Category Archives: Debt and deficits

Back and forth with Boozman on Buffett

Warren Buffett has gotten himself involved in politics, and he’s probably going to be sorry about it.

Buffett, the billionaire investor, has made the point lately that he pays a lower tax rate than his secretary. He’s talking about the unfairness of the tax system and, indirectly, the budget deficit.

President Obama has proposed a “Buffett Rule” that would place a minimum tax on million-dollar salaries. Republican Sen. John Thune has proposed his own “Buffett Rule” that would allow people to pay extra money to reduce the federal debt. Arkansas Sen. John Boozman is one of the co-sponsors.

Thune’s bill is a waste of time and a personal attack. In effect, Republicans are saying, “If you want to pay more taxes, Mr. Buffett, go right ahead.” But that would not solve the problems Buffett was pointing out.

I asked Sen. Boozman for some time to talk about this and sent him my questions, which were not softballs. He called me that day ready to answer them, and to his credit, he didn’t back down from any of them. Even when my questions were a little more direct than they should have been, his tone never changed. Man, he’s a cool customer.

Boozman’s main policy point was that Obama’s Buffett bill won’t address the problem Buffett was discussing because Buffett will still take advantage of the loopholes and deductions he uses now to pay a lower tax rate than his secretary. What’s needed are less spending and tax reform, he said.

Here’s more in my Wednesday column for the Arkansas News Bureau.

Griffin explains debt deal vote, tackles debt problem at Philander Smith

Rep. Tim Griffin is supposed to be embarking on a “Jumpstarting Jobs” tour, but at Philander Smith College Thursday evening, the talk was about the budget deficit.

Two days after President Obama signed the debt ceiling extension, Arkansas’ Republican Second District congressman defended his own vote for the deal. He said that while he wasn’t happy with it and wouldn’t have voted for it had Republicans controlled the White House and Senate, he “wasn’t willing to roll the dice” on the economy had it not passed.

Describing the deal, he said, “It’s like canceling your cable bill when you can’t afford the mortgage.”

Griffin broke with some in his party by saying that he believed the government should increase revenues by reducing the amount of tax deductions. Some Republican leaders have said that rates should be lowered in that case so that there is no net increase.

But he reiterated his opposition to increasing taxes. He said that tax revenues did not decrease as a percentage of the gross domestic product because of the Bush tax cuts. He repeated a favorite GOP line that Washington doesn’t have a revenue problem, it has a spending problem, punctuating it with a Powerpoint slide showing that while revenues have remained consistent since the 1940s, spending is rising dramatically as a percentage of GDP. Even if revenues were to increase somewhat, he said, there’s no way they can keep up with that rate of growth.

Ultimately, he said, the spending explosion will be addressed – if not by the government, then by its creditors.

Griffin said economic growth was the key to reducing the deficit. He called for a flatter tax, regulatory reform, patent reform, free trade, and pro-growth energy policy.

The debt ceiling deal includes automatic spending cuts if a committee of Republicans and Democrats – dubbed the “Super-Congress” by some – and the Congress as a whole cannot agree on reductions. Griffin said he expects Congress to make those cuts without the automatic trigger.

It was a lively discussion. Griffin opened the evening by asking who in the audience was the angriest and then handed the microphone to a man named Patrick, who read a lengthy statement in support of health care reform and against the Bush tax cuts. Despite it being his fifth event of the day, Griffin energetically engaged his audience. He didn’t shy away from any questions and even gave out his cell phone number.

He also didn’t sugarcoat the realities of the country’s budget deficit problem. Saying Medicare needs substantial reforms, for example, he said, “If you love Medicare, then you’d better reform it because it’s going away.”

The audience of about 60 was fully engaged and highly informed on the debt ceiling debate. And it seemed aware of the nation’s fiscal problems. “Everybody’s going to have to take a big bite of this doo-doo sandwich,” said a constituent named “Edmond” who described himself as an independent.

Don’t compromise on ending the debt; compromise on how to do it

What Congress should have done is agreed that ending the debt is nonnegotiable. The it should have compromised on the details.

What it did was decide that the details were nonnegotiable. But it compromised on the principle that we should stop passing on the debt to our children.

That’s a subject I tackle in this week’s column for the Arkansas News Bureau.

No Labels says “Enough”

There’s a bipartisan group called “No Labels” that has been making the argument that it’s time for Republicans and Democrats to stop playing partisan games. Among its leaders is Dave Walker, the former comptroller general under Presidents Clinton and Bush who was featured in the movie “I.O.U.S.A.”

The group is going on the air with the ad, “Enough,” shown above.

Here is the No Labels website.

And if you have never seen the movie, “I.O.U.S.A.,” here is the link. It called attention to the national debt problem way back in 2007, when the debt was $8.7 trillion. It’s now $14.3 trillion.

What if Uncle Sam became a deadbeat dad?

Of course, President Obama, the House and the Senate are going to find some way to merge their competing plans and raise the debt ceiling before August 2.

But what if they don’t?

Two things would happen.

First, the global economy, already shaky, would become even more so. The world’s safest investment, the United States government, would become a lot less safe. Don’t believe it? Consider how the world has reacted to little Greece’s troubles.

Second, the debt would grow, not shrink, despite what some congressmen are telling us. American taxpayers currently pay a very low interest rate on the debt because the government is seen as such a safe investment. What happens if the government is no longer seen as a safe borrower? The same thing that happens if you or I are seen as unsafe borrowers – investors demand higher interest rates in exchange for their capital. Who will pay those higher interest rates? Taxpayers.

Here’s more in this week’s Arkansas News Bureau column.