Caleb Brown: This is the Cato daily podcast for Monday, October 11, 2010. I’m Caleb Brown. According to CNBC reporter Michelle Caruso-Cabrera, the GOP has gone wrong on everything from Medicare to immigration to education and getting those issues right, she says, means a serious vision for smaller government to deliver greater prosperity. Caruso-Cabrera is author of the new book You Know I’m Right. We spoke after forum for the book held at the Cato Institute last week.

Looking through your book, it seems to be almost a catalogue of things that the right, for lack of a better term, gets wrong on a regular basis. You’re talking about healthcare, Republicans have, across the board, said well, you know, yes, we want to stop Obamacare but no, we don’t want to cut Medicare. Immigration has been something that has really hurt, I think, maybe the long-term prospects of Republicans. Talk about those issues.

Michelle Caruso-Cabrera: Yeah, I wrote the book because I was so frustrated that there didn’t seem to be any party that reflected my views of the world. Knowing my government stays out of my private life and out of my pocketbook, and neither party — even the party that was supposedly of small government — actually wasn’t small government, at least when it was in power. So, yeah, I don’t see any answer, really. I think they’re getting closer when it comes to spending. In fact, both parties I think have finally kind of found religion, so to speak, when it comes to spending because the electorate is so mad at them. But I don’t think they’ve made yet the leap to the really hard choices that we all know are coming. You know, what to do about entitlements. And how do we shift back to a nation that’s really bent on personal responsibility?

Caleb Brown: I’m actually kind of surprised to hear you say that because it seems like the pledge that Republicans have offered is sort of weak and anemic and hasn’t really done a lot, I think, to capture a lot of the enthusiasm in the tea party to really actually do something about spending and some long-term issues. Like Paul Ryan’s plan seems to be something that a lot of Republicans should be grabbing hold of but they have had sort of a weird relationship with his proposals.

Michelle Caruso-Cabrera: Well, they’re afraid of anything that touches the third rail, right? Social Security and Medicare — this idea of, I think Paul Ryan’s plan touches a little bit on personal accounts or at least the beginnings of trying to get toward individual responsibility and politicians are very, very frightened, because those are very, very popular programs amongst, particularly among the elderly who vote. So I understand why they are like that for political reasons and what to do about it, I don’t know, but it certainly is the hurdle when it comes to true reform.

Caleb Brown: Do you expect that war will become a fiscal policy issue? Because so far it really hasn’t been. People like Bill Kristol and others have gone out of their way to say no, no, no, don’t cut the Pentagon. And these are supposed to be standard-bearer, Republican-type people, right?

Michelle Caruso-Cabrera: Yeah. So the question is will it — will war become a fiscal issue? I mean I think in some ways it has. I think that because, although the death toll is heartbreaking, where it’s something like 5,000, it’s not like what we saw under Vietnam, right? 50,000. And so you don’t have the necessarily the same kind of outrage among the public. So at this point, no, and because we are pulling back so much I think it’s even less likely to be a fiscal issue. I think people complain about what they see around them more than anything, and so if they see government waste in their backyard or if they see it when they go to the DMV because the person behind the counter is rude to them and not very good at what they do, that’s the type of thing they gravitate toward more.

Caleb Brown: On the issue of immigration you talk about Silicon Valley specifically, that these are companies that are, were created by immigrants. Why, then, do you suggest — why, then, do you think there’s such a resistance to a credible, reasonable, even George W. Bush had what a lot of people thought was a pretty reasonable reform on immigration before 9/11 struck and even afterward.

Michelle Caruso-Cabrera: Yeah, I’ve thought a lot about this, because, you know, I open the chapter with four reasons why you should support immigration to the United States: eBay, Google, Yahoo, and Sun Microsystems. All founded by immigrants. And aren’t we also thrilled that we can call them American companies? I mean maybe that’s jingoistic, I don’t know, but to me it’s a point of pride. But I think in times of recession, in particular, people feel vulnerable and they want to protect what they have, and so I think intuitively it’s a kind of response that on the surface makes sense, but it’s hard — we don’t have anybody who really articulates well how important, how great immigration is for the country and it’s not a detriment.

Caleb Brown: And it hasn’t been an issue that tea partiers are happy to take up, either.

Michelle Caruso-Cabrera: No. I don’t know why — look, I don’t know the ins and outs of the Tea Party very much. I know they are very focused on fiscal issues, smaller government, that’s great. I don’t know if there’s a hesitancy to deal with it because they know it divides people so dramatically. I think it’s the most divisive issue within the Republican Party, amongst Republicans themselves, that they’re looking for unity, right? So is it a decision — maybe it’s focus on other issues rather than that one.

Caleb Brown: What should be the top two or three legislative priorities of a Republican House, if it does, in fact, emerge in 2011?

Michelle Caruso-Cabrera: Being able to buy healthcare across state lines, school vouchers and immigration reform.

Caleb Brown: What should that — what should those look like? I mean what should an immigration reform look like that would make you happy?

Michelle Caruso-Cabrera: First and foremost get rid of these quotas when it comes to the H‑1B visas so that way we can hire the best and the brightest from all over the world and I think they add to our economy, they don’t detract. But I think we need unskilled immigrants just as much as we need skilled immigrants. We need all kinds of folks to help us start businesses. And so, if we had more open immigration, I would want far more documented workers who come here. I think if you’re going to have a lot of immigration then obviously, like they did in Great Britain, you can’t be on welfare if you come. You can’t self-select because you know that we’re going to take care of you. You’ve got to be — you’ve got to self-select because you know that you can come here and be industrious and ambitious and get somewhere if you work hard, but it ought to be one based on you are free to come as long as we know who you are.

Caleb Brown: Michelle Caruso-Cabrera is the anchor of CNBC’s Power Lunch. She is author of the new book You Know I’m Right. You can watch the full forum for the book at CATO​.org.