Ken Rogoff, former Chief Economist at the International Monetary Fund and professor of Economics and Public Policy at Harvard University, joins "Starting Point" on Friday to discuss the impending fiscal cliff.
"Most likely they'll reach a deal in a few weeks," Rogoff says, arguing that the long-term problem is the inability of Republicans and Democrats to agree on larger issues.
"Well, we'd really like to see some forward movement in the bigger problems, the tax system. There are actually things we need to spend more money on, some things we need to spend less money on. It's dysfunctional. And those ideas are out there. They've been discussed. But they've reached this point where both sides are saying I'm going to hold my breath until I get my way," Rogoff explains.
Only twenty days remain until the U.S. falls over the fiscal cliff, but new reports this morning from the White House are signaling potential progress toward averting the crisis. The White House released a statement confirming that House Speaker John Boehner and President Obama met in person at the White House yesterday. Both Boehner and Obama also released statements saying they would not comment specifically on what was discussed, but both agree "the lines of communication remain open." Whether this means a deal is on the horizon is still in question.
Newark Mayor Cory Booker (D-NJ) thinks that failing to renew the tax cuts for the middle class would create significant economic challenges to those who are already struggling, such as residents across his state. "This is a time in our fragile economy that we cannot have a goverment that is – especially Republicans – holding hostage all of this country," he says. "It's going to really hurt people."
"We saw what happened the last time we had a conflict like this around the debt ceiling debate. This debate ground on, and unfortunately, consumer confidence dipped, the economy hurt, credit was downgraded...I'm really hoping we learned a lesson from this," he says.
Carlos Gutierrez, the former Commerce Secretary under President George W. Bush, joins “Starting Point” on Monday to discuss the impending fiscal cliff, arguing that the stakes of the cliff are more significant than increasing revenue in the short-term.
“The big picture is more than just the fiscal cliff,” Gutierrez says. “This is about the debt. It's about the fiscal deficit. It's about our economy. It's about our future.”
Gutierrez criticizes President Obama, who he says is “playing a very risky game,” for making the fiscal cliff talks tax-focused. “This is the biggest deal in this presidency,” the former secretary of commerce argues. “Why doesn't he explain to people why we have to do something about expenses, about Medicare, about entitlement, that they're going to go broke in ten years?”
"I think we've got to stop playing poker, work together, and understand that we're working to save the country," he adds.
With 29 days until the fiscal cliff, Republicans and Democrats continue to disagree about the necessary cuts and tax increases needed to make a deal. Sen. Richard Blumenthal (D-CT) joins “Starting Point” on Monday to discuss the impending cliff, but unlike others, the Democratic senator says he is “encouraged” that the U.S. can avoid the looming cliff.
Blumenthal says that he is "encouraged," first, because “a growing group of Republicans” have discussed increasing taxes to raise revenue and, second, because a number of business leaders “are proposing that the president’s plan make sense.”
However, the Connecticut senator warns that Republicans need to come forward with “some of their specifics." "If they say they want to avoid these tax increases, they need to be more specific on how to do it," he adds.
“There has to be, to use the magic word, compromise,” Blumenthal says. “And there have to be negotiations. You know, in any sort of compromise in any serious negotiations, there has to be a give and take and I'm hoping that there will be in the coming weeks.”
With only 32 days until tax rates automatically soar and spending cuts kick in, President Obama has released his proposal for dodging the fiscal cliff, which includes $1.6 billion in tax hikes. Ken Rogoff, professor of economics and public policy at Harvard University, joins “Starting Point” on Friday to argue that a mix of spending cuts and higher taxes are necessary, but that Congress needs to consider the long term costs of entitlement programs for any long-lasting solution to the debt crisis.
“Entitlement is the big, looming problem,” the Harvard professor argues. “It is a long-term problem every year. It's likely to get worse as we age. Medical care costs go up. That's the big problem.” He adds that “until people feel it’s fair, and they’re nowhere near feeling it’s fair, [the cuts] are not going to happen.”
Rogoff also says that while he believes the wealthy will need to pay higher taxes, the middle class will also “need” to pay more unless there’s “organic growth that just makes us boom for 20 years.” “We don’t have that,” he says.
The clock is ticking on the American economy's year-end 'fiscal cliff' deadline. Mayors across the country are urging lawmakers in Washington to act before it's too late. Many are gathering in D.C. to lay out the issues their cities face if there is no compromise.
Among them are Democratic Mayor Michael Nutter of Philadelphia, and Republican Mayor Scott Smith of Mesa, Arizona. They explain on "Starting Point" this morning why a balanced, bi-partisan deal is critical to ensuring the economic strength of their respective cities.
As the 2012 race draws to a close, CNN's Christine Romans takes an in-depth look at foreclosures and unemployment in swing states like Nevada, Colorado and Florida.
Harvard Univ. Economics & Public Policy Prof., Ken Rogoff on claims from Mitt Romney and President Obama in the presidential town hall debate.
Sheila Bair, former chair of the FDIC and author of “Bull By The Horns,” joins "Starting Point" to discuss the policies of the U.S. Federal Reserve and comments made by Federal Reserve Chairman Ben Bernanke.
"I think Ben [Bernanke] is heroic in trying to help our moribund economic recovery through monetary policy, but I don't think it works," says Sheila Bair. "The money doesn't stay here. The money doesn't go into lending - domestic lending that helps the economy. It goes overseas where it can get higher returns in these developing countries and that creates problems for them."
The economy was a crucial issue in the vice presidential debate late Thursday with Vice President Joe Biden and Rep. Paul Ryan defending their positions on taxes, the deficit and economic policy. Mark Zandi, chief economist for Moody’s Analytics and author of “Paying the Price: Ending the Great Recession and Beginning a New American Century,” joins “Starting Point” to discuss the current U.S. economy and what the future might look like after the election.
The U.S. is “making progress," Zandi says. “Obviously we're not going anywhere fast. The economy is not improving fast enough to bring down that unemployment rate. But we are improving, and the best news, most recently is the housing market. The housing market has turned the corner and of course housing was ground zero for our problems. The fact that it's turning up is very positive news,” he says.
The chief economist also argues that “regardless of who wins the election” the economic recovery will continue to progress. “The unemployment rate peaked at 10% just about three years ago. We're now at 7.8%. I think it's very doable to get to 6% by the end of next president's term,” he adds.
Despite positive news for the economy, Zandi warns that the next president will need to address the fiscal cliff early in his term. “Either president has to lay out a credible path to deficit reduction to stabilize their debt load. If they can do that, and I think either president can, then our economy is going to, I think, get its groove back,” he says.