Republican McCarthy Says Budget Plan Will Create Jobs

U.S. Representative Kevin McCarthy, the third-ranking Republican in the House, said Democrats blinked by agreeing to temporary budget cuts and his party’s plan would create jobs.

McCarthy said House Republicans’ plan to introduce a budget in April that will address entitlement programs, though he didn’t offer specifics on how his party would overhaul Medicare, Medicaid or Social Security. Those programs represent about 40 percent of the federal budget.

“We will be different than the president,” McCarthy, of California, said during a Bloomberg Breakfast with reporters in Washington. “We will address entitlements.”

McCarthy rejected reports by Goldman Sachs Group Inc. and Moody’s Analytics chief economist Mark Zandi that the Republicans’ $61 billion budget-cutting bill would hurt the economy.

The Republican proposal would reduce economic growth by 1.5 to 2 percentage points during the second and third quarters of this year, according to the report released by Goldman Sachs last week.

“I don’t believe the $61 billion is going to be a short term hit on jobs,” said McCarthy. “You’re going to say the $61 billion is going to shut down America? We just spent $1 trillion with interest in the stimulus.”

He called the House vote for the temporary budget cuts a “bigger victory than anyone could imagine,” with 104 Democrats siding with Republicans. “More voted with us than against it, of the Democrats,” he said.

Middle East

Commenting on the unrest in the Middle East, McCarthy said he would give President Barack Obama a grade of “C” for his handling of the turmoil.

“He should put a clear position of where America stands and where America is going,” he said. “It’s almost that the policy keeps changing with each inroad, with each country.”

Libyan forces loyal to leader Muammar Qaddafi counterattacked rebels today. Western powers are debating how to stop the attacks as two U.S. Navy ships head toward Libya.

McCarthy said he wouldn’t send military or financial support to the country.

“There are ways to do it without troops,” he said.

McCarthy said there wasn’t a clear frontrunner for the Republican nomination in the 2012 presidential race.

“You had a clearing of the deck per se after McCain,” said McCarthy, referring to the party’s 2008 nominee, Arizona Senator John McCain. “Who really is sitting there that’s next in line?”

Presidential Race

No Republican candidate has formally declared for the 2012 race. Four years ago, when no incumbent was in the contest, a total of 17 Republicans and Democrats had signaled their candidacies or set up exploratory committees by the end of January 2007, including Obama.

“Is there any hidden fact about who’s going to run probably?” said McCarthy, who mentioned former Minnesota Governor Tim Pawlenty, former House Speaker Newt Gingrich, Mississippi Governor Haley Barbour, and Indiana Governor Mitch Daniels as potential candidates. “By announcing, does that change anything they’re doing?”

He said a longer primary campaign would be “beneficial” for the party because it will allow candidates to build stronger campaign organizations and air potential issues.

“It’s not pretty, but I think it will be better for us in the long term to carry it out,” he said.

The Republican majority in the House can set the agenda for the presidential race, said McCarthy.

“Everything we do in the next year can lay up for what the debate for the presidency will be about,” he said. “We make it about job creation about the budget and spending, then you have to debate that.”