make — trying to fix the market with the government top-down trying to do it, and (ph) managed decline. And what happened was, people who did things that were wrong invested in things, took risks, were bailed out, and the folks who acted responsibly are now getting hurt because their houses have gone down in value. We need to let the market work, and that’s what hasn’t been happening so far.

COOPER: I’m going to allow each of the three of you to respond.

Governor Perry, you have 30 seconds.

PERRY: The fact is, Rick just has that wrong. We wrote a letter to Congress asking them to act. What we meant by acting was, cut the regulations, cut the taxation burden, not passing TARP.

There is clearly a letter out of our office that says that, Rick. I’ll get you a copy of it so you’ll understand it.

SANTORUM: Hold on. I need to respond to that.

He sent a letter the day of the vote on the floor of the House saying, pass the economic plan. There was only one plan, and that was the plan that was voted on the floor. It was TARP.

You sent a letter on that day saying, vote for that plan. Now, you can send a letter later saying I didn’t mean it, but when you said it, it was the only plan that was in play, and that was the TARP plan.

COOPER: Governor Perry — do you want to respond, Governor Perry?

PERRY: I’m just telling you I know what we sent, I know what the intention was. You can read it any way you want, but the fact of the matter, I wasn’t for TARP, and have talked about it for years since then.

COOPER: Governor Romney, 30 seconds.

ROMNEY: There’s an effort on the part of people in Washington to think somehow they know better than markets, how to rebalance America’s economy. And the idea of the federal government running around and saying, hey, we’re going to give you some money for trading in your old car, or we’re going to give you a few thousand bucks for buying a new house, or we’re going to keep banks from foreclosing if you can’t make your payments, these kind of actions on the part of government haven’t worked.

The right course is to let markets work. And in order to get markets to work and to help people, the best we can do is to get the economy going. And that’s why the fundamental restructuring I’ve described is so essential to help homeowners and people across this country.

(APPLAUSE)

COOPER: Mr. Cain, I want you to be able to respond. Thirty seconds.

CAIN: I have said before that we were in a crisis at the end of 2008 with this potential financial meltdown. I supported the concept of TARP, but then, when this administration used discretion and did a whole lot of things that the American people didn’t like, I was then against it. So yes, and I’m owning up to that.

Now, getting back to the gentleman’s question in terms of what we need to do, we need to get government out of the way. It starts with making sure that we can boost this economy and then reform Dodd-Frank and reform a lot of these other regulations that have gotten in the way –

COOPER: Time.

CAIN: — and let the market do it just like Mitt has talked about.

COOPER: Congresswoman Bachmann, does the federal government have a role in keeping people in their homes, saving people from foreclosure, in the state of Nevada?

BACHMANN: That was the question that was initially asked. And what I want to say is this — every day I’m out somewhere in the United States of America, and most of the time I’m talking to moms across this country. When you talk about housing, when you talk about foreclosures, you’re talking about women who are at the end of their rope because they’re losing their nest for their children and for their family. And there are women right now all across this country and moms across this country whose husbands, through no fault of their own, are losing their job, and they can’t keep that house. And there are women who are losing that house.

I’m a mom. I talk to these moms.

I just want to say one thing to moms all across America tonight. This is a real issue. It’s got to be solved.

President Obama has failed you on this issue of housing and foreclosures. I will not fail you on this issue. I will turn this country around.

We will turn the economy around. We will create jobs. That’s how you hold on to your house.

Hold on, moms out there. It’s not too late.

COOPER: We have another question. This one is a Twitter question.

“How do you explain the Occupy Wall Street movement happening across the country? And how does it relate with your message?”

Herman Cain, I’ve got to ask you, you said, — two weeks ago, you said, “Don’t blame Wall Street, don’t blame the big banks. If you don’t have a job, and you’re not rich, blame yourself.”

That was two weeks ago. The movement has grown. Do you still say that?

(APPLAUSE)

CAIN: Yes, I do still say that. And here’s why.

(APPLAUSE)

CAIN: I still stand by my statement, and here’s why.

They might be frustrated with Wall Street and the bankers, but they’re directing their anger at the wrong place. Wall Street didn’t put in failed economic policies. Wall Street didn’t spend a trillion dollars that didn’t do any good. Wall Street isn’t going around the country trying to sell another $450 billion. They ought to be over in front of the White House taking out their frustration.

(APPLAUSE)

So I do stand by them.

COOPER: Congressman Paul, you’ve been — Congressman Paul, you’ve been critical of Governor Romney for — for holding fundraisers with — with Wall Streeters. Do you think he understands what the protest is about? Do you understand?

PAUL: Well, I think Mr. Cain has blamed the victims. There’s a lot of people that are victims of this business cycle. We can’t blame the victims.

But we also have to point — I’d go to Washington as well as Wall Street, but I’d go over to the Federal Reserve.

(APPLAUSE)

They — they create the financial bubbles. And you have to understand that you can’t solve these problems if you don’t know where these bubbles come from.

But then, when the bailout came and supported by both parties, you have to realize, oh, wait, Republicans were still in charge. So the bailouts came from both parties. Guess who they bailed out? The big corporations of people who were ripping off the people in the derivatives market. And they said, oh, the world’s going to come to an end unless we bail out all the banks. So the banks were involved, and the Federal Reserve was involved.

But who got stuck? The middle class got stuck. They got stuck. They lost their jobs, and they lost their houses. If you had to give money out, you should have given it to people who were losing their mortgages, not to the banks.

(APPLAUSE)

COOPER: Mr. Cain, do you want to respond? He referenced you. So if you want to respond, you have 30 seconds.

CAIN: All I want to say is that representative Paul is partly right, but he’s mixing problems here. It’s more than one problem. Look, the people — the banks — yes, the banks and the businesses on Wall Street, yes, the way that was administered was not right.

But my point is this: What are the people who are protesting want from bankers on Wall Street, to come downstairs and write them a check? This is what we don’t understand. Take — go and get to the source of the problem, is all I’m saying.

COOPER: I’ve got to give you 30 seconds.

CAIN: And that’s the White House.

COOPER: And then we’ll go to Governor Romney.

PAUL: Yes, the argument is it’s — the program was OK, but it was mismanaged. But I work on the assumption that government’s not very capable of managing almost anything…

(APPLAUSE)

… so you shouldn’t put that much trust in the government. You have — you have to trust the marketplace. And when the government gets involved, they have to deal with fraud. And how many people have gone to jail either in the government, Fannie Mae or Freddie Mac, that participated in this? And nobody suffers the consequences. All these investigations, and yet the people who lose their jobs and lose their houses, it’s their fault, according — that’s why they’re on Wall Street. And we can’t blame them. We have to blame the business cycle…

COOPER: Time.

PAUL: … and the economic policies that led to this disaster.

(APPLAUSE)

COOPER: Governor Romney, you — you originally called the protests “dangerous.” You said it was class warfare. You recently sounded more sympathetic. Where do you stand now? What is your message to those people protesting?

ROMNEY: Look, we can spend our time talking about what happened three years ago and what the cause was of our collapse. But let’s talk about what’s happened over the last three years. We’ve had a president responsible for this economy for the last three years, and he’s failed us.

He’s failed us in part because he has no idea how the private sector works or how to create jobs. On every single issue, he’s made it harder for our economy to reboot. And as a result, we have 25 million Americans out of work or stopped looking for work or in part- time work and can’t get full-time employed. Home values going down. You have median income in America that in the last three years has dropped by 10 percent.

Americans are hurting across this country, and the president’s out there campaigning. Why isn’t he governing? He doesn’t — he doesn’t have a jobs plan even now. This — this is a critical time for America.

(APPLAUSE)

And I — and I can tell you that this is time to have someone who understands how the economy works, who can get America working again. Instead of dividing and blaming, as this president is, let’s grow America again and have jobs that are the envy of the world. And I know how to do it.

COOPER: We’ve got to take a quick break. We’re going to continue on the other side. We’ll be right back.

(COMMERCIAL BREAK)

COOPER: I’m Anderson Cooper, the western Republican presidential debate, live from the Venetian in Las Vegas. As you watch the debate tonight, send us your comments and questions for the candidates on Twitter. Use the hashtag #CNNDebate. Also contact us on Facebook and cnn.com.

When we come back, the right to bears and should a candidate’s faith matter? We’ll be right back.

(COMMERCIAL BREAK)

COOPER: And welcome back to the CNN GOP debate live from the Venetian in Las Vegas. Let’s continue. We’ve got an e-mail question that was left at cnnpolitics.com. This is from a Mike Richards who says: “With the controversy surrounding Robert Jeffress, is it acceptable to let the issue of a candidate’s faith shape the debate?”

Senator Santorum, this is in reference to a Baptist pastor who, at the Values Voter Summit, after introducing Governor Rick Perry, said of — said that “Mitt Romney is not a Christian,” and that “Mormonism is a cult.” Those were his words.

Should…

(BOOING)

COOPER: Should voters pay attention to a candidate’s religion?

SANTORUM: I think they should pay attention to the candidate’s values, what the candidate stands for.

(CHEERING AND APPLAUSE)

SANTORUM: That’s what is at play. And the person’s faith — and you look at that faith and what the faith teaches with respect to morals and values that are reflected in that person’s belief structure. So that’s — those are important things.

I — I’m a Catholic. Catholic has social teachings. Catholic has teachings as to what’s right and what’s wrong. And those are legitimate things for voters to look at, to say if you’re a faithful Catholic, which I try to be — fall short all the time, but I try to be — and — and it’s a legitimate thing to look at as to what the tenets and teachings of that faith are with respect to how you live your life and — and how you would govern this country.

With respect to what is the road to salvation, that’s a whole different story. That’s not applicable to what — what the role is of being the president or a senator or any other job.

(APPLAUSE)

COOPER: Speaker Gingrich, you agree with that?

GINGRICH: Well, I think if the question is, does faith matter? Absolutely. How can you have a country which is founded on truths which begins we are endowed by our creator with certain inalienable rights? How can you have the Northwest Ordinance of 1787 which says religion, morality and knowledge being important, education matters. That’s the order: religion, morality and knowledge.

Now, I happen to think that none of us should rush in judgment of others in the way in which they approach God. And I think that all of us up here I believe would agree. (APPLAUSE)

But I think all of us would also agree that there’s a very central part of your faith in how you approach public life. And I, frankly, would be really worried if somebody assured me that nothing in their faith would affect their judgments, because then I’d wonder, where’s your judgment — how can you have judgment if you have no faith? And how can I trust you with power if you don’t pray?

(APPLAUSE)

Who you pray to, how you pray, how you come close to God is between you and God. But the notion that you’re endowed by your creator sets a certain boundary on what we mean by America.

COOPER: Governor Perry, Mitt Romney asked you to repudiate the comments of that pastor who introduced you on that stage. He didn’t make the comments on the stage; he made them afterward in an interview. Will you repudiate those comments?

ROMNEY: Well, our faith — I can no more remove my faith than I can that I’m the son of a tenant farmer. I mean, the issue, are we going to be individuals who stand by our faith? I have said I didn’t agree with that individual’s statement. And our founding fathers truly understood and had an understanding of — of freedom of religion.

And this country is based on, as — as Newt talked about, these values that are so important as we go forward. And the idea that we should not have our freedom of — of religion to be taken away by any means, but we also are a country that is free to express our opinions. That individual expressed an opinion. I didn’t agree with it, Mitt, and I said so. But the fact is, Americans understand faith. And what they’ve lost faith in is the current resident of the White House.

(APPLAUSE)

COOPER: Time.

Governor Romney, is that — is that acceptable to you?

ROMNEY: You know, with — with regards to the disparaging comments about my faith, I’ve heard worse, so I’m not going to lose sleep over that.

(LAUGHTER)

What I actually found was most troubling in what the reverend said in the introduction was he said, in choosing our nominee, we should inspect his religion. And someone who is a good moral person is not someone who we should select; instead, we should choose someone who subscribes to our religious belief.

That — that idea that we should choose people based upon their religion for public office is what I find to be most troubling, because the founders of this country went to great length to make sure — and even put it in the Constitution — that we would not choose people who represent us in government based upon their religion, that this would be a nation that recognized and respected other faiths, where there’s a plurality of faiths, where there was tolerance for other people and faiths. That’s bedrock principle.

And it was that principle, Governor, that I wanted you to be able to, no, no, that’s wrong, Reverend Jeffress. Instead of saying as you did, “Boy, that introduction knocked the ball out of the park,” I’d have said, “Reverend Jeffress, you got that wrong. We should select people not based upon their faith.” Even though — and I don’t suggest you distance yourself from your faith any more than I would. But the concept that we select people based on the church or the synagogue they go to, I think, is a very dangerous and — and enormous departure from the principles of our — of our Constitution.

(APPLAUSE)

COOPER: Would you still like him to say that?

(UNKNOWN): I’m sorry?

COOPER: Would — would you still like the governor to say that? Or was that something you wanted him to…

ROMNEY: I’ll let him — that’s his choice.

COOPER: Do you want to respond to that, Governor Perry?

PERRY: I have. I said I did not agree with the — Pastor Jeffress’s remarks. I don’t agree with them. I — I can’t apologize any more than that.

ROMNEY: That’s fine.

COOPER: We’ve got a question from the audience.

QUESTION: Currently, there’s a deficit reduction measure to cut defense spending by $500 billion. Would you support such a reduction in defense spending? And if elected president, how will you provide a strong national defense?

COOPER: Congresswoman Bachmann, should defense be cut?

BACHMANN: Well, $500 billion is the amount that the questioner had mentioned. And don’t forget, this was an historic week when it came to American foreign policy.

We saw potentially an international assassination attempt from Iran on American soil. That says something about Iran, that they disrespect the United States so much, that they would attempt some sort of heinous act like that.

Then, we saw the president of the United States engage American troops in a fourth conflict in a foreign land. This is historic.

Then, on Sunday, we heard the reports that now that — in Iraq, the 5,000 troops that were going to be left there won’t even be granted immunity by Iraq. This is how disrespected the United States is in the world today, and it’s because of President Obama’s failed policies.

He’s taken his eyes off the number one issue in the world. That’s an Iran obtaining a nuclear weapon. That makes all of us in much danger.

COOPER: Time.

BACHMANN: And the president of Iran is a genocidal maniac. We need to stand up against Iran.

(APPLAUSE)

COOPER: Congresswoman –

BACHMANN: And as president of the United States, I will. We will be respected again in the world.

COOPER: The question though was about budget cuts. And is everything on the table in terms of cutting the budget?

BACHMANN: Absolutely everything.

COOPER: So defense spending would be on the table, should be?

BACHMANN: Defense spending is on the table, but again, Anderson, now with the president, he put us in Libya. He is now putting us in Africa. We already were stretched too thin, and he put our Special Operations Forces in Africa.

COOPER: I just want to make sure. OK. It’s on the table.

BACHMANN: It’s on the table, but we cannot cut it by $500 billion. We can’t do that to tour brave men and women who are on the ground fighting for us.

COOPER: Speaker Gingrich?

GINGRICH: I mean, if you want to understand how totally broken Washington is, look at this entire model of the super committee, which has now got a magic number to achieve. And if it doesn’t achieve the magic number, then we’ll all have to shoot ourselves in the head so that when they come back with a really dumb idea to merely cut off our right leg, we’ll all be grateful that they’re only semi-stupid instead of being totally stupid.

(APPLAUSE)

GINGRICH: Now, the idea that you have a bunch of historically illiterate politicians who have no sophistication about national security trying to make a numerical decision about the size of the defense budget tells you everything you need to know about the bankruptcy of the current elite in this country in both parties. The fact is, we ought to first figure out what threaten us, we ought to figure out what strategies will respond to that. We should figure out what structures we need for those strategies. We should then cost them.

I helped found the Military Reform Caucus. I’m a hawk, but I’m a cheap hawk. But the fact is, to say I’m going to put the security of the United States up against some arbitrary budget number is suicidally stupid.

COOPER: Congressman Paul, you’ve proposed –

(APPLAUSE)

COOPER: Congressman Paul, you just proposed eliminating the Departments of Commerce, Education, Energy, Interior, Housing and Urban Development. You say it will save a trillion dollars in one year.

(APPLAUSE)

COOPER: You’re proposing a 15 percent cut to the Defense Department. Can you guarantee national security will not be hurt by that?

PAUL: I think it would be enhanced. I don’t want to cut any defense. And you have to get it straight. There’s a lot of money spent in the military budget that doesn’t do any good for our defense.

How does it help us to keep troops in Korea all these years? We’re broke. We have to borrow this money.

Why are we in Japan? Why do we subsidize Germany, and they subsidize their socialized system over there? Because we pay for it. We’re broke.

And this whole thing that this can’t be on the table, I’ll tell you what, this debt bubble is the thing you better really worry about, because it’s imploding on us right now. It’s worldwide.

We are no more removed from this than man the man on the moon. It’s going to get much worse.

And to cut military spending is a wise thing to do. We would be safer if we weren’t in so many places.

We have an empire. We can’t afford it. The empires always bring great nations down. We spread ourselves too thinly around the world. This is what’s happened throughout history, and we’re doing it to ourselves.

The most recent empire to fail was an empire that went into, of all places, Afghanistan…

COOPER: Time.

PAUL: … they went broke. So where are we? In Afghanistan. I say it’s time to come home. (CHEERING AND APPLAUSE)

COOPER: It’s time.

We have a Twitter question. Given that Israel has just negotiated with Palestine for a soldier, would any of you negotiate for a hostage?

Herman Cain, let me ask this to you. A few hours ago you were asked by Wolf Blitzer, if al Qaeda had an American soldier in captivity, and they demanded the release of everyone at Guantanamo Bay, would you release them? And you said, quote: “I can see myself authorizing that kind of a transfer. Can you explain?

CAIN: The rest of the statement was quite simply, you would have to consider the entire situation. But let me say this first, I would have a policy that we do not negotiate with terrorists. We have to lay that principle down first.

Now being that you have to look at each individual situation and consider all the facts. The point that I made about this particular situation is that I’m sure Prime Minister Benjamin Netanyahu had to consider a lot of things before he made that.

So on the surface, I don’t think we can say he did the right thing or not. A responsible decision-maker would have considered everything.

COOPER: But you’re saying you could — I mean, in your words, you’ve said that I could see myself authorizing that kind of a transfer. Isn’t that negotiating with, in this case, al Qaeda?

CAIN: I don’t recall him saying that it was al Qaeda-related.

COOPER: Yes, he did. He said…

CAIN: Well, I don’t really — my policy will be we cannot negotiate with terrorists. That’s where we have to start as a fundamental principle.

COOPER: Senator Santorum?

SANTORUM: Oh, absolutely not. I mean, you can’t negotiate with terrorists, period.

To address Congressman Paul’s answer and the other answer on military spending, I would absolutely not cut one penny out of military spending. The first order of the federal government, the only thing the federal government can do that no other level of government can do is protect us. It is the first duty of the president of the United States is to protect us.

(APPLAUSE)

SANTORUM: And we should have the resources — we should have all the resources in place to make sure that we can defend our borders, that we can make sure that when we engage in foreign countries, we do so to succeed.

That has been the problem in this administration. We’ve had political objectives instead of objectives for success. And that’s why we haven’t succeeded. And as Michele said and correctly said, the central threat right now is Iran.

The disrespect, yes, but it’s more than that. They sent a message. The two countries that they went after was the leader of the Islamic world, Saudi Arabia, and the leader of the, quote, “secular world,” the United States.

This was a call by Iran to say we are the ones who are going to be the supreme leader of the Islamic world…

COOPER: Time.

SANTORUM: … and we are going to be the supreme leader of the secular world. And that’s why they attacked here. And, by the way, they did it in coordination…

COOPER: Time.

SANTORUM: … with Central and South Americans, which I have been talking about and writing about and talking about for 10 years.

COOPER: Congressman Paul, you were referenced in that answer, 30 seconds.

PAUL: Well, I think we’re on economic suicide if we’re not even willing to look at some of these overseas expenditures, 150 bases — 900 bases, 150 different countries. We have enough weapons to blow up the world about 20-25 times. We have more weapons than all the other countries put together essentially.

And we want to spend more and more, and you can’t cut a penny? I mean, this is why we’re at an impasse. I want to hear somebody up here willing to cut something. Something real.

(CHEERING AND APPLAUSE)

PAUL: This budget is in bad shape and the financial calamity is going to be much worse than anybody ever invading this country. Which country — are they going to invade this country? They can’t even shoot a missile at us.

COOPER: We have a question in the hall that gets to your question. The question in the hall on foreign aid? Yes, ma’am.

VICKI O’KEEFE, BOULDER CITY, NEVADA: The American people are suffering in our country right now. Why do we continue to send foreign aid to other countries when we need all the help we can get for ourselves?

COOPER: Governor Perry, what about that? I mean…

(APPLAUSE) PERRY: Absolutely. I think it’s time for this country to have a very real debate about foreign aid. Clearly there are places. As a matter of fact, I think it’s time for us to have a very serious discussion about defunding the United Nations.

(CHEERING AND APPLAUSE)

PERRY: When you think about — when you think about the Palestinian Authority circumventing those Oslo Accords and going to New York to try to create the conflict and to have themselves approved as a state without going through the proper channels is a travesty.

And I think it’s time not only to have that entire debate about all of our foreign aid, but in particular the U.N. Why are we funding that organization?

(CHEERING AND APPLAUSE)

COOPER: Governor Romney, should foreign aid be eliminated?

ROMNEY: Foreign aid has several elements. One of those elements is defense, is to make sure that we are able to have the defense resources we want in certain places of the world. That probably ought to fall under the Department of Defense budget rather than a foreign aid budget.

Part of it is humanitarian aid around the world. I happen to think it doesn’t make a lot of sense for us to borrow money from the Chinese to go give to another country for humanitarian aid. We ought to get the Chinese to take care of the people that are — and think of that borrowed money on today (ph).

And finally there’s a portion of our foreign aid that allows us to carry out our activities in the world such as what’s happening in Pakistan where we’re taking — we’re supplying our troops in Afghanistan through Pakistan.

But let me tell you: We’re spending more on foreign aid than we ought to be spending. And Congressman Paul asked, is there a place we can cut the budget? Let me tell you where we cut the budget. Discretionary accounts you bring back to 2008 level. We get rid of Obamacare. Number three, we take Medicaid, turn it back to the states, grow it at only 1 percent to 2 percent per year. Number three, we cut — number four, rather, we cut federal employment by at least 10 percent through attrition. And finally, we say to federal employees: You’re not going to make more money than the people in the private sector who are paying for you. We link their compensation.

(APPLAUSE)

COOPER: Time.

Congressman Paul?

PAUL: On foreign aid, that should be the easiest thing to cut. It’s not authorized in the Constitution that we can take money from you and give it to particular countries around the world. To me, foreign aid is taking money from poor people in this country and giving it to rich people in poor countries. And it becomes weapons of war. Essentially, no well — no matter how well-motivated it is…

COOPER: Congressman Paul, would you cut aid to Israel?

PAUL: I would cut all foreign aid. I would treat everybody equally and fairly. And I don’t think aid to Israel actually helps them. I think it teaches them to be dependent. We’re on a bankruptcy course.

And — and look at what’s the result of all that foreign aid we gave to Egypt? I mean, their — their dictator that we pumped up, we spent all these billions of dollars, and now there’s a more hostile regime in Egypt. And that’s what’s happening all around Israel. That foreign aid makes Israel dependent on us. It softens them for their own economy. And they should have their sovereignty back. They should be able to deal with their neighbors…

COOPER: Time. Congresswoman Bachmann…

PAUL: … at their own will.

(APPLAUSE)

COOPER: Should we cut foreign aid to Israel?

BACHMANN: No, we should not be cutting foreign aid to Israel. Israel is our greatest ally. The biggest problem is the fact…

(APPLAUSE)

… that the president — the biggest problem with this administration in foreign policy is that President Obama is the first president since Israel declared her sovereignty put daylight between the United States and Israel. That heavily contributed to the current hostilities that we see in the Middle East region.

Cutting back on foreign aid is one thing. Being reimbursed by nations that we have liberated is another. We should look to Iraq and Libya to reimburse us for part of what we have done to liberate these nations.

(APPLAUSE)

Now, I need to add something on this issue of negotiating for hostages. This is a very serious issue. For any candidate to say that they would release the prisoners at Guantanamo in exchange for a hostage would be absolutely contrary to the historical nature of the United States and what we do in our policy. That’s naive; we cannot do that. The United States has done well because we have an absolute policy: We don’t negotiate.

COOPER: Herman Cain, I’ve got to give you 30 seconds, because she was referring to — basically saying you were naive or if — if that’s what you were suggesting. CAIN: No, I — I said that I believe in the philosophy of we don’t negotiate with terrorists. I think — I didn’t say — I would never agree to letting hostages in Guantanamo Bay go. No, that wasn’t — that wasn’t the intent at all.

But let me go back to this, if I could, very quickly in the time that I have left, the question that you asked about, foreign aid. My approach is an extension of the Reagan approach: Peace through strength, which is peace through strength and clarity. If we clarify who our friends are, clarify who our enemies are, and stop giving money to our enemies, then we ought to continue to give money to our friends, like Israel.

COOPER: You have 30 seconds, Congressman Paul, and then we’ve got to go.

PAUL: Oh, yes. As a matter of fact, I don’t want to make a statement. I want to ask a question. Are you all willing to condemn Ronald Reagan for exchanging weapons for hostages out of Iran? We all know that was done.

SANTORUM: That’s not — Iran was a sovereign country. It was not a terrorist organization, number one.

PAUL: Oh, they were our good friends back then, huh?

SANTORUM: They’re not our good friends. They’re — they’re — they’re a sovereign country, just like the — the Palestinian Authority is not the good friends of Israel.

PAUL: He negotiated for hostages.

SANTORUM: There’s — there’s a role — we negotiated with hostages (inaudible) the Soviet Union. We’ve negotiated with hostages, depending on the scale. But there’s a difference between releasing terrorists from Guantanamo Bay in response to a terrorist demand…

PAUL: But they’re all suspects. They’re not terrorists. You haven’t convicted them of anything.

SANTORUM: Then — then — then negotiating with other countries, where we may have an interest, and that is certainly a proper role for the United States, too.

COOPER: We’ve got to take a quick break. I do want to give Speaker Gingrich 30 seconds, and then…

GINGRICH: Just very straightforward. Callista and I did a film on Ronald Reagan. There’s a very painful moment in the film when he looks in the camera and says, “I didn’t think we did this. I’m against doing it. I went back and looked. The truth is, we did. It was an enormous mistake.”

And he thought the Iranian deals with a terrible mistake.

COOPER: We’re going to take a short break. Our debate though continues on the other side of the break, so stay tuned.

When we return, which candidate has the best chance to beat Barack Obama, and should it matter in your vote?

Stay with us.

(APPLAUSE)

(COMMERCIAL BREAK)

COOPER: And welcome back. The GOP debate is under way.

Let’s talk about probably the most important issue to everybody on this stage, and probably just about everybody in this room, which is, who can beat President Barack Obama in this next election?

In today’s new CNN/ORC poll, 41 percent of Republican voters think that Governor Romney has the best chance of beating the president.

(APPLAUSE)

COOPER: To Senator Santorum, you got one percent. Why shouldn’t Republican voters go with the candidate they feel that can best beat President Obama?

SANTORUM: Well, the Pew poll last week asked how many people in this country can name any of us? And less than 50 percent could come up with even one. So, the idea that this has any relevance to people who aren’t paying close attention to this debate is, in fact, irrelevant. What’s relevant is to look at the track record.

No one in this field has won a swing state. Pennsylvania is a swing state. We win Pennsylvania, we win the election. The Republicans nominate it.

I’ve won it twice. I defeated a Democratic incumbent, winning it the first time, and I won the state of Pennsylvania, the only senator to win a state who was a conservative that George Bush lost. Bush lost it by 5, I won it by 6.

So, you have someone who is defeated and been matched up against three Democratic incumbents. I’m 3-0.

Nobody in this field has won a major race against a Democratic incumbent except me. No one has won a swing state except me as a conservative.

I didn’t run as a Democrat in Texas when it was popular, won and win there. I didn’t run as a liberal in 1994. I ran in 1994, the same year Mitt did in Massachusetts. He ran as a liberal, to the left of Kennedy, and lost. I ran as a conservative against James Carville and Paul Begala, and I won.

In 2002, he ran as a moderate. He ran as a moderate in — in Massachusetts. I ran for re-election having sponsored and passed welfare reform, having authored the Partial-Birth Abortion Ban Act.

COOPER: Time.

SANTORUM: I was a — a moral conservative, I was a foreign policy conservative…

COOPER: Time, Senator.

SANTORUM: … I was a fiscal conservative, and I got elected in a state that hasn’t elected a president since 1988 as a Republican.

COOPER: Thank you.

Governor Romney, I’ve got to give you 30 seconds, since he referenced you.

ROMNEY: I think the people of America are looking for someone who can beat President Obama and can get the country on the right track. And I believe that they’ve recognized that if they elect someone who’s spent their life in politics that they’re not going to be able to post up well against President Obama and convince the American people of the truth of the — of the principles that we believe in.

I believe that, having spent my life in the private sector, having actually created jobs is what allows me to have the kind of support that’s going to allow me to replace President Obama and get the country on the right track again. That, for me, is a distinguishing feature that’s going to get me elected as the president of the United States.

COOPER: Governor…

(APPLAUSE)

Governor Perry, was he referring to you?

PERRY: If you want to know how someone’s going to act in the future, look how they act in the past. I mean, so, Mitt, while you were the governor of Massachusetts in that period of time, you were 47th in the nation in job creation. During that same period of time, we created 20 times more jobs. As a matter of fact, you’d created 40,000 jobs total in your four years. Last two months, we created more jobs than that in Texas.

What we need is someone who will draw a bright contrast between themselves and President Obama. And let me tell you one thing: I will draw that bright contrast.

COOPER: I’ve got to give you 30 seconds. Governor Romney?

ROMNEY: Yeah. With regards to track record in the past, Governor, you were the chairman of Al Gore’s campaign, all right?

(LAUGHTER) And there was a fellow — there was a fellow Texan named George Bush running. So if we’re looking at the past, I think we know where you were.

Secondly, our unemployment rate I got down to 4.7 percent, pretty darn good. I think a lot of people would be happy to have 4.7 percent. And with regards…

(APPLAUSE)

With regards to the — to the record — to the record in Texas, you probably also ought to tell people that if you look over the last several years, 40 percent, almost half the jobs created in Texas were created for illegal aliens, illegal immigrants.

PERRY: That is an absolute falsehood on its face, Mitt.

COOPER: You have 30 seconds, Governor Perry.

ROMNEY: It’s actually — it’s actually…

PERRY: That is — that is absolutely incorrect, sir.

ROMNEY: Well, take a look at the study.

PERRY: There’s a third — there’s been a third party take a look at that study, and it is absolutely incorrect. The fact is, Texas has led the nation in job creation. eBay and Facebook and Caterpillar didn’t come there because there weren’t jobs and there wasn’t an environment to be created.

That’s what Americans are looking for. They’re looking for somebody that they trust, that knows has the executive governing experience. I’ve got it. You failed as the governor of Massachusetts.

COOPER: I’ve got to give Governor Romney 30 seconds. He said you failed.

(BOOING)

ROMNEY: I’m very proud of the fact — actually, during the four years we were both governors, my unemployment rate in Massachusetts was lower than your unemployment rate in Texas. That’s number one.

Number two, getting it down to 4.7, I’m pretty happy with. We worked very hard to balance our budget, did every year, put in place a rainy-day fund of $2 billion by the time I was finished.

And I’ll tell you this, the American people would be happy for an individual who can lead the country who’s actually created jobs, not just watching them get created by others, but someone who knows how the economy works because he’s been in it. I have. I’ve created jobs. I’ll use that skill to get America working again. That’s what we want.

(APPLAUSE)

COOPER: Herman Cain, you’re — Herman Cain, you’re tied with Governor Romney in some of the polls for the top leadership position right now. Is a — are they the ones — are either Governor Perry or Governor Romney, are they the ones who should be president?

CAIN: No, I should be president.

COOPER: Well, obviously.

(APPLAUSE)

CAIN: Governor Romney has a very distinguished career, and I would agree with much of what he has said. And there’s one difference between the two of us in terms of our experience. With all due respect, his business executive experience has been more Wall Street- oriented; mine has been more Main Street.

I have managed small companies. I’ve actually had to clean the parking lot. I’ve worked with groups of businesses, et cetera.

And as far as contrasting me with President Obama, if I am fortunate enough to become the Republican nominee, it’s going to be the problem-solver who fixes stuff versus the president who hasn’t fixed anything in this country.

(APPLAUSE)

COOPER: Governor Romney, you’ve got 30 seconds.

ROMNEY: I — I appreciate that. And probably the fact that we’re doing as well as we are is we both have a private-sector background. That probably helps.

But I just want to set the record state on my record — record straight on my record. I’ve been chief executive officer four times, once for a start-up and three times for turnarounds. One was a financial services company. That was the start-up. A — a consulting company, that’s a mainstream business. The Olympics, that’s certainly mainstream. And, of course, the state of Massachusetts. In all those settings, I’ve learned how to create jobs.

COOPER: Your campaigns are telling us we have to end. It’s time…

(CROSSTALK)

BACHMANN: Oh, no, no, no…

GINGRICH: Wait a second.

COOPER: Sorry.

BACHMANN: Anderson, Anderson, that is…

COOPER: It’s your campaigns. I’m… BACHMANN: Anderson…

(CROSSTALK)

COOPER: If you want to defy your campaigns, go ahead. Congresswoman Bachmann, 30 seconds.

BACHMANN: Anderson — Anderson, the good news is, the cake is baked. Barack Obama will be a one-term president; there’s no question about that.

(APPLAUSE)

Now the question is, we need to listen to Ronald Reagan who said no pastels, bold colors. I am the most different candidate from Barack Obama than anyone on this stage.

COOPER: Speaker Gingrich?

BACHMANN: We can’t settle in this race.

COOPER: Speaker Gingrich?

GINGRICH: Let me — let me just point out for a second that maximizing bickering is probably not the road to the White House.

(APPLAUSE)

And the — the technique you’ve used maximizes going back and forth over and over again.

I just want to say two things. I think that I would be the strongest candidate because of sheer substance, if you go to newt.org and look at the 21st Century Contract with America. As the nominee, I will challenge Obama to meet the Lincoln-Douglas standard of seven three-hour debate, no time — no moderator, only a timekeeper. I believe we can defeat him decisively to a point where we re-establish a conservative America on our values. And I think that is a key part of thinking about next year.

COOPER: We’d love to host those on CNN.

I want to thank all the candidates, the GOP candidates tonight.

(APPLAUSE)

(CROSSTALK)

COOPER: I want to thank all the candidates for a spirited debate on the stage. We also want to thank our co-sponsors, the Western Republican Leadership Conference, our host, the Sands Convention Center at the Venetian. Our coverage of “America’s Choice 2012″ continues right now here on CNN.

To cancel public debt held by the Federal Reserve System and to lower the public debt limit by an equal amount.

Status: This bill is in the first step in the legislative process. Explanation: Introduced bills and resolutions first go to committees that deliberate, investigate, and revise them before they go to general debate. The majority of bills and resolutions never make it out of committee. [Last Updated: Aug 2, 2011 6:24AM]