The house this past week. It is a 4 trillion budget. Romina, what should we know about this budget. For a pretty big increase in defense spending and fore are no requirements budget cuts. More is a potential for spending once Congress Works through the budget. They are are we talking about another bipartisan budget deal that will lift budget caps that have prevented the increases in defense that the president has asked for. Host by law, that has to happen. Stan, we are seeing your peace online and the headline says that the gop has murdered in the federal budget and now wants us to round up the usual suspects. What are you writing about your . The republican crow on house and senate and white house, they have misused and abused and not use the budget process the way it is written in law. The best example of this is that the budget that the house adopted has no relationship to correct fiscal policy. There was no attempt to look at what the economy will do over the next year and whether we need a budget that is stimulated or restricted. It looks like if there are a lot thinking its been a cause higher Interest Rates. They are not following the rules. Assuming that the republicans get tax reform done on some level getting into december, what happens with the appropriations debate based on in the 2018st year budget . Romina lawmakers do have time. They have to make sure they have all their ducks in a row by january because that is when a potential sequester could kick in. The discussions are now over some bipartisan deal similar to obama andw with the boehner deals. They allow for defense and nondefense spending increases. Both are happening now. I suspect by the time they wrap up, this package will move very quickly because when we are talking about spending increases and tax cuts, the American People are still very concerned about the deficit and debt and they are not really getting an in washington. What you think outlines to the budget are . What dont you like that is been proposed or put out by kevin brady in the allen of the tax plan . Vague it has been very when it comes to provisions that will help pay for some of the marginal rate reductions on the corporate side and also on the personal side. I also dont like the idea of keeping the highest individual rate or potentially adding a new one. I like the previous attempt at simplifying and coming down to three great only. Rates only. The health care exclusion should be capped and is not distributed differently so that individuals have more control over the health plans and not just employers. These are difficult political discussions. The gop is very interested in anding some legislative win keep the Difficult Conversations out of the room and that makes it easier. Host your view on what is now an outline on tax reform and what we will see, what will what do you think . You need to get the money into the hands of the people. This is skewed toward the wealthy. It will make a negative impact on deficit. That thisredicting tax cut along will cost 2 billion to 3 trillion over the next years and is likely to increase the annual deficit to about a trillion dollars a year, at a time when that kind of stenosis not necessary. There are a lot of things that is not really tax reform. There are tax changes that are being designed for political reasons. There does not seem to be any theory behind it or basis or discipline. It is just what it what we need to do to get the votes. Host we welcome your comments and calls. 202 7488000 for republicans. And for independence, 202 7488002. We look for your comments to the mother 2018 budget and the tax reform debate. Richard rubin in the wall street journal wrote that the National Association of Home Builders is concerned about deductions paired republicans say they will retain an itemized deduction. The ceo of the Builders Group said it is a bad bill for the housing sector. What do you think of that . Romina this is and another one of a year later incident of it all over once and cleanup the mass as Ronald Reagan had to do in the 1980s. To you think that the growth is giving more wins into the sales . They are saying they needed growth and may have the growth and they are not stimulating the economy to get there. growth, it 4. 5 sounds great, but the Interest Rates go higher. What you think about that growth argument . And it will bring in more revenues and grow our productive capacity and make us wealthier and provide more revenues to the government. How that plays out, we cannot there more growth, but are other factors that come into play, like a recession and if it would happen. They can try to stimulate with tax cuts that they are talking , but there are figures that will dictate what this will be. Do you think the negotiations are helping or hurting the process . What you are on talking about. The president has been on point see the passage of this legit, but it looked nothing like this and there is a consensus that tax reform is critical for the nation and they are selling concerns aside to make this happen. We have some calls for you. Lets go to our first call. Ok. Reform, as a tax republicans see this is a republican priority and it is not a priority for the nation. That taxay simplification is an enemy of the broad middle class that needs those special the ductions two make ends meet in this economy. If you really want to go to tax suggest we go back to the 1950s when the marginal tax rate was 91 . Increase in the marginal tax rate is in order. Have acorporate side, we stimulate economy. What do you want to do you will not even get that result because it has been shown by leading and i would admit, leftleaning leftleaning economist, that the aggregated debt at the level at which it is at now, that for every dollar, that was foregone and federal taxation, that you will get less than a dollar and perhaps even substantially less than a dollar. Stan joseph is correct in a variety of things. The average result is that tax reform does not seem to be as important to the average person. They promised it during the election. He is exactly right about the impact on the economy, we will be overstimulating in a shortterm. Third, i will say this as directly as i possibly can, this is not tax reform, this is tax cut. It is a big tax cuts skewed towards corporation and the wealthy. I am not sure that is the kind of tax cut. The only thing is the politics are different now. There are not as bipartisan. I am not sure we will get those tax increases if we need them. Host tax reform is a priority for the party, not the nation. Romina we have seen a disconnect between benefits and web Business Tax Reform can need for all americans, especially American Workers. The reason for that is that we know the Corporate Tax is not borne by the corporation, it is collected and born by workers. Wages have gone up for workers, that is what we are aiming for with the package. The other thing to keep in mind is that spending is what is driving deficit. We have a deficit problem, the deficit was on track to reach an trillion dollars. Before we talk about tax cut and tax reform. We are still on track. Tax reform could bring more Economic Growth. It will not get us out of the bind of having to perform entitlement programs that have to be on the agenda. That israel grew with stan. If we are only doing tax reform now and lowering revenues, and do not follow up with a bold spending reduction package, we will find ourselves in a position to raise taxes. Stan i have to take a serious exception with spending. We are lowering revenue by 2 trillion dollars. Revenues are a problem because we are lowering them. The decision has to be, do we want to pay for it . It is clear the congress dennis does not want to cut back spending. We will not get any cut pact cutbacks. Romina we are looking for traditional Economic Growth and we want to be more competitive in the global economy. Our corporate rate is almost 40 if you count the federal rate plus the average of state and local rates. The average global rate is only 22 percent, thats why the president talks about 15, because that gets us to 20. We will still be higher than the global average, but we will be much more competitive in many businesses, like anheuserbusch that left in 2008. Those are the kinds of divergence tax in versions that we are trying to avoid and be more welcoming for businesses to locate themselves in the u. S. Because that means higher wages, more jobs and more productivity growth for this country. Host we have other colors coming in. Chris in florida, independent mind. Caller i am a retired Financial Markets economist and a financial analysts. I have a friend who believes we are now in night of the living dead. The only way that things get solved on the spending side is a have a debt crisis. Do you think this the you think will occur . I am adamantly opposed to allowing these big corporations bring back foreign money to put in the pockets of the top 10 guys, period. I am also against the characterization by congressman brady, that getting rid of the death tax is helping family farms. Host we will let you go, chris. Stan it is not the death tax, because we are not taxing death, we are taxing the states. We only taxed the states over 5 million. That is a tiny percentage of anybody that will be taxed on that. The first point that you made about when are we going to reach debt crisis is interesting. I teach a class at Georgetown University, and that was the big question. When is the bond market and market going to stop buying u. S. Debt . We do not know because we have never been here before it may not be for a while. It is not like there is a specific number or level that we get to. It is when the market starts to get the feeling that the u. S. Will not make good on its debt. The u. S. Government has never missed a payment yet. It may not at any time soon, but it is the type of thing that is more likely to be a political question. Romina i would like to comment on that as well. It is about 70 of gdp right now. What economist thelma looking at industrialized nations, around 90 and 100 , that can put a drag on Economic Growth. In terms of a debt crisis that would force spending cuts and force the kind of political compromise. Which by the way, medicare, medicaid and Social Security are driving 100 of the spending. 85 if you are looking over the next 10 years and including interest on the debt. If youre looking at when that will bind in the u. S. , that is difficult to say. The dollar is the reserve currency of the world. That will likely be true for quite some time. We are looking at our friend and ally, japan. They are able to get away with 250 and are able to get away with debt crisis. They have instituted new taxes such as a value added tax. We do not have that and the United States. Investors know there is still a lot a fiscal room for the u. S. Government. The countries that have performed their budget successfully, sweden and canada, they are now balancing their budgets. They have adopted entitlement reforms we need to see here in the u. S. , moving from the benefits, Social Security. That only happen when their Interest Rates went up and when it became very expensive to Service Interest on their debts. Our Interest Rates are still very low. I dont know why they have not gone up. We have not seen inflation. We monetized. The Federal Reserve is now starting to unwind its bond buying program, but the economy seems to be taking get ok. There is no reason for lawmakers to worry about the deficits right now. Stan the last time we had a significant debt impact was during the administration we talked about on market vigilantes. They have gone nowhere. They have seen to have gone into hiding. Until the markets as we are not going to buy any more of your debt, or something we dont want unless Interest Rates go up, there will be no impact. I suspect it will be a political rather than economic question. Host you are more democrats better deficit hawks about this. Stan first of all, you have republicans that have been extremely hypocritical about the deficit after years during the Obama Administration. There are now with one of the biggest increases in the deficit in American History and are doing it gleefully. Romina i dont think so. I think the estimates that the jcp is putting out jct is wrong. There are not putting out the impacts of the economy that we could expect from a good plan. We should do more business in the United States and make workers more productive. That will be a boom to the economy. At 15 5 trillion that the Senate Budget allows revenue to be lower, we do not believe that they actual Deficit Impact will be of this size. It is easier to project spending in the 10 year budget window then taxes. Tax revenue fluctuates with the economy. When youre a economy is growing, you will have more revenue. Host we have a bunch of colors callers. Stan it is also the committee for responsible federal budget. The urban institute on taxation is saying that it will reduce revenue by a substantial amount. Any of the talk about this feedback is almost economic fantasy as opposed to reality. Host here is gloria on the republican line. Caller good morning. I am concerned about the proposed tax cuts. Am i connected . Host you are on the air. Caller the Corporate Taxes, they are paying although i dont know why we need to cut the middle off but most of them are only paying about 17 . The romina the reason we need to cut the marginal rate, big corporations can afford lawyers and figure out how to lower their overall tax burden, smaller corporations are not able to do that because they do not have the funds to hire expensive lawyers. We want a level Playing Field for all corporations in the United States. But we have seen, and this continues to happen now, american businesses are leaving the United States and continuing to do business here. They are moving their headquarters overseas. It is called eight tax and version. A tax and version. The Obama Administration tried to do that. The best thing we can do is make sure we are more competitive when it comes to the Global Market place for corporations who want to locate their businesses here and do business in america. That means lowering our marginal Corporate Tax rate, which is one of the highest in the world and among industrialized nations, to a level that is more appropriate given the global environment. Around 20 , that is as high as we can go in order to fulfill our competitive. Stan this is one of the political full crumbs of this tax bill. Stan the point seems to be more Corporate Tax cuts than individual tax cuts. The tax it seems to be more Corporate Tax cuts than individual tax cuts. They are coming along because they cannot do one without the other. This color has expressed what this caller has expressed this. Lets see what the impact will be an lets see how it goes along. It is clearly a political decision. Host marian on our democratic line. Caller thank you for taking my call. I want to respond to the lady who said that dynamics dynamic scoring was something we should take seriously. It is basically Wishful Thinking that the wealthy keeps saying it will make our economy better. It is nothing other than saying just an excuse to get your top to get your Corporate Tax cuts. We were told when we voted that the middleclass and the poor are hurting, the rich are doing fine, corporations are doing massively wonderfully. White. We just have a tax cut for the middle class why dont we just have a tax cut for the middle class . This is absurd, this is why we are angry in this country. I would like no heritage funded by billionaires. That is a big problem. All of these think tanks that washington journal has come on, we might have a 1500 thousand people that contribute, but it but if 40,900 of them contribute one dollar and one person contributes 5 million host ok, we will get our thoughts on dynamic scoring and heritage. Romina heritage is the most widely supported think tank in the world. We have a half a million members and our average donation is only 45 a year. We are supported by the average american all over the country because they believe that we are their voice in washington. We would be very happy to take your support as well. In terms of the tax plan distribution, the problem we have is that 70 of the federal income tax in the United States is already paid by the top 10 . The bottom 50 , we all can argue what is the middle class, there is 3 of the federal income tax burden. We have one of the most progressive income tax in the world. The tax that everyone pays our payroll taxes and state and local taxes. Only the income tax, which is what this is focused on, there is not much you can do. The president is trying to provide tax relief to americans. Didugh doubling of standard option, you are will have income and there will be an increase of the child tax bydit, which was proposed the president and that is a component of the plan. Skew totribution will the wealthiest, who pay the most. We should look at the impacts and we see the economic we dont just say this, we know this. It will create wage increases for workers. That will benefit middle income workers the most. What should we know about what dynamic scoring means. And your reaction to what the color said . Thank you for asking. I was hoping you would. There could be some feedback