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Obama, Simpson-Bowles, and Tax Reform

imreallyperplexed

Council Member
One thing that I noticed in the Republican debates over the last couple of days is that all the candidates - but especially Huntsman, Romney, and Gingrich - spend less time talking about the "poor economy" (primarily because recent economic news has something that elicits guarded optimism) and more time talking about taxes, tax-reform, and long-term economic growth. In particular, all three of them focused on alternately Simpson-Bowles (which was most concerned with long-term debt reduction) and with the Paul Ryan plan (which was most concerned with promulgating a supply-side policy for future economic growth.)

What is rarely mentioned is that Paul Ryan was on the Simpson-Bowles committee and voted AGAINST the Simpson-Bowles plan because of "taxes on the wealthy" and that the Ryan plan provides even greater tax cuts for the wealthy and on VERY optimistic (and arguably unrealistic) projections for economic growth in which the U.S. runs deficits out to 2040. (And if the rosy economic projections in the plan are not realized, we run deficits until even further into the future - or raise taxes or cut spending even more.) It is easy to argue that the Ryan plan is the "Return of Voodoo Economics" or "Voodoo Economics II" and will lead to endless deficits rather than to sustainable economic growth.

In any case, the Republicans criticize President Obama for not embracing "Simpson-Bowles" and tax reform. In fact, though he has not "embraced" tax reform, he has indicated that serious tax reform is necessary. What I expect to see from the President starting with the state of the union speech and moving on through the election is a push for Simpson-Bowles style reforms for deficit reduction coupled with an argument against Voodoo Economics II ala Ryan and Romney and Gingrich. Tax reform to 1. spur economic growth and 2. reduce the deficit will be the center of his campaign. His first term will be characterized as a gigantic and difficult struggle to pull the U.S. economy out of the ditch that the policies of the Bush Administration a Republican Congress pushed the economy into that is gaining momentum. His second term will involve getting the deficit under control and restarting the economy - in the manner of Bill Clinton. Part of deficit reduction will involve entitlement reform. All Democrats recognize that entitlement programs need reform. (And Republicans have some proposals that are worth considering.)

Personally, I wish that Obama had more forcefully pushed Simpson-Bowles in the 2011 state of the union and the 2011 budget. But given the Congress that he was faced with, I can understand the political timing would have been bad. I think that everything that I would have liked to see from the President on the tax reform front last year will be something that the Obama Administration will push this year (to the great discomfort of Republicans I suspect.)
 

MaryAnne

Governor
Now that the economy is improving and the war in Iraq over and Afghanistan winding down, I expect Obama to concentrate more on tax reform and jobs.

Obama is holding a meeting Wednesday for in sourcing. Just heard that another plant came back to Maryland because it was cheaper than shipping from overseas. That was a candle factory run by a woman.

So many are now concentrating on doing what is best for the Country for a change. Many now understand they have been penny wise and pound foolish by going over seas.
 

imreallyperplexed

Council Member
I think that tax reform will be a really major point of debate over the course of 2012. As I said, though I would have favored Obama bringing up Simpson-Bowles explicitly in the 2011 State of the Union, I think that he and his team may have been wiser to keep from focusing on tax reform until 2012 with an improving economy and both Republicans and Democrats agreeing that tax reform, entitlement reform, and deficit reduction are needed. (I think that there will be an important debate on foreign policy and military spending as well but that is likely to be secondary.) The main thing is that I think that there is a good chance that Obama will use the 2012 State of the Union to take control of the tax reform/entitlement reform/deficit reduction narrative and will use that to push against both the Republican House and the Republican Presidential nominee (whoever that turns out to be.)

It will be interesting to see how capably this can be managed in the face of opposition that seems to be wedded to a strategy of opposing anything that Obama does all of the time.

Now that the economy is improving and the war in Iraq over and Afghanistan winding down, I expect Obama to concentrate more on tax reform and jobs.

Obama is holding a meeting Wednesday for in sourcing. Just heard that another plant came back to Maryland because it was cheaper than shipping from overseas. That was a candle factory run by a woman.

So many are now concentrating on doing what is best for the Country for a change. Many now understand they have been penny wise and pound foolish by going over seas.
 

MaryAnne

Governor
Obama visited the Pentagon last week. Panetta said, "That was the first time for a President to visit." Can you believe that?

They had a Press Conference together on cutting Military spending. They seem to agree where many cuts will be. Panetta said,they would be stepping on some congressional toes. I liked what they said.

Now that you are hearing from all sides how the economy is coming back Obama will move on to other things and he will by pass Congress. The recess appointments were a warning to Mitch and John that he would do without them since they show no signs of co-operating.

I wish Reid would change the filibuster rules back so they would have to stand in the well and talk. I think that would be better for both parties.
 
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