Last month, former Federal Reserve Chairman Alan Greenspan — who was instrumental in advancing the Bush tax cuts — called for allowing the entire package of cuts to expire, saying “they should follow the law and let them lapse.” Yesterday, Paul O’Neill, who was Treasury Secretary when the Bush tax cuts were enacted, seemed to follow suit.
On CNN’s GPS with Fareed Zakaria, O’Neill pointed out that “I was strongly opposed to the Bush tax cut that was enacted in 2003. It was one of the reasons I got fired.” He explained that he opposed the cuts because they were unaffordable with, among other things, the possibility of a war with Iraq on the horizon. When pushed by Zakaria about whether or not the cuts should expire, O’Neill said a full expiration is “okay,” while making the case that broader tax reform is really the issue:
I say let them — I don’t care, I honestly don’t care — but I do care whether the President takes the lead in saying ‘this is not the right issue, it’s off the table, they’re expired. You know, everybody is going to pay more in taxes.’ That’s okay…I don’t mind paying taxes.
O’Neill, however, also came out against more stimulus funding — despite unemployment being at 9.5 percent and the economy creating a sluggish number of jobs — saying that an overhaul of the tax code would suffice to boost demand.
Republicans in Congress, meanwhile, have been advocating for a full extension of the Bush tax cuts (as opposed to President Obama’s proposal to extend only those for the lower- and middle-class), but when pressed about how much those cuts would add to the deficit, they fall apart. Yesterday, on Meet the Press, House Minority Leader John Boehner (R-OH) and Rep. Mike Pence (R-IN) simply wouldn’t answer when repeatedly asked about squaring their desire to cut taxes for the wealthy with simultaneously complaining about the deficit.
Extending the tax cuts for the richest two percent of Americans would cost $830 billion over ten years, which is unaffordable considering the structural deficit that the country faces. Even Rep. Eric Cantor (R-VA) has admitted as much, saying that extending the Bush tax cuts for the wealthy will simply “dig the hole deeper” when it comes to the deficit.