Michael Bloomberg on Tuesday called on members of Congress to allow the Bush-era tax cuts to expire on schedule at the end of next year, marking a reversal for the independent New York City mayor who last year urged the cuts be extended for “another couple of years.”
At an event in Washington sponsored by the liberal Center for American Progress and the conservative American Action Forum, Bloomberg also urged President Obama to “(commit) to veto any further extensions” of the 2001 and 2003 tax cuts should Congress send them to his desk.
“All income groups have to be part of the solution,” Bloomberg, who is also the 12th-wealthiest person in the world, said at the bipartisan event on debt reduction. “It’s fair to ask those who earn more to bear more of the burden.”
Bloomberg’s remarks come as a bipartisan “supercommittee” in Congress is grappling with the problem of the country’s debt. If the 12-member panel doesn’t reach agreement by Thanksgiving on a plan to shave at least $1.2 trillion off the debt over the next 10 years, a $1.2 trillion across-the-board cut to defense and non-defense spending will be enacted in early 2013 – something most members are seeking to avoid.
Along with entitlement reform, the tax issue represents one of the biggest sticking points in the bipartisan talks. Democrats are pushing for a plan that would include both spending cuts and tax increases, while Republicans have said tax increases should not be part of the equation.
The matter of the Bush-era tax cuts, which Congress last year voted to extend until the end of 2012, isn’t likely to be taken up by the supercommittee. But the issue looms large over the broader debate over the country’s debt, and Bloomberg argued Tuesday that certainty on the expiration of the Bush-era tax cuts could push lawmakers on the supercommittee to more seriously address the issue of comprehensive tax reform.
“If Congress knew for certain that the Bush tax cuts would expire next year, it would increase the likelihood that it would reform the tax code,” he said.
More broadly, Bloomberg said that “we need Republicans to accept the fact that we have a serious revenue problem” and criticized those who argue that returning to the Clinton-era tax rates would put the U.S. at a competitive disadvantage.
“The same people said the same thing back in 1993 when President Clinton and Congress adopted those rates as part of a major deficit-reduction plan, and I think everyone who reads history would agree, that turned out pretty well,” he said.
Bloomberg, who was a longtime supporter of the Democratic Party before running for mayor as a Republican in 2001, and later declaring himself an independent in 2007, also called on the supercommittee to take up the debt-reduction recommendations of the Simpson-Bowles commission “largely in their entirety, including the Social Security reforms.”
“All sides have to be willing to give on something,” Bloomberg said, adding that “we don’t have to slaughter the sacred cows, but we do need to get a little milk from them.”
Democrats, he said, should be willing to support reform of federal entitlement programs, including a gradual increase in the Social Security retirement age.
He also urged members on both sides to support a comprehensive tax reform effort that would do away with farm and energy subsidies as well as “outdated” tax loopholes in the financial industry.
“I say this even though many of the people who would be affected are my constituents, and I assume I will get some phone calls this afternoon,” Bloomberg said.