Tom Keene Talks to Strategas Research Partners' Daniel Clifton
Will the Select Committee on Deficit Reduction—aka the supercommittee—agree on $1.2 trillion in cuts, given its tight Nov. 23 deadline?
You can see the movement is at a turtle’s pace, but at least there is movement. The Democrats started talking about changes to entitlement. We saw a big trial balloon coming from the Republicans talking about ending tax deductions.
Why are we having this debate? The cuts come to only $120 billion a year over a decade in a $15 trillion economy. That’s not much.
When we started this year, we knew we needed $4 trillion of savings over the next 10 years to stabilize our debt-to-GDP ratio. We were on a path of going to debt of 104 percent of gross domestic product by 2021. So no matter what the supercommittee does, whether they come up with their own plan or whether automatic cuts come into place, we still have even more steps to go in 2013 to really take on these bigger issues.
Will the GOP accept a tax hike?
We are having a very different discussion today than we were a month ago. And that is that there is going to be some sort of revenue component to a deal. We are going to start removing tax deductions, or at least limiting tax deductions, and somehow preserve low rates so we are not going back to a system of 50 percent top marginal rates. I think that is the trade-off.