Vice President Joe Biden sparred with Republican vice presidential candidate Paul Ryan in a lively debate over taxes, foreign policy, the economy, abortion, Medicare and Social Security.
Biden struck an aggressive tone in Thursday night’s debate at Centre College in Danville, Ky., to make up for his running mate President Barack Obama’s lackluster performance at last week’s presidential debate (see Romney Debates Obama, Says He May Need a New Accountant).
Unlike Obama, Biden pointed to Republican presidential candidate Mitt Romney’s comments on the 47 percent of the U.S. population who pay no federal income taxes and tied it to comments made by the former Massachusetts governor’s running mate, Ryan, who chairs the House Budget Committee. Biden noted that the Obama administration had moved to rescue General Motors and the housing industry when Obama took office.
“Romney said, no, let Detroit go bankrupt,” said Biden. “We moved in and helped people refinance their homes. Governor Romney said, no, let foreclosures hit the bottom. But it shouldn’t be surprising for a guy who says 47 percent of the American people are unwilling to take responsibility for their own lives.
“My friend recently, in a speech in Washington, said 30 percent of the American people are takers,” Biden added, referring to Ryan. “These people are my mom and dad, the people I grew up with, my neighbors. They pay more effective tax than Governor Romney pays in his federal income tax. They are elderly people who in fact are living off of Social Security. They are veterans and people fighting in Afghanistan right now who are, quote, not paying any taxes.
“I’ve had it up to here with this notion that 47 percent, it’s about time they take some responsibility here,” said Biden. “And instead of signing pledges to Grover Norquist not to ask the wealthiest among us to contribute to bring back the middle class, they should be signing a pledge saying to the middle class, we’re going to level the playing field. We’re going to give you a fair shot again. We are going to not repeat the mistakes we made in the past by having a different set of rules for Wall Street and Main Street, making sure that we continue to hemorrhage these tax cuts for the superwealthy. They’re pushing the continuation of a tax cut that will give an additional $500 billion in tax cuts to 120,000 families. And they’re holding hostage the middle-class tax cut because they say, we won’t continue the middle-class tax cut unless you give the tax cut for the super-wealthy. It’s about time they take some responsibility.”
"If you heard that little soliloquy on 47 percent, and you think he just made a mistake, then I got a bridge to sell you," Biden later added.
Ryan defended Romney’s five-point plan for fixing the economy, noting that it includes tax cuts that would help the middle class, and criticized the Obama administration for the slow pace of economic growth. “We’re going in the wrong direction,” he said. “Look at where we are. The economy is barely limping along. It’s growing at 1.3 percent. That’s slower than it grew last year, and last year was slower than the year before. Job growth in September was slower than it was in August, and August was slower than it was in July. We’re heading in the wrong direction.
“Twenty-three million Americans are struggling for work today,” Ryan added. “Fifteen percent of Americans are living in poverty today. This is not what a real recovery looks like. We need real reforms for a real recovery, and that’s exactly what Mitt Romney and I are proposing. It’s five-point plan. Get America energy-independent in North America by the end of the decade. Help people who are hurting get the skills they need to get the jobs they want. Get this deficit and debt under control to prevent a debt crisis. Make trade work for America so we can make more things in America and sell them overseas and champion small businesses. Don’t raise taxes on small businesses, because they’re our job creators.”
Ryan, like Romney, declined to provide specifics on their tax cut plan, which would cut tax rates by 20 percent but limit tax deductions for upper-income earners. Biden claimed it would raise taxes by $2,000 on middle-class families, but Ryan disputed those figures.
“We’re arguing that the Bush tax cuts for the wealthy should be allowed to expire,” said Biden. “Of the Bush tax cuts for the wealthy, $800 billion of that goes to people making a minimum of a million dollars. We see no justification in these economic times for those, and they’re patriotic Americans. They’re not asking for this continued tax cut. They’re not suggesting it, but my friends are insisting on it. A hundred and twenty thousand families, by continuing that tax cut, will get an additional $500 billion in tax relief in the next 10 years, and their income is an average of $8 million. We want to extend permanently the middle-class tax cut. These guys won’t allow us to.”
Biden claimed Republicans were preventing separate votes in Congress on preserving the tax cuts for the middle class and the wealthy in order to preserve tax cuts at the high end. “We say let’s have a vote,” he said. “Let’s have a vote on the middle-class tax cut, and let’s have a vote on the upper tax cut. Let’s go ahead and vote on it. They’re saying no. They’re holding hostage the middle-class tax cut to the super wealthy. And on top of that, they got another tax cut coming that’s $5 trillion that all of the studies point out will, in fact, give another $250,000 a year to those 120,000 families and raise taxes for people who are middle-income with a child by $2,000 a year. This is unconscionable. There is no need for this. The middle class got knocked on their heels. The Great Recession crushed them. They need some help now. The last people who need help are 120,000 families for another $500 billion tax cut over the next 10 years.”
Ryan, like Romney, disputed those claims and said their tax reform plan would create jobs. “Our entire premise of these tax reform plans is to grow the economy and create jobs. It’s a plan that’s estimated to create 7 million jobs,” he said. “Now, we think that government taking 28 percent of a family and business’s income is enough. President Obama thinks that the government ought to be able to take as much as 44.8 percent of a small business’s income. Look, if you taxed every person in a successful small business making over $250,000 at 100 percent, it would only run the government for 98 days. If everybody who paid income taxes last year, including successful small businesses, doubled their income taxes this year, we’d still have a $300 billion deficit. You see, there aren’t enough rich people and small businesses to tax to pay for all their spending. And so the next time you hear them say, ‘Don’t worry about it, we’ll get a few wealthy people to pay their fair share,’ watch out, middle class. The tax bill is coming to you.”
Ryan noted that eight out of 10 businesses file their taxes as individuals, not as corporations. The Wisconsin congressman claimed that Obama wants the top effective tax rate on successful small businesses to be as high as 40 percent, when the average tax rate on businesses in the industrialized world is 25 percent. “Two-thirds of our jobs come from small businesses,” said Ryan. “This one tax would actually tax about 53 percent of small-business income. It’s expected that would cost us 710,000 jobs. And you know what? It doesn’t even pay for 10 percent of their proposed deficit spending increases. What we are saying is lower tax rates across the board and close loopholes, primarily to the higher-income people. We have three bottom lines: Don’t raise the deficit, don’t raise taxes on the middle class and don’t lower the share of income that is borne by the high-income earners.”
Moderator Martha Raddatz of ABC News asked Ryan to provide specifics of how he would pay for the 20 percent across-the-board tax rate cut in his plan. Ryan responded that he wanted to get a bipartisan agreement on which tax breaks to eliminate, comparing it to the tax reform deal of 1986 in which President Reagan and House Speaker Tip O’Neill worked out a compromise.
“Different than this administration, we actually want to have big bipartisan agreements,” he said.
Challenged by Raddatz to provide more specifics, Ryan responded, “Look at what Ronald Reagan and Tip O’Neill did. They worked together out of a framework to lower tax rates and broaden the base, and they worked together to fix that. What we’re saying is here’s our framework: Lower tax rates 20 percent. We raise about $1.2 trillion through income taxes. We forego about $1.1 trillion in loopholes and deductions. And so what we’re saying is deny those loopholes and deductions to higher- income taxpayers so that more of their income is taxed, which has a broader base of taxation, so we can lower tax rates across the board. … We want to work with Congress on how best to achieve this.”
Biden responded that he was in Congress when Reagan’s tax reform law of 1986 was passed. “He gave specifics of what he was going to cut,” said Biden. He added that 97 percent of the small businesses in the U.S. make less than $250,000 and would not see their taxes raised under Obama’s plan, but claimed that Romney views hedge funds as small businesses because they have pass-through income. “That’s what they count as small business because they’re pass-through,” he said.
“You think these guys are going to go out there and cut those loopholes?” Biden asked. “The biggest loophole they take advantage of is the carried interest loophole and capital gains loophole. They exempt that.”
Biden cited studies by the American Enterprise Institute and the Tax Policy Center saying that taxes would have to rise on the middle class to pay for Romney’s tax cuts.
“Taxes will go up on the middle class,” said Biden. “The only way you can find $5 trillion in loopholes is cut the mortgage deduction for middle-class people, cut the health care deduction for middle-class people, take away their ability to get a tax break to send their kids to college.”
Ryan disputed that assertion. “He is wrong about that,” he said, adding, “You can cut tax rates by 20 percent and still preserve these important preferences for middle-class taxpayers.”
Biden claimed it wasn’t mathematically possible, to which Ryan responded, “It is mathematically possible. It’s been done before. It’s precisely what we’re proposing. “
Biden said, “It has never been done before.”
Ryan rejoined, “It’s been done a couple of times, actually. Jack Kennedy lowered tax rates, increased growth. Ronald Reagan...,” Ryan began to say when Biden interrupted to quip, “Oh, now you’re Jack Kennedy." Ryan laughed at Biden's allusion to a famous exchange during the 1988 vice presidential debate between Lloyd Bentsen and Dan Quayle in which Bentsen chided Quayle for comparing himself to Kennedy.
“Republicans and Democrats have worked together on this,” Ryan insisted, pointing out that Romney had worked successfully with Democrats when he was governor of Massachusetts to balance the budget for four years without raising taxes. “Mitt Romney was governor of Massachusetts, where 87 percent of the legislators he served with were Democrats. He didn’t demonize them. He didn’t demagogue them. He met with those party leaders every week. He reached across the aisle. He didn’t compromise principles.”
Biden was asked by Raddatz what he would suggest beyond raising taxes on the wealthy that would substantially reduce the long-term deficit. “Just let the taxes expire like they’re supposed to on those millionaires,” he said. “We can’t afford $800 billion going to people making a minimum a million dollars. They do not need it, Martha. Those 120,000 families make $8 million a year. Middle-class people need the help. Why does my friend cut out the tuition tax credit for them? Why does he go out after the child [tax credit]?”
Raddatz asked Ryan if he would declare any tax breaks off limits, such as for home mortgage deductions, but he declined to provide any specifics, other than to insist that the only taxpayers whose deductions would be limited under the Romney plan would be higher-income people.
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