"Economic Choices '2008"-Dan Tarullo, Shares Sen. Barack Obama's Economic Strategy
Thursday, June 12, 2008SUSIE GHARIB: April 15 is long gone, but it's still tax season for the presidential campaigns. Senator John McCain's economic advisors said today rival Barack Obama will raise taxes sending up capital gains rates for seniors. In response Obama said charges like that are misleading and that he will cut tax rates for most American families. Tonight as we continue our coverage, Darren Gersh talked with Obama's senior economic adviser Dan Tarullo and began by asking what the senator's top economic priority will be.
DANIEL TARULLO, SR. ECONOMIC ADVISER, BARACK OBAMA CAMPAIGN: His main concern from the outset of his campaign has been the position of the middle class, the squeeze on the middle class. And I think what you see in his economic policy programs is a set of initiatives that will both relieve the squeeze on the middle class that has resulted from stagnating wages and higher cost-of-living and at the same time, make the kind of investments in our country that are necessary to create the good jobs of the future.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Well, as you know the Center for Tax Policy has taken a look at the policies that Senator Obama advocates to do that and added up the tax numbers and come up with a figure that the Obama plan would add $3.5 trillion to the deficit over the next 10 years. Have you seen that analysis? Is it accurate and if it is, what does that say about Senator Obama's goal of being fiscally responsible?
TARULLO: Well, we certainly looked at the analysis and I think I'd say two things about that. First, Senator McCain, the number that the Tax Policy Center assigns to Senator McCain's proposals is substantially greater than that, that is over $4.5 trillion. But secondly and probably more importantly, the Tax Policy Center is working with a baseline that assumes the disappearance of all the Bush tax cuts. So they're not looking at today and what our situation is today. Instead they're looking at an artificial situation which won't ever exist. If you just look at the difference in Senator Obama's tax proposals and his tax cut proposals, you will see that according to the Tax Policy Center, over 10 years, there is a net revenue increase of three quarters of a trillion dollars.
GERSH: But essentially they have also said that Senator Obama is looking for roughly close to a trillion dollars in savings from loophole closures, things like that, which they gave him the benefit of the doubt on. But they said we don't see how he gets to this number. But he says he is going to get to this number so we are going to give him credit for it. Are you really going to find a trillion dollars in savings from closing loopholes and things like that when the campaign hasn't really specified them?
TARULLO: Well, we certainly have specified the tax increases on the very upper income people. We've specified a number of the sources of revenue, the loopholes, obviously, (INAUDIBLE) leave oil & gas corporate tax preferences, I don't think you should underestimate the importance of cracking down on international tax evasion. So yes, we are confident that there will be adequate offsets.
GERSH: Let me ask you about trade which is something you worked on a great deal when you were in the Clinton administration on expanding free trade agreements. Right now the economy, basically the only thing keeping the economy out of recession right now is exports. Exports are doing quite well in this economy. It would seem like this would be a moment when the next president should be talking about expanding exports and coming up with ways to further trade agreements to expand exports. Senator Obama is talking about taking a different approach and pausing on trade agreements and re-examining them. Why is that the right approach if exports are holding this economy up?
TARULLO: Well, first off Senator Obama has never said that he would pause on trade policy. What he has said is that we need to follow a different set of trade policies than have been followed in the past. He has reiterated on many occasions, most recently this past Monday in a speech in North Carolina, that he is for trade. He believes in free trade. But it's got to be a trade policy which works for all Americans. And that's why he wants to shift the kinds of trade agreements and the kinds of trade policies that an administration will pursue.
GERSH: Mr. Tarullo, senior economic adviser to Senator Obama, thank you for your time.
TARULLO: Thank you.
GHARIB: A note regarding the presidential election. We have invited Senator John McCain's top economic adviser to appear on the program, as we continue our "Economic Choices '2008" coverage.
