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Welch: Republicans Will Pass a Bad Deal

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    Reason Magazine editor-in-chief Matt Welch on proposals to cut spending.

  • Duration 5:25
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He tells on proposals to -- the fiscal clip coming fast and furious right now we wanna get -- to speed.

On exactly where each proposal stands for the first time the president conceding on tax hikes raising taxes on those who make over 400000.

Instead up 250000.

A year.

That would raise in theory one point three trillion dollars in revenues speaker Boehner plans.

And his plan calls for tax hikes and only those who make over a million bucks along with a trillion in spending cuts president Obama's plan cuts 930.

Billion in spending.

And -- -- may be getting closer to a DL speaker Boehner is prepping a backup plan just in case.

I believe it's important.

Probably protect as many American taxpayers -- we can't.

Roundup our plan based.

Would protect American taxpayers who make a million dollars or less and have all of their current rates extended.

But the White House and Democrats are rejecting this plan be saying it does not ask enough -- wealthiest Americans on taxes.

Let's bring in Matt Welch he's the editor in chief of reason magazine.

And they're right out of the gate looking at planned AM planned need to speaker Boehner really have conservative Republicans on board can he get I -- -- I think that he'll get enough people to pass a deal probably the question is what happens to him after he passes and unsatisfying.

And not very good public policy.

Deal you know in January February what happens to speaker Boehner I think Republicans realize that they have a terrible hand.

That they have largely dealt themselves not just by.

Losing the -- presidential election this last time out.

But by declaring ten years ago that deficits don't matter and legislating and governing as if that was true was so they've.

They put themselves in this position and I think enough of -- will recognize that to pass a bad deal that does nothing to cut spending.

So on this issue of cutting spending one of the portions are one of the proposals laid out -- plan -- by Boehner is letting the debt ceiling debate.

Get delayed for at least a year or two I know the negotiation is undergoing a -- but -- -- -- -- is this I mean.

Don't Democrats understand the dangers of letting our deficits run at these levels.

Seems like they don't care much.

But yeah didn't know the answer is no I think I mean that's why aren't spending cuts being taken more seriously.

Well because neither political major political party has -- wrong or made politics around -- notion of cutting spending we're locking in.

A historical expansion of federal spending -- from one point eight trillion dollars.

In Bill Clinton's last year to three point eight trillion dollars now and I'll go up to four point 7000000000010 years this deal whatever happens to it.

Is not going to do anything to get us closer to balancing the budget cutting spending there is no politics organized around it Democrats thinks we think that we can borrow money at these rates forever and -- there's no worry about that.

-- and they will be right until the moment that they are wrong and if they're wrong this country is in a world of trouble.

Now we're stuck on the issue of raising taxes on the wealthy right now which doesn't generate enough revenue to make a difference still the same time.

You know that is the issue at the forefront that seems didn't like it has to be settled first to get any further do you think that they'll end up settling in the middle line.

You know families that make more than 400000.

A lot of people think that that will be didn't appoint in the middle that that we and that what do you think.

Yeah I think so I mean both sides right now according to the reporting today -- yesterday.

They're circling around each other area at pretty close level so it looks like we're heading towards an agreement whether it's 600000.

Or 750 or 500000 I think it'll be somewhere there Republicans are going to -- to.

Tape there will take increasing taxes on wealthy -- because they've.

-- -- perversely because -- held the line only on taxes for so long.

Instead of talking about spending they're being forced to eat this.

By Barack Obama who you know campaigned on this for sure.

So that will be -- the first and main hurdle of this and then we're have a a mixture of of spending cuts would air quotes that will be predetermined in the future including I believe other -- major component is that future savings on possible interest payments I'm really looking forward to the -- It is so that you know building on -- point is why it seems.

Two sides only care about tax rates I mean we're not even getting to -- -- discussion on entitlements here and I feel like we're just gonna sit back and watch this whole thing backfire on the economy.

We yes I mean what what we're doing is we're taking money out from people's pockets and giving it to government still not enough to actually -- For the true cost of government's -- government right now according to both Democrats and Republicans is at a level that if we paid for it.

We would have permanent recession which is a charming and contemplate.

A -- but yes that we're talking about tax rates were not talking about entitlements and we're kicking down the road.

New discussions about the debt ceiling anything having to do with entitlements reform -- tax reforms.

And we're now in a permanent state governments where we just careen from artificially made deadline crisis to artificially made deadline crisis would no actual budgeting or process.

For even laying out an annual sort of fiscal planning.

It's an appalling state of affairs and this date of this deal will only extended even in trench that way -- negotiated OK thanks so much.

Thank you.

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