Eric Cantor on U.S. Foreign Policy

Eric Cantor, former majority leader in the U.S. House of Representatives, joins ABC News' Jonathan David Karl to discuss the challenges and opportunities facing U.S. global leadership, and U.S. foreign policy and its implications for the 2016 presidential election. Cantor additionally reflects on his time serving in the House, outlining his perception of congressional politics within the Republican Party today. On foreign policy, Cantor addresses the challenges the Obama administration faces as it pursues a final deal with Iran over its nuclear program. Cantor goes on to discuss the U.S. alliance with Israel, the legacy of the Iraq war, and the foreign policy perspectives of various candidates for the 2016 Republican presidential nomination.

KARL: All right, thank you for joining us. I'm Jonathan Karl with ABC News. It's an honor to be back here at the Council on Foreign Relations with Eric Cantor, the of course former majority leader of the U.S. House.

And you look rested. You look comfortable.

CANTOR: Well, it's great to be here in a very unburdened fashion.

KARL: And you're now with Moelis, and it seems fully acclimated to the private sector.

CANTOR: Well, listen. I'm delighted to be here. Obviously still very, very interested in what goes on with sort of the policy debate, certainly Council on Foreign Relations plays a big role in terms of providing a forum for discussion on things having to do with America's position globally.

I am, as you say, currently in the private sector. I came from the private sector before my 14 years in Congress. And now Moelis & Company is a global investment bank with 17 offices all over the world. So traveling somewhat extensively, and very much focused on the conduct of business and its interactions with government and the global economy.

KARL: So let's start by looking back at your old job. First of all, I've heard many say that if you had not lost that primary, which took all of us by surprise, including you...

CANTOR: Me too.

KARL: ... that you'd be speaker of the House right now. Is that right?

CANTOR: Oh, who knows? You know it's—you know I really don't spend a lot of time looking back and trying to look forward. You know it was a very unexpected event. And people in many instances you know just started—or dealt a setback.

And it was certainly a big surprise. But feel I've really landed on my feet with a great opportunity, again, to be with a firm like I'm with in Moelis that is a firm dedicated to advising clients in the investment banking world.

And if you think about it, the role as majority leader very much was about trying to give advice, trying to help shape policy outcomes, and to best figure out ways to forward solutions. And you know that is a tough thing in this town and unfortunately just not easy to come by.

KARL: Do you ever—will you ever go back? Do you ever see yourself running again? I mean, not necessarily for Congress, but for governor of Virginia? They tend to—it seems every four years or so get a new one of those.

CANTOR: All I will say is my dear friend and mentor from a long time ago in the House, Roy Blunt, always said never say what you'd never do.

And so you know listen, it is a great position I'm in now with an ability at my age to see the world in a different light. To follow a passion that I've always had, which is economic growth.

And as you know, I was always very much involved with things economic, with how to make the economy work and knowing full well that the private sector is the engine for economic growth. And that's what we at Moelis do.

We talk to boards of directors, CEOs of big public companies that mean a lot to communities around this country and the world. And how do you allow them the atmosphere and environment to grow? So, again, very excited at this new opportunity.

KARL: So when you were in the House and it became even more so, you had one of the biggest Republican majorities we've ever seen. And yet time and time again you—there was basically no governing majority. I mean you guys had 35 or so members who were going to vote no on just about anything.

I mean have you thought, looking back at all of that, was it a mistake to try to you know get them on board, get this intransigent group who many of whom thought things like you don't need to raise the debt ceiling you know. It's hard to convince somebody who thinks it's OK to default.

CANTOR: You know I think if you look at it I mean listen, there was a lot of pent-up frustration that sort of brought the Republicans into the majority come 2010 and beginning in 2011. It was frustration because you know, of what the country was looking at was a very unilateral policy agenda being implemented frankly by the president and his party.

And it marked, I think a real turning point in Republican politics and politics across the country in the grassroots. That's really what gave rise to the Tea Party, taxed enough already, don't tread on me, the government's growing too much.

And so there's a lot of frustration there. And I think when we were catapulted into the majority back then, that frustration carried through in terms of the type of things that transpire.

But if you look at where things were then and where things are now, there still remains a large, large gap, divide between the two sides on two important issues. One is the issue of taxes and the other is the issue of entitlements and entitlement reform. Those two issues and the solutions for which have not—the gap has not been bridged.

And you know it's very difficult once that is dug in to try and bring folks together. If there isn't concerted effort on the part of both parties to see what we can do in the middle, to see where things are that lay in common.

And you know you then add to that the fact, and you're seeing things sort of transpire now, that this administration, this president in his last two years I think frankly losing a lot of his ability to bring the Democratic Party along because he's a lame duck.

And you know so the fact that that is the case allows many, even on my side of the aisle to say hey, wait a minute. If we just hang on, if we just patch things over, kick the can so to speak, until the end of (audio gap) of a year-and-a-half, we'll have a new shot, a new chance to help solve these problems (audio gap) in a different way.

So I think all those factors are (audio gap) that notion because no one, no one serving this Congress or I think ever has experienced the day in which this government defaulted on its debt, never. So, when someone says it's fine to do that that means someone is willing to undertake a risk that to me is extraordinary.

And if we are in the business of managing the risk, and I certainly know in the private sector that's a big part of what you know capital allocators, entrepreneurs do in order to turn the profit and hire. Jobs create value.

We've got to look at in the same way leaders of the United States government. You know it is not to go in and inflict or undertake this risk and inflict it upon the constituents who sent you here. So there's no question. I think you remember I was adamant.

KARL: I remember. So, what you said privately when a Ted Yoho went in and said you know what, we're not going to do this?

CANTOR: I would look anyone in the eye who says well I think it's worth it. I think that the country's come so far off the rails that we need to do this.

And I would say really? So if someone wakes up tomorrow morning and sees that the government has now defaulted on its debt, what do you think may happen to that individual's 401(k) or that individual's portfolio in the equity markets?

And if the individual I was speaking to had any idea and said it I'd say you have no idea because we've never been there, which is exactly why it is a risk way too large for us to be undertaking.

And then I'd say look, if you're a conservative, you know conservative means conservative temperament and conservative in philosophy. To me that is revolutionary, has nothing to do with being conservative, and frankly is apocalyptic.

So I had—listen, I had many of those conversations. And as you know, we struggled with a lot of that.

KARL: Yes. No, I remember well.

CANTOR: And I think the leadership now is doing a great job. I mean they are still struggling with some of the elements there, though. But doing a great job, trying to conduct the affairs of Congress and run the government with incentives in place for some to just say I'm not playing.

KARL: Well, one thing I've noticed that they've done most recently, and the big example is the doc fix bill, is they haven't even gone to some of those on the far right of the party. And they went directly to forge a deal with Democrats. And there's actually a lot less talk of the Hastert rule these days.

But is that basically—and I think you make a good point that the divide on the big issues is so wide you can't really do that on entitlement reform necessarily. But is that the approach for the Republican leadership now?

CANTOR: You know I don't know if you can draw a lot of lessons from the SGR or the doc fix. I think that certainly that was a bipartisan product. And but there were extraordinary circumstances at work for the years, I remember, under SGR.

Certainly you had promises made by both sides that they wanted to overhaul the system. Promises that were made by the Democrats in their passage of the Affordable Care Act did not deal with that. And their promise was unkept.

On the Republican side I know that I was constantly engaged with our physician caucus trying to come up with answers to the SGR. So, you know there was a lot of that, years' worth of being built up.

And I think from the fiscal conservatives on the Republican side, a growing realization that there was funny math going on. And this was just Washington speak that we were really paying for the doc fix.

And I think all that, together with the fact you're dealing with somebody's ability on Medicare to see their doctor, it's huge in terms of personal impact and how it affects your constituents. I think all that sort of led to this coalition that was built.

But I'm not so sure there are many others that are like that. You know we've got trade coming up and we'll see.

KARL: So let's get to present day. Today the House this afternoon will vote on the Corker bill on Iran, which of course will give Congress the opportunity to vote down a deal, a nuclear deal with Iran, assuming the president gets the deal.

How do you think this is going to play out? I mean first of all, do you expect that there will be a deal?

CANTOR: I think the president is very determined, it's clear, to have a deal. I personally am very, very suspicious and don't think the deal that is underway should be struck.

KARL: OK. So he gets his deal, June 30 is the deadline, current deadline. I imagine the majority in both houses of Congress probably agrees with you.

So Congress votes this down, assuming they can get 60 votes in the Senate. The White House has signaled they will veto the disapproval of the deal. And then what happens? Does it matter that Congress has been on record?

CANTOR: Well, first of all, back up for a second because there's a lot of assumptions in there that I think need to be addressed. And you know if you were correct and all that happened I think the president would be in a very difficult spot having the Congress already said, with a 60 vote majority in the Senate, saying this deal is no good. I think that would be a very difficult position for the president to be in.

KARL: Just to tell you, on that assumption I've been told point blank by top people in the White House that there's no question that the president would veto that, even if it—even if there were 65 votes to override his veto. They would be happy that the veto was not overridden.

CANTOR: Nonetheless, very difficult political situation for the president to be in.

KARL: Who's not running for reelection.

CANTOR: Right. But you know I do think that that's the point because now Congress—you know the president did not get his way when it came to Corker-Menendez. He had to allow Congress to enjoy its prerogative to have a say, even though he didn't want to. And I think that right there shows you the power of this issue.

And obviously the issue of the U.S.-Israel relationship as it relates to Iran, the issue of foreign policy and the role that Iran's threat plays in the formulation of U.S. strategy. I think all of that is fertile ground, if you will, for 2016 and the election.

I think that if it transpires the way you do, it certainly will be a major issue in the 2016 election. And that is yes, the issue of a nuclear Iran.

But the larger question about Iran's role in destabilizing the region it's in, our allies, both Israel and the Gulf allies. But I think yet it spawns even more debate about America's role in the world and the question of our status as a superpower.

KARL: So, you're absolutely right that the president didn't want this Corker bill to begin with. But Corker had to make some significant compromises along the way.

One of the big ones was to take out the provision that said that Iran would have to—the White House would have to certify that Iran was not sponsoring terrorism against Americans. Was it a mistake to make that compromise?

CANTOR: You know I don't know what Senator Corker, what was behind his compromises and what he had to do. I can tell you I am in disagreement with the direction this president is heading. I am for continued oversight of what this deal process is about.

And look, clearly I think the majority of the Congress, as you say, is against this deal. Our allies, who are most proximate to this threat, are against this deal.

Look what's going on in Camp David today and the spectacle of the Arab rulers and monarchs not even being here because they're so seemingly—they would never admit it, but they're seemingly upset about the lack of a response to their needs as far as U.S. foreign policy's concerned.

So it's certainly I think better to have Congress in and making sure that all of this as much as possible can come to light because I think we're in it for a much longer game here. I mean I do think that 2016 and the nominees of each party will have to answer to what this is about and what it portends.

KARL: So what happens, though? I mean so we've gone through a series of sort of assumptions. You've agreed it looks like the president will agree to something with Iran. There will be a deal.

You've agreed the Congress majority is against. And it's a question of what happens in terms of a presidential veto...

CANTOR: Although I'd interrupt for a second, Jonathan, because you have maybe 150 House Democrats who've already signed a letter that say they support the current framework, even before they've seen the details of the current framework. So again, that's why I questioned the assumption because if that is the case, you may not see...

KARL: Congress may not vote it...

CANTOR: Right. You may not see a disapproval vote. So I don't know.

KARL: What happens, though, going forward? You have certainly every, with the exception of Rand Paul, every Republican presidential candidate is opposed to this.

So what happens if Republicans win in 2016? The president's deal with Iran is now you know almost two years old by the time a Republican president is sworn in. Is it really something that can be undone?

I mean the sanctions would've been—remember, this is obviously a P5+1. This is not just the United States. The sanctions that hurt the most are the European sanctions.

I think what this goes back to is the initial assumption that the president was operating on, and that is what I deem a false choice, that it was either this or war. I don't believe that. I didn't believe it back then.

You know we're well down the road now, given where the administration is. But it does speak to the strategy I guess that the White House deployed very early on that they wanted this deal, period.

Versus trying to get a White House in there that can respond more effectively to our allies that are in proximity to the Iranian threat geographically. And also to go in and I believe engage with our European allies in a way that could respond to some of the concerns of those closest to the threat.

I mean that is the real disconnect to me is how is it that the Europeans and then the White House are so gung-ho on this deal, but it is the allies? Of all things, Israel and the Sunni Gulf allies on the same side. How is it that there's such a disconnect on this? There's something amiss here. There is something that doesn't make sense.

So I believe that the president would come in and would take those facts and begin to put together what hopefully would be a very robust effort to try and reduce sort of the benefit that Iran would get from saying that it complies when probably, and I have no trust in the compliance prospects of the regime in Iran.

That's the key. And I think that's where our allies are. They don't trust that this regime in Tehran that has thumbed their nose up at international law is going to actually come clean.

KARL: If you had been in the Senate would you have signed the Cotton letter?

CANTOR: I don't have to answer those questions anymore.

(LAUGHTER)

I mean I really don't. But let me comment...

KARL: But go ahead. You're free now.

CANTOR: Let me comment on it. I do think that it certainly served a purpose in drawing attention to the issue. Did I think that that was the best way to go and do it, to demonstrate the kind of objection that we had with the White House in terms of Republicans? Probably not. But it did elevate the issue in a very big way. But we are where we are now.

KARL: So, the related issue of U.S.-Israeli relations, we see something that we really hadn't seen over the past I mean this year, a kind of a breakdown of the bipartisan consensus, the pro-Israeli bipartisan consensus in Congress.

Was it a mistake for Speaker Boehner to invite Bibi Netanyahu the way he did, going around the White House, to speak before the Congress?

CANTOR: Another one I don't have to answer either.

(LAUGHTER)

KARL: Would Speaker Cantor have invited...

CANTOR: And I certainly am not answering that one, so but you know look, it is—I disagree that there's a breakdown in the bipartisan alliance, support of the alliance between the U.S. and Israel.

KARL: Well, it's—you certainly still have a bipartisan consensus. But it's not—would you say it's as strong as it ever was?

CANTOR: We wouldn't have seen the passage of Corker-Menendez. We wouldn't have seen that.

KARL: Well, maybe we would've seen Corker-Menendez with the provision that was originally to be in there requiring the Iranians to recognize the state of Israel.

CANTOR: Well, when that was—again, not knowing what was there, but you would not have seen that if there was not a bipartisan alliance. And you yourself say that there's a majority. And I do believe a strong majority in the Congress, House and Senate, bipartisan, of bipartisan of members who say they stand with Israel. And so, listen...

KARL: But you mentioned the letter of 150 House Democrats who are already saying they agree with the framework of a deal that they haven't—so which—Israel's not a big fan of that framework.

CANTOR: And I think now you come to sort of what the definition is of being for a strong U.S.-Israel relationship. And I think even more than your suggestion, which I take issue with, about the breakdown of bipartisanship around this issue.

I think you have seen a White House that for the first time has been, in a very long time, has been almost openly hostile to the Israeli government. And there have been enough instances here where there've been snubs personally and the rest.

But also you know you hear the president continue to say that "no president has been better on the issue of security in Israel than I have." You've heard him say that.

KARL: He talks about Iron Dome and...

CANTOR: All the money and Iron Dome and the support like that.

But then in the next threat you hear the White House then put a statement out saying that if Israel takes the posture of it cannot support a two-state solution, then the White House and the president will have a difficult time defending Israel in international bodies like the U.N.

Now that to me is where the shift is. I don't recall a White House or a president taking that position because I don't think there's enough money or weaponry in the world to give to our ally, Israel, that could secure, guarantee the security of Israel, if the U.S. decides to isolate and allow Israel to dangle out there by itself in the international forum.

So I think that's where the shift is taking place. And if you would look at the Congress, I do not believe that the Congress shares that attitude.

KARL: So I want to get to questions, but I have one more subject I wanted to ask you about in the news today. This week Jeb Bush has asked directly, knowing what we know now, would he have supported the invasion of Iraq, and he's had a hard time answering that question, as you've probably seen.

As I recall, you were around when that vote was actually taking place. So, I'd like to get your take on how Jeb Bush has handled it. But first, how would you have voted if you knew that the intelligence was wrong and that there were not weapons of mass destruction?

CANTOR: See, I'm also now very free to really respond with what I think, right? I think that the question is inane.

(LAUGHTER)

OK. Because I think...

KARL: Thank you, sir.

CANTOR: And you didn't come up with the question, right. You didn't come up with the question. You're just repeating the question.

So I mean think about it...

KARL: I think the question was first phrased on Fox News, by the way.

(LAUGHTER)

CANTOR: So think about it. Think about this question. It's basically saying if you operate with 20/20 hindsight then what? That's not what we are looking for when the country considers who would be the best leader or the best president.

We want somebody with foresight, not hindsight. We want somebody who can actually learn from the experiences of the use of force in Iraq, in Afghanistan, the experiences of the Bush administration and the Obama administration, and what that means about the projection of American power going forward and our place in the global geopolitical environment. So that should be the discussion here.

Now look, I can see all day long why one would hesitate to want to respond to an answer—a question like that. Think about what that means and the potential to denigrate the sacrifice of so many thousands of men and women in uniform.

KARL: Saying the war wasn't worth it...

CANTOR: Right.

KARL: ... that it was a mistake?

CANTOR: Right. And that somehow—and that somehow their sacrifice wasn't worthy. That's not a question that I think any potential leader should want to try and respond to for that reason.

So you know I'm hopeful that the debate around the potential nominees on both sides can be elevated, because this kind of gotcha political question is unfortunately what has infected sort of the discourse here. And what Americans truly need to hear is who's thinking about going forward?

How do we address that? How do you deal with the situation now? Not if you have 20/20 hindsight. Who has that? Nobody has that in the here and now.

KARL: But is Iraq going to be a problem for Jeb? I mean this...

CANTOR: I think even more looking forward what we should say is what would Jeb or others do given the current situation in Iraq and Syria and Libya, you know and Yemen. You know all—with all the sort of threat that emanates from that region, what about Iran?

And that's the kind of discussion that we should be having. I know people want to say, hey, answer that question. What would have done back then, because it's a game. But seriousness and the kind of leader they want would be somebody who could actually rise above and say let's focus on how it is that we affect the security of country. And how does America properly look to its role going forward?

And I would say it's a very interesting book that's just come out by a guy named Ian Bremmer. It's called "Superpower." And he lays out three options for what American foreign policy could or should or shouldn't be.

And one is he calls the Independent America. And it basically says America should have the independence to not worry about having the responsibility to solve everybody else's problems. Second he calls it Moneyball America, which is sort of what are the best-odds situations for America to get engaged and prevail? And thirdly is an Indispensible America.

And I think most—a lot of what Republicans would look to that view and say there's no way that you can see the defense of our values without America playing this role. And the free shipping lanes and the respect of human rights and minorities, the rule of law, normal commercial practice that we're used to, that those kinds of things actually in order the benefit of our security.

So again, those are the things that we should be asking. And I would say to you, because I know you, I set you apart in that profession. That's what we should be hearing from that.

KARL: And there will be an interesting debate on that in the Republican primary, guaranteed by the fact that Rand Paul is in that primary.

CANTOR: Absolutely.

KARL: So I want to turn to questions now. Reminder, this meeting is on the record. So, if I can ask you to wait for the microphone to call you. And if you can state your name and affiliation as well, yes?

QUESTION: I'm Barry Wood, an economics columnist. I'd like to ask you about the IMF.

Paul Ryan says that with trade it's important for the Americans to be at the table in setting the rules. Certainly that applies to the IMF. And there's been a withdrawal, as Larry Summers calls it, from the IMF over the last few years. The Republicans have not stepped forward to get this done, nor has the president.

Why did it happen the way it did with no action on these 2010 reforms? An organization which we control, by the way, or at least have dominant power. And how do we get it done now?

CANTOR: I don't know if I have all of those answers, but I will say this. I was one who was supportive of the reforms at the IMF, have a continuing dialogue with the director there, Mme. Lagarde. And I believe that it is in America's interest to support those reforms and to be the leader in that organization.

And I think you're correct, it behooves us and our security interests, our economic well-being to be engaged. I mean look at what the rival and rival powers are doing in Asia. Look at what China is about with the others in this infrastructure bank that it has started.

And I think what that says is you look at the allies of ours and Europe who decided to be a part of this infrastructure bank, as well as in Asia. What does that say about America's ability to persuade our allies not to do that when we decided not to do it?

And the question is whether that was the right move or not. But clearly when we have an entity like the IMF, we should be doing what it is in our interest, which is to engage in them.

And I think to Jonathan's point, this is part of the question about engagement or retreat in foreign policy. From an economic standpoint it's inextricably linked to our military projection of power and vice versa.

KARL: Yes, sir?

QUESTION: Alan Went (ph), formerly with the Department of State. What would you say the U.S. position should be with regard to a possible two-state solution in the Middle East? Is this still the right way forward? What can we do to help bring it about?

CANTOR: You know I'm one that believes if you're going to have a two-state solution you have to have two parties on each side of the table willing to engage, willing to recognize one another's right to exist. That has been an element missing from day one.

The Palestinian Authority and the leadership within that has never, ever accepted Israel's right to exist as a Jewish state. And if you don't have that, you're not going to have a two-state solution.

And so when your question is how you're going to bring it about, that has been the lifelong quest here. I mean certainly since the creation of the modern-day state of Israel people have been looking to see how you go in and foster a neighborhood in which all can get along.

So in the meantime I think the proper course is to look to our ally Israel to make sure its defenses are up, its security is priority, maintain that qualitative military edge that the Congress has consistently said. And then also look to see what we can do to help the economy, which has certainly been a focus lately in the West Bank to try and increase sort of the standard of living.

Because I think that maybe everyday people and Palestinian families certainly would like to see the life and future for their kids have a better quality. But let's not fool ourselves in thinking that we can somehow impose this two-state solution when you don't have a Palestinian Authority willing to recognize the existence of a Jewish state.

KARL: Yes?

QUESTION: Hi. I'm Barbara Cochran with the University of Missouri journalism program here in Washington.

What do you see as the most significant problems with the way the political system is functioning today? And what specific structural changes or reforms would you advocate to try to fix some of those problems?

For example, some people talk about money in politics. Do you think there's too much money in politics? Or is it OK?

CANTOR: I'm really going to go speak to the assumptions of your question, and that is that there is some kind of structural reform that we can affect that really fixes what seems to be paralysis on many issues.

And just if you look back—if I look back on the six years I was in leadership on the Republican Party, four of which we were in the majority, you know there was in the beginning a real attempt to try and work with the White House. And I'll never forget the day that Barack Obama, it was Jan. 20, 2009 when he was inaugurated.

And any of you were there knew that assembly of people on the mall was extraordinary. I don't know if there's ever been an attended event as big as that. And that came from this tremendously inspirational story of Barack Obama being elected our nation's first black president, given all of our history.

And I remember (audio gap) John Boehner and I going to a meeting (audio gap) and saying he wanted to work with us, bring me your ideas. And at the time it was a stimulus plan that was already being reported and (audio gap) talked about.

So you know (audio gap) but yet to no avail. And I think that was the beginning of the downturn, if you will, in the ability to work together.

And then came the cap and trade attempt in the House. Then came Obamacare. Then came Dodd-Frank. And as you know, vast, vast partisanship began to play out.

And so it's not that my side wasn't also engaging in responding to being shut out. And so we became very, very focused in saying here are our ideas, and if you don't like them, we're going to be for them, you be for yours.

And so I think it's about leadership. And that's why I think the country now looking forward, 18 months now we're going to elect a leader at the executive branch, which everyone knows is the engine of agenda and offense in the political situation here in Washington.

And hopefully that chief executive, the president, come 2017 will be one that actually will spend time on the day-to-day management of this town. I think it's been missing.

I told the president and I told his chiefs of staff, all of them, that if you would just concentrate on working one-on-one with some members, do it in small groups, it will go a long way toward trying to fix what it is that I think is behind your question.

And I say, the most rock red ribbed Tea Party Republican member, if invited to the White House to have dinner with the president and the first lady, this president and first lady, would absolutely be there. They would want a picture.

Tim Petra's (ph) here. They know. They would be there. And that human element of interaction would go a long way.

KARL: I do remember the Super Bowl, the president inviting a few Republicans over and then none of them voted for the stimulus. I think that was they think I'm never doing that again.

(LAUGHTER)

But let me just follow up on that because there was a moment, I totally agree. I was up covering every step of that, the stimulus, and there was a real sense that there was a bipartisan support for the idea of a stimulus, absolutely. You said it publicly.

But you then led the opposition to what the White House had put together. And I remember you telling me before the vote went down, some time before the vote went down that there would not be a single Republican to vote for this as it stood. And you were right.

I didn't believe you at the time. I don't think anybody—but it was—that was a remarkable moment. It was the biggest spending bill in the history of the United States passing without a single vote from the opposition party.

Was there a specific moment where you saw that happening? You were working, you were negotiating. You had your trips to the White House. You guys were making suggestions.

You said the president seemed—when did it click that this was just not going to work, because that of course led to all the other ones you mentioned. And in the White House narrative you guys were just bound and determined from the beginning not to work with him. But I don't think that was right. I think—so what was—what triggered that?

CANTOR: Absolutely. See again, their portrayal that we were never going to work with them is absolutely false. Because I really—I was very intent on following through on the president's request.

When he came over to then Leader Boehner and I and said bring us your ideas, we brought a white paper of all things into the Roosevelt Room at the White House. And I asked the president if it was OK if I handed it out.

Of course he initially said, "Well we're not going to go over all that here." But he took a look at it and he said there's nothing unreasonable in here. Because clearly we were—you know as Republicans we were upset with the prospects of increased taxes, capital gains, marginal rates, the rest.

We knew we weren't going to get a positive response on our position on that. But we went much more toward where we thought we could go in common on business expensing and deprecation and the rest, and other issues like that. So, and the president himself said nothing here seems unreasonable.

But from that point to then the following meeting, I think it was the following meeting, when we got into a whole discussion about the method of tax credits essentially. It was the refundable credits and the rest. And basically he was I think it was make work pay credit or whatever it was at the time. He decided that's what he wanted to do.

And I'll never forget what he said. He said "Eric, elections have consequences and I won. So we're doing it my way."

(LAUGHTER)

So, OK. I mean that really said it to me. You didn't accept any of the things that we put on this paper. Instead, you decided yourself what it was that Republicans should accept as a bipartisan gesture. You then said elections have consequences. You won so you're not going to have any of our policy considered.

At that point, what do you do? I mean that—really, that was a statement right then and there. You weren't interested in forming relationships developing together, that that was it.

And so at that point—I mean that's when I recall. I said look, and you know I know that John Boehner and I decided this was just not going to work.

KARL: As you recall, he had a slightly different view of the consequences of election in 2014.

(LAUGHTER)

CANTOR: Right.

KARL: Yes?

QUESTION: Larry Korb, Center for American Progress.

The way our districts are gerrymandered or constructed now it's very hard to lose a general election. But in the primary, as you know, you can lose. And so what happens in the primary you get people, the committed people, rather than the more moderates on either side voting. Is that one of the reasons why you have this? And if you want to comment on your own experience there I think it would be helpful.

CANTOR: I think that my own experience actually defies that notion. My own experience in the surprise that took us all by surprise was the assumption that my political team made in my primary that it was going to be a Republican-only primary.

You know we are very unique, I think, in states. I'm not sure how many have it. We have open primaries. The Democrat Party did not have a primary that day.

Post-election polling indicated yes, I won the base, as you say, the Republican primary electorate. Not by what I used to win it by because of all the immigration issues, TARP, all the things that I had—was involved in.

But when you have 23,000 Democratic primary voters from past primaries come in, in that instance, that was the mistake my political team made was not thinking hey this is probably more like a special election than a primary election, given the sort of target that was on my back.

But I think it defies the notion of what you say is because you know if there are states like that certainly there could be that force at work. Again, very hard to mobilize voters to come out in June for a primary, you know and much too—we have, I think, set records in my primary for all the turnout that occurred when I lost.

So there's no—the incentives, and I think that's where your question goes is what's the incentive for individual members to work with the other side?

You know I was very focused on the immigration issue and trying—did not necessarily agree with the president's overhaul comprehensive position, but said that at least we ought to make some progress sand begin to work together, that notion of a compromise saying hey, what about the kids?

They didn't do anything. And I think our law—the precedent in this country is you don't hold kids liable for parents' illegal actions. They didn't do anything. They were in most cases brought here when they didn't even know. And this is—this was their country.

That notion that I was saying that we should do that first, that was the kind of thing that then riled up some of the folks in my party say aha, that's amnesty, you can't be for that.

Well again, I think you're right. That does create more difficulty. And human nature being what it is, you're going to take the path of least resistance most instances that people wouldn't necessarily support that.

So I do think there's some validity in the suggestion here. I'm not sure what the fix is. I'm not sure you could ever remove politics from redistricting. I'm really not sure you can do that.

In the same way the prior question about getting money out of politics, I don't think—and I think the Supreme Court said that as well, you can't take money out of politics. So the best way is transparency, to me, on that.

KARL: Listen, Iowa did a pretty good job. I mean you have competitive districts. They have the nonpartisan you now drawing of the lines.

CANTOR: I am not familiar with Iowa's process or the population in Iowa. And the homogeneity and lack thereof in Iowa versus other places.

KARL: Right.

CANTOR: Because I think you can also look to, especially those of us who are from Voting Rights states, you know there's all kinds of controversy around that right now. And again, where demographics come into play in terms of partisan support, et cetera.

KARL: Yes. Back over here?

CANTOR: I'd like to go back to the grand—my name's Peter Bombush (ph). I'm a lawyer in Washington. I'd like to go back to the grand bargain.

I know the president did put slightly Social Security reform on the table, at least the COLA. And is there any chance that a grand bargain as long as the, certainly the House of Representatives and maybe even the Senate Democrats—I mean the Republicans—refuse to vote for any tax increase?

And second part off the question, is a gasoline tax increase some possibility to break that we won't tax you at all mindset?

CANTOR: Again, I can answer this not having being responsible for whatever happens. But I will say I doubt seriously that gas taxes are going to be on display here.

And to your question about the grand bargain, you know there was a real disconnect in terms of the definition of grand bargain. For some on my side of the aisle, grand bargain meant 75-year plus generational fix to the entitlement program in which we put forward for many years.

Otherwise known as the Ryan budget that Paul had done when he was chairman of the Budget Committee, which essentially took the Medicare program, the health care entitlement program in our country, and transitioned it from a defined benefit to a defined contribution program, much like what is done in the private sector with legacy retirement and health care costs.

And that was the definition and the integral piece of what many in the Republican ranks, and still do think is a grand fix or bargain. And if that fix was there meant you were no longer digging the hole deeper. Because when you say the president put on the table COLA or the inflation of benefits in Social Security or means testing in the entitlement programs.

Those things, I haven't looked at the numbers lately, but at the time if the economy were growing at a pretty decent clip, which it's not, it would give you maybe 15 years, 20 years at the max, not even, fix to those programs. So when you say well if you get that you can have—then you have to give tax increases.

Again, it goes back to the definition of what you think the grand bargain was. I always thought it was a real fix.

So if you were to get the transition to the type of defined contribution outlook, I think then you're talking a different game because a lot of Republicans will say fine, if you're paying more to pay off the debt and not go squander it, there'd be support for that. But we were never...

(CROSSTALK)

KARL: Tax increases.

CANTOR: Right. Never anywhere close to that, ever. And that goes back to my sort of initial sort of framework here that the town still operates under, two sides very far apart on entitlements, both on Medicare, most importantly, and taxes.

KARL: But Boehner was this close to a deal that was going to be some tax increases and some of those more minor adjustments to it...

CANTOR: This has been much written about.

KARL: Well, were you going to support him on that?

CANTOR: I mean he—I mean I remember going down to his office to get briefed on what it was going to be right before it blew up. I mean it's been much written about.

I did not support tax increases. We were never anywhere near close to the kind of deal that I just discussed about where most Republicans felt we needed to go. Which in order to re-instill the integrity of these programs, again, just like the private sector's done.

In fact, there's been no presentation or proposal of any fix to these entitlement programs other than that which was transition to a defined contribution program. Today still there's no suggestion out there that attempts to fix the problem. It's more just patching it.

KARL: Yes, Esther?

QUESTION: Hi. Esther Lee...

(CROSSTALK)

QUESTION: (Inaudible)...

KARL: Oh. We'll get you next. Yes. We'll get you right next. Right behind you, sorry.

QUESTION: Sorry. Esther Lee, Council of Korean Americans.

As you probably know, May is Asian American/Pacific Islander Heritage Month. I was just at the White House summit on AAPIs a couple of days ago. Lots of talk about the United States becoming a minority majority nation by 2040. And I think I met you at the Korean meet up in Congress a few years ago.

Can you talk about what, if anything, the Republican Party should be doing to be successful in this country with respect to minorities? Or do you think the Republican Party is doing a good job?

CANTOR: You know, if you look at the electoral outcomes in the national elections, when you have a presidential election, no, it's not a—the track record is not one that I would like to be satisfied with. Certainly we need to do a better job.

One of the things that I tried to do as—when I was majority leader in helping shape the agenda was to make our party one of more inclusion, not exclusion. That's why I took the position I did on the immigration question.

Like it or not, that has become sort of symbolic of what a party is about in terms of inclusion or not. And the simplification that goes about sort of in the...

KARL: Amnesty.

CANTOR: ... in the dialogue and all that doesn't help matters. But it is what it is. I mean the public is looking to see who's got solutions. I think that you know we are a country of laws and we are a country of immigrants, bottom line.

I mean I've told my immigrant story many, many times. I'm you know the grandson of Russian immigrants. And you know it is the story of our country. So I do think the Republican Party's got to be addressing that.

You know I think that there is less of an upper hand on the part of the Democratic agenda right now when it comes to those who are disaffected, when it comes to those who are less economically advantaged because they're not seeing a way for them to really climb that ladder.

And if we believe that America really is a country of ordinary people doing extraordinary things, that better become more of a reality to more people in this country. And I think that's where our party has a real leg up, especially given the debates of ideas going on, on our side in this election. You don't have that going on in the Democratic side.

KARL: Yes, ma'am?

QUESTION: Thank you.

Among all the intractable problems that you've mentioned, I guess the one that specifically fit you was immigration. And I wonder whether you see any possibility of a bargain between the admissionist side and the restrictionist side that could bring about more than simply dealing with the young people, all the other questions. Is there any inclination that you can see on the part of either party to fight out a deal?

CANTOR: You know it is amazing to me Washington's desire for grand bargains and deals. You know when you look at comprehensive deals that are made, tell me one that's really worked. I mean tell me one. If they're bipartisan in nature, sure. But again, this seeking some grand bargain (audio gap).

You know, look at the health care bill. You know the Supreme Court is going to look at that now next month as to its viability going forward. Look at this desire for a grand bargain and fix in the Middle East.

It has been attempted and attempted. But yet the willingness to go incrementally every day improve the lives of the Palestinians on the ground, improve the security of the Israelis could be tremendously accretive to the situation.

In the same way that my position on immigration. Deal with—let's go to the low-hanging fruit, as they say. Let's go fix the border. Let's go to the high-skilled workers. We know that you can address that. We had a bipartisan bill that passed in Congress years ago before this became so hot politically.

You know there are plenty of areas in which we can agree. And I believe human nature is such that if you begin that process of working together and accomplishing things, that can breed even more.

So that would be my response to is there ever going to be a big grand deal. Let's decide OK if that's the goal for some. But first, let's make progress with what we can deal with right now, every day.

KARL: All right. We have time for just one more question. As a reminder to everybody, this meeting has been on the record.

Yes, last question?

QUESTION: Kevin Sheehan, Multiplier Capital.

In the wake of the Amtrak tragedy in Philadelphia, there's been a renewed emphasis on infrastructure spending, not only in railways, but also in roadways, fundamental research and biotechnologies. In other areas where you're producing a common good and there's no natural private sector solution.

CNBC was quoted this morning as saying that China's outspending us 90 to 1 on infrastructure. How should the Republican Party be thinking about infrastructure spending?

CANTOR: You know, I would probably—I'm going to put a generality out there. I'd probably say most people, Republicans included we think, we need to spend some more on infrastructure in this country.

The question is what to do. You know you take the Amtrak situation, which is tragic. And we don't know really all the details on what happened yet. So I'm a little bit reticent to want to comment on that.

But if you look at Amtrak in general, you know now and spending a lot of time both here and in New York I can tell you, the most traveled corridor in the United States, the Northeast Corridor. And one in which frankly Amtrak, I imagine, could make a real decent profit or a private operator could make a decent profit in that corridor.

But yet, the political situation dictates that we've got Amtrak running all across the country, and frankly, having to subsidize all those routes that don't make any sense economically because of the politics. So you got to address that. You have to.

And again, I look at my world that I'm in now and you know when you know I'm with my partners at Moelis going in and advising CEOs, boards, managers and the rest about what to do if they look to acquire a company or look to try and increase the bottom line. You got to be smart. There's no luxury of just saying more money is better.

It is what's the value of that investment? How do I see the return? What are the synergies if I go in, in one industry and try and acquire another asset in the same industry? It's that type of analysis that really needs to be done in terms of infrastructure. And hopefully that will be done.

But again, you run into this sort of fundamental block in this town because where the pay fors coming from? And unless you get to the pay fors for something big, you're just going to continue to patch things rather than have a much more sensible, long-term type of blueprint on transportation.

KARL: Gas tax, for instance.

(LAUGHTER)

CANTOR: See, but again that goes right back to that's the response to say just more money. Just more money. And whereas what I just said about where are the tracks, and you can apply the same in highways and the rest. Research you mentioned, infrastructure in the grid. All those things.

We're in a new day now. We got to up the game in terms of analysis. It can't just be more money and then we'll figure it out, because it never gets figured out.

Again, that's the real difference in the private sector. You cannot and you do not have the luxury. Shareholders won't allow it. Certainly active investors won't allow it. You've got to go and make your case, tell your story and get out there with the narrative before you do something like that.

And so again, easy to say, Jonathan, but I think the wrong way without having put the thought into it.

KARL: All right.

Eric Cantor, thank you very much.

(APPLAUSE)

CANTOR: Appreciate it. Thank you.

(APPLAUSE)