April 13th, 2012
05:07 PM ET

Watch GPS: Did Republicans slow the U.S. recovery?

On Fareed Zakaria GPS this week, the most important issue: the economy. Fareed goes one-on-one with President Obama’s top economic adviser: Director of the National Economic Council Gene Sperling.

Also, the race for the top job at the World Bank. Should the next leader be an American (as has always been the case)? Nigeria’s Finance Minister says “no.”  Ngozi Okonjo-Iweala makes the case for her own candidacy.

And a fascinating look inside Africa’s “Dirty Wars” with the New York Times' Jeffrey Gettleman.

GPS airs Sunday at 10a and 1p Eastern on CNN.

Gene Sperling on Republicans and the recovery

Now it’s fortunate we got the payroll tax cut, the veterans’ tax cut, the unemployment insurance. And those are helping. But just think about how much stronger the job market would be if just two of the things he had proposed that the Republicans said "no" to had passed. One, teacher layoffs. And secondly, construction jobs, and infrastructure. I think if those two things had passed, we’d be knocking on the door of going under 8 percent, being into the 7 percent on unemployment and making much further progress.

Gene Sperling on the Buffett Rule

Fareed Zakaria:  Let me ask you about the Buffett rule. The Buffett rule, most of the analysis suggests, raises about $40-$45 billion a year.  The federal government is going to spend, over the next 10 years, $45 trillion.  So is this about economics?  Is this about deficit reduction?  Or is it, as your critics charge, class warfare?

Gene Sperling: I think what it is about is it’s about the basic fairness and trust in our tax code and in our government, and it’s about putting together a larger deficit reduction plan that includes the values of shared sacrifice.

So, yes, on the fairness side, I think when people call for tax reform, what a lot of people are talking about, typical Americans, is, yes, they want less complexity in filling out their own taxes. But what really irks a lot of Americans is the idea that people who are extremely well off are able to use tax planning, tax accounting, parking money, arranging all their income to be at preferential rates, so that the most well-off people in our society can actually end up paying less than a lot of middle income families, who are struggling to make ends meet.

And the Buffett rule is very simple. It says you can do all those kind of tax planning. You can do all you want.  But at the end of the day, there’s kind of a flat rule. If you make over a million dollars, you’re going to play - pay at least a flat 30 percent rate. Now on the numbers, if you kept tax rates where they are today, this would actually raise $160 billion. Which is significant, $160 billion over 10 years. And if you allowed the tax rates to go back to where they were in the Clinton era for the most fortunate, which would be 39 percent, then it would raise $47 billion. Well, of course, that alone isn’t going to solve our deficit. But that’s not the issue.

The issue is, is that an important component of an overall deficit reduction plan? And the reason why I think it is, is because people in our country are absolutely willing to sacrifice if they believe we’re all in it together, their shared sacrifice. When you look at the House Republican budget, they’re willing to cut Medicaid for people with disabilities, poor children, people in nursing homes by a third, 10 years from now, at $810 billion, and then at the same time they won’t raise one penny in revenues, they’ll actually have tax cuts that could give the typical millionaire $150,000, that breaks that kind of social compact.

Gene Sperling on Paul Ryan

Fareed Zakaria:  Paul Ryan this week said the president walked away from Simpson-Bowles. He set up the Cantor-Biden talks to fail. He has set up a sequestration process that he knew would unravel, that he’s not serious about deficit reduction.

Gene Sperling:  Well, obviously, I could not disagree more. And while I like Paul Ryan personally, I do not think at this point he has contributed in any way to our country moving forward on a bipartisan deficit reduction plan that reflects shared sacrifice.

I mean, Paul Ryan, talking about walking away from a balanced plan like Bowles-Simpson is, I don't know, somewhere between laughable and a new definition for chutzpah. He was on the commission and voted against it. That plan, the Bowles-Simpson plan, actually calls for raising more revenues than President Obama has.

So President Obama says that as part of an overall $4 trillion deficit reduction plan you should have $1 1/2 trillion of revenue.  Bowles-Simpson says it should be more like $2 trillion.  Paul Ryan says not only is it zero, but he proposes cutting taxes more and doing everything on spending cuts. So his budget has become the poster child for an extreme budget that puts all the burden on the middle class and the most vulnerable.  It includes no revenue.  When the core of Bowles-Simpson was a balance of revenue and entitlements savings, and a principle that you don’t put much burden at all on the most vulnerable in our society.

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Topics: Economy

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