February 12, 2020
In an interview with CNBC’s Squawk Box this morning, Senator Portman discussed President Trump’s FY 2021 budget proposal that was released earlier this week. He highlighted the current strength of the economy, due in part to tax reform and regulatory relief, and how Congress should come together on a bipartisan basis to address rising mandatory spending and federal debt, a key issue for ensuring economic growth in the long term.
Excerpts of his interview can be found below and a video can be found here.
PORTMAN ON THE STRONG U.S. ECONOMY
“You know, I think a couple of years ago people would have said, ‘No, that just can’t continue’ and now even with an economy that’s hitting on just about all cylinders and, you know, you have what you think would be wage pressure and so on, you have wages going up. The last 15 months we’ve had a wage increase of three percent or more every single month…So it hasn’t affected rates so my sense is that there’s some new economic thinking out there which is when you look around the globe and you look at the United States rates are staying low regardless of growth rates.”
PORTMAN ON WORKING ON A BIPARTISAN SOLUTION TO ADDRESS THE DEBT
“Well first, just for a second on the corporate tax cuts, as you know the vast majority of the corporate side was made permanent. So when you’re looking at the rate, you’re looking at the territorial system which are the two biggest changes. Those are permanent – in other words, they’re part of the tax law until changed. Although, the point was made about R&D, that’s certainly true. But it’s so bipartisan, I think that’s probably something that can continue to provide economic growth. On the budget, you know, the budget’s a blueprint, it’s a message document. It does do some cuts on a small part of the budget, which is about 14.5 percent of the budget, which is the part we appropriate every year outside of defense.
“…But he did want to get to a balanced budget over 15 years, which he does in this budget, and that’s how it is done. But the reality is that we have to do something with regard to the mandatory spending side on a bipartisan way because that’s the only way that it will happen. And everyone acknowledges that, it’s now 70 percent of the budget and effectively on auto pilot, and it’s just not sustainable and Democrats are saying we want to add to that. So the Medicare for All, there’s a right-leaning group and left leaning group that looked at Bernie Sanders’ proposal there. Both of them come in at north of $30 trillion, so it’s just not affordable and I think everybody acknowledges that.
“Well it’s frustrating that as a group here in Congress, we’re sort of choosing to ignore this reality and whoever gets elected as president, a year from now will step into office and have at his or her doorstep this issue. So, I do think, and I’ve talked about this before, smart to have some sort of a group that gets together now, that says, ‘Okay, on a bipartisan basis, what could you do that, what are the options at least,’ so that when whoever gets elected hits the ground running on this issue, they have some ideas out there. Because it’s the biggest fiscal issue we face, we have a great economy right now. Revenues are coming in, in fact, this year it’s projected revenues will be up 4.9 percent…So it’s not about revenues. They are actually increasing up and above the historic average as a percentage of GDP. It’s about the spending.
PORTMAN ON BUDGET PROJECTIONS
“Well, the budget projections are always a little rosy on the economic growth front but let’s also realize that pre-tax cuts and post-tax cuts, everybody’s economic growth numbers were way too low so they are accurate when the administration says that both CBO and other forecasters have been way too low in terms of the budget projections and in terms of the revenue projections and in terms of the jobs projections. But you’re right, it’s a little rosy in terms of economic growth.”
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