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NJ Governor Chris Christie's economic advisor Bob Grady argues the growth of entitlements is preventing the country's ability to invest in the future.
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-- back up Bob Grady -- to this a conversation -- governor Christie of new Jersey's chief economic advisors we wait for President Obama -- want to ask you specifically about the tax.
Question and -- negotiations his their congressman Graham Michael from New York was here earlier.
And Charlie Gasparino came in with his story right on on the Republicans apparently going to be really play hard ball with this according to the house Republicans he's talking to with this deadline.
Right so if you're the Republicans here can use that settles the right word but can you settle.
Did say.
Will -- will go for something like closing tax loopholes which is congressman Graham says many of them support.
And let the Democrats say that that addresses the quote revenue question which is really I think people would really times for raising taxes -- Once I would make first the problems the growth of entitlements as I was -- before the right.
Last twenty years US economy -- -- 150%.
Medicare grew 360%.
Medicaid grew 570%.
That is not sustainable.
To -- if you raise rates on the top 1% as President Obama has proposed that makes a trivial difference mean.
You know you've raised the rates by five points on that group.
It's easy 54 billion dollars next year the deficits one and have truly you haven't solved problems.
Third however.
A number of commissions including the president's own Simpson Bowles commission was a bipartisan commission.
Have suggested a broad architecture.
Of getting rid of a lot of the -- in the tax code deductions credits for all these crazy things.
And having radically lower rates since the -- case was 8% -- below 70014%.
Needed to ten.
23 above 210.
I think if you get rid of a lot of the deductions.
And credits if you radically lower rates and it -- of yielding more revenue in the CBO model.
I'm not sure that's a tax increase I personal and I think most Americans.
Well want lower rates even if you have to get rid of some that the -- which frankly are benefiting only the top.
-- one to 10% of taxpayers most.
Most normal people most little guys -- just taking the standard deduction.
They don't benefit from this complex tax -- we that's the compromise them because the -- of the Democrats come out and say that they addressed the revenue question right and I cover and say we got lower tax rates for all Americans -- so what's taken so -- help.
Both sides of this do you think that that will what I think I think I think the problem you know there's two sides takes two to tango and on the democratic side we've heard nothing.
About how they're gonna curb Medicare Medicaid.
You know with the president's gonna -- -- -- vital that we address that we invest in infrastructure and education and be more competitive I agree I think most Republicans would agree.
But the thing that is precluded us from investing in infrastructure and in university research and these domestic discretionary programs is the growth of entitlements.
That's what's crowding out our ability to invest in the future threaten somebody needs to call the Democrats on that to both have to come to the table.
-- but I think getting rid of deductions and having lower rates is not necessarily tax increase rich.
It's and you wanna jump back in on this in this discussion that -- happening and you know are we off base here or does that seem that you do a lot of reporting on this -- number of sources on Capitol Hill does that seem logical to you that you -- there is a deal to be done here you can.
-- the language out and the Democrats can call one thing in the Republicans and other.
That sounds about right a lot of folks are watching -- see that is the likely outcome of what you have here is if if Republicans it.
Are going to actually achieve cuts if they're actually going to achieve curves innate sense of entitlement programs Democrats are gonna have to get something here and -- Democrats have specifically targeted.
As being now the mortgage interest deduction for those earning more than 250000 dollars you're scaling that back a little bit -- back.
I charitable deductions for those folks also the accounting trick might -- last in first out there want to change that although Republicans have hit Democrats on that.
They've been not talking against that say that basically you're just raising taxes on companies but.
You saw this a little bit earlier about a week ago when Republicans in the senate along with Democrats.
Voted -- repeal ethanol subsidies that's a step.
-- that you don't really see that often -- it was a bit of an argument between Republicans conservatives there because some conservatives like Grover Norquist were arguing.
But if you repeal those subsidies and you don't cut taxes elsewhere.
That is in effect and net tax increase and therefore you've raised taxes.
There are plenty of Republicans who didn't agree with them they thought that those ethanol subsidies wasteful so they voted to the repeal the answer -- is that -- within the Republican Party we saw last week we're gonna say Bob yeah.
I think there's one from the democrats' strategy on taxes they are obsessed with raising rates on the top 1% are people about 250 K and that's because -- looking at polls.
That -- 5% of Americans agree with that 25 -- But the reality is raising rates on the -- -- That does hurt small business that -- -- investment in innovation that -- -- the future economic performance the United States so.
I think they're doing it frankly -- -- just looking at polls would say it's very popular and not because it's good economic policy --
