House Democrat Backs Murray's Threat to Hike All Tax Rates

Adam Smith: 'She would choose to let all of them expire, and I agree with her on that'

NEWSMAKERS: Congressman, let's begin with some of the news of the week. Sen. Murray indicated that the Bush tax cuts should essentially expire. How likely is that to happen?

SMITH: Well, what Sen. Murray said was that if the choice was between extending all of them are letting all of them expire, that she would choose to let all of them expire, and I agree with her on that. Her preferred position and mine is to let some of them expire, but not all of them. But if—and it depends on how the majorities play out in this election, obviously—if the Republicans insist that it is all or nothing, then I think what she said the is that the better policy position is nothing. Let’s keep in mind that would give us the tax rates we had in the late 1990s under President Clinton and, I should add, a Republican Congress and we had the strongest economy we had since World War II. So obviously those tax cuts that existed prior to the Bush tax cuts can sustain a strong economy.

NEWSMAKERS: Do you feel the same way about sequester? Are you prepared to cross that sequester line if you do not get the concessions from republicans that you hope?

SMITH: I think that’s a more flexible thing. It depends what options are put on the table to deal with sequester. I didn’t vote for it in the first place; I thought it was a terrible idea. We heard testimony this week in the Armed Services Committee that this is built off of the sequestered from the1980s. Everyone who has ever supported this has said, we don’t think this should happen, we don’t think this is a good idea. It’s a forcing mechanism. It's so bad we feel it will force people to act. Well, unfortunately, they have underestimated the current situation and now we have something where the people who supported say it is so bad it shouldn’t happen. We are reaching the point where one of the wisest course of action will be to say no, we’re not going to do this. We still have to deal with the deficit, but we will not put a gun to the head of the economy in this fragile state forcing that. So, sequester is a big problem. There's no clear way out right now.