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tazzygirl -> RE: How the Deficit Got This Big???? (9/14/2011 11:57:21 PM)
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washingtonpost.com: Good morning, Rep. Portman, and welcome. Can you tell us a little bit about what you expect to happen after Congress returns from recess? President Clinton has both threatened to veto the GOP tax plan and publicly said he hopes for further negotiation and resolution.
Rep. Rob Portman: It depends on the president's willingness to consider tax relief as part of the $3 trillion projected surplus. I believe that once the American people understand the alternatives better, it's likely that there will be pressure for substantial tax relief, and that negotiations will take place. I certainly hope we can come up with a reasonable compromise.
Tampa, Fla.: Why is immediate tax relief so important when debt reduction will help the current economy and current and future generations? Why couldn't tax relief occur once we are sure the debt is taken care of?
Rep. Rob Portman: We should both reduce the debt and allow people to keep some of their own hard-earned money. With a $3 trillion projected surplus, we can and should do both. Under the plan Congress passed, $2.2 trillion of the $3.6 trillion public debt would be eliminated. This would result in our debt being relatively low as a percentage of our economy, and that's good for everybody.
The president's plan reduces less debt, and increases government spending more instead of tax relief.
It should be noted that the biggest part of the Republican tax relief plan (the across-the-board tax relief) is subject to a "debt trigger," meaning that it only goes into effect if we reach the debt-reduction targets in the plan.
Oxford, Ohio: The president says he wants universal savings accounts as the main portion of his tax relief package. What are they? Does the president still want to invest Social Security money in the stock market?
Rep. Rob Portman: First, USA accounts are retirement savings accounts that the government would fund. My biggest concern about the USA accounts is the fact that the government would be taking the place of private funds that are now used to prepare for retirement, primarily through employer based pension plans. A better alternative – much more cost-effective for the taxpayer – is to allow every American to save more tax-free for their own retirement, rather than creating another government entitlement program. One of the best things about the Republican tax bill is the pension expansion provisions, which allow everyone to save more for their own retirement through 401Ks, IRAs and other pension plans. This seems to be a more sensible way to achieve the president's goals.
With regard to the president's plan to invest Social Security Trust Fund surpluses in the stock market, this is part of the president's plan that he talked about in the State of the Union address. His idea is to have the federal government make these investments, which would result in the federal government being the single largest investor in our economy. This plan hasn't been particularly popular among Republicans or Democrats. My own view is that achieving the much higher rate of return in the private markets is a good idea, but the investments must be directed by individuals, not the government. And there must be a safety net for everybody so that no one's Social Security benefits would be reduced. There are plans like that out there, the best known being the so-called Archer-Shaw plan.
El Dorado, Kan.: Congressman Portman:
During the Reagan administration a $1.6 trillion dollar tax cut was floated by the president. In response, House Speaker Tip O'Neal offered what he and fellow Democrats felt was a more "responsible" $1.3 trillion package. How, rhetorically, are you making Americans realize that the current tax cut proposal is peanuts and that the Democrats stand in the way of even greater economic growth?
Rep. Rob Portman: You raise an interesting question about how this tax bill would compare to others that have been proposed. I would make the simple point that in the past 35 years, all tax relief proposals have come out of further deficit spending, not surplus. In other words, what distinguishes this tax relief proposal from all others in the past few decades is that it responsibly only assumes there should be tax relief when there is an "on budget" surplus in the federal budget. We only need to look back two years to 1997, when a net tax cut of roughly $100 billion over five years – all of which came out of more deficit pending, not surplus, was supported by not only the vast majority of Republicans and signed into law by President Clinton, but was also supported by about 160 Democrats in the House. Many of those same Democrats have argued against tax relief, even though we now have non-partisan projections of a real surplus of taxpayer funds.
http://www.washingtonpost.com/wp-srv/politics/talk/zforum/politics081299.htm
Something for you to chew on tonight. [;)]
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