you have Rep. Ron Paul on CNBC. It would be a great idea to have him on right before the next Fed meeting. All available evidence indicates that Rep. Paul is the only member of Congress who has a basic understanding of the role of the Fed (or of Economics in general).
If by congress you mean the house, then maybe, but Phil Gramm is more than qualified to handle any questions concerning the economy, or the money matters facing our country.
senate.gov
Fox News Sunday with host Tony Snow
July 25, 1999
Interview with Senator Phil Gramm (R-TX) and White House National Economic Adviser Gene Sperling on Tax Cuts
TONY SNOW: Republicans of both houses favor 10-year tax cuts of nearly $800 billion. But President Clinton says he will veto anything larger than $300 billion. Who's on the side of the angels in this dispute? We're joined by Senator Phil Gramm, who holds a Ph.D. in economics and a black belt in politics, and the equally formidable Gene Sperling -- I'm sorry, I've got to get that Jesse Ventura stuff in my blood -- the president's national economic adviser. Mara Liasson also joins in the questioning.
Senator Gramm, the White House, including Mr. Sperling, say that the economic plan the Republicans put forward -- $800 billion in tax cuts over ten years, would gobble up -- if you pay the national interest for the next 10 years, would gobble up every available penny and leave no money for Medicare reform and other social expenditures and even defense spending. Your response?
PHIL GRAMM: Well, it's not true. The bottom line is that we're looking at about a trillion dollar surplus and we're talking about an $800 billion tax cut. And the amazing thing -- to show you the willingness of the White House to say and do anything -- when the Congressional Budget Office scored their budget they spend -- net new spending -- $1 trillion, $33 billion over the next 10 years.
They're claiming that by letting the American people keep $800 billion that they earned, that somehow we're jeopardizing the government and the economy, when in reality they would spend more in Washington than we would give back to working people in America. And the important point is, if you create all those new programs, you'll never get that money back. If you give it back to the American people, if you ever really needed it, you could get it back by raising taxes, as President Clinton proved in 1993. So if you're looking for a responsibility, our plan is a lot more responsible.
SNOW: Mr. Sperling, I think, disagrees.
GENE SPERLING: Well certainly I disagree. This isn't about keeping money in Washington, it is about paying down Washington's national debt. It's about making sure that we've put aside enough funds to secure Medicare and Social Security. It is about first things first. You know, Tony, a family doesn't decide how large of a vacation they're going to have. They don't decide how much they're going to spend on vacation and then hope they have enough for food clothing and shelter.
Likewise, a fiscally disciplined government first figures out how much they need to pay down their debt, secure Medicare, Social Security, defense and education, and then see what we can have left for a tax cut. That's what we mean by first things first.
SNOW: Is Senator Gramm right though, you have $1.3 trillion in additional spending?
SPERLING: No. We pay down -- what he said there was a trillion dollars in the surplus over the next 10 years, that's right. What he didn't say is that when you take their tax cut, and the interest savings it loses by having a tax cut instead of paying down the debt, there is no money available. And then the tax cut, particularly when the House explodes over $3 trillion in the second 10 years, so there is no funds available for Medicare and it leads to very serious cuts in everything from education to public safety, (INAUDIBLE). And actually, in discretionary spending is below inflation over the next 10 years.
GRAMM: Wait a minute. You guys are shameless, shameless. The Congressional Budget Office last week analyzed the Clinton budget and concluded that it has $1 trillion, $33 billion of new spending, it reduces the debt of the government to the public by $200 billion less than we do. And yet they're saying, when they went to go on the largest spending spree in American history, that letting working people to keep $800 billion that they earned after all -- we're over taxed -- somehow them spending a trillion is great. Letting us give $800 billion back is somehow bad.
MARA LIASSON: But, you know, but the president said it is not whether we have tax cuts, it is what kinds of tax cuts. And for Americans who read these charts that are printed in the newspaper that compare your plans to the president's plan, I mean, the president has $300 billion, you have $800 billion, why can't you get together and split the difference and come up with a compromise?
GRAMM: Well, let me first say that we believe tax cuts are for taxpayers. Now, I know that you're going to hear Gene say, but 35 million American families don't pay taxes and they don't get a tax cut in the Republican plan. Right. They don't pay taxes, they don't get a tax cut.
Most Americans don't get food stamps, they don't get Medicaid, they don't get a lot of government programs. Those programs are for people who qualify. Tax cuts are for taxpayers. We have an across-the-board tax cut. That means that Tony probably gets 10 times as big a tax cut as I do. But he pays 10 times as much taxes so that doesn't break my heart. Gene goes crazy about it.
SPERLING: Well, I'll tell you what we find disturbing. Not only is the tax cut so large that it will not allow savings for Medicare, up to the point that Medicare goes insolvent in 2015, but the top one percent -- the top one percent -- get four times more than the bottom 60 percent. So the top one percent...
GRAMM: because they pay 4 times as much taxes.
SPERLING: ... people who make over $340,000 get four times more than the bottom 60 percent, that does not seem fair. And, Mara, this is not about just splitting the difference. This is about fiscal discipline and first things first.
Let me be clear. A tax cut that is $800 billion or $500 billion is an irresponsible tax cut that would threaten our ability to pay down the debt, secure Medicare, Social Security and education. And the president will veto a tax cut of $800 billion or $500 billion because it threatens our ability to secure Medicare and Social Security and pay down our national debt.
LIASSON: Let me ask you a question about the Senate Democrats who have a different plan than the House Democrats or the president. First of all, one of the things that is conspicuously absent from that plan is the president's tax cut, these USA accounts. Why is that getting so little support among Democrats in Congress?
SPERLING: Well, I think that many of them are assuming that the president will, if there is some kind of deal at the end, look out for the tax cut he cares the most about, which is a progressive savings tax cut. There are over 70-80 million Americans who don't have an IRA or 401(k). Most of the tax benefits for savings go to upper income people. We want something that helps all Americans be part of the wealth creation, save for their future. We think it is a good, smart tax cut and we think we can do it in combination with the long-term child tax credit -- child care tax credit. But, first things first.
These are projected surpluses, let's first make sure we have enough to secure Medicare and Social Security and pay down the debt. And then we make sure we do a tax cut that is responsible.
LIASSON: Well, Senator Gramm, let me ask you those two questions. Number one, what happens if the surplus doesn't materialize? What are you going to do? And also, why haven't the Republicans come forward with a plan to extend the solvency of Medicare?
GRAMM: Well, first of all, they haven't come forward with a plan to extend the solvency of Medicare.
LIASSON: Well, they're going to devote a lot of the surplus to it.
GRAMM: But they do it to add more spending. They're loading more passengers on the Titanic. They're letting non-elderly people get on Medicare. They don't have a plan for Medicare. They killed the only plan for Medicare, which was the bipartisan commission headed by Senator Breaux.
The president says well, there's no money to fix Social Security. He killed Social Security reform. For two years he had all these political cliches: save Social Security first, save Social Security now. Then he came out with a totally fraudulent, dishonest, phony plan that was denounced by Democrats and Republicans alike.
Now, he's got a plan to spend $1 trillion, $33 billion on new government programs. We're trying to give $800 billion back to taxpayers and he uses all of these phony concerns about Medicare when he killed the real reform; Social Security when he killed the real reform; to try to prevent us from letting people keep the money.
LIASSON: But is there a Republican plan for Medicare?
GRAMM: Yes, it's a bipartisan plan that the commission came up with, that is supported by Senator Breaux and Senator Kerrey on the Democrat side; that is supported by the vast majority of Republicans. We would like to bring that back to life. But it is not alive today because President Clinton killed it.
Let me say one other thing about this rich people tax cut. When you're cutting taxes across the board, you're saying that you get back 10 percent of the excess that you sent to Washington. How they can call that a rich person's tax cut with a straight face is very hard for me to imagine. Now, they're very skilled at saying things that don't make any sense, and aren't true, with a straight face. But I think they've gone beyond the limit on this one.
SPERLING: Well, let's start with something you said that is not true. You said the president doesn't have a Medicare plan. The president just put out a detailed Medicare plan that offers prescription drugs, that offers modernization and competition and sets aside enough of the surplus to pay down the debt so that Medicare is solvent for 12 more years to 2027.
I have not seen any Republican plan and I challenge you or any Republican to come forward with a plan that extends the solvency of Medicare till 2027. The president objected to the Breaux-Thomas Medicare plan for very specific reasons. He thought it didn't provide enough prescription drug coverage. He did not agree that we should increase the eligibility age from 65 to 67 and he was concerned that the independent actuary said that premiums for people on the traditional Medicare program would go up 10 to 30 percent. But he didn't just criticize. He put out a specific plan that extends Medicare until 2027. Where is your plan, Senator?
GRAMM: Let me accept your challenge. Your proposal is totally fraudulent. Because all you do is give Medicare IOUs that have to be paid by raising income taxes in the future. That is not extending the life of Medicare. It's like everything else you all do. It is totally dishonest.
SPERLING: Let's present this to the American people. One of our plans...
GRAMM: We're going to.
SPERLING: ... sets aside $700 billion for Medicare, pays down the debt for Medicare.
GRAMM: And those are IOUs, Gene.
SPERLING: No, Senator. It is paying down the debt so you are saving money so that you can have money to pay later. It is no different than a family who knows they have a health care debt coming due, paying down their debt or paying down their mortgage, so they have more money available. That's what we're doing. We're paying down the debt by $700 billion so that we, unlike you, can fix Medicare without having to do serious cuts or tax increases in the future.
GRAMM: Congressional Budget Office says we pay down the debt $200 billion more.
SNOW: Gene Sperling, Senator Phil Gramm, thank you for joining us today. |
