House Republicans and Senate Democrats touted separate budget proposals this Tuesday while the White House announced it would delay the release of President Obama’s plan to ameliorate the nation’s fiscal woes until early April.
The House GOP proposal spearheaded by Wisconsin Congressman Paul Ryan balances the federal budget in ten years by restructuring entitlement spending without raising taxes. Senate Democrats produced a competing plan under Budget Committee Chair Patty Murray of Washington. Though Murray’s proposal does not balance the federal budget, it does reduce the size of the deficits that are continuously added to the national debt each year.
Bennett on taxes, spending, and the Affordable Care Act
Airing locally on Philadelphia’s 990 AM WNTP this Tuesday, American Enterprise Institute Money & Politics blogger Jimmy Pethokukis appeared on Bill Bennett’s Morning in America to discuss the broad strokes of the GOP budget proposal.
“My point is that the core – and let’s just take a quick step away from the budget – the core of…[what] Paul Ryan would like to do is do tax reform to improve economic growth, move Medicare to his premium support plan, which would allow you to pick among a variety of plans including Medicare – inject choice and competition, and then pushing Medicaid back to the states to be block granted to them so they can be more inventive and come up with new ways of spending that money more wisely.” Pethokukis summarized.
Byron York of The Washington Examiner joined Bennett later in the program to offer his own take on the budget battle.
York noted that the House GOP budget proposal assumes the repeal of ObamaCare and replaces the current six personal income tax brackets with two rates set at 25% and 10%.
He then downplayed the ability of congressional Republicans to achieve these changes, remarking, “I have to wonder what is the practical value of such a document, I suppose it’s kind of a starting point but clearly I don’t think either one of those things are in the offing given our political situation at the moment.”
York then shifted to the plan advancing in the Democrat controlled Senate, stating, “the Murray budget is just coming from the other side – calls apparently for a trillion dollars in new revenue but also they say a trillion dollars in…spending cuts. And my feeling is you have to look at that very, very carefully to see if any actual real cuts are in there.”
Bennett pushed back on criticism regarding the feasibility of Paul Ryan’s plan by referring to some of the Wisconsin congressman’s own comments, asserting, “…this is a competing philosophy. We have a different view of the world and we’re responsible to put that view forward.”
Though he remained skeptical of the ability of the GOP to repeal all (or part) of the Affordable Care Act during FY 2014 budget negotiations, York later alluded to the fact that many of the more controversial aspects of the law were deliberately designed to take effect after the 2012 election.
“Congress passed it; the president signed it; the Supreme Court upheld it. It seems to me that its failure will come in its implementation. And it’s unlikely there will be any political action on ObamaCare…until we see how it exists and how it affects the lives of everyday Americans. And then there could be quite a bit of it.” he speculated.
Ingraham with Fred Thompson
Broadcasting locally in the City of Brotherly Love on 1180 AM WFYL this Tuesday, Laura Ingraham queried former Senator Fred Thompson (R-TN) on the country’s fiscal challenges.
“Paul Ryan comes out with this budget plan. It’s very detailed. There are a lot of assumptions in it undoubtedly, but he is already being demonized by of course the usual folks on MSNBC and the pooh-poohing [happening] on the left.” Ingraham began.
“Do you see an actual opportunity for left and right to somehow come together and come up with some quote Grand Bargain? Is that possible today.” she inquired.
“Only if Obama’s numbers keep plummeting – otherwise if he still maintains, generally speaking, his political success and doing what he’s been doing there’s no way.” Thompson answered.
“It’s not as if people got up one day back a few years ago or a few months ago and decided we’re going to be more acrimonious. We’re going to disagree on everything and we’re going to raise hell and just not get anything done. No. What has happened is we’ve got a 16 – almost 17 – trillion dollar debt. And a few years down the road we’re going to really fall off a cliff.” Thompson added.
“We’ve got people today retiring in this country and adding to those issues. Half the people are very concerned about that and the other half of the people are not, and they’re more concerned about what they’re going to get politically and materially today instead of what their grandchildren are going to get down the road a little ways – or their children more likely now. So that’s fundamental. That is basic. And I’d like to be optimistic about all this.” the senator mulled.
“Yeah it’s hard to be.” Ingraham assented.
“But I don’t see anything [good happening]. The Democrats have been shamed into a budget now on the Senate side so that’s progress.” he offered.
Kudlow on tax reform
The Democrat proposal designed by Pat Murray left open the possibility of further tax reform via reconciliation bills which cannot be blocked through the use of a Senate filibuster.
Airing locally on New York’s 770 AM WABC on March 9th, Larry Kudlow unpacked the likely direction of Barack Obama’s upcoming tax proposals with Encima Global President David Malpass and University of Maryland Professor of International Business Peter Morici.
Kudlow got the ball rolling by expressing his own desire to reform the tax code with respect to companies taxed at the shareholder level rather than the corporate level.
“I want large and small businesses – I want LLCs and Subchapter S to be able to convert to a new C [corporation] rate that would be let’s say 25%. So we go from 40% to 25%. I think David that would be the most slam-bang-pro-growth thing we can do right now.” the radio host pressed.
“Right, I agree but we’re going the other way. The effective rate went up a lot on January 2. And each time the government kind of takes a look it says it wants more money from the private sector – a higher tax rate which is going to really just keep growth slow.” Malpass answered.
“See Peter Morici – I had some conversations with some people who were in that Obama Dinner Diplomacy thing at the Jefferson Hotel...And he has a totally different view of tax reform than at least the Republican senators.” Kudlow observed.
“His view of tax reform is A) get rid of the loopholes and don’t lower rates for individuals and B) regarding corporations – and this is something – he might lower the corporate tax rate as he has said, but he wants to go after specific industries. And he wants to go after foreign profits that are domiciled abroad where they’ve already paid taxes. He is particularly vicious on that point. He wants to double tax those profits. We are the only country that does that. And this to me is a huge stumbling block and a problem for business tax reform.” Kudlow continued.
“Well absolutely, I don’t think we’re going to have business tax reform on those terms. There are even a lot of moderate Democrats that aren’t going to go along with it. And this kind of reveals or gives color to the charges that he really is a very left-wing and ideological president. It’s a very anti-capital position.” Morici responded.
“But if you look at his just general posture on tax reform, and that is get rid of the deductions and so forth but don’t lower the rates so he gets more money even though the tax take is now going to be much higher than the 40-year average he’s really barking up the wrong tree. If you look at what’s politically possible on the personal [income] side the biggest [tax] exemptions or deductions to be harvested are middle class deductions, things like the mortgage…interest deduction.” Morici elaborated.
“And on the corporate side if you talk about going after Big Oil and so forth, you put those two together and you have a reasonable blocking coalition. He’s at risk of really blowing his political capital from his reelection over the next 12 months fighting a battle he can’t win. He would be much better off doing some spending cuts to bring the deficit into line, placating the Republicans on that. And then pressing harder on his agenda on immigration and other areas – saving his capital for those areas where he can actually have some wins that mean something.” Morici asserted.
“Well good luck on that. We will see. I’m not optimistic about any legislation and maybe that’s the best thing we can get...” Kudlow concluded.
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