Podesta Says Deficits Make Value-added Tax More Plausible
“Theres going to have to be revenue in this budget,” Podesta, co-chairman of President Barack Obamas transition team, said in an interview on Bloomberg Televisions “Political Capital with Al Hunt,” airing this weekend.
A so-called consumption tax would “create a balance” with European and Japanese economies and “could potentially have a substantial effect on competitiveness,” he said. Value- added taxes in Europe and Japan encourage savings by taxing consumption.
Podesta said that though such a tax may be regressive, it can be balanced by exempting some products and using “the money to support low-wage workers.”
Podesta, who is president of the Center for American Progress, a Washington-based public policy group, is convening a meeting of economic policy experts Sept. 30 to discuss the long-term federal budget deficit.
The Congressional Budget Office estimated in August that the deficit will be 11.2 percent of gross domestic product, the highest since World War II. Clinton, facing a deficit of 4.2 percent of GDP, pushed Congress to raise taxes on the wealthy to help trim the shortfall.
“He passed it without a single Republican vote,” Podesta said. “It led to the longest period of growth in the United States history.” Podesta said thats the kind of thing “we want to talk about and look at.”
Ending Tax Cuts
Podesta said Obama will begin tackling the deficit by ending the upper-income tax cuts enacted under his predecessor, President George W. Bush. “Then you have to look at whether that gets you far enough of the way,” he said.
On health care, Podesta expressed optimism that Congress will pass a health-care bill in the next couple of months even though so far none of the measures has won Republican support and Democrats are divided over whether to include a government- run program to compete with private insurers.
“Were in a narrow track now between the ideas that are being debated” in the Senate Finance Committee and those being debated in the House,” Podesta said.
If Maine Senator Olympia Snowe, a Republican who has worked closely with Democrats on compromise legislation, votes for a bill, “that really advances the cause forward,” he said.
Senate Finance Committee Chairman Max Baucus put his panel to work drafting a proposal this week after months of seeking agreement with Snowe and other Republicans. So many amendments were filed by members of both parties that Baucus, a Montana Democrat, pushed the committees debate into next week.
On politics and personalities, Podesta said Clinton has patched up his relationship with former Vice President Al Gore. Historian Taylor Branch, in a new book called “The Clinton Tapes: Wrestling History with the President,” reports on his recorded interviews in which the former president spoke candidly about many issues, including his differences with Gore.
Podesta said he recalled “one last session in the White House,” after Gore lost the 2000 presidential election to then-Texas Governor George W. Bush following a recount fight that was decided by the U.S. Supreme Court.
Clinton and Gore “kind of let it all hang out for a few hours,” Podesta said.
“That was the anger of the campaign,” Podesta said, and “you dont get over those things in 15 minutes.” For his part, “President Clinton had some questions about the way the vice president ran the campaign.”
The two “have great respect for each other,” Podesta said. “I would describe them as friends again.”