Bloomberg touts tax reforms in federal budget cut proposals
As a bipartisan committee of Washington lawmakers tries to come up with ways to tame the mounting U.S. debt crisis, Mayor Michael Bloomberg gave his own suggestions during a policy speech Tuesday at the left-leaning Center for American Progress in the nation's capital.
The independent mayor isn't convinced the supercommittee will identify the necessary $1.2 trillion in spending cuts by a Nov. 23 deadline.
Instead, Bloomberg said his suggestions and others that he supports would save about $8 trillion and balance the budget by 2021.
amNewYork asked experts whether those proposals make sense:
Bloomberg suggested "slowly and gradually phasing in a higher retirement age over the next six decades" to help make the system solvent for the next 75 years.
It's a "reasonable approach," said Eugene Steuerle, a senior fellow at The Urban Institute. Cuts will have to be made in big social programs, and despite the politics of touching Social Security, "government has to ask the public to do something. People understand that if they live longer, the system would have to adjust," Steuerle said.
"Tax loopholes in the financial industry that are outdated should be closed," the mayor said.
Ending various corporate loopholes could earn the U.S. billions of dollars a year, said Roberton Williams, a senior fellow with the Tax Policy Center. But they can't be changed piecemeal, he added, and must be part of a broader tax reform. Whether politicians are willing to work together to do so remains to be seen.
Bush tax cuts
"Allow the Bush tax cuts to expire at the end of 2012, not just for high-income earners, as [President Obama] has proposed, but for all tax brackets," Bloomberg said.
This would "get rid of half of our debt problems," Williams said, but forcing everyone to pay higher taxes now would be bad for economic growth.