Tags: Schumer | Simpson | Bowles | trap

Schumer: Simpson-Bowles Fiscal Reform Plan Is a ‘Trap’

Wednesday, 10 Oct 2012 08:02 AM

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The deficit-cutting program outlined by a bipartisan commission appointed by President Barack Obama is a “trap” that favors the rich and doesn’t help the middle class, said Sen. Charles Schumer, D-N.Y.

The National Commission on Fiscal Responsibility and Reform, which is co-chaired by former Sen. Alan Simpson, R-Wyo., and Erskine Bowles, former White House Chief of Staff under President Bill Clinton, calls in part for the elimination of lax loopholes in an effort to drum up government revenue and narrow deficits.

Those loopholes should be closed, but savings should go to pay down deficits and should not be accompanied by tax breaks for the wealthy, Schumer said in a speech at the National Press Club.

Editor's Note: Obama Donor Banned This Video But You Can Watch it Here

“It is an alluring prospect to cut taxes on the wealthiest people and somehow still reduce the deficit, but you can’t have your cake and eat it, too,” he said, according to CNNMoney.

Aside from eliminating tax loopholes, the Simpson-Bowles plan would reduce the tax rate for top earners to between 23 percent and 29 percent.

Today the top rate stands at 35 percent and will climb to 39.6 percent next year.

The plan, Schumer said, is a “trap of tax reform,” especially for the middle class, who would suffer the most from closing loopholes, CNNMoney added.

“To raise enough money to both reduce tax rates and cut the deficit, you would need to slash deductions and credits on a far greater scale than we ever did in 1986 — middle-income earners would not be spared,” Schumer said, referring to reforms made under the Reagan administration.

Obama tabled the Simpson-Bowles plan, though many in Congress call for its revival or plans that resemble it.

Simpson and Bowles said recently that Congress needs to work quickly to steer the country away from a fast-approaching fiscal cliff, an event that will strike at the end of the year when tax cuts expire at the same time automatic spending cuts kick in.

The nonpartisan Congressional Budget Office has warned that failure to deal with the fiscal cliff could send the country into a recession next year.

Lawmakers have refused to deal with sensitive tax and spending issues in an election year, but after November or even in early 2013, they better work quickly to avoid disaster.

“If I had to tell you the probability, I’d say the chances are we are going over the fiscal cliff. I hate to say it, but I think that’s probably right,” Bowles told CNBC recently.

“We worked hard to try to get common sense to overrule politics, and that’s a tough thing in Washington.”

Now is not the time for blame and partisan politics either, said Simpson, as the problem of too much spending is decades old.

“People will often say ‘how did we get here?’ It’s easy how we got here. We were told to bring home the bacon for the last 70 years,” Simpson also told CNBC alongside Bowles recently.

Editor's Note:
Obama Donor Banned This Video But You Can Watch it Here

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