Cruz, Rubio discuss America’s spending addiction
Two of the GOP’s prospective presidential candidates – Senators Ted Cruz (R-TX) and Marco Rubio (R-FL) – gathered at an event sponsored by the Concerned Veterans for America and Weekly Standard last week to offer a sneak peak of their populist conservative agendas.
The panel also featured Pete Hegseth, CEO of Concerned Veterans for America, Veronique De Rugy, senior research fellow at the Mercatus Center, Congressman Adam Kinzinger of Illinois, and Ed Rendell, former Pennsylvania governor and co-chair of the Campaign to Fix the Debt.
Cruz kicked off “The Need for Spending Reform: The $17 Trillion Debt Threat & America’s Spending Addiction” with plenty of red meat, but also offered a conciliatory message, pointing out that both parties should be focused on restoration of economic growth — a weak economy imperils all agendas, after all — and that there should be room for compromise.
While Rubio also claimed compromise was necessary, both GOP heavyweights believed that any tax reform shouldn’t be designed to generate revenue but rather promote economic growth. Obamacare and more spending increases do not meet those criteria. Consequently, Rubio claimed that he would “not vote for continuing resolution, unless it defunds Obamacare. We should refuse to raise the debt ceiling by one single cent.”
As things stand, the prospects of Washington gridlock subsiding and fiscal reform emerging are slim. Rubio suggested, the root ideological difference between Right and Left have grown in the 21st century: “What we have with this administration is not a policy disagreement, but a deep philosophical disagreement,” he said. “The good news is there’s only three years left of this. The bad news is on a lot of these issues, we don’t have three years to spare.”
These divides will probably outlive the Obama presidency. For instance, De Rugy, an immigrant from France, advocated reforming “the hell out of” Medicare and Social Security. The question is how?
One idea that seemed to resonate among the panelists was the the idea of a chained CPI — an idea Rendell advocated for and President Barack Obama agreed to in the last round of debt ceiling negotiations. It would slowly decrease Social Security checks if enacted, and by 2033, checks will be 3% smaller than they would be under today’s measure of inflation. Rendell, who would be considered a senior at the age of 69, testified. “Seniors aren’t dumb. They may not be happy about it, but they understand.”
Chain CPI would save 280 billion over ten years, Rendell claimed. Not a lot. But it’s something.
Another idea Rendell advocates for is the Blank Slate tax reform approach. “Every one of those expenditures goes away [under Blank Slate]. If you want them back in, you have to justify the spending to the Treasurer,” said Rendell Americans for Tax Reform sent a letter to Senator Orrin Hatch (R-Utah) in support of his Blank Slate reforms, and asked him and his fellow senators to consider further proposals:
A revenue-neutral reform target is an absolutely essential precondition to any tax reform plan… A comprehensive income tax base is the wrong starting point… Avoidance of multiple layers of taxation on savings should not be considered a tax preference item… Parity between business investment and other business expenses should not be considered a tax preference item. Parity between debt and equity financing should not be considered a tax preference item… Any tax system should be neutral as it treats business entity formation… Any tax provision which eliminates the possibility of international double taxation should not be considered a tax preference item… All legitimate tax preference items should be on the table.
These two idea have some appeal across ideological lines. At the very least it might be a good place to start.
Caroline Mahony is an editorial intern with Human Events.