Years. That was the route to the american dream, whatever it was for families, go to college, buy a house. These trump projections, it will double and this has been painfully apparent in the labor market. We have had recovery for eight years and we have not seen anyone get a raise. We have seen anemic investment in the United States and we get repeated reminders that our companies would rather be headquartered somewhere else than the United States and all of this says to me the status quo is not working and we ought to try something different. I am open to something that is a growth oriented tax reform that will generally help the middle class. Nothing helps the middle class more than having an economy that generates jobs and a raise on a regular basis. Host when you think republicans talk about the middle class, those opposing the plan, who are you talking about . Was sort of range are you looking at . Guest the Median Income in the about 60,000,s so i am thinking about the to 50,000 and 200,000. The reality is more than half americans do not pay the income tax, so the income tax is about the upper half of the Income Distribution and you want to target the bought amended that. Host the republicans announcement that the plan this week worked up largely between the ways and means committee, congressman brady, the finance committee and the senate, and President Trump also. What do you think the hardest sell will be for republicans . Guest i think the most important thing to know is it is not a plan. They call it a framework. It is that. It says we would like to save 20 and on the individual side, free tax brackets and maybe one fourth and we will decide that later. We will have a tax rate on Small Businesses at 25 at most, but we do not know if they begin and end. We do not know where there are dividends and capital gains. That is by design. They want to have a framework and save these are our goals, and you draft legislation that would do this and in the senate, you take the finance committee and do the same. Road wherehits the you say, we would like to get the tax rate down, but how do we do that . We have to talk about reductions, and all of those will be popular and that is when Congress Starts to hear about it. Host also the fact that this tax plan will increase the debt, or what our republicans counting on to mitigate the fact, or according to the current outline, the debt is going to increase over the next decade . Guest the reported deal in the senate is between senator toomey and senator corker, and that is to at most have 1. 5 trillion more in deficits. I think that is something to be generally concerned about. We already have the deficit 700 billion and it will do nothing but rise for the future. Madeieve the case can be given that a sensible program of tax reform that generated a lot of revenue down the road is an idea, but tax cuts do not pay for themselves, you do not just wait them along and have it get done. They will have to make tough decisions. Thet on the issue of debt, wall street journal had a chart on deficits and proposed tax plans that headlined tax cuts do not reduce the deficit, pointing out tax plans throughout the tax cutyears or so over plans from ronald reagan, showing the federal debt after reagan cut taxes, bush cut them in 2001, that the debt as a share of gdp rose after each tax cut. Guest tax cuts do not pay for themselves. I think that is right, but everyone loves to talk about taxes but when you spend the money, you make a big decision. You are going to have to finance that one way or another. Taxes,do not like the then you have to deal with spending and that has gone largely unchecked. Host our guest is former congressional budget director douglas holtzeakin. We welcome your calls at 202 7488000 for democrats. Republicans, 202 7488001. And independents and all others, 202 7488002. This is just part of the equation. The other part is the suspending equation that the house next week and possibly the senate definitely taking up their budget resolution. Tie that into laying the groundwork for getting the tax proposal done in congress. Guest there is a direct link. Republicans want to pass this tax legislation in the senate and the usual senate rules require 60 votes and a vote on passage, and there is something known as reconciliation. If you write reconciliations into the budget, the house has to past the budget, agree on a budget, and if they do that, then they can have special protections, so the budget resolution is part of tax reform. Host similar to what they were trying to do with the health care proposal. [laughter] do you think they would try on another issue to bring the poster again on the Health Care Association reconciliation . Guest this is a tax only effort, but i do think the lessons of health care is the idea that they were house the senate and house have to be roughly on the same page and it became important during the health care bill. Host one more deadline this morning. In the wall street Journal Business journal, they say wall street has hundred for a tax overhaul for Stronger Economic and a, corporate hiring, lower Corporate Tax rate, as bankd for, should boost owned profits, and bankers expect pain points that are confident benefits will outweigh them. Thanks her happy. How about Smaller Banks are happy, how about smaller businesses . Guest this is an example of how tax reform does not happen, which is people think of one perspective, one issue, or one particular deduction. You cannot please anyone. You want to broaden the base, and the real choice is, do you want to stay in this economy, going poorly with the tax cuts and transparent problems, or do you want to have a better tax code, knowing there will be winners and losers . The big picture choice. If it is framed as your deduction will go way, usually, that is how it tables. Host lets go to ron in illinois, republican line. Caller good morning. I have a question and comment. Companies have done temporary hiring and that is going on more since the recession or since the recession of 2008, i think, how much of the temporary hiring is a result of obamacare for companies to avoid the responsibility of giving these benefits to their employees . The other comment, i do a ride ministry, taking people who do not have cars to work. I find in the twentysomethings, basic job skills that i am trying to teach, getting up in the morning with an alarm clock and going to work their assigned shift, and then receiving the , i can go get close because i got paid. There is a think i noticed in my community, where a lot of twentysomethings have been learning how to hustle the coast they had not had a job. I was wondering if you could comment on that. Host several things there. Guest on the parttime work, this has been a conjecture for a long time. We really do not know the answer. We do know one thing, and i prerevealinga fact about the u. S. Economy. We saw in the most recent census report, that median Family Income grew at a rate of 2 , widely great news. If you look at the incoming increase of people who worked fulltime, the answer was zero. All of the income gains where the gains that the caller was talking about, parttime work, all good news, people moving from parttime to fulltime, but the real troubling part to me is this sort of meat and potatoes of you go to work every day and they have not gotten a raise for years. We have got to do something different. In terms of the skills of people in the labor force, this is a mixed bag. We have folks who are clearly not ready for a highquality job, and that is not a new phenomenon. That has been around. Workers,the temporary do you see a problem down the road of the potential of underfunding, further underfunding Social Security and medicare because of the lack of fulltime work . Guest those programs are going to have to reform regardless. That is the reality. Social security will have to cut benefits by 25 across the board for everyone in retirement in two decades. I think that is a disgrace. We should have a better security system. Those problems are not just the amount of work. We have essentially full appointment now. Host he was arthur in memphis. Good morning. Them acrosss line democrat line. Caller i want to know why the when donald trump says this tax cut will not benefit him, that is a crock, and you know it. Guest im sure it will benefit him. It is intended to benefit every american. He will get benefits in terms of freight reductions and tax provisions, but the goal more broadly is to make sure the economy performs better and that is the litmus test. Whether individuals support the plan or not, it is the position from politicians. I think they are there for one reason, to make the economy perform better, and if they do not, i think they will be judged. Host part of the plan calls for the repeal of the estate tax, republicans call that the debt tax. How important is that as part of the proposal . Guest i do not think of that as the central plank. To me, there are three different buckets in the framework. The first is the corporate reforms. There are two prop there are two prop, we do have the highest tax, and it would get us to the middle by cutting. It would by no means be a tax haven. We are the last country to try to tax the earnings of our headquarter companies worldwide. Every other country taxes on based what they earn in the country. What that has spent for our companies is that if they go to brazil to a german firm, the german firm pays resilient tax and they are done. Our firm pays the brazilian tax and the tax in u. S. And that is a disadvantage. The way they fixed that is they pay the tax and brazil, do not bring the money back to the u. S. And that means the money does not come back to help our economy. That is a problem. Worse, anytime there is a merger or one firm buys another, they run the numbers and think, do we want to be in another country or where we get taxed under the sun in the u. S. . We will lose all the headquarters every time they run the numbers. I think it is really important. The second bucket is changes to the way we tax Small Business is, most shows up on individual tax returns but it is more than half of business income and United States, so it is an important way people get hired and cutting that rate to a maximum of 25 , giving them the , rightpe of revisions offers for their investments, those will help and include incentives to innovate and higher in america. The third bucket of the individual tax provisions, and that would the mostly about making sure the first 24,000 of income is untaxed. A big increase in that, free brackets, much simpler, and the promise you control out your patch on a postcard, and we will see how that gets fleshed out but we dont know the details. Host do you have any idea on what they would like to do on the mortgage reduction . Guest the proposals do nothing to it. Says, weproposal it will have the mortgage reduction, things like that, and then fairly day, something for hire education, something for retirement savings, and then all of their productions are going to go away. That obviously needs to get more clarity. Host and the increase in the child tax care credit, clearly in influence that ivanka trump has pushed. Guest she has been vocal about this. Is 1000. They will go higher. I think 500 is the number. Host 500 higher . Guest yeah. Host lets go to washington, d. C. , on what douglas holtzeakin. Caller hi, there. I am someone who benefits from the 5. 45 million estate tax grandfather died in 2001 when it was nowhere. That being said, i kind of find it unimaginable for a fool waiver for an entire your state, regardless of the value of the state. I cannot see how republicans would let the middle class of this country, look them and i and be serious about paying down the National Debt by giving away billions and billions of dollars to families who are already comfortably wealthy. I will take my comments offline, please. Guest these have been a political issue for years, it connolly, come back. It suggests gone away, come back. Lowerre associated with relation of productivity and growth. It is open to some debate. The tax rate that seems to matter is the estate tax when people are in their prime learning years. Theyre looking ahead and thinking, to a want to extend my Family Business or not . Do we want to set up a Charitable Trust to avoid it in a legal passion . It is clearly having consequence, people rework Financial Lives to avoid estate tax and complying with it i would say is viciously a nightmare. It is a horrible experience. And republicans have liked it intensely. Host it is like pointed out in the last years, they have raised tot from 600,000 something 5. 4 million. Guest you have to have an estate above a certain level to get into the system at all. Host how much money do they think they will save . Guest it does not make or break this. If you look at individual income taxes, they are about one point archery and dollars right now. We spent 4 trillion endres about another 1. 5 trillion in payroll taxes. 300ave a little over billion, and it doesnt really raised the book of the financing for the federal government. Here is host host here is don in virginia. Caller first, thanks to cspan. When they calculate, this it america has the highest Corporate Tax around, do they calculate value added taxes that most European Countries have as part of their tax system . Is it even appropriate to look into what value added taxes have on Corporate Taxation . Guest the answer is no. It is a comparison of Corporation Income tax rates. It does not include the value added taxes, which are big revenue raisers in a lot of European Countries. There are other comparisons, which are total tax burden. Here, the u. S. Has a relatively light tax burden compared to European Countries. Host an opinion piece from Michael Peterson of the Peterson Institute in the washington times, talking about Economic Growth, he wrote that relying on unreliable put predictions may make growth appear responsible but it is avoiding the tough decisions. We all went Economic Growth but the truth is that growth is hard to predict, let alone control. Banking on rosy projections of the growth is setting the economy of for disappointment. Guest i think it is right on the mark. I am in favor of a solid tax reform. I think we need to have better tax policies but that is different than saying, we can cut the tax rate and it will be good, right . It will grow fast, bring in the money, and the temptation to overstate the ease with which this can be accomplished is troubling to me because its not easy, we have not had it for 31 years for a reason. I want everyone to know it is worth doing but hard. Host you are a former Congressional Budget Office director and now president of the American Action forum. What do you do . Guest we are a policy analysis group. We Pay Attention to all of the issues in the labor market, energy, environment, regulation, puerto rico infrastructure, tax help, and a lot is going on in congress. Our goal is to make sure people understand the issues and we can somehow find a way to make good politics and get it done. Host the cbo has been in the spotlight over health care, a lot of criticism and support on both sides with the scoring of these bills, including the most recent effort by senators graham and cassidy. When you hit it is schism of the cbo, what do you think . Guest this is business as usual. Republicans were displeased with some of the things that came out of the cbo and that his life. My role of them is, you always mbsappoint my rule of thu is to always disappoint the party not in control. It is just the way it goes. Democrats are like, how can you do this to us . It is the job. You do the job, it comes when moments where congress is pleased, and then they dont say anything, and when they are not pleased, you hear a lot. Host nick in california. Hello. Caller i was making a note here, former director, i studied in berkeley when i first left college at 60 different there have been a lot of people on cspan, good be ing, douglas, ill touch with the, douglas. I have been running stuff here, it is more disruptive and greener than anybody i have met because i am a numbers guy, also. I just got connected to the two key analyst in the country. Host do you have a specific question . Caller i have been doing for the years of research and taking the numbers down. Host lets hear from rockford, illinois, mike on the independent line. Go ahead, mike. Caller good morning. I noticed agenda, yesterday on cspan, they passed a law saying they can search her house now without a warrant, so for the future of the gop, im wondering after watching the bysident executive branch, talking about the readings and whatnot, i feel the president should be pretty much a cheerleader and promoting ratings,nd talk about and stuff, it does not have anything to do with governing. Host the president seems quite eager to promote this tax plan, and he is taking on it. Guest i think that the blunt political reality is republicans feel they really need this. The Congress Needs to have a better performing economy come november, so it is clear that there united in their desire to get it done but the question is, will they be united in the mechanics of passing legislation to the president s desk . So far that has not happened. Host in the washington times, democrats have a shot of pushing the carbon tax, writing that the reform plan released does not mention the controversial idea of a carbon tax and endless believe there is an opportunity for democrats to push for fees as part of a broader generation compromise on taxes. Tax reform effort comes as prominent republicans, such as Lindsey Graham have voiced strong support, raising taxes on carbon emissions. What else do think would be on the table democrats could use in negotiation with this tax package . Guest i do not think we get a new revenue source. I think this will be focused on individual and Corporate Taxes, but the degree to which democrats contribute to this, i think in the house, there is little likelihood we see democrats supporting the legislation at all. In the senate, there could be a handful of democrats that would be interested. There are some the president has ooing. Uling w to the extent they are genuinely interested, they may have some impactful legislation. Host im sure there is a lot of debate ahead. Douglas holtzeakin, former cbo director, thanks for being here. There is more ahead on washington journal. The director with of the center puerto rico studies at Hunter College, talking about the impact of Hurricane Maria and what is ahead. Nader on, three secretaries are under fire for travel expenses. We would take a look at the federal rules regarding travel from the fx watchdog common cause. Saturday, book tv has coverage of the 2017 baltimore book festival. Starting at noon eastern, the discussion on fears we cannot stop a sermon to white america. And laura jacobs with her book you are in the wrong bathroom. Invisiblehie with against Police Violence black women and women of color. Robin spencer, author of the revolution has come. Devon allen, author of a beautiful ghetto. And contributors from the books of democracy to freedom, and no wall they can build. Watch our coverage of the baltimore book festival saturday on cspan twos book tv. Pretty consistently ranks among the lesserknown president s. The only thing most people remember about him is his distinctive facial hair, his mutton chop sideburns. Aboutday night on q a, the life and political career of chester a arthur. I think he recognized he was not qualified for the job. He ended up on the ticket by accident, was surprised to be there, never imagined he would be president of the United States and all of a sudden, he is on the threshold of office. Host sunday night at 8 00 eastern on cspans q a. Q a. History daily. In 1979, cspan was created as a Public Service by americas Television Companies and brought to today by your cable or satellite provider. Washington journal continues. Host we are joined from new york by edwin melendez, with the Hunter College center for puerto rico studies, the director of that organization. Thank you for joining us on washington journal. Guest my pleasure. Host we sit here this morning from eight days or nine days after the impact of Hurricane Maria and puerto rico. You are in touch with people on the island, what are your biggest concerns this morning . Guest