Mike Pence promises more of the same that we've seen from Republicans during the first two years of the Obama presidency -- more obstruction. While defending keeping the Bush tax cuts for the rich in place, Pence also seems to have a little trouble with "sophisticates in Washington" and their accounting. Apparently Eliot Spitzer hasn't figured out that Mike Pence isn't going to let a little thing like mathematics get in the way of his talking points.

Pence has absolutely no interest in governing and hates government, but he wants to be president in 2012. Looks like he'll fit right in with the rest of them on the GOP's short list of potential nominees.

PARKER: He is one of the most powerful Republicans in Washington and he says, "no compromise." He promises to stand in the way of an aggressive liberal agenda. That's how he sees it, anyway. And joining us from Wadesville, Indiana, Congressman Mike Pence.

Welcome.

PENCE: Thank you.

SPITZER: Congressman, you and I may not be on the same side of the aisle on this one, but enjoying keeping up your energy and making the most of the last couple days. And by the way, more important, perhaps, congratulations. I know you can't quite say it this way, but you're running for president, we hear and that's going to be one big endeavor for you. So enjoy it and we wish you nothing but luck.

PENCE: Well, thanks, Eliot. I've read that too. I tell you, my focus is entirely on November 2. You know, I really do believe this is one of those -- this is one of those generational moments in electoral politicians. You know, I'll agree with President Obama who said that this election is a choice. I don't think it's a choice between the failed economic policies of the present and the failed economic policies of the recent past, but I think the American people are going to decide and I hope in definitive terms, whether we're going to continue this pathway of more government and more spending and more bailouts and more takeovers or whether we'll turn back to fiscal responsibility and pro-growth policies and I'm honored to be some small part of that debate. And we'll let the future take care of itself.

SPITZER: Congressman, I want to jump in on something you said, and I think we would all agree, at the fulcrum of this election is jobs, jobs, job, how are we going to get them back. But I want to challenge you a little bit, when President Obama came into office we were losing jobs at a horrendous rate. We're going to throw up a graphic right behind us. You can't see it, but I'm sorry for that, but you've seen these numbers before. It's that curve that shows how many jobs we were losing until President Obama came into office: 700,000 a month. He passed a stimulus, he got the government geared up. We are now creating jobs. And yet, you have been intensely critical.

President Bush, we went over the cliff, we were losing hundreds of thousands of jobs. President Obama, a stimulus package that by all economic accounts has worked. What is your answer to the charge you're playing politics. You're now the candidate of no, you've said that yourself. What was wrong with what President Obama did in the stimulus which a third of which was a tax cut as requested by the Republican Party?

PENCE: Well, I would say, Eliot, I don't know where the consensus is that it worked. The administration said we had to borrow $1 trillion in the stimulus bill or unemployment would reach eight percent. It's now more than 9.5 percent across the country. It clearly has not worked. And that's because this administration didn't learn the lessons of the last administration and that is you can't borrow and spend with deficits and debt your way back to a growing economy...

SPITZER: Congressman, look...

PENCE: Eliot, you know, I was a pretty harsh critic of the last administration. I supported the tax relief, but I fought against the big government programs of the Bush administration. I opposed the leadership of my own party because the American people know that the way to get the economy moving again is you combine pro-growth tax policy with real fiscal discipline in Washington, D.C. and that's the real pathway to prosperity in the future.

SPITZER: We will get to fiscal discipline in just a moment and we will have that conversation. I'm going to give you every opportunity to discuss it because that is a critical issue. But when you say it hasn't worked, when President Obama came into office, we were losing jobs at a clip of 700,000 a month.

PENCE: Right.

SPITZER: We now have positive job growth. And so how can you say that hasn't worked when the policies of President Bush, where the curve is going straight down, we turned that around 180 degrees? How can you possibly say that hasn't worked?

PENCE: Well, again, I think the administration said that we need to spend $1 trillion in the stimulus bill or unemployment would go to eight percent, it's 9.5 percent. It's now -- I think last month, Eliot. We're now at 9.5 percent or higher for the longest time in success since the Great Depression.

Look, we can't borrow and spend and bail our way back to a growing economy. The economy is going to continue to wrestle its way forward and find marginal gains in the public sector, the private sector. But I think most Americans know the way you get the economy moving again is a combination of across the board tax relief and you put into practice real fiscal discipline which this administration clearly hasn't done, and frankly, the last administration didn't do that well with either.

SPITZER: Well, look, the trend line we had with President Bush would have taken us to 13 percent or 14 percent unemployment. But let's put that aside for a moment. You want to extend the tax cuts in perpetuity, which everybody agrees will give us an $11 trillion deficit over the next decade. And we're asking everybody this, "Name Your Cuts." How are you going to balance that budget? Specifically, where do you cut to close the chasm of this deficit?

PENCE: Well, look, I know that -- I know the way that sophisticates in Washington do the numbers, is they tend to talk about how you pay for tax cuts as though the government kind of owed all the money and if they let people keep more of their money, they got to find a way to pay for it. But just going with that kind of accounting, that's fine.

First, I think, to get the economy moving again, you ought to make sure that no American sees a tax increase in January of 2011, not one. You're never going to balance the budget in a combination of our three lifetimes if we don't get the economy growing again at three percent or four percent.

So, first thing you want to do is make sure no one sees the tax increase. Next thing, I think you ought to look for additional tax relief that will encourage capital formation and investment. And then in terms of your question about budget cuts, Eliot, I think everything's on the table. I mean, you've been a governor, you know, you got to look at the whole budget. I think we've got to look at everything from domestic spending to entitlement reform to even defense spending. I mean, this country's going broke. Two years in a row of $1 trillion deficits, we've got to take decisive, across the board action to put our fiscal house in order.

SPITZER: I may disagree with your promise that if you cut the tax rate further you're going to generate any growth, but let's focus in right now on the tax cuts. You said everything will be on the table, which I admire you, I agree with you, it's got to be on the table. Will you increase the retirement age for Social Security to 70 as has been proposed by Paul Ryan and many others?

PENCE: Well, look, my personal view of what we do with Social Security and Medicare is -- is we basically say to everybody 40 years old and older that we'll keep the promise that we've made to you in Medicare and Social Security, through the course of your life and career. So people that are within a generation of retiring, we just tell them, we'll keep you in the deal. But for Americans under the age of 40, absolutely, we've got to reform these systems. We got to make them a better deal for taxpayers. And when you combine them with private savings alternatives and private health insurance alternatives, I think we're going to give Americans under the age of 40 a better deal to replace the old new deal program.

SPITZER: And I admire you for being willing to say for those below 40 you would change the equation on Social Security, basically saying you're going to change the retirement age. But if you push it back that far, it's not going to do what we need to do. Are you willing to consider any cuts in defense?

PENCE: Well, look, I didn't -- the retirement age thing, I think all the alternatives to reforming Social Security and Medicare for people under the age of 40 ought to be considered. I didn't want to put my -- hang my hat on one peg. But you bet, Eliot, come one, I mean, we know there are inefficiencies in defense spending in this country. We have real challenges. There are rising threats around the globe far beyond the reach of the war on terror. We need to be preparing for, for the future. I think we can do that if we look for greater efficiencies and if we set into motion processes that will encourage efficiency and a better use of taxpayer's dollars in providing for the common defense which of course is the first article of the federal government. That's the first and most important thing the federal government is going to do other than protecting the basic constitutional rights of every person in the country.

SPITZER: And I want to come back to the tax rate one more time, because you keep talking about cutting the tax rate which of course everybody would love to do, but you know that historically -- and we can put a graphic up showing this -- the marginal rate, the top rate used to be up at 94 percent back in the early part of the '40s, the '50s and it has been coming down consistently until it is now at about 35 percent, which is really one of the lowest points it's ever been. And growth, in our economy, has not really been affected by this over time, if you look at that. So, when you say "cut the rate more," you realize that has not generated the growth that you're talking about.

PENCE: Well, look, I think -- I actually think when President Kennedy cut the top marginal tax rate, when Ronald Reagan cult the top marginal tax rate, when President Bush cut the rate after the towers fell in your beloved New York, we saw those top income earners ultimately sending more money under a lower marginal rate because it generated economic activity. I think that's a pretty unbroken historical fact.

But, you know, I will stipulate that this notion that you can go back to the tax cut and spend policies of the recent Republican past is a nonstarter. It was like Republicans replaced the tax and spend liberal Democrat Congress and they become a liberal tax cut and spend majority. The way it's going to work is if we have serious, across the board tax relief for working families, small businesses and family farms and we practice fiscal discipline. But the other thing is, when you talk about that marginal income tax rate, Eliot, I got to tell you, you know, whether it's Whirlpool here in Evansville, Indiana, or all across southwestern Indiana, we've been losing manufacturing overseas for some time.

And as I talk to business leaders, we have some of the highest corporate tax rates in the world. Individuals who -- business owners who file as individuals pay some of the highest business taxes in the industrialized world. We've got to stop looking at just what America's done in the past, but what are those countries doing that we're losing jobs to and create the tax structure that's going to encourage capital formation and jobs here?

PARKER: Congressman, I think the American people would like to see Congress work together. Is there anyone across the aisle you feel you can work with to cut the deficit next year?

PENCE: You know, I really believe -- I believe there is, and more than one, Kathleen. Look, I think there are many honorable men and women in Congress who are ready to roll their sleeves up...

PARKER: Can you name people?

PENCE: ...and work on both sides of the aisle to put our fiscal house in order. Well, look, I don't want to intrude myself in campaigns. But let me tell you, I think the American people are possibly -- I'm not making prognostication predictions, here -- I think it's possible the American people will send a deafening message to Washington, D.C. that they want our fiscal house in order. And whether it's new conservatives being elected or Democrats who managed to return to Capitol Hill, I fully expect, and I hope and I literally pray, that we'll be able to come together and do the hard work to put our nation on a pathway toward fiscal solvency and a balanced federal budget.

PARKER: Well, thank you very much. We hope those prayers get answered. Congressman Pence, thank you for being with us. We'll be right back.