Former Congressional Budget Office Director Douglas Holtz-Eakin criticized President Barack Obama’s latest budget, calling it “a real threat to our ability to have growth in the United States,” during a lecture Thursday in Martha van Rensselaer Hall.
Despite budget projections from 2008 predicting that the debt-to-GDP ratio will rise from a factor of 40 to 90 by 2020, the federal budget has remained unchanged, Holtz-Eakin said. This not only leaves the state of the budget “more depressing than bioterrorism,” but also threatens American businesses’ ability to compete in the global market, he said.
Holtz-Eakin, the current president of the American Action Forum and commissioner on the Congressional Financial Crisis Inquiry Commission, served as the chief economic policy advisor to U.S. Senator John McCain in the 2008 presidential campaign.
“I’ve been in Washington for about a decade,” Holtz-Eakin said. “During that time, there’s been a continual repetition of events and issues associated with the economy, terrorism, issues of oil … and the federal budget.”
Holtz-Eakin associated excessive spending in Obama’s budget with the Affordable Care Act, calling both, “the biggest intergenerational money grab in history.” He stressed that as the number of retired seniors increase, younger generations will have to bear the burden of increasing government medical welfare costs.
“I am your problem,” he said. “I’m 53 years old, I’m the baby boom generation, and health care is going to get more expensive. If we don’t change these programs for me, then we will have grandfathered the problem for you.”
In addition to discussing government spending issues, Holtz-Eakin argued for tax reform.
Because the U.S. taxes companies on the basis of a worldwide income system as opposed to a territorial system, a U.S. firm in Brazil, for example, owes both Brazil and the U.S. taxes, while a competing German firm would only have to pay Brazilian taxes, he said.
To tackle the problem, Holtz-Eakin said the government should dedicate revenue into a trust fund to subsidize businesses, cut corporate taxes and push for taxes that “everyone in America will pay” rather than a select minority of upper-income Americans.
“When you hear an esoteric debate about corporate taxes in America, remember that this is affecting our ability to compete, which is essential for the next generation,” he said. “When we lose corporations, it’s the average American’s pay that gets affected.”
Acknowledging the unpopularity of tax reform, Holtz-Eakin said, “Conservatives are willing to do hard things now for the sake of the future.”
“We need to build strategies that are fundamentally pro-growth … The sooner we control federal spending and get government back to a contained, defined size, the better off everyone else in this room will be,” Holtz-Eakin said. “What is at stake is our prosperity and our freedom.”
Garrett Blaber ’13, who attended the lecture, said that it was a largely one-sided discussion.
“I thought he provided an accurate outlook of current congressional decisions and their impact on the budget, but he was fairly partisan,” Blaber said. “Although he provided great points about unsustainable spending, he overlooked the main opposing points of liberals.”
Judah Bellin ’12, who is also a Sun columnist, said he appreciated hearing the advice of a policy expert.
“I thought the lecture was really superb. [Holtz-Eakin] gave a great summary of some of the policy challenges we’re facing, but also provided concrete and sensible policy advice,” Bellin said.
Original Author: Akane Otani