CED Senior Vice President and Director of Research, Joe Minarik, discusses the state of the U.S. and global economies on CCTV’s Biz Asia America, a business program anchored by Phillip Yin covering North, South America, and Asia.
In an op-ed in the Financial Times, CED spokesperson and Honeywell chief executive David Cote, calls on business leaders to speak out and urge action regarding our nation’s debt problem:
There is no time to waste. As we approach the end of the year, we get closer to the edge of the “fiscal cliff”. If there is no political deal, the US will face a triple witching hour of automatically triggered spending cuts, the expiry of tax cuts, and a failure to raise the debt ceiling. We all saw what happened during the last debt ceiling “discussion”. It wouldn’t be a surprise to see the same dysfunctional process or another agreement to “kick the can down the road”, as they say in Washington.
CEOs can no longer stand on the sidelines. We need to ensure debt resolution is a core part of the presidential election campaign.
Mr. Cote offers five specific recommendations for U.S. CEOs. He was a member of the US fiscal commission chaired by Erskine Bowles and Alan Simpson.
Ed Crooks from the Financial Times features Mr. Cote’s remarks in his piece.
This was a busy week in Washington as the budget battles continue in this election year. Some key highlights from the U.S. fiscal scene:
- Senator Kent Conrad released his FY 2013 budget resolution. The plan is based on the bipartisan Fiscal Commission plan put forth by Erskine Bowles and Alan Simpson. To view a summary of Conrad’s budget plan and how it differs from the original framework in Simpson-Bowles, click here.
- Senator Pat Toomey released his FY 2013 budget resolution. His plan is more aggressive in generating savings through spending cuts than the House Republican budget put forth by Congressman Paul Ryan. CRFB’s blog, “The Bottom Line,” outlines the key points in Toomey’s proposal. Continue Reading >>
In an article on the Wall Street Journal, Damian Paletta reports that the federal budget deficit is slowly shrinking as corporate and individual income taxes rise due to the improving economy:
Individual income-tax revenue from October through March, the first half of the government’s 2012 fiscal year, hit $484.1 billion, up from $475.6 billion in the year-earlier period. Corporate income taxes rose to $84.5 billion from $55.1 billion a year earlier. The higher tax revenue helped shrink the six-month deficit to $778.8 billion this year, $50 billion lower than the year before.
However, monthly tax data can fluctuate considerably and the deficit could grow again if the economic recovery loses steam.
In The Concord Coalition’s blog “The Tabulation,” Diane Lim Rogers writes about a recently released report from the Congressional Research Service (CRS) titled “The Challenge of Individual Income Tax Reform: An Economic Analysis of Tax Base Broadening.”
The CRS report finds that the 200+ tax expenditures for individuals are worth more than $1 trillion per year and “the largest 20 of them represent 90 percent of that revenue loss to the government.” Dr. Rogers adds that “when you look closely at that ‘Top 20’ list, it is easy to get discouraged about the prospects for substantial broadening of the tax base. [T]he largest tax expenditures look a lot more like ‘entitlements’ than ‘loopholes.'”
Earlier today, the House Budget Committee released its 2013 budget plan titled “The Path to Prosperity: A Blueprint for American Renewal.” Click here to view the full report.
Following the release, House Budget Committee Chairman Paul Ryan delivered remarks at the American Enterprise Institute. Watch the event here:
Some key elements of the GOP’s 2013 budget plan:
- Consolidates the current six individual income tax brackets into just two brackets of 10% and 25%.
- Reforms Medicare: offers premium-support to allow beneficiaries to purchase traditional Medicare or competing plans through a government-run exchange.
- Reduces the corporate tax rate from 35% to 25%.
- Cuts discretionary spending below the level established under the Budget Control Act.
- Repeals the $55 billion in defense cuts expected to come from the budget sequester.
- Dismantles the healthcare reform law.
- Turns social safety net programs like food stamps and Medicaid into block grants for states.
Click here to read Back in the Black’s evaluation of the budget resolution.