TRANSCRIPT: Daily Caller interview with Karl Rove

THE DC: I have numbers that show that non-defense discretionary went up 8.5% in his first term, which is higher than either of Clinton’s terms.

ROVE: No. No, I’ll tell you what that does. That includes, basically Clinton’s last budget and makes Bush responsible for the spending binge pushed through a Republican Congress by a Democrat president. And take a look in the book. I’ve got the numbers. I worked them very carefully through with Steve McMillan, and I’ve got the right numbers in the book. Now, you can make the argument that Bush did have an unfunded tax cut. I don’t think we ought to be paying for tax cuts. I don’t think we ought to say it’s a zero sum game: if you want to cut taxes you got to raise the revenue somewhere else. I just don’t believe that. There are times particularly when we have such a huge surplus, ostensibly, or when you have a need to jumpstart the economy, as we did on ’01, that you don’t sit there and say, ‘Oh yeah we are going to pay for the tax cuts.’ The second thing is that you could make the argument that Bush had an unfunded liability, the unfunded entitlement that he created in the form of the Medicare prescription drug benefits, and I think that’s a reasonable argument to make. But I would remind you that you ought to take a look at it in terms of what we faced when we were fighting over the Medicare prescription drug benefit. We had both parties in 2000 say we need to modernize Medicare with a prescription drug benefit – this was something Bush campaigned on. Second of all, we had two competing plans, the Democrat plan, scored by CBO at $800 billion, was a government run form formula. The government said, decided what drugs you would get, and what the price would be. The Republicans said we want a market-oriented benefit that’s going to be delivered by private providers who set the formula and set the prices. It was scored by CBO at $450 billion. We pushed through the Republican benefit. It wasn’t a question of– neither one of them, incidentally, was, quote, paid for. Democrats didn’t pay for theirs, we didn’t pay for ours. The choice was do you want the really big one run by the government, or do you want something with market forces that include things like health saving accounts? We pushed through the Republican one. Three bad things then happened: more people signed up, more people signed up quicker, and everybody used it more than was anticipated by the actuaries, the so called utilization ring. And guess what happened? What happened was, that the program is going to come in one third less than the CBO projection for the first ten years. And why? Because it’s market forces that are delivering the benefit, not a government mandate, not a government run, not a government dictated, not a government price setting mechanism. It’s delivered by market forces.

THE DC: All right, let me move on real quick. Why is the GOP in such bad shape politically? Why are there no leaders of the party? Is the Democratic majority Congress part of the Bush administration’s legacy?

ROVE: No, I think it is a natural result of– look, our losses in the 2006 election, we lost one more Senate seat then White House parties normally lose in second term mid-terms, and one more seat in the House then parties normally lose in the second term mid-term. We lost the Senate by 6,200 votes in Montana. We lost the House, if you take the top 14 or 15 races – I’ve got the specific numbers in the book – we lost it by 27,000 votes out of 81 million cast. So we lost them by a narrow margin after picking up seats in 2002, only the second time in the history of America that that had happened. And after picking up seats in the House and Senate in 2004, which again has not happened in American politics. So the losses are normal. But did we have a lousy presidential campaign in 2008? A very worthy man, but not a particularly effective campaign. And we had two years to watch the Democrats beat up on Bush and the Republicans didn’t defend him or themselves. So look, I recognize that the party is looking to the future and that’s what it ought to do, but we ought to be careful as we do so that we don’t have premature expectations of where we ought to be. This is not a time, after losing the White House, that one leader has emerged, that one leader should emerge. We have the utility of diversity of opinions. And it’s great that we’ve got different voices out there. I thought the February 25th Blair House meeting was spectacular, in that we had so many different voices, from Ryan to Barrosso, to Colburn to Alexander, whom people didn’t normally see and they got a sense of how good we have it in, how many good members of Congress we have and how many good leaders of the party we have. I have arrived at my location so you have one more question.

THE DC: How about three ‘yes’ or ‘no’s?

ROVE: Oh I am not committing to give you ‘yes’ or ‘no’s.

THE DC: Ok, well they’ll be that quick. Have you talked to General David Petraeus or anyone around him about a political future?

ROVE: No.

THE DC: Are you talking or working regularly with Tea Party folks on what they’re doing.

ROVE: I’m talking to Tea Party people all the time.

THE DC: Lastly, you’ve had some personal impact from your pursuit and your service to government. Was it worth it?

ROVE: It was a great experience and my family and I will be forever grateful that we had the experience that we had in Washington.

THE DC: Ok. Favorite founding father?

ROVE: You know what, it’s hard to answer that question because I love Washington, I love Jefferson, I love Hamilton, I love Adams. I mean there are is something to be found in almost every one of them that is admirable. From Robert Morris who died in poverty. One of my favorites that is not well known is Caesar Rodney. He’s got to be the ugliest founder, and he’s got cancer of the face, and he mounts a horse and rides a carriage in order to break the tide and casts Delaware’s vote in favor of the Declaration of independence. So I mean it’s hard to pick one of those incredibly amazing people. Alexander Hamilton, I mean it’s a remarkable group.

THE DC: I am surprised you said you like Jefferson actually.

ROVE: I’m a huge Jefferson fan, I must admit I’ve changed, my attitudes about him have changed over time because while I love his small government view, his small government view was so closely tied to agrarianism and I must admit the idea of an agrarian America, rather than the robust source of innovation and competition is not my ideal.

THE DC: Ok, that’s a good one to end it on. Thanks Karl.

ROVE: Thanks, bye.

Transcription by Elizabeth Simson, Monique Hamm and Joseph Tauke.