TEXT OF INTERVIEW
Renita Jablonski: This week on the Marketplace programs, we’ve been hearing from economic advisors for the presidential candidates. This morning, it’s Republican Mitt Romney’s turn. His advisor is Glenn Hubbard. Marketplace’s Scott Jagow started his conversation with Hubbard about one of the biggest questions facing our economy right now.
Scott Jagow: Well, let’s start with the plan to stimulate the economy. What is Mitt Romney’s position on that package?
Glenn Hubbard: Well, Governor Romney is concerned about current developments in the economy, and broadly supports the package the president has put forward. He also has suggested the need to remember that making the Bush tax cuts permanent is probably more important stimulus than anything we’re talking about today.
Jagow: OK, would that be a centerpiece of his long-term philosophy?
Hubbard: Most definitely. He has said that the cornerstone fiscally is to begin with making the Bush tax cuts permanent. He has other fiscal objectives on the spending side and the tax side, but it starts there.
Jagow: All right, what are some of those?
Hubbard: Well, after stopping the large tax increase that would be in store for us were the tax cuts not make permanent, he has suggested the need to boost military spending and to have spending restraint in the rest of the budget and the need for entitlement reform for long-term budget balance.
Jagow: We’ve talked about the idea of tax cuts. What about the tax system?
Hubbard: Well, he’s already proposed removing taxes on saving for all households who make less than $200,000 a year. He’s certainly keen to look at tax reform — particularly in corporate area, where the U.S. now has the second-highest statutory corporate tax rate in the world.
Jagow: What about a more radical approach, something along the lines of the Fair Tax that Governor Huckabee has suggested?
Hubbard: Well, national sales taxes of the level that would be required to fund the federal government are virtually impossible. You know, were you to want a national consumption tax, which has great merit, it would be implemented more on the business side. So it’s possible to design a consumption tax that is fair and is more efficient, but that would not be a so-called fair tax.
Jagow: If you had to pick one economic feature of Governor Romney’s philosophy, what would you focus on?
Hubbard: Well, that’s an easy one, because I think what has distinguished him in his business and political career, and certainly in the presidential race, is his emphasis on openness in the American economy and optimism about our future. He believes that we have an excellent future, as long as we maintain an open economy and an economy that shares its prosperity broadly.
Jagow: Glenn Hubbard. He’s an economic adviser for Mitt Romney. Thank you so much.
Hubbard: My pleasure.