Fox News Interview - Transcript

Interview

Fox News Interview - Transcript

FOX NEWS INTERVIEW WITH REP. DARRELL ISSA (R-CA) INTERVIEWER: BILL HEMMER
SUBJECT: CALIFORNIA'S TAX REFUND DELAYS

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MR. HEMMER: Hey, some bad news for taxpayers in California hoping to get some extra money in their pockets this tax season. The state is suspending the refund for the tax system, basically issuing an I.O.U. instead -- here's the statehouse in Sacramento -- the most populous state in the nation running out of money, and quickly; a deficit that tops $40 billion. One state, $40 billion.

California Congressman Darrell Issa, ranking member of the House Oversight and Government Reform Committee. Sir, welcome back here.

REP. ISSA: Thanks.

MR. HEMMER: We talked last week, and it's good to have you back on our program. Are you going to get a refund in this or not?

REP. ISSA: Well, you know, I'm not going to get a refund. Fortunately, I'm one of those people that didn't overpay the state, and I just rolled forward the little amount.

But the fact is that California's breaking its trust, and if every state begins breaking it -- its trust, whereby if they're out of money they don't start cutting in order to be balanced, we're not going to come out of this. And California's one of those examples where they know they have a deficit.

MR. HEMMER: How do you think -- yeah. How do you think your state got into this situation?

REP. ISSA: Well, Governor Schwarzenegger's always been right when he says our problem is not our revenue, it's a spending addiction. The legislature has continued to grow far faster than growth, inflation, all of the indices -- not just on Governor Schwarzenegger's watch, not just on Gray Davis's watch, but even on Pete Wilson's watch. And that fundamental change has not yet sunk in, that you can't do that forever.

MR. HEMMER: Well, your tax revenue's down now, and you're staring at a $42 billion deficit. How you going to climb out of this hole? I mean, it's one thing to -- in my view, it's a slap in the face to Californians if they're not going to get their tax refund and get it in a prompt matter -- and to get it, quite honestly, with interest -- from the state.

REP. ISSA: Well, it is. And, you know, the answer to the question always is, can we get fundamental change, binding change, constitutional change, in return for whatever it takes to get out of this problem?

Governor Schwarzenegger's been trying to negotiate with a legislature that wants a tax increase, and at all -- in every case of tax increases throughout California's recent history, since at least the '70s, the taxes are very hard to get back, and they stay in place well into a boom era. And then those excess funds that come in end up being spent.

So the fact that the governor's been holding the line and saying, "I need to either get it all in cuts, or we need to have fundamental change," is the right approach.

MR. HEMMER: Well, I -- it's hard for me to see, economically, how these people are going to get their money in due course, if the debt's going to continue to mount. And, I mean, unless you get that off your books -- it seems to me like the state's taken a position that they're not going to write the checks.

REP. ISSA: Well, clearly the state is ignoring the obvious, which is that you can get the money. You can get it in a short-term bond, a three-, four-, five-year bond. Yes, you're going to pay 7 or 8 percent, double-tax-free, and then you can refinance those when times get better.

One of the reasons they're not doing that, quite frankly, is that they're hoping that somehow the federal government will come in and supply a substantial portion of that 40 billion (dollars) at -- as a grant, and thus they'll never have to pay it back. I think that's a fool's waiting game.

MR. HEMMER: Well, I -- listen, I've got to go. I'm out of time. But I appreciate your time today.

REP. ISSA: Thank you.

MR. HEMMER: The California congressman is Darrell Issa. You know, California sometimes can set the trend for a lot of other states.

REP. ISSA: Absolutely.

MR. HEMMER: Let's hope this isn't what -- one of them. Thank you, sir. Thank you.

REP. ISSA: You're very welcome.

END.

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