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Another $1T Budget Deficit?

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    American Action Forum president Douglas Holtz-Eakin on politics and the budget deficit.

  • Duration 5:13
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Embers coming up.

Our let's saddened move along on top of -- politics federal budget deficit were about an hour away here from the government.

Releasing its latest numbers on the 2012 budget deficit with the Congressional Budget Office expecting it we learned last week to come in it.

Over one trillion dollars yet again.

Last night congressman Paul Ryan fired back at president Obama's promise to cut the -- it.

In his first term -- Remember when he said.

I promise by the end of my first -- cut the deficit in half in four years.

We've had fort budgets.

Four trillion dollar deficits.

A debt crisis is coming we can't keep spending.

And borrowing like this we -- keep spending money we don't have.

For reaction is Douglas Holtz Aiken douglas' president of the American action forum former director of the Congressional Budget Office himself -- it's wonderful to see you again.

I think -- thousand strong point for Paul Ryan last night in the vice presidential debate what's your take on the -- specifically how the budget issue was handled.

Let me certainly that -- of the debate from the point of view of mr.

Ryan is to always hearken back the president's record.

On the record is unpopular.

Policies are unpopular certainly.

The large amounts of spending and debt that have been run up are among the things that jump right out -- the polls when you ask people so I thought he did that very effectively.

Certainly -- the job for vice president Brian Biden was to make sure that.

On -- -- never had a chance to explain how he'd fix this problem and always to try to explain that things are getting better and -- even better in the future so one about his plan.

So just remind everybody were waiting for the firm numbers from the treasury -- haven't gotten in yet yet last week the CBO did how last expected another one point one trillion dollars in federal budget deficit.

Which that is actually improvement from last year was one point three trillion.

So what's this been politically.

Well I think that you know there's not much to -- here that the budget has gotten better largely as the economy has improved somewhat compared.

2009 but.

I to argue that this is a good news story because the economies -- was a tough place to end up so.

That the real difficulty is going to be too.

Be -- and if you -- the numbers and explain that you can't close at all with taxes and high income Americans I thought that was handled very well last night.

After the administration.

They basically have to say.

-- we you know we we inherited a bad situation we promise we'll -- Garrett.

In the next four years but obviously they have -- the promise to him on the first clears hanging over them Savannah tough spot.

What do you think of how voters.

The general public anyone in to get.

This idea Romney's idea that -- not only the federal budget deficit but that national debt in of itself as a is a moral issue our our people buying into that.

Opt for a long long time the conventional wisdom is that on nobody change their vote because of the budget deficit but.

In the -- in 2010 we saw for the first time a very important phenomenon.

It was voters going to the polls and saying you know I changed my vote even against my congressman.

-- there's too much spending too much debt.

And among the most important.

Things that they care about -- the next generations who sought again in the polling at the Supreme Court decision on the affordable care acts of auto obamacare.

Where people.

-- when they heard how much spending was involved and how much would be the burden on the next generation again that changed your view of law itself so.

We're seeing a sea change in American politics this is no longer something that's safe -- can -- explain -- how governor Romney's tax policy -- deficit neutral.

It's up pretty straightforward on what -- does is cut the rates 20% across the board so 3528.

And and below that.

And then the question is how can you make it deficit neutral one way to do it is is to do what Bowles Simpson did because they have about the same rates and nasdaq's initial.

A different way to do was demonstrated by Martin Feldstein a Harvard where he got rid of deductions for high income Americans and pointed out to you -- do that without burning the middle class.

A third way to do it was proposed by -- Harvey Rosen pursue university.

Who again.

Broaden the base in relied a little bit on economic growth again you don't have to to -- the middle class so.

There are variety of demonstrations.

About the basic principle that low rates and broad bases are both better tax policy and will raise the money necessary for the federal government.

-- -- one last question who's gonna win this presidential election.

I think that governor Romney's gonna -- about -- it's very very close and on the it is going to be very close to the end this is not an election and I see swinging.

In and a strong went one way or the other not -- the finish line it's going to be tough battle.

Douglas Holtz Aiken thanks so much thank you.

Going to be interest -- you know because obviously Joseph Biden vice president came out swinging last night was very aggressive -- -- how much so that's going to be translated into next Tuesday's debate.

With the president who has been criticized and he himself admitted he was -- -- lackluster at best.

I wonder there's a fine line is and then when you come out swinging and you regress if you cross it then it can really -- -- -- strategy is -- was saying.

To just not hot let -- have a chance to explain his policies so a lot of people actually left.

More confused on the depositions.

On taxes spending overall policy -- we're gonna get into that.

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