Sen. Graham was first elected in 2002, and previously served in the U.S. House of Representatives.
The federal government is set to reach its credit limit early next year. In an exclusive interview with Newsmax TV, Graham explains what he wants to see before he would agree to an increase in the debt ceiling.
“Saving Social Security and Medicare from bankruptcy in the next 20 years,” he declares.
“We’re becoming Greece as a nation over time not because of tax rates going from 39.6 percent to 35. That whole tax rate discussion is a political trophy for President Obama. It doesn’t solve the nation’s economic woes.
“Social Security and Medicare are programs that are valuable to the country that are going to go bankrupt because the baby boomers are retiring 10,000 a day and you’ve got a very small workforce. The system’s going to fail.
“So what I would like to see from the president for me to raise the debt ceiling is to turn around the nation’s long-term indebtedness, adjusting the eligibility age for Medicare from 65 to 67 over decades like they did with Social Security. Means test benefits — there’s no reason in the world my prescription drug entitlement program should be subsidized by the general treasury. Have people in my income level pay the actual cost of Part B and Part D premiums on the Medicare side and means test [Social Security] benefits for upper-income Americans.
“That will turn around America’s fortune and we won’t become Greece with entitlement reform. And if we don’t get that, then I’m not going to raise the debt ceiling. What good have you done to keep borrowing money if you never address what got you into debt to begin with? And that’s entitlement spending over time.”
Graham was asked if the president has enough leverage with his own party to get the cuts that are going to make the GOP happy.
“Man up, Mr. President, and do something like Ronald Reagan and Tip O'Neill did,” he says. “He has never done a bipartisan deal that was of big enough consequence in his entire political career. The only big ideas he’s pushed since he’s been president is Obamacare, Dodd-Frank, the massive stimulus package — big liberal ideas.
“What a legacy it would be for President Obama to work with the Republicans to save Medicare and Social Security for the people who are going to need it the most. We’re talking about 40 to 50 trillion dollars of unfunded liability. You would need $8 trillion in today’s money in a bank right now to keep Social Security solvent for the next 75 years. You need about three times that for Medicare.
“When these programs fail, to keep the checks coming you’re going to have to either increase taxes for everybody in the country by a third or cut benefits for everybody in these programs by a third. If you do it now, you can protect those who need the most protection.”
For the Republican Party, saving Social Security and Medicare is “the biggest historic opportunity I’ve seen for our party, my party, to do something big and good for the nation,” Graham asserts.
“So if we’re worth our salt as a party when it comes to looking out for the welfare of the country on the fiscal side, we will dig in our heels and accept some political criticism that will surely come and use the debt ceiling discussion as a way to turn around the country.
“I’m not asking the Democrats to privatize Social Security. I’m not asking for premium support for Medicare or a voucher program. I am asking for real changes: age adjustment, means testing, CPI (Consumer Price Index) adjustment. And if we don’t do that as a party, if we’re not willing to do it now, when are we going to be willing to do it? This is the best chance I’ve seen since I’ve been in Congress to bring about meaningful entitlement reform.”
A recent ABC News-Washington Post poll shows that the GOP base is not happy with the way Speaker Boehner is handling the fiscal cliff negotiations.
Graham comments: “I like John Boehner. I have confidence in John Boehner. He’s a real conservative. But here’s reality: At the end of the year, all the tax rates go up on everybody in the country. And raising tax rates to solve our debt problem will hurt jobs.
“I don’t mind capping deductions. That would generate revenue in a job-friendly way. John Boehner is in a tough spot but when it comes time to raise the debt ceiling, all the advantages come back to us. The public would support higher taxes on people making more than $250,000. Well, if you raise tax rates on people above $250,000, you’re going to destroy a lot of small businesses. John will do the best he can to get the best deal given a bad situation.
“Here’s where John Boehner’s leadership will be very important: After the fiscal cliff comes in January, and we haven’t done a big deal, and I don’t think we will, the next leverage point for Republicans is raising the debt ceiling and I am convinced that John Boehner will not raise the debt ceiling unless we have substantial and significant entitlement reform.”
Addressing reports that some conservative grassroots groups might launch primary challenges in 2014 against Republicans who vote to hike taxes, Graham says: “At the end of the day, if you focus on saving America from becoming Greece, you’re going to be just fine. If you focus on pro-growth economic policies as a Republican, you’ll be fine.
“What Republican conservatives should be focusing on is doing the least amount of damage to the economy as possible in the year of negotiations and really dig our heels in on saving America when it comes to debt ceiling negotiations.”
Asked if tax increases are in the best interest of the country, Graham responds: “It depends what you define as a tax increase. Raising rates is a bad idea. I’m not going to vote for it because it doesn’t solve the problem. I didn’t get into this business to give Obama a political trophy. I got into this business to save the country like Ronald Reagan and Tip O'Neill did.
“Conservatives and liberals are going to have to work together to save America. You can’t wipe the Democratic Party away and they can’t wipe us away. We have got to negotiate a solution to our joint problems.
“But raising rates seems to be a singularly bad proposal and it’s no accident that everybody else who’s looked at this in a bipartisan fashion rejected raising rates. It’s a partisan solution. I don’t care to do that. I do care to save the country, and capping deductions, simplifying the tax code and having pro-growth tax policy is where we need to be going to create jobs, which helps us with revenue.”
The fiscal cliff would also mandate cuts to defense spending in addition to the $489 billion cut in the Budget Control Act of 2011. Asked if these further cuts can be made without harming the military’s ability to protect our interests at home and abroad, Graham — a member of the Armed Services Committee — states simply: “No.
“In the words of Leon Panetta, with sequestration, which is a $500 billion cut over the next decade, we’ll be shooting ourselves in the head when it comes to our military. You’d have the smallest Navy since 1915, the smallest Army since 1940.
“I’m probably one of the strongest defense hawks up here but here’s what I’m not going to do: I’m not going to let the defense cuts that hang over our heads goad me into voting for tax increases that will harm the economy. You’re not helping the Defense Department by destroying job creation.”
Graham calls the $489 billion in cuts already planned “substantial. The only thing the Obama administration’s cut in the whole government is what? Defense spending. We’re not in debt because of defense spending. It is a quarter of our discretionary budget. You could take all of the money we’ve spent on Iraq and Afghanistan and that doesn’t begin to get us out of debt.
“But having said that, I signed up for $489 billion and I’m willing to consider more if they’re willing to do things on entitlements.
“But here’s my view as a conservative: When you do a federal budget, the first thing you should get right is defense spending. I’m a Ronald Reagan Republican. There is no Social Security without national security and budgets have to be formed in terms of the present time in which you live.
“We’re fighting radical Islam. We must win this conflict. Iran is marching toward a nuclear weapon. I would suggest that in a time of war you need to be prudent in cutting your defense spending.
“When we resolve the Iranian problems, when we get Afghanistan in a good spot, when we get Syria behind us and when we would begin to deal with radical Islam in a more effective way, come back to Lindsey Graham and we’ll talk about additional defense cuts.
“My belief is that the defense capabilities we have today have to be improved upon to keep the edge against an enemy and that enemy one day could be China. I don’t think we’re going to war with China but I do know this: The Chinese must believe they would lose. That’s the best way not to go to war.
“Reducing defense spending by $489 billion does reduce coverage but when you’re $16 trillion in debt, you have to give at every area. So if a guy like me is willing to take a $489 billion hit at a time of great conflict, I would hope there would be somebody on the Democratic side willing to help save Social Security and Medicare from bankruptcy.”
In his exclusive Newsmax interview, Sen. Graham also discusses the resignation of his fellow South Carolina Republican Sen. Jim DeMint, and Gov. Nikki Haley’s choices to replace him.
Read the exclusive Newsmax interview with Sen. Lindsey Graham on the likely successors to retiring Sen. Jim DeMint:
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