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Medicare, entitlements on the table for cuts: Pelosi

Medicare, Social Security, and other entitlements must be looked at for cuts, House minority leader says. But in addition to Medicare, Congress should cut subsidies to oil industry.

House Minority Leader Nancy Pelosi, shown here arriving for a news conference on Capitol Hill in Washington May 12, 2011, was interviewed by CNBC's Larry Kudlow May 16, 2011. She said the deficit must be reduced, which means looking at cuts in entitlements, such as Medicare, as well as subsidies for business.

Evan Vucci/AP

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By Margo D. Beller, Special to CNBC.com

Everything must be on the table as the U.S. Congress works to cut the deficit, including Medicare, Social Security and entitlements, House Minority Leader Nancy Pelosi told CNBC Monday.

"All the money is fungible, and at the end of the day the deficit has to be reduced," the California Democrat said the day the $14.3 trillion debt ceiling expired.

The government has 11 weeks to raise the debt ceiling or be in default.

Last week House Majority Leader John Boehner set the Republican position: no tax increases, and any dollar to raise the debt ceiling must be accompanied by a dollar reduction in spending.

"Did he say then that the Republicans would vote for avoiding the default if we don’t move forward?" Pelosi responded Monday, noting that Republican support was hard to find when Democrats worked with the Bush administration to enact the Troubled Asset Relief Program.

"We all know we must reduce the deficit ... we must put everything on the table," she said. "We’ve got to look at cuts, for sure—waste, fraud, abuse, duplication, obsolescence, you name it."

At the same time, cuts can't be so draconian that growth is stifled, particularly in education and research and development.

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Pelosi supports making the tax code "simpler and fairer" for business and increasing domestic production for oil, natural gas and renewable resources.

However, she also favors removing tax subsidies for the Big 5 oil companies, the subject of a Senate Finance Committee hearing last week.

Cutting the subsidies to Exxon Mobil, Chevron, Conoco, BP and Royal Dutch Shell will save over $30 billion over 10 years, which she said was about what they earned in the first three months of this year.

The companies are "going to make more than a trillion dollars. Don't tell me they need $30 billion over 10 years. No one is going to cry over the oil companies. We’re saying to seniors you’re going to pay $6,000 more for fewer benefits so we can give tax cuts to big oil."

She said the arrest of International Monetary Fund chief Dominque Strauss-Kahn gives a new definition to the term "moral hazard."

"What a shame at a time when the IMF is at center stage for what’s happening in Europe and Greece and the world financially to have this disruption," Pelosi said.

With the U.S. owning 18 percent of the IMF, she foresees no congressional investigation at this time into how the fund, or any other international institution, is spending the money it gets from this country.

"For a long time now many of us have been saying we should subject any number of our international financial institutions … to scrutiny as to what the original purpose was [and] how they are fulfilling it. Let’s just take a look because there are important resources put there and we want to make sure we’re getting the best for it," she said.


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