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Inside the battle over extending Bush-era tax cuts

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    WSJ's Steve Moore weighs in

  • Duration 5:17
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The battle over extending the bush era tax cut to something you're gonna be hearing a lot about and it's getting bigger by the minute and now -- some new reports.

A secret meetings.

By lawmakers try to figure out what to do next White House spokesman Jay Carney responding to whether or not a temporary extension is something the president will consider.

By saying this quote the president's position it as that we absolutely should extend the tax cuts for the middle class.

We should not extend and he will not extend tax cuts for the highest income.

Americans well that's the reason why he had to make your response -- that this week President Clinton said that temporarily extending all the bush era tax cuts.

Might be the best course of action for now something the Republicans.

Jumped on quickly.

It's really important that we provide some certainty to job creators in our country and extending all of the current tax rates.

For at least a year is really important if we're gonna help job creators getting a little more confidence and put Americans back to work.

Even Bill Clinton came out -- before it was against it.

-- former Florida governor Jeb Bush weighing in on the issue today this morning let's take a listen.

Here's what I know to be true next year -- the year after there's going to have to be a grand bargain.

We are on an unsustainable course.

It is not possible to continue to do what we are -- what we're doing today.

-- now that all sides and chimed in there are reports of some of these meetings underway between members of congress to to come up with a solution may be that grand bargain.

That governor bush was talking about there are seen more as a senior economic writer for the Wall Street Journal -- secret meetings nasty so both sides can speak freely.

What -- Bob what are we doing what.

This has been quite a week you know you're right it started out by.

President Clinton saying maybe we should suspend all these tax increases and and that he got smacked a -- by the White House shot and they said your your freelance saying you're not taken a party line and if he were quickly retreated but -- You also had a top economists from the Obama administration Larry Summers who said.

This week maybe it's time not to do this tax increase and what this is all about -- as you aptly put it is that.

On January 12013.

We're gonna have this big tax time bomb explode.

Higher capital gains taxes higher dividend taxes highs -- -- small business taxes.

-- -- more economists and politicians are coming into the conclusion.

That this is a disaster for the economy and so that's what this is all about Jana -- it'll be interesting to see whether the White House retreats from this is us look given the state of the economy the lousy jobs numbers the lousy stock market.

A lot of CG DP growth numbers now is not the time to raise taxes.

-- -- so Politico is reporting today that the lawmakers from both sides are trying to come together.

And to avoid the partisanship of this election season and talk freely about how to fix the economy but how can we trust them to fix the economy Steve and they can't have these conversations.

And.

-- -- But how has a great point and you know I just laugh a little bit when you say they're gonna overcome the partisan -- chip that's not gonna happen in my opinion over the next 45 months I mean things are just so deeply divided right now on Capitol Hill that we power in the midst of the most important presidential election and thirty yourself.

That this is certainly made it very difficult to get any kind of up.

Agreement on this but I do still think -- -- sometime later this summer or in the fall.

The president Obama's gonna come to a census and they they may make a deal saying look now is not the time to be having that what what would be Jenna.

The biggest tax increase in this country.

Let me let's talk a little bit about what what happened in those tax kids go away or if they -- -- at the Congressional Budget Office came out this -- -- and if we keep the current policies and we keep the current tax rates for everybody.

Public debt as a percentage of GDP will be at 200%.

By 2037 so keeping us -- in place this CBO that them nonpartisan.

CBO says can be a real problem for the economy so we're talking about temporary extensions what are we really talking about.

Well look I I think the CBO also said the worst way to raise taxes to raise tax rates which is exactly what this tax increase would -- -- fundamentally disagree -- that.

Assessment by the way John I think you've got to get this economy growing again we're never gonna get the revenues were never gonna get the -- -- -- we get the economy growing and it's just and in my opinion very difficult to grow an economy look who wants to win best right now China when you're looking at higher capital gains higher dividend -- small business taxes nobody wants to invest in that kind of coming tsunami so I think -- -- take that off the table now the important point.

That it that is left out of that CBO report is look if we get spending under control which -- grown so enormously over the next over the last four years -- -- bring that got down and you can grow the economy so I I think we should get rid of that.

The tax increases but we should do the spending cuts and that was part of that CBO analysis that you match in the -- getting into this found they got and that if you do that Johnny get trillion dollar deficits from now until kingdom come.

I've -- that all down.

And if you in any secret meetings.

You're let me know Steve Elliot plays the word -- got the suspend the data we got a deep views this tax time bomb because it really is -- -- it's one of the -- the markets been so bad John the last few weeks on that today and we're gonna talk a little bit about that also on the show Steve nice to see is going all right thank you -- masters and the timer.

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