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Donald Marron, Urban-Brookings Tax Policy Center director, details what tweaks can be made to the U.S. tax code in time for the debt deadline.
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Being changes our next guest doesn't think so joining us now is Donald Marron director of the urban Brookings tax policy -- -- And a former director of the Congressional Budget Office thanks for being with us today.
Fisher thing are right so I wanna ask you read and that you you -- rich -- since report about.
Everyone's sticking to their guns.
One -- that loading up taxes the other side isn't moving.
On health care if it overly ambitious Donald sit and now lumping tax reform on top of all this -- Well it's -- tax reform.
As -- is a variable concept right it depends on what you define as being reform.
I think doing a fundamental wholesale fixing -- -- tax code is too much to ask for in the next three weeks but they're certainly tweaks that you can make.
-- write this so what are they tweaks and we can make an isn't actually feasible and tick -- accomplish these tweaks in an election year.
Well so we have to do something to get the debt limit -- right that's that's the primary responsibility of the negotiators the president the folks in congress it's unthinkable that the debt limit doesn't go up so they need to deal with these.
Out what we're seeing is kind of classic brinkmanship negotiation were each side is trying to draw lines in the sand.
But eventually folks on both sides are gonna have to compromise.
And for the Republicans that may mean accepting some things that look like revenue increases.
You know walking back loopholes changing the treatment of certain types of corporations that kind of thing.
Donald all.
A lot of -- owning that until it's done but you know we just had a temporary.
Hike into in the debt -- blessed I guess about a year ago and we ate through that money pretty quickly fact -- think we've had temporary hikes its the last fifty years.
What happens when this next two and a half trillion dollars runs out.
-- -- I -- we are at a pace at the moment where we need to borrow a lot of money -- this year but for every year into the future.
I'm so we're on a trajectory where the debt -- -- has to go up periodically you know every year or two depending on how much they -- it.
You know.
It's gonna require enormous -- by the folks here in Washington to get on a trajectory where the debt could stabilize merely relative to the size of the economy much less an absolute terms.
You know a lot of people talk about how the CBO's gain by politicians.
Is weird the way that the CBO can do analysis of these sort of bills because.
To keep borrowing money to what sounds like infinity obviously comes to an -- allied what we're seeing in Europe.
This is -- we'll do any sort of independent analysis without the input of Republicans or Democrats.
Absolutely yes CDO does a host of studies on our long run fiscal outlook publish them periodically there very helpful.
They have for example analyses that look at what would happened under existing laws or under existing policy accounting for changes that people think are likely.
And those analyses show that if you go out a couple of decades on the trajectory were on that bad things happen.
-- the debt spikes up faster than the economy and that weakens the economy dramatically.
Donald sit gray area here the EC can actually -- -- negotiated.
And compromise on.
So about I think in the tax area you you know you've heard people talk about this distinction between tax increases and revenue increases.
The idea being there that there's some things in the tax code that we'll call awful lot like spending programs that have been tucked into the tax code.
And that if you walk those fact that really shouldn't necessarily count as a tax increase I think that's one area for potential potential agreement.
And that also frankly on the spending side there are a lot of programs defense other things and discretionary spending.
Where I think they're both d.s and r.s were who -- be willing cap that spending out later years.
Sometimes you -- work with the areas that are easy to an easier to make compromises -- this sounds like you've given us two good ideas too great places to start with.
Donald Marron thanks for joining us have a great weekend.
-- -- You know this kind of crazy that we may have to keep borrowing money for ever never never to pay money that we borrow before once -- -- your credit limit you reach a crap.
