Home Budget, Economy Video: Mark Warner on National Debt, Tax Expenditures

Video: Mark Warner on National Debt, Tax Expenditures

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Where I agree with Mark Warner is that direct expenditures and tax expenditure (e.g., mortgage interest deductions, charitable deduction, ability to deduct healthcare) are “both spending by just different names.” Where I also agree with Warner is that defaulting on our debt, or even coming close to defaulting on our debt, would be a disaster (“if you spook the bond markets at this point…we could see double-digit interest rates…hiring’s going to come to an end…would be a disaster…to play politics with this issue is, in my mind, the height of irresponsibility”).

Where I disagree, fundamentally, with Mark Warner is that a compromise with Republicans should even consider continuing the foolish-then-even-more-foolish-now Bush tax cuts – the ones that played a huge role in turning Clinton’s surpluses into Bush’s deficits – at least for the wealthiest Americans. Those Bush tax cuts cost our country $400 billion a year, $4 trillion a decade, which means that, in and of itself, getting rid of those tax cuts would reach Warner’s goal of reducing the next decade’s deficits by $4 trillion. In other words, that one’s a no-brainer; ditch the Bush tax cuts, then proceed from there on addressing tax expenditures and other issues (personally, I’d look at means testing for Medicare, as I know lots of people who are upper-middle class or higher yet are receiving full benefits for decades, and it’s not affordable).

By the way, one thing that is NOT acceptable in this entire discussion? Slashing federal workers’ pensions, certainly not unless everyone else is forced to sacrifice as well. But to just pick on federal employees, to use them as scapegoats, is completely wrong, won’t even come close to making a dent in the deficit, and is simply bureaucrat-bashing for no good reason other than it gives the right wingnuts sadistic glee to do so. Sen. Warner: just say no to that!

  • Jeff Barnett

    If our government tries to invent a new tax code in the next few months it will simply fail. A consensus on a new tax code just does not exist. What does exist is a proven formula to balance the federal budget, protect middle class programs, and spark economic growth. In 1993, a Democratic White House and a Democratic Congress delivered this formula. It:

    • Produced the longest economic expansion in US history

    • Moved the Federal budget from record deficits to record surpluses

    • Created 23 million jobs (averaging a quarter million new jobs every month for 8 years)

    • Dropped national unemployment to 4%

    The Bush-43 tax cuts destroyed this framework. According to the non-partisan Center on Budget and Policy Priorities, the Bush-era tax-cuts are a dominant cause of today’s federal deficits:

    If not for the tax cuts enacted during the presidency of George W. Bush that Congress did not pay for, the cost of the wars in Iraq and Afghanistan that were initiated during that period, and the effects of the worst economic slump since the Great Depression (including the cost of steps necessary to combat it), we would not be facing these huge deficits in the near term.Anyone who is serious about solving the deficit must start by walking back the Bush-43 tax-cuts. That means returning to the Clinton tax rates. If not the exact rates, then at least the Clinton tax revenues.

    We don’t need to reinvent the wheel when it comes to sane taxes and spending. Just copy what Bill Clinton and a Democratic Congress did. His administration cut spending, raised revenue and regulated industry. The result was an economic boom in America. Government helped create financial nirvana. What’s wrong with that? Absolutely nothing. Coming up with a new comprehensive plan when we already have a proven path is political nonsense.

  • Dan Sullivan

    That is what it sounds like when the Senator names that figure: 20%. As he stated, there is the tax rate and the effective rate. And 0% for GE does a lot to skew it to the left of 20%.

    Let’s not let the tax tail wag the business engine dog.