In anticipation of the Super Committee's approaching deadline to cut the deficit, NY Mayor Michael Bloomberg spoke at the Center for American Progress yesterday with his own advice on how to solve the 'deficit crisis'. Previously he had hosted an intimate dinner at Gracie Mansion to urge the Committee to 'Go Big'on proposing budget cuts. Rather than the $1T they are looking for and he considers completely inadequate, he recommends cuts of at least $8T.
He went on at length about how businesses are saddled with uncertainty preventing them from investing their trillions of cash and creating jobs. The examples of uncertainty facing 'every CEO he speaks with' are the unknowns of healthcare reform legislation and financial reform legislation. (Interestingly one of his solutions to the deficit 'crisis' is to enact more healthcare legislation, in the form of tort reform and fee for service payment).
But he then draws the conclusion that the solution to solving the uncertainty problem (caused by not knowing what legislation will be enacted) is to lower the deficit, and his plan will do so by 8 trillion dollars. Nowhere in his long speech does he address how reducing deficits will solve the uncertainty problem, other than it will show the business community that Washington can work together to solve problems, and assure them that the country is on stable financial footing. So, to recap, Washington should solve the problem he designates, to show that it is capable of doing so.
And he suggests numerous ways to cut the deficit by lowering spending and raising revenue in a shared pain for all approach, lecturing Democrats and Republicans alike in his inimitable finger wagging style.
Democrats have to face the reality that we need more spending cuts including reasonable entitlement reform. And they have to stop pitting Americans against each other in a game of class warfare for their own political purposes.
In what seems like an obvious dig at Occupy Wall Street with which he has had recent public tensions, he identifies the source of Washington's deficit problems - Democrats waging class warfare.
Republicans have to face the reality that we need more revenue - more revenue than we get from cuts alone. And they have to stop protecting every tax break and loophole as if they are sacrosanct when in fact many of them are bad economic policy.
Well at least that was a breath of fresh air.
The Wall St. Journal specifies the nasty medicine Republicans must take, but skips over what his prescription for Democrats is.
Republicans, he said, must accept that the problem can’t be solved by budget cutting alone, and agree to raise more revenue. The mayor, who supported extending the Bush-era tax cuts when they were due to expire a year ago, said the time has now come to let them expire at the end of 2012 for all tax brackets. Republicans have fiercely opposed any increase in tax rates.
Well there goes that breath of fresh air.
It's fair to ask those who earn more to bear more of the burden - that's the whole idea behind a graduated income tax. But all of us should help carry the load - and there is actually a very straightforward and achievable way to do that: Allow the Bush tax cuts to expire at the end of 2012 not just for high-income earners, as the President has proposed, but for all tax brackets.
Because the poor and middle class just aren't paying enough taxes. And he brings us to the spending cuts he proposes:
And let me say clearly: I believe the time has come for members of the Super Commitee to embrace the spending cuts in Simpson-Bowles largely in their enitrety, including their Social Security reforms.
This, despite the fact that Social Security does not contribute to the budget deficit he is claiming to solve. This is how he explains the need:
When you look at Social Secuirty's underlying numbers, the need for reform is undeniable. Already, Social SEcurity is the greatest transfer of weatlh in the history of the world- with the posible exception of OPEC. And as fewer and fewer workers support more and more retirees, that transfer will get ever more burdensome for American workers. 15 years from now [the number of workers per retiree] is expected to be only two workers per retiree. That means Americans will spend more and more of every day working to support other people's retirement, instead of supporting their own families.
But don't call it class warfare! At least he didn't call it a Ponzi scheme, but it's clear where Rick Perry was getting his talking points from. All this time I thought workers were putting aside part of their paychecks into the Social Security fund to pay for their retirements. Well I'm glad he cleared that up.
Here's the transcript of the speech:
Here's the video of the speech which is over an hour long, if you can deal with watching it.