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LBBJ: Unless Congress acts, Bush-era tax cuts will expire and maybe even cuts to the federal budget will come with the new year. This is the precise formula that sent Britain into a double-dip recession this year. What would you do with both the tax cuts and the mandated cuts to spending.
DeLong: Two things. First of all, I would not increase taxes. Not on the middle class, not on the poor, not on the wealthy. I wouldn't increase taxes on any American today, because my number one priority is to get the economy going again and creating jobs. So does increasing taxes help you toward that, or hurt you? I don't see any way that increasing taxes helps the economy grow. None. So, now, does it hurt it a little or hurt it a lot? I don't think we could afford either right now. I am not in favor of increasing taxes.
LBBJ: Would you extend the Bush tax cuts for an additional two years? Four years? Indefinitely?
DeLong: Not indefinitely, because I'd like to think that we're going to get some good policies together to get our economy going again, and when that happens, it might be appropriate, down the road, to increase taxes. It might. It might not. But I certainly always want to have that option, so I would not say indefinitely, but it would seem to me that, I think we're all in agreement, that it's going to be more than a year or two before the economy is robust. So if you only increased it one year, that just means that you're back at the same old battle nine months from now taking valuable time. So I would like to extend the tax cuts for at least a couple of years.
LBBJ: In the spending cuts, a large chunk of which will hit the defense department, something that Republicans are traditionally supportive of, what would you do in that regard?
DeLong: Two things. First of all, I don't think you want to single out any specific department, like defense. To have sequestration targeting 50 percent, I think that's crazy. What we should do is similar to what we've done here in Long Beach. You might say, look, we're going to cut our operating costs two to six percent. So I would have each of the department heads give me six percent. Some might get two, some might get one, some might get six, some might get four, some might get eight. Let's see what the cuts are that are proposed and what the impact is onto our citizenry. That's how I would make that decision, but I will tell you that you need to look at everything. Everything needs to be evaluated, because you can always do something better. You can do it more cost effectively. You can do it more efficiently. That can always be done. We're not doing that. We should be doing that.
LBBJ: Did Congress, both sides of the aisle, back themselves into a corner, do you think, with sequestration, going back to that whole fabricated debt ceiling debate in August 2011?
DeLong: Well, it would certainly seem to me that they didn't think it all the way through of what the potential downsides could be by taking that approach.
LBBJ: Are you concerned that without extending the tax cuts and these pretty significant spending cuts that are mandated, that will come through, if nothing is done, are you concerned that we are at risk for a double-dip recession?
DeLong: I think we are absolutely at risk for a double-dip recession. Absolutely.
LBBJ: If that occurs?
DeLong: If that occurs or if that doesn't occur. Our economy is stumbling. We have no good federal policies coming out of Washington. I think we are absolutely at risk for a double-dip recession. We need to do something more proactively and positively.
LBBJ: Well, along those lines, real quick, Bowles-Simpson – should Congress revisit that?
DeLong: Two things. One is, I think it might pass today.
LBBJ: You really think there's bipartisan support for something like this?
DeLong: I think they understand the devastating consequences if they don't pass it, and that's a lot of it. You know, when you look at something, you say, "Is there political will to do this?" You have to look at it and say, "What is the alternative if they don't do something?" I think when Bowles-Simpson first came up, they did not see the downside liability of not hammering out a deal. I think, today, both sides say, "We had better work together and get something done." So I think there would be more political will, and I think that was the right approach. I think there should have been compromise there, and I still think there should.
LBBJ: Earlier, we talked about the debt and deficits, calling them complicated. You said not so much, that it's as simple as you don't spend more than you take. But, where it does get complicated is where you choose to make those spending cuts. We know you don't want to pick winners and losers, but what are the key targeted areas, in your opinion, where spending has to be reduced, and not only reduced, but reduced significantly?
DeLong: Well, I think that you need to have the attitude to have an open mind to anything, because if you come in and say, "Look, I'm not willing to cut defense," and then you say, "I'm not willing to cut any of the entitlement programs," so I say, "Well, I'm not going to cut this." Pretty soon, there's nothing left. So you've really got to go in with an open mind. I am willing to work with anybody from either party at any level of leadership and come up with some kind of compromise that moves our country forward. I am willing to talk about anything in an effort to build some consensus.
LBBJ: Tax rates, including those on capital gains, have not changed in approximately 10 years. Do you think that cutting taxes further, as some in your party are proposing, would do a lot to spur job growth?
DeLong: No, I don't support cutting taxes right now.
LBBJ: Along those same lines, some people have talked about, rather, raising taxes to generate new revenues, saying why don't we close some of the loopholes and change deductions.
LBBJ: You agree?
DeLong: I strongly support that. I think we need to do two things. I don't support increasing taxes across the board. I absolutely positively do support closing loopholes. When you hear the stories of that millionaire or billionaire that's paying a lower tax rate than someone who makes a significant amount less, I think that's wrong. I think we should absolutely look at all of those, whether you want to call them loopholes or special interest regulation, where they've created a tax rule that benefits one company or one entity. I think those are wrong, and I think we should be going through the tax code with a fine-toothed comb, and we should be ripping that out as much as possible.
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