Q Thanks, Peter. I was wondering if you could respond to one of the criticisms that some of the Republicans are putting forth -- forward about your budget, which is that -- you know, they're comparing the situation that President Obama sees himself with the situation that Bill Clinton inherited. And they say, well, when Clinton came into office he made a bunch of tough choices, he raised taxes, and he used that to defray the deficit and build confidence in the markets; whereas Obama makes a bunch of tough choices but uses it to expand the role of government in things like energy and health care. Can you talk about that?
DIRECTOR ORSZAG: Sure. Let me first start with I think it's easy to lob criticisms, but part of governing needs -- or part of the policy process needs to involve putting forward alternatives. I haven't seen on the Senate side an alternative budget and my understanding is there won't be one. So it's kind of -- it seems off to be criticizing without putting forward an alternative.
The alternative that has been put forward by Representative Ryan in an op-ed in The Wall Street Journal a few weeks ago embodies $3 trillion in tax cuts, including for very high-income individuals and for corporations. It involves -- and let's look at this from a fiscal perspective -- it involves setting up privatization under Social Security and having the federal government bear all the downside risk there. So if that system had been in place over the past few years, the federal government would have incurred massive amounts of liabilities to make individual accounts whole for the stock market declines that have occurred. And it involves an approach to health care in which you're given a check for 80 percent of the cost of health care, which then declines over time, and told to go off and just sort of fend for yourself.
So in terms of an alternative vision, I think -- at least it's my impression, that that is the only thing that's been out there. And I think the flaws in it are pretty clear. And with regards directly to your question, I'd also note that, you know, you had said that in 1993 Bill Clinton proposed tax increases. Well, people are saying we're proposing tax increases now.
We are, in terms of health care, approaching this in a somewhat different way than was the case in the early 1990s. But I don't think it's accurate to say, just pursuant to what we were just discussing with regard to the deficit-neutral health reserve fund, it's not accurate to say it's a massive expansion of government. And in fact, as I noted, it -- the health reform effort will be deficit-neutral.
And then the final point I would make is the point that the President made last night and has made on "60 Minutes" and before that, which is if you've asked corporate leaders over the past decade or two what the key to our long-term productivity is, they would -- they have answered consistently: a more efficient health care system; a more efficient energy base and reduced dependence on foreign oil; and improved education, along with a -- you know, raising national savings, which involves reducing the deficit.
So on our four key principles they're very much in line with what even corporate leaders have been saying for a long time is the key to our future prosperity. And I think that's precisely right. I've said this before. But I reject the notion that the key to future prosperity is the top marginal tax rate. See the whole Q&A here.
Wednesday, March 25, 2009
Orszag Says Criticizing is Easy
It's easy to be a critic, says Peter Orszag, budget director. He says he's not expecting a budget from Senate republicans and that Representative Paul Ryan crafted an unimpressive budget, complete with tax breaks for the wealthiest and corporations.