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Conrad: Obama isn’t asking for enough tax revenue in 'cliff' talks
Democratic Senator Kent Conrad (D-N.D.) said Wednesday that President Obama should be pushing for a more “robust” deficit-reduction plan than the one he has discussed with Speaker John Boehner (R-Ohio).
Speaking at the National Press Club’s Newsmaker Forum, the outgoing Senate Budget Committee Chairman began his presentation by saying the president wasn’t seeking enough new revenue in the “fiscal cliff” negotiations.
“What seems to be lacking to me is any sense of perspective in these discussions,” he said. “[The White House proposed] $1.6 trillion in revenue and people say, ‘Oh my god, $1.6 trillion, that’s a huge tax increase.’ The latest number is in the $1.2 trillion range, but how much are we going to raise over the next 10 years? Over $37 trillion with no change, so that’s 3.2 percent of what we’re going to raise.
“We can’t have a 3.2 percent increase in revenue? We’ve got a revenue level near a 60-year low as a share of [gross domestic product], and we can’t increase the revenue by 3.2 percent over next 10 years to get the deficit under control?”
He used the example of an individual who lives in a Manhattan high-rise but pays only 15 percent on unearned income, versus the janitor that services the building and pays 35 percent on earned income.
“That’s a 20 percent differential,” Conrad said. “I don’t know how anybody justifies that as a fair sharing of the burden in this country. When I came to the Senate the capital gains rate was 28 percent. I’ve not heard any convincing argument that we need a 20 percent differential on unearned income versus earned income.”
Conrad also blamed Republicans for refusing to budge on new revenue, saying that some of them have gone “into an ideological ditch” with opposition that “is not fact based.”
But the Democratic senator also said Republicans weren’t pushing for enough spending cuts, and he singled out the healthcare and entitlement programs that Democrats traditionally defend.
“On the spending side, we also have what I think has been a lack of perspective,” he said. “The Speaker is calling for healthcare savings of 3.6 percent. … We can’t save 3.6 percent? Really? We’re in a situation where 5 percent of Medicare beneficiaries use half the money. Certainly we can save 3.6 percent by doing a better job of coordinating the care of people who are using most of the resources.”
“There is a lot of room to save on Medicare and Medicaid,” he added. “We’re talking about a very small percentage of what we intend to spend in the savings being discussed.”
Conrad blasted Boehner’s “Plan B,” which will likely see a vote in the House on Thursday, calling it “an utter waste of time and a step back” from the progress made between the parties in recent weeks.
The proposed legislation is being pushed as an alternative to a broader deficit-reduction package, but it doesn't deal with extending unemployment benefits or the debt limit.
“What I would like is a package that is far more robust that’s in the range of between $4 trillion and $5 trillion of debt and deficit reduction over the next 10 years that has more revenue and that has more savings on the spending side,” Conrad said. “I think it is passing strange that the Speaker has gone with this Plan B.
“To me it’s an utter waste of time and it’s a step back from the adult discussions that appear to be under way, and in that way it’s a big disappointment. We’re better than this … and the American people have a right to expect better than this.”
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