President Obama delivered a pretty interesting speech on the economy yesterday, but towards the end, he completely abandoned his prepared text, ignoring the teleprompter to reflect on something that clearly bothered him on a personal level.
“[J]ust last month, at least one top Republican in Congress said that tax cuts for those at the top are – and I’m quoting here – ‘even more pressing now’ than they were 30 years ago. More pressing. When nearly all the gains of the recovery have gone to the top 1 percent, when income inequality is at as high a rate as we’ve seen in decades, I find that a little hard to swallow that they really desperately need a tax cut right now, it’s ‘urgent.’“Why? What are the facts? What is the empirical data that would justify that position? Kellogg Business School, you guys are all smart. You do all this analysis. You run the numbers. Has anybody here seen a credible argument that that is what our economy needs right now?”
Almost every word of this was ad libbed. Presented with the Republican argument that the wealthy really need yet another tax cut, the president seemed genuinely gobsmacked. To appreciate the degree to which Obama was amazed, watch the video – go here and forward to the 48:02 mark.
Of course, the president wasn’t making up any of the allegations themselves – a leading congressional Republican really did argue last month that tax breaks for the very wealthy are “even more pressing now” than a generation ago.
The congressman is none other than House Budget Committee Chairman Paul Ryan (R-Wis.), who recently suggested combating poverty is one of his top priorities.
Here’s the interview the far-right Wisconsinite did with the conservative Weekly Standard.
“I’m a classic growth conservative. I believe that the best way to help families, the best way to help the economy is to reduce rates across the board,” Ryan said when asked about Utah senator Mike Lee’s plan to increase the child tax credit and create two income tax brackets of 15 percent and 35 percent. “Growth occurs on the margin, which is a wonky way of saying, if you want faster economic growth, more upward mobility, and faster job creation, lower tax rates across the board is the key-it’s the secret sauce.“Some conservatives have argued that reducing the top rate is less urgent now than it was during the Reagan administration, when the top rate was cut from 70 percent to 50 percent and then cut again from 50 percent to 28 percent. But Ryan says that cutting the top rate is “even more pressing now” than it was back then “because the American economy was so dominant in the global economy and capital was not nearly as mobile as it is today.”
As a substantive matter, this serves as a reminder of why it’s tough to take Paul Ryan seriously as an alleged wonk. As Matt Yglesias explained after the Ryan interview was published, “The idea that globalization, which tends to increase the overall size of the economy while also increasing inequality, makes tax cuts for the rich even more urgent strikes me as a little bit hard to defend intellectually.”
But as a political matter, let’s not lose sight of the larger context. Sen. Mike Lee (R-Utah) has floated a tax cut plan that focuses primarily on the middle class. Paul Ryan is drawing a distinct between Lee’s approach and his own – Ryan wants the tax cuts focused on the rich.
In light of everything we’ve seen, in light of the enormous class gap, in light of the already low U.S. tax rates as compared to most of the world, Ryan’s ideas about tax breaks for the wealthy just won’t budge.
Is it any wonder the president is astonished?