Now that the election is over, President Obama's next major issue to tackle is the fiscal cliff. But with as divided a Congress as before the election, it could take some time before Democrats and Republicans reach a deal.
Austan Goolsbee, professor at the University of Chicago’s Booth School of Business and fmr. chairman of the White House Council of Economic Advisers, joins Soledad on “Starting Point” to talk about the looming fiscal cliff.
Republican House Speaker John Boehner has statements indicating some willingness to compromise for the fiscal cliff, but mentioning that simply raising taxes will not solve it. Goolsbee agrees with Boehner’s statements to reporters. “It’s got to be part of a grand bargain, and hopefully they’ll be some room for compromise,” Goolsbie says. “But I fear there’s still one more celebrity death match left in that old kind of Tea Party viewpoint.”
Republican Sen. Kay Bailey Hutchison of Texas asks Gooslbee about tax reform creating revenue in regard to Boehner’s statements. “If by raising revenue through tax reform, it meant ‘lets go in and figure out how we broaden the base and get rid of deductions and exemptions,’ then I think there’s a chance,” he says. “But, if it meant, “We’re gonna rely on the Laffer curve if we could only raise revenues by cutting rates and counting on the tax cuts to pay for themselves,’ that will definitely not work.”
Treasury Secretary Timothy Geithner has said he will not remain in the position into President Obama’s second term. Gooslbee says he doesn’t blame Geithner, having had to tackle the financial crisis and debt crisis.
“It strikes me that the big issue of 2013 on the economic side is gonna be confronting the grand bargain,” Goolsbee says, “so whoever’s gonna be his replacement is gonna need to be totally up to speed on budget tax reform and those kinds of issues, because that’s gonna be what’s facing us.”