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Hume: Will Jack Lew tell the 'truth about taxes'?

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    Reaction to treasury secretary nomination

  • Duration 2:26
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On -- thank you now for some analysis on the Lou nomination were joined by senior political analyst -- you great break her breath.

Senate Republicans as you've just heard objected Jack -- because they think he failed to tell in the truth in the past.

It will be interesting to see if he will tell -- this time -- -- about taxes.

As budget director will -- well knows that the amount of money available from taxing rich people.

Is nowhere near enough to pay for the swelling cost of entitlement programs.

Now about 60% or so -- federal spending.

Since the president shows no interest in reforming those programs the only way even to come close to financing them.

Is to -- the middle class with a higher taxes much higher.

Mr.

-- problem is it mr.

Obama has shown no interest in doing that either.

Although many suspect sooner or later he will but witness the recent fiscal cliff negotiation.

Higher income taxes on all taxpayers were set by law to take effect January 1.

Mr.

Obama never even considered letting it happen agreeing instead to let them rise only on the top 1%.

Although he did quietly -- a two year cut in Social Security payroll taxes expire as scheduled.

-- other problem is that higher taxes dampen growth and we growth means lower tax receipts.

Given their liberal -- mr.

-- and his president have left -- -- good no good options for dealing with these dilemmas.

Mr.

-- could make at least to start by telling the truth about Texas but Willie.

-- talk about this before about the word default being got tossed around -- talking about the deaths.

Why do you think that that word is being.

Kind of loosely use in this -- default has traditionally understood means failure to make payment on your debt on your national debt.

Those payments now that we must make year by year account for about 6% of federal spending.

Tax receipt which would continue after a breach of the debt ceiling account for about 60%.

So there would overwhelmingly be plenty of money to make payments on the national debt so you'll hear the phrase.

Default on our obligations.

That's a sort of a loose and slippery term which means that the government wouldn't be able to to finance all of its spending.

It would be a bad outcome.

But it would not be default is traditionally understood in other words the government would have to close things -- cause significant pieces of the government programs would shut down people would be furloughed and so -- But it would not be default on the national debt.

An important distinction Brit thank you bit.

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