Following US President Barack Obama’s announcement of a deficit reduction plan including tax raises on the wealthy, FRANCE 24 interviewed Elizabeth Jacobs, a specialist in US social and economic policy at the Brookings Institution.
FRANCE 24: What are the main sources of deficit reduction announced in Obama’s plan?
Elizabeth Jacobs: The president’s plan draws on three main sources of deficit reduction:
1. Tax reform, in the form of the elimination of tax loopholes and a tax increase for the wealthiest Americans.
2. The drawdown of troops from Afghanistan and the transition from a military-led to a civilian-led mission in Iraq.
3. Cuts and reforms to a wide range of mandatory programmes – but with no major changes to the Medicare, Medicaid, or Social Security programmes.
4. Discretionary cuts enacted earlier this year in the Budget Control Act.
F24: Does the plan have even the slightest chance of getting through Congress?
EJ: The Republican House will not pass this bill, and their reaction to the plan is likely to be dismissive. The Republicans, led by Speaker [John] Boehner, have stated clearly that they refuse to consider proposals that incorporate any form of tax increase. The president’s plan features tax reform, including tax increases on the wealthiest Americans, paired with modest reforms to entitlement programmes. The tax increases proposed by the president are likely to disqualify it from consideration by Republican political leadership.
F24: In that case, what was the point of Obama proposing it?
EJ: This plan is likely to be received enthusiastically by the Democratic base. The “Buffett Rule” that people making more than one million dollars a year should not pay a smaller share of their income in taxes than middle-class families pay appears tailored to appeal to the Democratic base – and potentially to appeal to independent voters’ sense of populist justice as well. The plan barely touches core entitlement programmes that the Democratic base protects fiercely.
In general, the overarching message of “asking everyone to do their part, so no one has to bear all the burden”, and requiring that “everyone – including millionaires and billionaires … pay their fair share”, is speaking directly to the Democratic base, and challenges the Republican Congress to fight on behalf of the wealthy at the expense of the rest of the American public.
Date created : 2011-09-19