and martin feldstein is a professor at harvard university. a longtime conservative thinker, he was the chair of council of economic advisers in the reagan administration. gentlemen, we thank you both for being with us. >> good to be with you. >> woodruff: professor feldstein i'm going to talk with you. let's talk about the tax cuts in the president's plan first. this notion that he would cut the social security payroll tax in half for employees, expanding it, and then extending it to employers. what effect would that have on jobs? >> well, a very small positive effect. the part that households get, that employees get, the part that employers get i think would basically be just saved, added to retained earnings. so that would have almost no impact at all. >> woodruff: why don't you think it would have a greater impact on employers? >> oh, because you're talking about a 3% of payroll reduction. so if you're going to hire somebody and pay them $30,000, it's $900 a year. that's tax deductible against a corporate rate. so it's $600. so for $600, t

people like martin feldstein who was president reagan's chief economist have said that some of the most wasteful and unproductive spending anywhere in the budget is actually in the tax code. those are a number of things that obama is talking about. i'd also note that when you do the math and you include as one should the spending cuts that were just enacted last month in all of the non-entitlement programs, when you take the numbers, you remove the war spending-- i agree with phil there-- and you use the same budget baseline, the same measuring rod that both simpson and the gang of six today, you'll actually find the obama package is more than $2 in spending cuts for every dollar in revenue. >> ifill: does your math equal that? >> bob and i need to open up a spreadsheet after the show and do the math. there's going to be a mix of politics and policy. you know, for me it's fine actually for the president to put out his vision and give the kind of angry speech. that's fine. everyone should just understand last week was policy. this week is politics. hopefully those two can merge and both

martin feldstein served as chairman of the white house council of economic advisers in the reagan administration. and dr. feldstein has written more than 300 research articles in the field of economics, founded the national bureau of economic research, and is currently as a professor at harvard. john engler, president of the business roundtable, three term governor of michigan. mr. engler, governor engler was president and ceo of the national association of manufacturers. and edward kleinbard, chief of staff of the joint committee of taxation from 2007 to 2009. he has 20 years of experience practicing tax law in new york, and is currently a professor of law at the university of southern california. this is an extraordinary panel. thank you for honoring us with your presence. senator crapo? >> thank you, mr. chairman. i appreciate your holding this hearing as well. i want to focus right at the outset on one of the early comments. that is any part of the important needed changes that we need to be making in america today with regard to economic and fiscal policy, tax reform, is one of the key piec

host: to hear a voice on the other side, let's listen to the economist martin feldstein. >> it uses the revenue to finance a new collection of government spending programs, when we need that revenue from reduced tax expenditures to reduce future budget deficits and to lower marginal tax rates. second, as you know, the president would limit the tax expenditure reductions just to hire income taxpayers, those with more than $200,000 in income. but a long-term deficit reduction requires that everyone shared in that burden. if congress were to pass the president that a proposal to reduce tax expenditures just for higher income individuals, i think it would be very difficult to revisit that at a later time and to extend it to the entire population of tax payers. host: two voices in the continuing debate over tax policy. we have two at the table this morning. we are taking your telephone calls on tax policies, specifically using the president's proposals in his jobs plan at our vehicle for discussion. a viewer from new york says -- replacing the income tax with a consumption tax? guest: it wou

off >> host: and a voice on the other side, let's listen tosten economist martin feldstein. t >> it uses the revenue todstein ew collection of government spending programs. when we need that revenue fromed reduced tax expenditures to reduce future budget deficits fe and to lower marginal tax rates. second, as you know, the president would limit the taxhe expenditure reductions just tout higher income taxpayers, those with more than $200,000 in

i've heard chairman, the fed reserve, former chairman alan greenspan, and martin feldstein was just referred to arguing tax expenditures are a difference in form of a different kind of government spending. what's your assessment of whether tax expenditures are another form of government spending in another package. >> well, senator, that's the construct of the tax expenditure is to say where am i doing something special? there's a lot of different ways that government policymakers can choose to do something special. you could have a direct subsidy, or you could have a subsidy through the internal revenue code. in that sense, you think of tax expenditures as spending by another name. now that sort of begs of question of why, you know, on policy merits, the congress decided to do it this way. in some cases a direct spending program could be easier to administer and more efficacious, could require fewer rules. it's possible that the opposite could also be the case, that it could be, you know, easier to administer a tax benefit than, you know, a specific new government program. remember, it's --

martin feldstein served as chairman of the white house advises.of economic counci he has written morein the field of economics, founded the national bureau of economic research, and is currently a professor at harvard. john engler president of the business roundtable, a three- term governor of michigan. mr. engler, i governor engler was president and ceo of the national association of manufacturers. and edward kleinbard, chief of staff of the joint committee of taxation from 2007-2009. he has 20 years of experience practicing tax law in new york and is currently a professor of law at the university of southern california. an extraordinary panel. thank you for honoring us with your presence. senator crapo. >> if thank you mr. chairman. i appreciate your opening as well. i want to focus on one of your earlier comments. any part of the important needed changes that we need to make in america today with regard to our economic and fiscal policy, tax reform is one of the keys that we must not allow to be ignored. i have been working with a group of six, it has been called the game. -- gang.

martin feld stein served as chairman of the white house council of economic advisors in the reagan administration and dr. feldstein 300 research articles in the field of economics, founded the national bureau of economic research and is currently a professor at harvard. john ingler, three-term governor of michigan, president of the business round table. he was president and c.e.o. of the national association of manufacturers. and edward kleinbar, chief of staff of the joint committee of taxation from 2007 to 2009. he has 20 years of experience practicing tax law in new york and is currently the professor of law at the university of southern california. it's an extraordinary panel. thank you for honoring us with your presence. senator crepo. >> thank you, mr. chairman. i appreciate your holding this hearing as well. i want to focus at the outset on one of your early comments that as any part of the important needed changes we need to be making in america today with regard to economic and fiscal policy, tax reform is one of the key pieces that we must not allow to be ignored. as you know, i've been working with a gr

host: to hear a voice on the other side, let's listen to the economist martin feldstein. >> it uses the revenue to finance a new collection of government spending programs, when we need that revenue from reduced tax expenditures to reduce future budget deficits and to lower marginal tax rates. second, as you know, the president would limit the tax expenditure reductions just to hire income taxpayers, those with more than $200,000 in income. but a long-term deficit reduction requires that everyone shared in that burden. if congress were to pass the president that a proposal to reduce tax expenditures just for higher income individuals, i think it would be very difficult to revisit that at a later time and to extend it to the entire population of tax payers. host: two voices in the continuing debate over tax policy. we have two at the table this morning. we are taking your telephone calls on tax policies, specifically using the president's proposals in his jobs plan at our vehicle for discussion. a viewer from new york says -- replacing the income tax with a consumption tax? guest: it wou