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A total government shutdown averted at least for now but our congress still has yet to tackle the most pressing issue.
The fiscal cliff bush era tax cuts are set to expire in major sequestration kicks in eight years then.
It's pretty much a make or break moment affecting the wallets of all of us and yet our congress still isn't any closer to finding a solution.
For more on what's at stake group -- Norquist the presence of Americans for Tax Reform -- great to CEO happy Friday.
Actually I wanna start with this OMB report on sequestration.
They were pretty outspoken today what they thought -- sequestration would do they said.
Report leaves no question that the sequestration would be deeply destructive to national security domestic investments core government functions.
Sequestration -- result in reduction in readiness to many non deployed units delays and investments in new equipment and facilities.
Cutbacks and equipment repairs declines in military research and cell lines fell on.
Do you agree.
Well what sequestration that's it -- over the next ten years you have to drop a trillion dollars in the additional spending.
You were planning this is a reduction in increases.
It's about a hundred billion dollars a year.
Budgets that are quite large.
And it's fifty billion on defense and fifty billion on.
-- perhaps other ways to save that money but this is a small amount of money as a percentage of the budget.
And if we give the government some flexibility and how to save the money these are reasonable.
Reductions in the increase.
In government spending.
Well I I understand your point but I think a lot of people tighter making the point are you seeing what's going on in the Middle East is this any time direction -- spending on defense.
Conservatives know that when the liberals say we're gonna spend money on education.
We know perfectly well a lot of it goes to the bureaucracy in the teachers union has nothing to do with the kids.
Sometimes people say they gonna spend money on defense and it doesn't have anything to do with how strong our military -- We need to be very careful not to let somebody throw up a red flag and -- defense and conservatives act the way liberals do when people say welfare.
And an act as -- -- welfare spending actually help people that it doesn't.
I wanna talk about Ben Bernanke and the bad because he took major action this week -- listen to this from Ben Bernanke.
It's a fiscal cliff is -- address -- I've as I've said.
I don't think our tools are strong enough to offset.
The effects of major fiscal shock.
So I think it's really important for the fiscal policy makers to the work together to try to find solutions -- that.
What do you make of the Fed's move I know we're not an economist but you certainly study the finances of our government and our country fat.
It it it struck me as as overreaching in the extreme especially when he himself says.
We really don't have the tools to deal with unemployment.
Well I think he means we the fat but he's can inflating -- thing.
Two things happen in January 1 is we reduce the increase in government spending.
A little -- with the -- -- That's a good thing for the economy you can argue how you allocate the reductions in the increase but that's helpful to the economy.
The other is a massive tax increase of five.
Hundred billion dollars over the next year but that that -- -- a hundred billion dollars in less increased spending.
And they panic and then they talk well you know gonna raise taxes 500.
Billion dollars next year.
And every year for the next ten years.
That's very damaging to the economy those are not the same things we shouldn't confuse spending reductions.
With tax increases the Alternative Minimum Tax goes from heading for a million families today.
To 31 million violation January.
We should continue that so called bush.
Talk Charlotte's look good -- their right now let's show what's at risk.
At the end of the year here if nothing happens if we go over this fiscal -- bush tax cuts payroll tax cuts AMT.
Stimulus tax cuts obamacare taxes.
If we go to the fiscal -- what is the impact on what happens to our economy.
Well that the higher tax rates will slow economic growth the higher taxes.
We'll slow economic growth.
What Obama says he wants to do.
You know continue the bush tax cuts for some people.
Now why would you believe them.
For three years he never introduced legislation.
To make the bush tax cuts permanent for anybody.
Nobody not the -- about the middle class not rich.
I think he wants all that lovely money and plans to spend it and that's that's what this fight about this election is about.
Romney and and Ryan say they'll continue the present tax rates and then have tax reform.
Obama wants -- to start with a 500 billion dollar tax increase next year.
And then his promise not to raise taxes in the future that he made in 2008.
He's changed that.
The new promises no tax increase next year.
It area in 2013.
He says you -- raise taxes but in 2014.
We can have about an energy tax more income.
-- that I think you know the that's what -- cents.
-- we've got a long way to go and I hope you that come back to talk about the fiscal clip as I am sure we -- gonna be reporting on it pretty much every single day affect -- Thank you fair have a great -- good deal yes.
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