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Democrats push for higher taxes in debt deal

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    Austan Goolsbee on impact of looming fiscal cliff

  • Duration 4:21
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The types of home I want every Austan Goolsbee -- is because Austan Goolsbee has a former top economic advisor to the president when they have always commanded -- gentlemen we're about.

Is he's a straight -- reserves -- very pragmatic he's not one of these dogmatic on either side.

He's one for moving the ball forward so that's this -- -- the angels that I -- to address right here Austin because I think both parties have to.

Adhere to their better angels and try to move this ball forward how -- we do that right now.

You know I agree with that I thought actually this statement that does speaker Boehner -- was a pretty mature statement you know if if five pars -- right.

That he was basically saying.

All right let's go let's address the fiscal cliff and let's address you know what's called the grand bargain of of long run fiscal consolidation.

And -- I think it might be bumpy for several months.

Partly because he's still got the the mentality of the celebrity death match still kind of lingering in there from last summer but if we can just get past that.

I think what would there's a decent chance that in 2013 we can do tax reform we can do a grand bargain.

And both sides I think would view that is a pretty big accomplishment.

Yeah I know I agree without also -- the usual worries me.

But we do we the interim because it's not as if it just.

Patch together something down there isn't enough time to do all of this stuff as you pointed out just now -- -- prior -- -- With the grand sort of a tax reform package and may be as simple streamlined budget process and avoids this.

Constant you know -- -- But how did they get to -- if if if John Boehner is saying I did yesterday right I am open to revenues on them just.

Paraphrasing here.

I do not hear that again does not taking sides the same willingness -- the same leap on the part of democratic leaders to -- all right and where opened to reining in.

Let's say entitlements for want of a better word.

Well I don't I don't I don't know -- how can they.

Is that what they need to do today and say all right we got the entitlement thing going you've got Maynard the taxing going.

We agree on that I do think it -- my sense is that will win -- -- Well.

A look I I do think that that would be part of it certainly they're gonna do the grand bargain.

You'd have to have.

You know the entitlement reforms is that it right -- revenue you'd have spending cuts etc.

now here's the thing that -- that they will -- I'm almost certain.

Choose to avoid and that is if you were back you know ten.

The two sides made a deal to extend the tax cuts for two years just like this.

And the feeling when we did that was hey look we've shown the world.

That the two parties can get along and they can do something and they even made another deal to avoid a shutdown of the government.

But then what that did is put the whole thing naked all under the debt ceiling increase.

And that allowed to what I call the hostage taking to began that's -- nothing else the president had nothing to say to the Tea Party folks.

That they wanted so he had no bargaining position so.

And -- literally so -- laws are not just.

Very I just want to extend the tax cut and -- also so excited they were to try to do I think the markets would sell off today -- through debt that Salinas.

Will quickly I do want to get -- reacts in the CBO estimates that just eliminating the automatic.

Spending cuts keeping Medicare payments of -- Would boost the US GDP by about three quarters of a point factory and the fact that all.

The tax rates are extended minus those -- the -- now that that's an ideal mess -- -- That the CBO but do you do you agree that.

-- -- -- So this so there's there's you extend all the tax cuts except the high end -- you -- and you don't do this sequester a not a mandate.

Automatic spending cuts keeping Medicare payments on change would boost US GDP.

But three quarters of percent -- -- right course.

I mean I think you do if you just add up the mechanics of the map that sounds right.

I think this CBO.

Everybody ought to do you know sober themselves up election's over go look at the CBO report -- she goes.

If you go -- the fiscal cliff.

The economy goes into recession in the beginning it when he thirteenth so this is not a small matter I do think we gotta address this very good point Austan Goolsbee thank you very much.

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