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CNN Live Event/Special

Sens. Ted Cruz and Bernie Sanders Debate GOP Tax Plan. Aired 9- 10:30p ET

Aired October 18, 2017 - 21:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JAKE TAPPER, CNN: Live from Washington, this is CNN's Debate Night with Senators Bernie Sanders and Ted Cruz. At issue, President Trump's new tax plan. Will Congress go for it? And how might it affect your wallet? I'm Jake Tapper.

DANA BASH. CNN: And I'm Dana Bash. This morning, President Trump again promised his plan will be a boon to small businesses and the middle class, but President Trump's critics say the plan is a huge boost to the rich and might even raise taxes for some in the middle class.

TAPPER: Meanwhile, President Trump's treasury secretary is saying that the stock market, now at a record high, will drop if Congress does not cut Taxes. Senator Cruz supports the president's effort to lower taxes. Senator Sanders opposes it.

BASH: Gentlemen, welcome. A reminder: You will get 90 seconds to answer questions from us and our audience, 45 seconds for responses and rebuttals. Senators, let's start with your opening arguments. You each have one minute.

Senator Cruz, we'll start with you.

SEN. TED CRUZ, R-TEXAS: Dana, thank you. I want to thank CNN and Jake and Dana both for hosting this, everyone for coming out, and, Bernie, thank you for joining us for a substantive debate on tax policy. Several months ago, you and I did Obamacare. Now we're back with taxes.

And I got to say, this debate is very, very simple. Bernie and the Democrats want every one of you watching today to pay more taxes. And Republicans want to lower the taxes for each and every person watching this debate.

Now, tonight I'm going to make a prediction. Bernie is going to suggest in just a few seconds that this is not really about you, this is about, quote, "taxing the rich." That's what the Democrats always say. But here's what you need to know. Every time Bernie says the rich, what he means is taxpayers. And so if you pay taxes, he's talking about you.

Now, how do we know this? We know this because there's a difference between facts and rhetoric. Bernie's tax plan cost over $13 trillion. That's what he's proposed raising in new taxes. And who pays for it? Well, the Democrats always talk about the millionaires and billionaires, but here's a simple fact. We could take every single person making $1 million a year or more and confiscate 100 percent of their income, everything they make, every penny, and it would raise about $1 trillion, about 8 percent of the cost of Bernie's tax plan.

That means if you want tax revenue, you don't get it from the millionaires and billionaires. You get it from the middle class. You get it from the working men and women in this country.

Tax cuts are about jobs and more money in your pocket, more money for the single mom to buy books for her kids, for the truck driver to be able to afford sending his daughter to college, for -- for the family who's struggling to make ends meet to be able to save up and go to Disneyworld.

This debate is very, very simple. Bernie and the Democrats want to raise your taxes. And the Republicans want to cut them so that you have more in your pocket.

BASH: Senator Cruz, thank you. Senator Sanders?

SEN. BERNIE SANDERS, I-VERMONT: Let me make a prediction.

(LAUGHTER)

In two minutes, Senator Cruz is going to tell you that if we give tax breaks to the billionaires like George W. Bush did, like Ronald Reagan did, we're going to create zillions of jobs and you're all going to become very, very rich, that we have a trickle-down economic theory, tax breaks for the wealthiest people, the largest corporations, and, whoa, everything is good.

That is a totally fraudulent theory. Here is the reality of American society today. For 40 years, the middle class of this country, the great middle class has been shrinking. And what we have seen is a massive transfer of wealth from working families to the top 0.1 percent, trillions of dollars because of cooperate greed and an unfair tax system.

Now, the Trump Republican tax proposal that's before us today, this proposal is being pushed by Senator Cruz's campaign contributors, some of the wealthiest people in this country, by the Koch brothers, who are worth $90 billion. Why are they pushing this agenda? Because 80 percent of the tax breaks in this proposal will go to the top 1 percent.

In fact, 30 percent of the middle class will end up paying more in taxes. Forty percent of the tax benefits will go to the top 0.1 percent. This is massive tax breaks for the wealthy.

And then the other thing they do, in order to pay for their tax breaks, you know what they do? They cut Medicaid over a 10-year period by $1 trillion, throwing 15 million Americans off of the health insurance they have. They cut Medicare by $470 billion.

So what this is, in fact, is a proposal -- which is right on the floor of the Senate right now -- Senator Cruz and I go back tomorrow, we're going to continue the debate -- it is a Robin Hood proposal in reverse. They are taking from the working families and the poor and they're giving to the rich. It's a proposal that must be defeated.

TAPPER: Thank you, Senator Sanders. Let's talk about some of the details now. Republicans are working out a lot of the details of the tax plan, but the proposed framework would cut the corporate tax rate from 35 percent to 20 percent and reduce the number of individual tax brackets from seven brackets to three brackets, creating three new rates of 12 percent, 25 percent, and 35 percent.

I want to begin with the question of who this plan will benefit. We're going to bring in Kelsey Yarzab. She's a student at the George Washington University here in Washington. She has a question for Senator Cruz. Kelsey?

QUESTION: Senator Cruz, I come from a middle-class family, and I worked hard in high school to get into a competitive college. But even after academic scholarships, my parents and I are still struggling to afford my education. And that's without indirect costs.

So it's hard, then, for families like mine to see the benefits of cutting corporate tax rates and re-attempting trickle-down economics when that hasn't been a long-term solution for the middle class in the past. How would you justify cutting the corporate tax rate by 15 percent, but only barely making a dent in the tax rate for middle- class Americans?

CRUZ: Kelsey, thank you -- thank you for your question. And congratulations on your studies.

Look, I understand -- I understand the frustration. And you know what? There are a lot of young people who feel frustrated. You've probably got student loans. I know, when I was in college, I had about $100,000 in student loans and didn't -- wasn't sure how to pay for them because my parents had declared bankruptcy when I was in high school.

So I understand that's hard. You asked why cut the corporate taxes for a young person? I'll give you the single best reason. Because when you graduate, you want a job.

Do you know the United States has the highest corporate tax rate of any developed country in the world? You look at countries all over Europe, you look at Ireland, you look at the United Kingdom, you look at France, they're cutting their tax rates. And what's happening is jobs are fleeing to those countries. Capital goes where it gets the right tax rate.

And Bernie's solution is jack the taxes up even more. If you jack the taxes up even more -- we've already got the highest corporate tax rates in the developed world -- you'll see even more companies leaving, even more jobs leaving.

And the frustration young people feel is you're coming out of school and you don't have opportunity. You know, Bernie talked a minute ago about the gap between rich and poor. He's right. It's growing. But it's grown dramatically under Barack Obama.

Do you know that right now the top 1 percent have a higher share of our national income than any year since 1928? If you look at an article called "The Greatest Wealth Transfer in History" by Justin Gardner, New York Post editor called the period between 2008 and 2015 the great fleecing. Those are the Obama years. Because what happened? What happened is $4.5 trillion in wealth was accumulated in Wall Street, and that was with high Obama taxes, high Obama regulation, all the cronyism and favoritism of Washington, and the people that got hurt, the gap between rich and poor, widened more under Obama than under any other president.

What I want to see is young people coming out with opportunity. And the way you have opportunity is to have two, three, four, five job offers. When you cut taxes on small businesses and job creators, the result is everyone benefits because you have more opportunity, better jobs, and higher wages.

TAPPER: Senator Sanders?

SANDERS: Well, for a start, I commiserate with you as a student struggling. And what you should know is that in order to give incredible tax breaks to the 1 percent, the Republican budget that we're debating right now would slash Pell Grant funding. Pell Grants are the major source of federal help for working-class young people. It would slash that funding, if you can believe it, at a time when so many young people are struggling to figure out how they're going to go to college, these guys want to cut Pell Grants by $100 billion.

They want to cut housing assistance all over this country. You're a young person. You're thinking of getting an apartment, getting a house. We have millions of people who are spending 40 percent, 50 percent of their limited incomes on housing. They want to cut Section 8 housing and other housing programs by $37 billion.

So what this entire proposal is about is to give tax breaks to people who don't need it, and you do that by making massive cuts in education, in health care, in housing, in the programs that working families desperately need.

TAPPER: Senator Cruz, do you want to respond?

CRUZ: You know, I do. It's interesting. In his opening, Bernie invoked Robin Hood. And I got to say, I think Bernie fundamentally misunderstood that story. Robin Hood was robbing the tax collectors who were collecting too much taxes from the working men and women and taking it for the rich.

In -- in Bernie's analogy, it is the Democrats who are King John and the Sheriff of Nottingham. And Robin Hood is saying, tax collectors, stop hammering people who are struggling, who are laboring in the fields, who are working, stop taking it to the castle to give out to your buddies.

You notice Bernie's going to tell you all this free stuff he's going to give, and the Democrats love cooperate welfare. They love to rail on the insurance companies. What they won't tell you is that under Obamacare the profits for the insurance companies doubled.

When you have Washington giving out goodies, the big guys do great. It's the little people who hurt, it's the young people, it's the entrepreneurs. Look, when my dad came to America from Cuba, he couldn't speak English, he was washing dishes, he was making 50 cents an hour. Our economy has been the place where people can come and do that. And it doesn't work.

You notice Bernie didn't disagree with what I said that the gap between rich and poor has increased more under Obama than any president in history.

SANDERS: It's increased significantly over the last 40 years under Republican presidents and under...

CRUZ: Yeah, but it happened the last eight.

SANDERS: It did increase under Obama. And it did increase under Bush. Under the Bush proposal, remember, what Senator Cruz is talking about, if we give tax breaks, we're going to create all these jobs and we're going to have all this growth and we're going to have a surplus and so forth and so on.

Under President Bush, he did it. He gave tax breaks. And you know what happened? He gave tax breaks to the rich. And you know what happened? We lost 500,000 private sector jobs, and the national debt almost doubled under Bush.

Now, here is the most important point tonight. Really, it has nothing to do with taxes. It has something to do -- everything to do with campaign finance reform. And I want all of you to ask yourself a very simple question. Why do you think the Koch brothers and Ted Cruz's major donors, billionaires, are supporting these proposals?

Do you think they're staying up nights worrying about working families? Do you think they're worried about kids who can't afford to go to college? Do you think they're worried about elderly people who can't keep their homes warm in the wintertime? They are not.

You've got one group of people, the Koch brothers, two people worth over $95 billion, they are going to spend $300 million alone in this campaign cycle. To do what? To pass legislation that protects the interests of the wealthy and the powerful and to support candidates like Senator Cruz who will do just that.

So when you think about politics, always ask the question, who is behind this agenda? There was an article, front page, Boston Globe the other day. It said the Koch brothers want this tax reform. And you know what the article said? And Ted actually I think was at a meeting with the Koch brothers the other day. Isn't that right?

CRUZ: Indeed.

SANDERS: Yes.

(LAUGHTER) And the -- you may have heard this guy say to you, if you don't get your act together for the billionaire class, you know what they're going to do? They're going to cut your funding, Ted. You're going to be in trouble.

So we used to think that what Congress was about is representing the middle class and working families of the country. Unfortunately, as a result of Citizens United, we have a corrupt campaign finance system. What this legislation is about is not for the working families of this country, no matter what Senator Cruz may say. What this legislation is about is to benefit the wealthy and the powerful and those who make large campaign contributions.

TAPPER: Senator Cruz, I want to give you a chance to respond, and then I do want to get to another citizen.

CRUZ: You know, there's a pattern you see of Democrats, which is they try to scaremonger. And so their latest villain is the Koch brothers, and they say this money and politics is what it's all about.

But, you know, John Adams said facts are stubborn things. Here are some facts. You look at 2014. In 2014, of the top 20 groups that gave money to politics, I guess listening to Bernie they were all Republican, no? That's not the case. Sixteen of the top 20 gave primarily to Democrats.

The top six, ActBlue, Tom Steyer, the Carpenters and Joiners Union, the City of New York, the Democratic Governors Association, the NEA, gave almost exclusively to Democrats. Where did these mysterious Koch brothers fall on the list? Number 59.

SANDERS: Ah.

CRUZ: So they do a good job.

(LAUGHTER)

Democrats do great with rich people. In the last eight years under Obama, rich people got richer. You know, the most stunning thing, Bernie -- gosh, Republicans don't care about young people or old people or people struggling. That is malarkey, Bernie. And the young people aren't able to get jobs. The people like my dad, the struggling immigrants washing dishes, have lost their jobs because of the taxes and regulations from Obama, and you're proposing more taxes, more regulation without acknowledging what we're doing isn't working.

SANDERS: No, I don't think that's why they've lost their jobs. They lost their jobs because, among other things, we have a corporate world who are prepared to shut down tens of thousands of factories in this country to move to China, to move to Mexico, to move to other low-wage countries.

CRUZ: So if you raise their taxes, do they do more of that or less?

SANDERS: Believe me, their taxes right now -- you made a statement a moment ago about how highly taxed corporations are, we have the highest cooperate taxes in the world, is that what you said?

CRUZ: That's -- In the developed world.

SANDERS: Well, it's wrong. In the developed world, well, it's wrong. Nominally it's 35 percent, but in effective tax rates, it is 14 percent. Very few global corporations pay 35 percent. According to the GAO, the average tax rate is about 14 percent, which puts us in the middle of the global economy.

Bottom line here, though, is where Ted is right. We need to create millions of decent-paying jobs. And the American people are going to have to make a choice. Do you want to give $1.9 trillion in tax breaks to the top 1 percent, or do you think it makes more sense to invest a trillion dollars rebuilding our crumbling infrastructure, our roads, our bridges, our wastewater plants, our water systems? And doing that, we can create 15 million jobs.

BASH: Senators, we want to get to somebody who wants to create those jobs.

SANDERS: Sure.

BASH: And that is John Conrad, who supports President Trump and runs a trucking company in Pennsylvania. He has a question for you, Senator Sanders.

SANDERS: Yeah.

QUESTION: Senator Sanders, over my lifetime, all we've seen is more government and more expenses. Cutting taxes from top to bottom or bottom to top, however you view it, then we'll give some relief to the burdensome expenses all Americans face. Why would you not want a tax cut across the board for all Americans?

SANDERS: Well, I do want a tax cut for the middle class and working families. But when the top 0.1 percent now owns as much wealth as the bottom 90 percent, when you have a handful of people with incredible wealth and power, no, I'm afraid that I will not support tax breaks for billionaires. Now, I don't know if you were there when President Trump -- were you there when President Trump came to Pennsylvania?

QUESTION: I was.

SANDERS: Yeah. And President Trump was touting, as I understand it, the repeal of the estate tax, something that Senator Cruz supports. That's why he was there, correct?

Let's talk about the repeal of the estate tax. The only people who benefit from that are the top 0.2 percent. 99.8 percent of the people do not pay a nickel in estate taxes. Senator Cruz will tell you about all the farmers and the ranchers. Well, Ted, there are 80 of them in the United States. The overwhelming majority of beneficiaries of this estate tax that Trump was supporting are people like the Walton family. Do you really believe that the wealthiest family in America should get a tax break of up to $50 billion, that the Koch brothers should get a tax break of up to $30 billion? Do you think that makes sense?

QUESTION: I did say all Americans.

SANDERS: Well, do you think that the wealthy should not get tax breaks?

QUESTION: I did say all Americans.

SANDERS: OK. Well, I happen not to believe that the Koch brothers need a tax break.

BASH: Senator Cruz?

CRUZ: Well, let me say a couple of things. One, Bernie once again said, oh, look it's the super-rich that we're going to pay the taxes, it's the top 0.1 percent, the millionaires and billionaires. You notice Bernie hasn't responded to the simple fact that if we confiscate 100 percent of the income of everyone making over $1 million, it produces about a trillion dollars. Where does Bernie get the other $12 trillion that he's raising taxes? It comes from the middle class.

And by the way, if you confiscate 100 percent of a person's income, the next year, they're not going to work or produce it if you're going to take 100 percent.

But let's take what Bernie just brought up now. The death tax. I think the death tax...

SANDERS: It's the estate tax. They call it the death tax.

CRUZ: No, it's the death tax, because it kicks in when you die. You paid taxes your whole life.

SANDERS: No, your family pays it. Yeah.

CRUZ: And then, when you die, you see two people, the undertaker and the tax man. That's not fair.

SANDERS: Well...

CRUZ: And -- and -- and let me point out, you know, again, the rhetoric behind the estate tax is, oh, this is all about the rich guys. You know the George Soroses of the world don't pay estate tax. They have armies of lawyers and accountants. They do all sorts of trusts and generation skipping. They don't pay it. The people who pay the death tax are farmers, they're ranchers, they're small- business owners.

Now, Bernie said a minute ago -- said, oh, there are only 80. You know, there might be 80 in Vermont, but those facts are not right. And let me give some real facts. According to the U.S. agriculture census, there were 3.2 million farmers in America. Thirteen percent of the estates subject to the estate tax included farms. One-third of all farmers are over 65. And if you look at from 1995 to 2016, 102,000 closely-held businesses and 36,000 farms paid the death tax. What does that mean? That means a family farm, when the farmer passes

away and his or her kids inherit the farm, often the first thing they have to do is sell the farm or take out big debts. A small business, if you've got a factory in a town and you've got equipment that is employing -- that has workers working, and the owner of that small business dies, under the death tax, a small-business owner doesn't have the fancy lawyers and accountants that George Soros has. So the small-business owner ends up having the kids sell the business and end up having to fire the workers. It's not fair. It's not...

(LAUGHTER)

TAPPER: Let me just say...

SANDERS: Whoa, whoa, whoa.

TAPPER: No, we're staying on the subject. I just want to introduce you to somebody who wants to talk about the federal estate tax, which as you've noted currently only applies to inheritances worth more than $5.5 million. We're sticking with this issue. I just want to bring somebody in.

SANDERS: Can I just say something then? Let me respond.

TAPPER: We're coming right to you after Senator Cruz. I just want to bring in somebody who actually wants to talk about this specific issue. Scott Nash, he's the CEO of Mom's Organic Market. He has a question for Senator Cruz and then, I promise, Senator Sanders, we'll go right to you after that.

SANDERS: OK.

QUESTION: I started a grocery company with $100 out of my mother's garage, and I now employ more than a thousand people. I am extremely grateful that I now qualify for the estate tax.

I learned from my parents that each of us needs to help those in need while pulling our own fair share. And I teach my children those same values. I believe that leaving everything to my kids would deny them the opportunity to gain self-esteem, satisfaction, and personal growth that comes from hard work and accomplishing goals. So why should my children or the children of any wealthy person inherit millions of tax-free dollars, while other Americans have to pay taxes on the money they actually earn?

CRUZ: Well, let me congratulate you on your business success. And I'm starting -- started the business, Mom's, you said you called it. I'm glad it's going well.

You know, to be honest, the death tax is -- at the end of the day, it's not about you or your kids. It's about the thousand workers you said you employ. And if you don't want to hand the business over to your kids, if you want to shut it down and lay those workers off, that's your choice. If you want to give the money to charity, God bless you, that is a wonderful thing to do. But I'll tell you, it's a terrible thing for those workers who are relying on that paycheck to feed their kids, to pay their mortgage. What the death tax does is other business-owners like you, when they pass the business on, the simple fact that you died means you've got a massive tax bill that the only way to pay for it is to lay those people off.

You know, the first question that was asked about, as a young person, why should I care? Young person may be saying, well, gosh, the death tax, you know, when you're 19 or 20, you think you're going to live forever. Why do I care about the death tax?

Well, you care about it if you want to be one of those thousand employees, if you want to have an opportunity to grow in a small business. And small businesses provide two-thirds of all new jobs.

I'll tell you, I spent a lot of time in west Texas, in the agriculture community. And Bernie's suggestion that farmers and ranchers don't care about the death tax is nonsensical. I have sat with farmer after farmer after farmer that has a lot of land, so under Bernie's definition, they're rich, they've got a lot of land. And they go broke every year planning and paying people's salaries and barely making ends meet, and yet the death tax would make them sell the farm. That's not fair, and it's not right.

SANDERS: Ted, that's a good speech...

CRUZ: Thank you.

SANDERS: ... but it has nothing to do with reality.

CRUZ: I appreciate that.

(LAUGHTER)

SANDERS: Here's the reality. You know, after Trump and people like Senator Cruz go around saying, oh, it's mostly the workers and the farmers and the ranchers who are going to pay the estate tax, Steve Mnuchin, who is our secretary of Treasury, this is what he said, and I quote, "Obviously the estate tax, I will concede, disproportionately helps rich people."

Yeah, it helps rich people, the top 0.2 percent. 99.8 percent of families of somebody who died do not pay a nickel in the estate tax. Factcheck.org said, quote, "Less than 1 percent of farm operators, less than 1 percent of farm operator estates is projected to pay any estate tax."

Tax Policy Center said, quote, "Only an estimated 80 small farms will pay any estate tax in 2017." Center on Budget and Policy Priorities said, "Only the wealthiest 0.2 percent will pay estate tax."

Here's who are beneficiaries are, and this is why the Koch brothers are spending so much money to see this legislation passed. Their family will benefit to the tune of some $30 billion. So spending a few hundred million dollars to elect people like Senator Cruz is pocket change if your family is going to get $30 billion. If you are the Walton family, the wealthiest family in the country, you will get up to $50 billion.

So this is an incredible boondoggle going to the top 0.2 percent, $269 billion going to the top 0.2 percent. You know what I think? We had a young lady coming up here talking about the cost of college. I think it makes a lot more sense for us to make public colleges and universities tuition-free and lower student debt rather than give the Walton family up to $50 billion in tax breaks.

TAPPER: Senator Cruz?

CRUZ: Let me say a couple of things. First of all, you notice Bernie didn't say a word in response to my point that 2014, of the top 20 political givers, 16 of them gave to Democrats.

SANDERS: Oh, I will.

CRUZ: And I will note...

SANDERS: Oh, I will.

CRUZ: ... in 2016, I listened to a certain candidate, a senator from Vermont, rail against Hillary Clinton for being captive to all the millionaires and billionaires that have funded the Democratic Party. So I agree. And listen, I will note, your campaign, like mine, were funded predominantly by grassroots voters. You had a ton...

SANDERS: I did not get money from a super PAC funded by billionaires, Ted. You did. I did not.

CRUZ: What I -- what I did receive was 1.8 billion contributions all across the country.

SANDERS: Billion contributions?

CRUZ: A million, million. We talk billions and millions, these start -- 1.8 million contributions. But you know what? Tonight, if people go to tedcruz.org, it might be billion if it works out.

Look, there is power to grassroots campaigns, and both of our campaigns enjoyed that. But the modern Democratic Party, of which you are today one of the leading voices and leading faces, you and Elizabeth Warren represent the heart of the Democratic Party, and that Democratic Party is captive to the special interests in Washington, to -- to the billionaires...

SANDERS: The billionaires? Oh, my.

CRUZ: George Soros, Tom Steyer, yes, they're billionaires. And they give massive amounts...

SANDERS: And the Koch brothers are just low-wage workers who are struggling to feed their families with their $95 billion in personal wealth. CRUZ: And, Bernie, by the way, let's be clear. Most of the

billionaires on the Republican side were not with me in this race. They were with other candidates, also, because...

SANDERS: Yeah, but...

CRUZ: Listen, you and I have agreed on one thing for a long time, which is Washington is corrupt. But let me ask you something. If Washington is corrupt, if both parties are in on favoring giant corporations and big business and big labor and all the people with power, where Bernie and I disagree is the solution. If Washington is corrupt, why would you want to give more power to Washington? Under all of these high taxes and regulations, the working class, the young, women are doing worse, and you're saying keep on with the policies that aren't working.

SANDERS: No, not quite.

CRUZ: Or make them worse. Make them worse.

SANDERS: OK, OK. Let's do two things, Ted. Number one, you ran a good campaign.

CRUZ: Thank you, you did, too.

SANDERS: You were -- you were the guy who, you know, Trump one, and you were right behind him. And I applaud you for that. But don't -- please let's not confuse our campaigns.

I did not have a super PAC. I did not have billionaires contributing millions of dollars into that super PAC. I never had a super PAC, I don't want a super PAC, and I'm damn proud that my average contribution was $27 from over 2 million people. That's number one.

Number two, you're playing games here with words when you talk about the Koch brothers or, whatever it was, 69th or so forth and so on. Of course unions contribute, but there are millions of people in a union. The Koch brothers are two people. Two people! So if the NEA, which is the teacher's union, which has I suspect millions of members, makes a contribution, I think...

CRUZ: How much money does Tom Steyer give?

SANDERS: Tom gives a lot, as a matter of fact.

CRUZ: An awful lot.

SANDERS: That's -- yes, he does. Look, and I'm not...

CRUZ: George Soros?

SANDERS: Yes, he does.

CRUZ: OK, just...

(LAUGHTER) SANDERS: Oh, believe me. All right. And that's why, Ted, I want your support for campaign finance reform, which will say to any billionaire, Democrat or Republican, they can't buy elections.

BASH: Senators, senators...

CRUZ: Your solution is always more government power.

SANDERS: No.

BASH: OK, guys...

CRUZ: My solution is more freedom and less government.

SANDERS: We're on to a good issue here.

BASH: You know what? You've...

SANDERS: Stick around. Don't go away. Airplane.

BASH: Senators, you both just said -- you both just said what we're going to maybe do in our next debate. Let's focus on the legislation...

TAPPER: Tax reform.

BASH: ... that is before the United States Senate. You are two members of the Senate. We appreciated the walk down memory lane. But let's focus on taxes.

President Trump has championed the Republican plan as a win for small businesses. The proposal would cut the top tax rate for small -- small-business owners, rather, from 39.6 percent to 25 percent. I want to bring in Mark Hagar. He owns Prentice Products, a specialty graphics company in Indiana, and has a question for Senator Sanders. Mark?

QUESTION: Senator Sanders, you've characterized this plan as bad policy, disastrous, and morally repugnant.

SANDERS: Yes. As a matter of fact, I did.

QUESTION: One element of this plan calls for a reduction in the tax rate for small businesses like mine who are already taxed at a higher rate than our corporate counterparts. Can you clarify for me how that's disastrous...

SANDERS: Sure, look...

QUESTION: ... or bad policy or repugnant?

SANDERS: No, it isn't. All right, but here's the point, Mark, and you make a good point. Small businesses are struggling with federal, state, local taxes. I got it. And we want to help small businesses.

But, Mark, what this particular bill does, as I mentioned earlier, 80 percent of the benefits go to the top 1 percent, not to you, not to small businesses. And $269 billion go to the top 0.2 percent.

So we can come together in a bipartisan way and say we need to help small business. Yeah, I think you do need help, and I'm there for you. But please, as a nation, we have got to look at your issues as a small-business person in a different way than we look at the needs, or the so-called needs, of the Koch brothers and billionaires. That make sense to you?

QUESTION: Sure.

BASH: Senator Cruz?

CRUZ: You know, it's interesting. Bernie said he's there for small businesses. And yet what he means by that is he's happy for you and anyone else to get a government check. But you notice he didn't talk about any taxes that he would cut. So when it comes to taxes, it's interesting. So, Bernie, you focus a lot on the death tax. I get that you like the death tax. All right, fine, you and I disagree.

SANDERS: Do I like the estate tax? No. I like -- I don't want to see it repealed. That's for sure.

CRUZ: OK, all right. So we disagree on that. But how about some of the other elements of the framework that have been put out? Because, you know, it's interesting. You're not for cutting any taxes. You're for raising everybody's taxes.

So let me ask you some of the elements. One of the elements that's put out is doubling the standard deduction. So for individuals, the first $12,000 you earn, you pay zero. For a couple, the first $24,000 you earn, pay zero. Now, are you for that or against that? Because you keep telling us what you're against. Do you agree with any aspect of cutting taxes?

SANDERS: Yeah, yep. But I don't...

CRUZ: So you would double the standard deduction?

SANDERS: Yeah, I think that's a good idea. I think it'll help working-class families.

CRUZ: All right.

SANDERS: But what I am not for, Ted, is repealing the individual exemption, because what that would mean, if you have a large family -- you got two kids, right?

CRUZ: I do.

SANDERS: And, you know, a family of two, three, four kids, you know what, they're going to end up paying more in taxes. So I want to get rid of that part of it.

CRUZ: Yeah, I'm not sure what you're talking about, but you would agree that increasing the standard deduction, letting a married couple pay zero taxes on the first $24,000 of income, that helps working- class Americans? Would you agree with that component?

SANDERS: Yep, I would.

CRUZ: OK, good. We found some common ground. It is a miraculous night. All right. Let's take a second element, an element the gentleman that just asked the question, who is a small-business owner. You said you're with him, you've got his back. One of the elements is cutting the tax rate for small-business owners to 25 percent instead of being at 39.6 percent. Would you agree with cutting the taxes for small-business owners to 25 percent so that he can hire more workers?

SANDERS: All right. But you can't look at it this and that. You got to look at it in a comprehensive way. Ted, will you -- before we talk about the small-business guy -- will you agree with me that it makes no sense to lower the tax rates of the highest income people in this country?

CRUZ: I don't agree with that. But answer -- I'll get into this. Answer my question.

SANDERS: Oh, no, no, but you have to look at -- would you agree with me that thousands of people will die if we -- if we cut Medicaid by a trillion dollars and throw 15 million people off of their health insurance that they have? And that's not Bernie Sanders. That's a number of studies saying that.

So to answer your question, if the question is should we support small businesses and low-income people, the answer is of course we should. That's the kind of tax reform we should do.

CRUZ: That's support, you want to write them a check?

SANDERS: I don't want to write them a check. We could lower taxes.

CRUZ: But your plan doesn't do that.

SANDERS: But what you are doing is saying we're going to help a lower income person here, a small-businessman over here, but we're going to tie it to the fact that 80 percent of the benefits are going to the top 1 percent. Work with me on a tax proposal where 80 percent of the benefits go to the working class and middle class of this country. Will you work with me on that?

(APPLAUSE)

CRUZ: As you shared, Bernie, you and I both ran presidential campaigns. We both laid out our own tax plans. And so you don't have to ask hypothetically, gosh, what tax plan might I support, because you campaigned on one, and the tax plan that you campaigned on was a $13 trillion tax increase. You didn't cut taxes on small business when you had the chance. You jacked them up. You didn't cut taxes, you didn't increase the standard deduction.

You didn't actually -- because your view is tax everyone, tax them like crazy, tax them at levels we've never seen, and then the government can send you a check on the back end. So my tax plan, the tax plan I campaigned on was a simple flat tax of 10 percent for individuals and families, a business flat tax of 16 percent, which would be the tax you would pay, sir, in your small business, and we abolish every other federal tax. And it benefited every American. It increases every American's after-tax income by at least 14 percent from the very poorest to the very wealthiest. That is what happened when you get jobs and economic growth.

SANDERS: Ted, just wanted to be clear, was this the same exact tax plan that in 2015 the "Wall Street Journal" headline said, quote, "Ted Cruz's new tax plan delivers its biggest benefits to the top 1 percent of U.S. households, adding about one-third to their after-tax income"? Is that the plan we're talking about, Ted?

CRUZ: Look, I don't remember, but the Journal had lots of editorials criticizing me for my tax...

(CROSSTALK)

SANDERS: Of course they did, because you're going to drive up the deficit.

CRUZ: No, no, wait a second. I thought Republicans were the candidate of big business. Why was the "Wall Street Journal" criticizing me?

SANDERS: Oh, the "Wall Street Journal" has some very good reporters. Their editorial page is a little bit off the wall.

CRUZ: But that's who you were quoting was their editorial page.

SANDERS: No, this was a headline.

(CROSSTALK)

SANDERS: No, no, no. It's a headline, not from their editorial page. The point is, look, the point is, do we need tax reform? Sure we do. It's a complicated system.

CRUZ: What positive are you in favor of?

SANDERS: Look, can I, please, yeah?

CRUZ: Sure.

SANDERS: In general, this is my view. Number one, we help the people who are hurting. You do not help the people who are doing phenomenally well. Corporate profits today, Ted, as you may know, are at an all-time high. We have large multinational corporations who in a given year don't pay a nickel in federal taxes.

CRUZ: Absolutely, and that's wrong.

SANDERS: All right, good. All right, there, we'll work on that. But we can work on...

CRUZ: And that got worse under Obama. SANDERS: ... tax reform, which puts money into the hands of working people, not into your billionaire friends'.

TAPPER: So let me -- I want to turn to another -- another taxpayer here. Republicans are proposing the elimination of something that's called SALT, which stands for state and local tax deduction. It currently allows Americans to deduct their income and property taxes on their federal returns.

I want to bring in Andrea Nikischer. She's an assistant professor at Buffalo State University. She's the mother of three boys. And she has a question for Senator Cruz. Andrea?

QUESTION: Senator Cruz, while I do not mind paying the state taxes required to make New York one of the best states in the country, I've come to rely on that SALT, state and local tax deduction. And it's actually been on the books since income tax code was invented in 1913.

It seems to me that many GOP senators from red states are deliberately trying to punish blue Democratic states by removing the SALT deduction, which benefits higher tax states. To me, this seems both unethical and bad policy. So my question for you is, why would a middle-class working mom like myself support taking away the middle- class SALT deduction so that the wealthy Americans, like you, can get more money? Thank you.

CRUZ: Well, Andrea, thank you for your question. Thank you for being here.

Look, let me make a couple of points. Number one, I agree with you. The objective of tax reform should be cutting everyone's taxes, cutting people's taxes in blue states, cutting people's taxes in red states. And if we don't do that, we've done something wrong. That's what I'm urging in Congress, that we should cut everybody's taxes. You're a mom with three kids. We need to be cutting your taxes.

Now, I'll tell you, the state and local tax deduction is taken overwhelmingly by those earning $200,000 a year or more. It's those who are itemizing their taxes. It tends to be the wealthy. Now, and I favor eliminating that deduction, why? Because I don't think the federal government should be incentivizing states and local governments to jack up their taxes.

But let me give a big caveat. I wouldn't favor eliminating that deduction unless we are lowering the tax rate enough that people in New York state, that people in Orange County, California, are paying less in total taxes. They're not deducting their state and local taxes, but the rate is a lot lower so the check they're writing at the end of the day is smaller.

And, you know, I will say -- you know, it's interesting you bring up New York. People vote with their feet. High taxes, what Bernie and the Democrats envision in jacking up taxes, we see it state by state. If you look at the 10 states with the highest tax rates, they have all seen -- or virtually all seen -- nine of the 10 have seen population fleeing. Of the 10 highest states with tax burden, New York is number one, sadly, 240,000 people left those 10 states in 2015. And of the 10 states with the lowest tax burden saw a net influx of 100,000 people in 2015.

People are voting with their feet, and it's a combination of things. Number one, people are tired of sending more and more of their paycheck to the government. But, number two, the high taxes and high regulations are killing jobs.

The reason why you see people coming from high tax states to low tax states is, in a state like Texas, where we have low taxes, there are jobs. Jobs are plentiful. Young people have opportunity coming out. And so I agree we should lower taxes for everyone, but we see state by state an illustration of how what Bernie and the Democrats are proposing doesn't work and people vote with their feet every single day.

TAPPER: Senator Sanders?

SANDERS: First of all, let's be clear that at a time when Senator Cruz is fighting to provide 80 percent of the benefits to the top 1 percent, 30 percent of the middle class, because of the point that you raised, are going to be paying more in taxes.

So I do not believe that everybody deserves a tax break. As I mentioned earlier, the former president from your state, George W. Bush, he gave very large tax breaks to the wealthy and corporate America. We lost 500,000 private-sector jobs and the national deficit soared.

So this idea is -- of giving tax breaks to large corporations is basically a fraud. Listen to what Ronald Reagan's domestic policy advisor Bruce Bartlett said. He said that virtually every Republican -- what every Republican says about taxes today is a lie. Reagan's OMB director David Stockman said that the idea that closing loopholes and adding growth will pay for trillions in cuts, quote, "is just completely fanciful and irresponsible."

The people in the Reagan administration understand that when you give huge tax breaks to very, very wealthy people, the loss of revenue does not -- is not made up by economic growth. It's a fraudulent theory developed by the wealthy people. Just coincidentally, big money think-tanks think it's a great job, great idea to give tax breaks to the wealthy. Isn't that a great surprise?

I happen to believe that if you want to really get the economy moving, you do things like raise the minimum wage to $15 bucks an hour, put money into the hands of working people, provide targeted tax breaks to small businesses and working people, rebuild our crumbling infrastructure, creating 15 million jobs.

When you make public colleges and universities tuition free, millions of people will now have the opportunity to go out and get the decent- paying jobs that are being created today that today they can't get.

And when we do what every other major country on Earth does and finally acknowledge that health care is a right of all people and not a privilege, by passing a Medicare-for-all single-payer system, this will not only help working people all over this country, it will help small businesses who no longer have to spend half their lives figuring out how they're going to pay for the health insurance their workers need.

TAPPER: Senator Cruz, I just want to follow up, if I can, for one second about the state and local deduction, SALT, because a study from the Government Finance Officers Association found that 28 million middle-class American households took this deduction in 2015. So you're talking about helping middle-class Americans; 28 million households in that bracket took the SALT deduction. You're talking about eliminating it.

CRUZ: We've got to lower the rate enough that those 28 million are paying less in taxes. The objective on this is to cut everybody's taxes.

And, you know, it was interesting. I'll say a couple of things. Number one, you know, Bernie talks about all the things he wants the federal government to spend on. He wants free education for everyone, he wants free health care for everyone, he wants a chicken in every pot.

SANDERS: No, not a chicken.

CRUZ: You noticed he hasn't said -- look, if he were in Colorado, it would be a pot in every chicken, but that's different. You know what he hasn't told you? A single bit of government spending he'd cut, because I don't think it exists.

SANDERS: Oh, yeah! I'll tell you -- you want to ask me the question?

CRUZ: And let me say beyond that, he also hasn't addressed how you pay for all this. Look, you think health care is expensive now, wait until it's free.

SANDERS: OK.

CRUZ: It -- the costs that are associated -- and he's never once addressed the fact confiscating the millionaire doesn't pay for it.

SANDERS: OK, Ted, Ted, Ted...

CRUZ: Hold on a second. I didn't interrupt you. Bernie read several quotes. Let me read a quote back at you. Our present income tax rate structure now holds back consumer demand, initiative and investment, the largest single barrier to full employment of our manpower and resources, and to a higher rate of economic growth is the unrealistically heavy drag on federal income taxes, on private purchasing power, initiative and incentive." You know who it was that said that? It was John F. Kennedy.

John F. Kennedy was a passionate advocate of cutting taxes. John F. Kennedy would be drummed out of the Bernie Sanders and Elizabeth Warren Democratic Party because he campaigned on cutting taxes. And not only that, he promised -- he said if we cut taxes, we'll get 5 percent economic growth. And you know what happened? He came into office, he cut taxes, and he saw 5 percent economic growth. The same thing happened under Ronald Reagan, where he cut taxes and the economy took off. Jimmy Carter and Obama raised taxes and the economy went into a nose dive.

SANDERS: Whoa, whoa, whoa, OK, fact check, Ronald Reagan raised taxes four separate times.

CRUZ: Which was more, the decrease...

SANDERS: Four separate.

CRUZ: Hold on, hold on. You said he cut too much?

SANDERS: No, no, no, you forgot to mention that. The reason he raised taxes four separate times was because lack of revenue coming in from his tax cuts. Now, second of all, let me -- you asked me a question. What programs would I cut? Now, Ted, I gather you are a big deficit hawk, yeah?

CRUZ: Indeed.

SANDERS: Indeed, OK. And that's why you are supporting legislation that would increase the national debt by $1.5 trillion over 10 years. But above and beyond that, you asked me a fair question. You said, OK, what programs would I cut?

Ted, how did you vote on the authorization bill for the Department of Defense which increased military spending by, if I'm not mistaken, $70 billion, so that we are now spending more on the military than the next 12 nations combined? Check -- correct me if I'm wrong, Ted, I think you voted for that huge increase in military spending.

CRUZ: So...

SANDERS: Is that right or not?

CRUZ: I voted enthusiastically yes. And I will accept, as your friendly amendment, you will slash the military, you'll cut the Army and Navy and Marines and Air Force...

SANDERS: Not saying that.

CRUZ: But you won't cut anything else? So I agree...

SANDERS: No, no, no, no, no, no...

CRUZ: You'll cut the military. And I think that's an enormous mistake.

SANDERS: No, we're going to cut...

CRUZ: But, yes, you would cut the military.

SANDERS: Hold on. OK. All right. All right. Don't concede for me. You have to explain to people... CRUZ: No, no, no, I'm conceding, you would cut the military, I wouldn't. That's a real difference...

SANDERS: I didn't say I would cut the military...

(CROSSTALK)

CRUZ: Democrats want to cut the military, Republicans want to defend our nation. That's a real difference.

SANDERS: That is -- that is inaccurate statement. What was the vote on that authorization?

CRUZ: Would you cut the military?

SANDERS: What was the vote? You just said Democrats...

CRUZ: I voted yes, you voted no.

SANDERS: Correct. But how many people voted no?

CRUZ: Oh, you know, I don't know, but this is a great point.

SANDERS: There was a few. There was about 10. Let me finish.

CRUZ: You're asking a question, let me respond to it.

SANDERS: No, no, you said Democrats voted to cut the military. In fact, they did not. Overwhelmingly, they voted the same way you did. I voted no, because I think that at a time when we have people working two or three jobs trying to make ends meet where kids can't afford to go to college and are leaving school deeply in debt, I happen not to think that spending $70 billion more on the military and giving a huge boondoggle to the military industrial complex that Ronald -- that Dwight D. Eisenhower warned us about, I happen to think that was not a good idea.

I'll tell you what else I would cut. I would end a lot of the tax -- well, I would tell you what else I would cut would be oil subsidies and tax breaks. You work beyond that? We're going to do away with the billions of dollars...

CRUZ: What subsidies are you talking about?

SANDERS: Oh, the oil depletion allowance. The very...

CRUZ: That's ordinary expensing that every other business has.

SANDERS: Oh, really?

CRUZ: But you want to punish one particular sector.

SANDERS: No, I don't want to punish them.

CRUZ: I think we should treat every energy source fairly. And I'll give you an example... SANDERS: Hold it.

CRUZ: I went to Iowa and campaigned on ending the ethanol mandate, which is corporate welfare. You, of course, wouldn't end the corporate welfare and campaigned in the same state, correct?

BASH: Senators, we have a lot more to talk about, corporate welfare, about the deficit...

SANDERS: Let me just say this...

BASH: We have to...

TAPPER: We have to take a quick break.

BASH: We have to take a quick break.

SANDERS: OK.

TAPPER: We have to make some money here. Thank you.

CNN's Debate Night returns right after this.

(COMMERCIAL BREAK)

BASH: Welcome back to CNN's Debate Night. We're back with Senators Ted Cruz and Bernie Sanders.

We want to start, Senators, with the fact that President Trump promised this morning to increase the child tax credit, which currently allows middle- and working-class parents to take a $1,000 tax credit for each child under 17. And I want to introduce Jasmine Simon from Nevada. She is a single mom who works two jobs, and she has a question for Senator Cruz. Jasmine?

QUESTION: Like many Americans, I make hard decisions to support my daughter. One of the hardest choices has been postponing my college degree so that I can afford my daughter's daily needs. And one of the most expensive needs is childcare.

I'm willing to sacrifice anything for my daughter, but working multiple jobs and still trying to make ends meet each month sometimes seems impossible. My question to you is that, isn't the child tax credit a little too late for families like mine, when I need to pay my bills every month, including childcare, not just in April?

CRUZ: Jasmine, thank you for that question, and let me commend you. I've got to say, being a single mom may be the hardest job there is in the whole world. And I'll tell you, I come from a family of single moms. My sister was a single mom. Both my aunts were a single mom. And for a period of time, my own mother was a single mom when my dad left us when I was a little kid. Thankfully, he came back, so I didn't grow up with a single mom.

But it -- the challenges that are on your shoulders, your kids are relying on you every day. And it's hard. You're trying to provide for them, you're trying to teach them, you're trying to raise them, you're trying to love them. And there are only so many hours in the day. And so thank you for the strength and courage you give every day for your kids.

When it comes to the child tax credit, it's designed to help moms like you. It's designed to say you need more money in your pocket. And so part of the framework that's being laid out is to increase that child tax credit so that you would get more. And right now, it's refundable, which means you can get a check. Not only do you not pay taxes, but if you're not paying taxes, you can get a check, as well. And so it's designed to help make it easier to deal with how hard it is to be a single mom.

But I'll tell you, I think the single best thing that would help you and so many other single moms is to have a growing economic environment where you had better job opportunities, where your wages were going up. I think it would make it easier to provide for your kids if your wages were going up and they weren't going down.

And I would note, there are a lot of single moms who are working a couple of jobs. Why? Because Obamacare defines a full-time employee as 30 hours a week. And there are millions of people across this country who are working 28 and 29 hours a week because their employers won't pay them full time. They're single moms who are having to work two and three jobs at the same time. That's not fair. It's not right.

And interestingly enough, Bernie and the Democrats don't have an answer to those moms who are the 29ers working two and three part-time jobs. I'd like to see you be able to get a job that pays you well that puts you on a path towards a career to provide for your kids.

BASH: Senator Sanders, I want you to respond, but as you do, I'd like to ask about the president's daughter, Ivanka Trump, who has been meeting on Capitol Hill with lawmakers and policy groups. She is discussing the child tax credit. Senator Marco Rubio said last week he thinks the issue would have universal support. Is this a proposal you can get behind?

SANDERS: Absolutely. Look, let's be clear about it. You know, Ted talks a lot about he hates taxes and taxes. But the corresponding fact is that we do not have the resources to do what we should, among our things, for our children.

Ted, we have the highest rate of childhood poverty in the industrialized world. Do you know that there are countries out there where mothers like Jasmine would not have to ask that question? You know why, Jasmine? Because they have universal preschools. They have strong early childhood education opportunities that are available to all families, regardless of their income. I believe in that. And I think it's a lot more important that we invest in our children and in early childhood education.

This proposal that Senator Cruz is supporting would make massive cuts in the Head Start program. How dumb is that when we have to put more resources into our children? We're talking about taxes today, but, Dana, you know what, this is not just about taxes. It is a vision for America. I want to raise taxes on upper-income people to do what? To expand Social Security. Senator Cruz, I think you were quoted as saying Social Security is a Ponzi scheme.

CRUZ: I've never said that. That's false.

SANDERS: OK, then I -- you were quoted as that. If you tell me it's false, then I accept that. OK.

CRUZ: It's false.

SANDERS: OK. I want to expand Social Security. You'll tell us in a moment what your view on Social Security is. I want to make Medicare available -- Jasmine, what it would mean for your family if you didn't have to worry about health insurance, that you and your kids had health insurance as a right, and to understand that, despite what Senator Cruz is saying, we spend in this nation twice as much, $10,000 per person, on health care as Canada and any other industrialized country.

And the reason for that is we have a health care system not designed to provide quality, cost-effective health care. It's to make the drug companies have billions and billions of dollars in profit, as well as the insurance companies.

So when we talk about our national priorities, it is not just taxes. It is what taxes do for the American people. If you cut taxes for the rich and you don't have the money to do the right things, then you lead -- you're led to the situation which Senator Cruz is in, trillion-dollar cuts in Medicaid, 15 million people losing their Medicaid, $470 billion cuts in Medicare, cuts in Head Start, cuts in the Pell Grant program. Is that the America we want?

BASH: Senator Cruz?

SANDERS: I don't think so.

CRUZ: Well, you know, Bernie is fond of saying cuts, and cuts only in the language of Washington where a slight decree in a future rate of growth, where the spending next year is higher than the spending this year, only in Washington is that considered a cut. But let me say something about that...

SANDERS: That is an outrageous statement, because 15 million people are going to lose their health insurance. I think those people would think this is a cut.

CRUZ: You know what the 15 -- you know what people have heard under Obamacare? Is that under Obamacare the average premium have increased over $5,000 a year. Obamacare is a failure. And what's Happening...

SANDERS: Why are we talking about Obamacare?

CRUZ: Bernie, I didn't interrupt you.

SANDERS: Yep. CRUZ: Now, one of the things I like about debating Bernie is he's

honest. When he ran in Vermont, he ran as a socialist, an unabashed socialist.

SANDERS: No, I didn't. No, I ran as an independent. Longest serving independent in the history of the United States Congress.

CRUZ: Are you a socialist or not?

SANDERS: I am a democratic socialist...

(CROSSTALK)

CRUZ: OK. Good.

SANDERS: But don't tell them -- I didn't run as a socialist. I ran as an independent.

CRUZ: You told people you were a socialist. Fine, fine.

SANDERS: You didn't run as a right-winger. You ran as a Republican, right?

(LAUGHTER)

CRUZ: I am happily a conservative.

SANDERS: Conservative, all right.

CRUZ: I am happily conservative.

(APPLAUSE)

So Bernie ran telling the voters he was a socialist, and then in this last election he ran in the Democratic Party. He almost won the Democratic Party's nomination. And if you didn't have superdelegates and the corruption of the DNC, you probably would have been your party's nominee.

SANDERS: Are you looking for a job as my campaign manager?

CRUZ: You know...

(LAUGHTER)

But I'll say it was interesting. Right before the campaign -- right before the commercial break, when I said Bernie and the Democrats want to cut defense, cut the Army and the Navy and the Air Force and Marines, Bernie reacted and said, no, no, no, the Democrats don't, that's just me, Bernie.

So it's interesting. Listen, I think today -- I think the lesson the Democratic Party took from this election was Hillary Clinton was too moderate, and I think the Democratic Party is the party of you and Elizabeth Warren. But let me just ask, since this is a tax debate, what is the difference between a socialist and a Democrat on taxes? SANDERS: Well, I don't know the answer to that, because I don't know

what every Democrat...

CRUZ: I don't, either.

SANDERS: But here's what I think. As a democratic socialist, Ted, similar to the people in Denmark and Sweden and Norway and Finland, people who have, by and large, a much higher standard of living than we have, people who guarantee health care to all of their people as a right, where kids have free -- free -- preschool education, where retirement benefits are much more generous than the United States, this is what I do believe, Ted.

I believe that in a civilized society, people, especially those on top, should be asked to pay their fair share so that every man, woman and child in our country can have a decent standard of living.

CRUZ: So...

SANDERS: Let me finish. We are the healthiest nation in the history of the world, and Ted has got to explain why we have 28 million people without any health insurance, many more underinsured, and if he gets his way, another 15 million losing their health care.

TAPPER: Hold on. Hold on.

(CROSSTALK)

TAPPER: We're staying with the subject, because believe it or not, on the subject of Senator Sanders' worldview and his support for democratic socialism and his love of Denmark, the next question -- no, I'm being -- the next question comes from Jacob Kirkegaard who is a senior fellow at the Peterson Institute for International Economics. He's a citizen of Denmark. He works here in the United States, so he pays U.S. taxes. And he has a question for Senator Sanders. Jacob?

QUESTION: Yes, Senator Sanders. You have at various times, including just now, expressed the -- I mean, belief that the United States should look to Denmark and the Scandinavian countries for inspiration or the vision where the country is going, I should say. As was alluded to, I grew up and I was born and grew up in Denmark.

And, you know, these are countries which -- where the government spends -- taxes and spends approximately twice the level of the United States. And while I am very sympathetic to many of your spending proposals, especially on the things you mention on early childhood and single-payer and the like, I also know that these are countries that heavily tax everybody, not just the rich people, middle classes. They have consumption taxes on everything of 20 percent.

So while I'm very sympathetic to what you're saying, my sense is still that you would like to spend as a Scandinavian but not tax as one, is that right?

SANDERS: Well, we have -- the answer is -- you raise some very good points. When we talk about health care, for example, OK, what my proposal would do, as I'm sure you understand -- how much do you pay -- or the people of Denmark pay for health care when they go to the doctor?

QUESTION: There is approximately -- if I'm not -- about $10 co-pay for everything.

SANDERS: $10. And how much do you pay when you go to the hospital? If you have cancer, God forbid, and you went to the hospital, how much would it cost you?

QUESTION: Zero.

SANDERS: Oh, cost you zero. And how much is preschool in -- high quality preschool for the children in Denmark?

QUESTION: It would depend a little bit on the region of the country, but I'd say $200 or $300 a month.

SANDERS: $200 or $300 a month, OK. And what about college in Denmark? Our kids can't afford to go to college. How much does it cost to go to college in Denmark?

QUESTION: Well, in fact, you get a government stipend to go to college.

SANDERS: Oh. In other words, not only is it free, they give you a stipend, because they want to make sure -- correct me if I'm wrong -- that they take advantage of the wisdom of all of the kids. They want to make sure that every kid in that country gets the best education he or she can have. Is that correct?

QUESTION: If you have the appropriate grade average, yes.

SANDERS: Right, exactly. Yeah, exactly, all right. So here is the point. And your point is well taken. To provide quality, virtually free childcare, to provide free higher education, to provide virtually free health care, it costs money. Nothing is free. Taxes are high. You're right.

But I would suggest that the average American would rather pay $3,000 more in taxes and see a $5,000 premium to a private insurance company disappear. They will be better off. In Denmark, my guess is, please correct me if I'm wrong, probably the per capita cost in health care is half what it is in the United States. Is that a good guess?

QUESTION: Approximately, yes.

SANDERS: OK. So the point is, they are able to run a high-quality health care system, probably better than ours, at half of the cost because it's a public health care system.

But to answer to your point, and it's a fair point, nothing is for free. But I believe in a kind of society which is different from Ted's does. I want to see all of our people -- the young people, the old, the poor, the working class -- be able to get the education they need, the health care they need, the job training they need. Does it cost money to do that? It does. But I believe, at the end of the day, that is the kind of nation that the American people would like to see us become.

TAPPER: Senator Cruz?

CRUZ: You know, we just witnessed a very important moment in this debate, which is that Bernie admitted that he wants to raise everyone's taxes, not just the rich. The question was, to pay for this socialist state, you've got to raise everyone's taxes, and Bernie said, yep, that's right, your taxes are going up. That is a rare moment of candor in Washington.

You know, it's interesting when I asked him the difference between a socialist and a Democrat on taxes, he couldn't tell me. I can't tell you either, because the Democratic Party today, the difference is Bernie admits his policies are socialist. Now...

SANDERS: I...

CRUZ: Hold on. I didn't interrupt you, Bernie. He lionized socialized medicine in Europe. If you look at socialized medicine, there are waiting periods. There's rationing. The government says, if you're an elderly person and you need a hip replacement, it says, well, you may not get a hip replacement. We were talking about Denmark. The average wait time in 2014 for cataract surgery was 83 days...

SANDERS: Would you leave that gentleman up there? Come on back. Come on back.

CRUZ: And the average time in Denmark, which he brought up, for hip replacement was 55 days, 59 days for knee replacement. There is a reason why -- Bernie, I didn't interrupt you. Just relax.

SANDERS: I'm not interrupting you. Come on, come on. It's the Italian in me.

CRUZ: You know, as some might say, curb your enthusiasm.

(LAUGHTER)

(APPLAUSE)

By the way, the impression Larry David does of you is spectacular and uncanny.

SANDERS: And some day you may also have somebody impersonating you. You've got to work on it, though.

(LAUGHTER)

CRUZ: You know, all I need is a bunch of left-wing comedy writers to want to glamorize it.

SANDERS: All right, but...

CRUZ: No, hold on. I was in the middle of making a point.

SANDERS: It's a long point, Ted. We're running out of time here.

CRUZ: Bernie likes to glorify socialism, but if you look at the greatest engine of prosperity the world has ever seen, it's the American free enterprise system.

(APPLAUSE)

There is a reason millions of people risk their lives to come here. You know, he talks about poverty. Yes, we have people who are suffering in this country, but it's worth noting that in the United States per capita income in the United States is over five times greater than the world average, and it's 50 percent greater than Europe.

There's a reason why my dad coming out of prison and torture in Cuba came here with a hundred bucks in his underwear, because, you know, you go to socialized countries and you don't have the economic mobility. You've got rich people that live like kings, but you don't have penniless immigrants who can go start a small business and work towards the American dream.

And your answer is let's make us like European socialism. I say let's make us like American exceptionalism, free enterprise and opportunity for everybody.

(APPLAUSE)

SANDERS: Well, I wish -- I wish we had opportunity for everybody. Now, you heard his remarks about the -- you're with the Peterson Institute, which is a conservative group. So I'm talking to somebody who is a conservative, all right. How bad is the -- and I don't know the answer. You tell me. Is the Danish health care system also terrible?

QUESTION: No, I mean, I think the generally characterization of sort of waiting lists across the board is vastly incorrect. And I'll give you the example of my mother, who was hospitalized with cancer. She was treated, you know, in a matter of one or two days. And this is true on a number of issues. So the demonization of health care systems in Europe is just not true.

SANDERS: Thank you very much. And, look, you can go out...

CRUZ: You know -- you know...

SANDERS: Hold on -- can I -- I was talking now, OK? All right? And, you know, here are the facts. When people are polled as to whether or not they like their health care system, we come down very low on the totem pole compared to other countries.

Furthermore, when you look at our health care system, it has to be understood that not only do we have 28 million without any health insurance -- the only major country on Earth -- you may be proud of the fact that 28 million have no health insurance and you want another 15 million not to have any health insurance. You may be proud of the fact that people have high deductibles so that they can't even walk into the doctor's office. I'm not.

So I believe, yes, that when we're paying twice as much per capita as the people in Denmark or the people in Canada, I happen to believe that health care is a human right and that every man, woman and child should have the right to health care as an American citizen.

TAPPER: Senator Sanders, I just want to ask a follow-up, because just to be clear, Danish citizens pay the highest tax rate of all developed nations as a percentage of GDP. The United States on that list ranks 32nd.

SANDERS: That's right.

TAPPER: Denmark number one. Do you think Americans are ready for -- to pay taxes like that?

SANDERS: Well, but here's the point. If we can have sensible discussions like this, yeah, I think they will be. Here is the point. If you're an American watching this, listening to Senator Cruz say, oh, my god, Bernie Sanders want to raise my taxes.

But let me also tell you what he's not telling you is that we're going to do away with your private health insurance premium. Maybe you're a family of four today on an individual insurance account and you're paying $15,000, $20,000 for your family. And if I ended that private insurance that you're paying to Blue Cross Blue Shield or some other private insurance company and said you're going to pay $8,000 more in taxes, you'd be $12,000 to the good. And you and your kids would have comprehensive health care. So, yeah, you're raising taxes, but you're doing away with private insurance.

Same thing with college. You know, you talked about America being low tax. By the way, Ted Cruz was busy telling us how high taxed we are. You've just told us we're one of the lowest taxed countries in the world.

But here is a point. If you're a mom or a dad out there and you've got a high school kid, you say, isn't it great, I am low taxed, but how in God's name am I going to come up with $40,000 next year to send my kid to college? So what we do is we only look at taxes. We don't look at the other expenses of life.

In Vermont, do you know how much it costs to send a kid to desktop childcare? $12,000, $15,000 a year. Other countries cover that.

So, yes, to answer your question, Jake, if we can explain to people, yeah, you're going to be paying more in taxes, it's going to be a progressive tax system. The wealthy are going to pay their fair share, not the middle class, not the working class, but everybody will pay some more. But you're going to get free health care and maybe you're going to get free childcare, and maybe your kids are going to be able to go to college tuition-free, you know what, you're going to be better off than under Ted's system.

TAPPER: Senator Cruz?

CRUZ: Well, there you go again. It -- we had another moment that's important.

SANDERS: Oh.

(LAUGHTER)

CRUZ: Earlier, Bernie said he wanted to raise everybody's taxes. And now Bernie has admitted not only does he want to raise everyone's taxes, he wants to raise them to the highest level in the world like Denmark.

SANDERS: Did I say that, Ted?

CRUZ: You said if we had this conversation, the American people will be ready to do that. You know what....

SANDERS: No, you're -- stop putting words into my mouth.

CRUZ: That is a debate and quote.

SANDERS: No. What I said is...

CRUZ: Bernie, I didn't interrupt you.

SANDERS: Yes, you did.

(LAUGHTER)

CRUZ: Well, I stopped when you pointed it out.

SANDERS: Don't interrupt me when I'm interrupting you!

CRUZ: Well said. Well said. You know, Bernie is pointing to health care, and, you know, it's interesting. Socialism is always sold on a promise of tomorrow. Reagan used to point out that something liberals never seemed to notice is that the rifles on the Berlin Wall all pointed one direction.

As a Cuban American, I have a different way of looking at it. Something liberals never seem to notice, if you go down to Key West, the rafts from Cuba are all coming one direction. We don't see any Hollywood liberals jumping on rafts and heading to Cuba for free health care, because it doesn't work in practice. It's a disaster in practice.

You know, we have an example of what government control of health care is. That's Obamacare. That was proposed. Bernie voted for it. It was his party. What has happened under Obamacare? Obamacare was sold to the American people on a mountain of lies. They were -- you were told if you like your plan, you can keep your plan. Over 6 million Americans found out that was a lie and had their plans canceled.

President Obama promised average premiums would drop $2,500 a year. In fact, they rose $5,000 a year... SANDERS: We had the debate on health care. This is not health care.

CRUZ: You've been talking about health care for 20 minutes.

SANDERS: No, you've been talking about Obamacare...

(CROSSTALK)

TAPPER: While you guys -- while you guys -- we're going to take a very quick break.

CRUZ: Bernie, is it true or false...

(CROSSTALK)

TAPPER: We're going to take a very quick break...

CRUZ: Is it true or false that the profits of insurance companies doubled under Obamacare?

TAPPER: We're going to take a very quick break. CNN's Debate Night returns after this.

(COMMERCIAL BREAK)

BASH: Welcome back to CNN's Debate Night. We are talking to Senators Bernie Sanders and Ted Cruz. And we want to get right to another audience question. And the question comes Fiorella Riccobono, who is a student at Florida State University. And she has a question for Senator Cruz. Fiorella?

QUESTION: Senator Cruz, recent projections estimate that the tax framework currently under consideration would add $2.4 trillion to the debt over the next 10 years. What steps will you take to ensure that the tax reform doesn't add to the debt burden my generation is already facing?

CRUZ: Well, thank you for that question. It's a very good question. Listen, when it comes to the deficit and debt, it is immoral the debt we have. When Barack Obama was elected, the national debt was $10 trillion. Today it's $20 trillion. One president doubled what 43 presidents had built before. We've got to turn it around. That's a big part of why I ran for Senate.

Now, how do you turn the debt around? I'll tell you, the only force big enough to turn the debt around is economic growth. Congress is not going to cut spending enough to bring the debt around. Economic growth, from 2008 to today, economic growth has averaged 1.2 percent a year. It's been miserable under the Obama economy. The average since World War II has been 3.3 percent, so we're about a third of what is historically true.

You know, I mentioned two examples, the Kennedy tax cuts, where he cut taxes, we saw booming growth, and not only that, federal tax revenues increased from $49 billion to $87 billion when he cut taxes. Ronald Reagan likewise cut taxes, the economy boomed, and federal tax revenues increased from $347 billion to $549 billion.

But let me make a point that's particularly important. There are two different approaches, high taxes like Obama or cutting taxes like Reagan. One works and one doesn't. I want to show you this chart, which is hard to see from where you are, so let me show you individual pieces of it. Because it's important...

SANDERS: Ted, how many charts do you have there? We're running out of time here.

CRUZ: It's important. And Bernie, I'll let you see them.

SANDERS: I know. But you...

CRUZ: OK, Bernie, Bernie, relax. Obama versus Reagan...

SANDERS: Wait, wait, your job is to moderate, guys. This is not a one-man show here.

TAPPER: He's answering his question, and then we'll go to you.

BASH: It's definitely a two-man show. He'll finish.

SANDERS: All right.

CRUZ: Obama versus Reagan, under Obama, median income increased 6 percent. Under Reagan, 17 percent. How about African-Americans? Under Obama, median income increased 8 percent. Under Reagan, 12 percent. How about women? Under Obama, median income increased 6 percent. Under Reagan, 25 percent. Young people, under Obama, 9 percent, under Reagan, 55 percent. Young women, under Obama, 8 percent, under Reagan, 73 percent. And, finally, the bottom 20 percent, those struggling, under Obama, 12 percent, under Reagan, 40 percent.

When you cut taxes and the economy booms, everyone benefits. That's what we need to do. And that's what the Republican majorities need to deliver on now.

BASH: Senator Sanders.

SANDERS: When President Bush was in office, Ted, he cut taxes for the wealthy and large corporations, and the national debt nearly doubled from $5.7 trillion to over $10.6 trillion, and we lost about a half-a- million jobs, all right?

Voodoo economics, which as you may recall is what the first Bush referred to trickle-down economics, is a fraud. It is an idea propagated by big money interests to give some kind of intellectual veneer for more tax breaks for billionaires.

Second point that I want to make, Ted, you said earlier -- two points that I want to make here. Number one, we can have a debate about whether you like what's going on in Denmark or not. Don't compare Denmark to Cuba. Don't compare Denmark to communist countries. Denmark has a higher voter turnout rate than we do. They're a vigorous democracy, as are other Scandinavian countries.

Second point that I want to make, and this is important. You said a little while ago that you never said that Social Security was a Ponzi scheme. Go to my Twitter page, and you will hear Ted Cruz say Social Security is a Ponzi scheme.

(LAUGHTER)

And the point is not whether maybe Ted -- Ted, we got it on the damn screen. You know, it's there. But that's not even the point.

The point is, what Ted's views are on things like Medicare, Medicaid, Social Security, whether or not our kids can afford to go to college, I happen to believe -- as -- you know, and I believe this very deeply -- that we are the greatest nation in the history of the world, and all of us are very proud to be Americans.

Ted talked about his dad coming over here. Ted, you may know, my father came to this country at the age of 17 without a nickel in his pocket from Poland. Never made a whole lot of money. Worked hard, was the proudest American that there was. This is a country that has attracted a whole lot of people.

But let's have a serious discussion and not compare Denmark or Sweden -- you can argue about the pluses and minuses...

BASH: Senator...

SANDERS: ... of those countries, but, please, don't redbait and don't call countries like that Cuba.

BASH: Senators, let's go back to the question at hand, which is about how much these tax cuts going forward would potentially add to the debt and deficit. Just going back to the last large tax cut that President Bush enacted, it added $1.7 trillion to the debt over 10 years, according to the CBO. How are you so sure that this tax plan, these tax cuts won't do the same thing?

CRUZ: Well, let me -- I can't let what Bernie said go by without responding to. He's referring to an interview where I was asked about another Republican who made the comment about Ponzi scheme. It wasn't my comment. It was somebody else's.

Let me tell you what I think about Social Security. I think it's a fundamental bulwark of our society, and I think too many politicians in Washington are recklessly letting it careen towards insolvency. And I campaigned all across the country on strengthening Social Security, doing it so that those on Social Security or near retirement, there are no changes at all. Every dollar, every penny of benefit is protected, but for young people, people my age...

SANDERS: I got bad news for you. You're not so young anymore. But...

(LAUGHTER) CRUZ: You'd be surprised. But for people of younger generations, you know, there are a lot of young people here. It's interesting, you ask young people how many of you think Social Security will be there for you, and there are very few that will raise their hands.

BASH: Senator...

CRUZ: For young people, we need to reform Social Security, and we can do that by gradually raising the age not for those on it, but for young people...

BASH: Senator, we're almost out of time. I just want to follow up on this question at hand.

CRUZ: And allowing you to keep some of your savings in an account you control.

BASH: ... $2.4 trillion over 10 years, that's how much the Tax Policy Center says the GOP proposal in front of you right now will reduce federal revenue.

CRUZ: So the Tax Policy Center is a left-wing operation. And, by the way, their projections...

BASH: They're nonpartisan.

CRUZ: Their projections are impossible, because at this point there has been a framework put out, but without specific numbers. What I can tell you is simple facts.

So Bernie said voodoo economics. Here are the facts. Kennedy cut taxes and federal revenue, individual income tax went from $49 billion to $87 billion. And corporate income tax -- and Kennedy cut corporate taxes, went from $23 billion to $37 billion. Now, let's fast-forward to Reagan. These are simple numbers. Reagan cut taxes, total tax revenue was $347 billion. It rose to $549 billion. Now, it's not voodoo economics. It's math that 549 is a lot bigger than 347...

(CROSSTALK)

BASH: Senators -- Senator, we're going to have to take a quick break.

SANDERS: All right, let me just very briefly say...

BASH: We have to take -- this is about our economics. You have time at the end of the program.

SANDERS: Bill Clinton raised taxes on the wealthy, 22 million jobs were created to develop a surplus.

BASH: Thank you, Senator Sanders. Thank you, Senator Cruz. We're going to take a quick break. CNN's Debate Night returns right after this.

(COMMERCIAL BREAK) TAPPER: Thanks for being back with us. As we have heard tonight, the decisions that the senators make in the coming weeks will have potentially huge implications for the tax bills of every American.

BASH: And, Senators, you each have a chance to make one last pitch. You have one minute. Let's begin with Senator Cruz. Senator?

CRUZ: Thank you for joining us this evening. I appreciate you all taking the time. Thank you, Bernie, for being here, having a substantive and real debate. We ought to have more debates on substance in politics.

This question is important. You've seen two fundamental views of government. Bernie and the Democrats believe government knows best. Bernie admitted that they want to raise taxes on all Americans. As Republicans, we have a Republican president, we have Republican majorities in both houses. We have got to deliver on our promise to cut taxes for working families, for small business, for farmers, for ranchers.

I'll tell you what I believe, that you know better how to spend your hard-earned money than the government does, that you need to spend it to pay for braces for your kids, that you need to spend it to pay for new tires on your truck, or to save for retirement, or to start a business.

And the simple reality is the high taxes of socialism of the Democrats don't work. If you remember no other chart, remember this one. There are a lot of young women here. Young women, under Reagan, your incomes increased 73 percent. Under Obama, 8 percent.

America is a land of opportunity. We're going to cut your taxes. And it's going to make a difference in terms of a better future for Americans all across this great nation.

TAPPER: Thank you, Senator.

(APPLAUSE)

BASH: Senator Sanders?

SANDERS: Let's examine what Senator Cruz really wants to do. He wants to see legislation passed that would give $1.9 trillion in tax breaks to the top 1 percent, significantly increase the national debt being passed on to our kids and our grandchildren. And in order to pay for these tax breaks for billionaires, he wants to throw 15 million people off of Medicaid, cut Medicare by over $450 billion, cut Pell Grants, cut programs like the WIC program, Women, Infant and Children program, designed for low-income pregnant women and their little babies.

I do not believe that America is about giving tax breaks to the very, very wealthy and cutting life-and-death programs for working families. This Trump Republican tax proposal is a disaster. And the American people have got to stand up. And together we are going to defeat that awful proposal. Thank you very much.

(APPLAUSE)

BASH: Senator Sanders, thank you very much. Senator Cruz, appreciate it, thank you. Thank you also to our studio audience for being here tonight. And thank you for watching.

TAPPER: "CNN Tonight" starts right now.