President Barack Obama plans to name a task force to review and overhaul the U.S. tax code, a spokesman for the Office of Management and Budget said today. Obama will ask the Economic Recovery Advisory Board, led by former Federal Reserve Board Chairman Paul Volcker, for a top- to-bottom review of the 96-year-old law in an effort to "rebalance the federal tax code," spokesman Tom Gavin said in an interview.
That makes me feel good after the way he handled that UN Oil for Food scandal.
"The goal is a tax system that works better for the American people," Gavin said. "The president's going to ask the board that they find ways to simplify the tax code, protect progressivity in the revenue base, close tax loopholes and find ways to reduce tax evasion and that they reduce corporate welfare."
Austan Goolsbee, the president's senior economic adviser, will be named staff director of the tax-review panel. Members of the panel will include Harvard's Martin Feldstein, former chief economic adviser to President Ronald Reagan; Laura D'Andrea Tyson, professor of economics at the University of California at Berkeley and former economic adviser to President Bill Clinton; Roger Ferguson, chief executive of Teachers Insurance and Annuity Association and former vice chairman of the Federal Reserve; and William Donaldson, former chairman of the Securities and Exchange Commission.
Martin Feldstein is a token that will be thrown off immediateley - As a member of the board of AIG Financial Products, Feldstein was one of those who had oversight of the division of the international insurer that contributed to the company's crisis in September, 2008.
A date for the formation of the task force hasn't been decided, Gavin said.
Obama plans to ask Volcker, Goolsbee and the panel for a package of recommendations to be on his desk Dec. 4. That would leave enough time for decisions to be made and included as proposals in the White House budget for fiscal 2011, to be submitted to Congress in February 2010.
There will be two restrictions imposed on the tax review task force, Gavin said. There should be no increase in taxes on families earning less than $250,000 per year, and taxes should not be increased in 2009 or 2010, he said.
Continuing the tax cut beyond 2010 "remains a major pillar of the president's budget," Gavin said. The review panel will be charged with consulting "a pretty wide range of tax-policy experts and other public voices" before recommendations are made to the president, Gavin said.
The tax-review plan comes as Obama faces opposition in his own party as he pushes for approval of a $3.6 trillion budget that Republican critics say would pile a mountain of debt on taxpayers for years to come.
The president scheduled a meeting with congressional leaders on Capitol Hill today to persuade them to back his long- range plans for an overhaul of health care, energy programs and education to revive the U.S. economy.
House and Senate lawmakers are struggling to work on the 2010 non-binding spending blueprint amid a worsening deficit. Lawmakers are tentatively scaling back on some domestic programs, including curbing greenhouse gas emissions. Senator Kent Conrad, a North Dakota Democrat who heads the Budget Committee, has drafted a spending plan to generate a smaller deficit than Obama's plan, with next year's shortfall totaling $1.2 trillion. Obama's budget would generate a $1.4 trillion deficit next year, according to the nonpartisan Congressional Budget Office.
Conrad's plan deletes an Obama budget proposal that called for $250 billion to aid the banking industry. His plan pledges to reduce the deficit from a forecast $1.7 trillion this year to $508 billion in 2014.
Tax credits, under the "Making Work Pay" program, which lead to $400 tax cuts for most workers and $800 to couples, would expire at the end of 2010.