As NewsBusters has been reporting, the media have been on a full-court press in recent days supporting the President's push to raise taxes.
Doing his part was NBC's David Gregory who trotted out the words of former Vice President Walter Mondale on Sunday's "Meet the Press" to really drive home the point, and then got a huge assist from former Federal Reserve Chairman Alan Greenspan (video follows with transcript and commentary):
DAVID GREGORY, HOST: Walter Mondale wrote a piece this week in The Washington Post. I'll put a portion of it on the screen. It has to do with the tax debate. He says this: "We will not be able to control our budget deficits without raising taxes. ... President Obama's speech Wednesday lived up to that moment, and now Democrats and Republicans in Congress must take a similar stand. ... I told the truth," he writes, "in 1984 ... in my acceptance speech at the Democratic National Convention in San Francisco. `The budget will be squeezed. Taxes will go up. ... It must be done. Mr. Reagan will raise taxes, and so will I. He won't tell you. I just did.' I lost the election, but I won the debate. Reagan ended up increasing taxes in 1984, 1985, 1986, and 1987 to mend the budget and tax systems." Do taxes have to go up if we're going to get real about the debt?
Although it's been a common exercise in recent years for liberals to talk about all the times Reagan supposedly raised taxes, the reality is that when he took office in 1981, the top bracket was 70 percent - 50 percent for earned income. When he left office in 1989, that bracket was 28 percent.
The point of Reagan's tax reform was to simplify the tax code by reducing the number of brackets along with their percentages while cutting deductions and loopholes. Some of the latter indeed raised taxes, but the combination of all Reagan's reforms acted to significantly bring down the nation's tax burden.
Unfortunately, nobody on Gregory's panel brought this up:
SEN. MIKE LEE (R-UT): No. And with all due respect to Mr. Mondale, that argument isn't going to go over any better this year than it did in 1984. Americans understand that...
MR. GREGORY: But Reagan did it, is his point.
SEN. LEE: ...you can't raise taxes, particularly in an economy like this one, without hurting jobs, without hitting economic growth. And we desperately need those things. Whether you're in favor of bolstering national security on the one hand, or shoring up entitlements on the other hand, you need the revenue that can fund those programs. But we can't have that when we hurt the economy by raising taxes.
MR. GREGORY: Dr. Greenspan, is that accurate? You, you've been--you're a veteran of many budget wars. Is it realistic to say that taxes can't, can't be raised if we're going to get serious about the deficit?
Given Greenspan's answer - which is guaranteed to be headline news as well as ammunition for the Left for some time - one has to wonder if Gregory knew what was coming:
ALAN GREENSPAN, FORMER FEDERAL RESERVE BANK CHAIRMAN: Well, it's--the, the data shows something very interesting about endeavoring to curtail budget problems of the type that we have. The IMF, a number of well-known academics have all observed that if you have a disproportionate part of your budget cuts from tax increases, it won't work. And indeed, the economic impact of cutting back on spending is rather modest, and the IMF is saying to the point of possibly being insignificant. But having said that, I think this crisis is so imminent and so difficult that I think we have to allow the so-called Bush tax cuts all to expire. That is a very big number. But having put the rates back to where they were in the Clinton administration, I would argue that everything else should be either cutting spending or taking out the subsidies which are in the tax expenditures.
MR. GREGORY: So you say let them expire for everybody.
DR. GREENSPAN: Everybody.
MR. GREGORY: Go back to Clinton-era rates.
DR. GREENSPAN: Yes. And I think that what we have to become aware of is that if we allow taxes to fill in the holes here, we are going to find that we're getting ever closer to the type of economies that exist in Europe, which are very heavily laden and not rapidly growing the way our, ours can. I must say, I am feeling far more optimistic about resolving this issue now than I was several months ago. And the fact that people are saying--putting on the table that this issue requires a major cut in entitlement spending in order to resolve this issue is the issue that has got to be confronted. We're going to do it realistically. I hope sooner rather than later.
Somewhat strange answer if you really analyze it.
On the one hand, Greenspan cited the IMF claim that "if you have a disproportionate part of your budget cuts from tax increases, it won't work." He's also concerned that "if we allow taxes to fill in the holes here, we are going to find that we're getting ever closer to the type of economies that exist in Europe, which are very heavily laden and not rapidly growing the way our, ours can."
Regardless of both those valid points, Greenspan still would like to see the Bush tax cuts expire.
What will likely get lost in the media replays of this statement is that what is most fueling his optimism about resolving our deficits is "the fact that people are saying--putting on the table that this issue requires a major cut in entitlement spending in order to resolve this issue is the issue that has got to be confronted."
I doubt that will get much play from the tax hike-crazed media.