Latest / OneLegUpAlex Media / A 2.1 Trillion Dollar Leg Up For the American People, Says Pete Sepp of the National Taxpayers' Union on the Alex Garrett Podcast Network

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A 2.1 Trillion Dollar Leg Up For the American People, Says Pete Sepp of the National Taxpayers' Union on the Alex Garrett Podcast Network · OneLegUpAlex Media

0:03
Here's your most Alex Garret. Well, through the smoke in the haze and
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the crazy week that was in the Northeast, there was some clarity this week.
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First of all, we saw an indictment, actually thirty seven of them
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against the former President of the United States, Donald J. Trump. And
0:26
here's what Special Counsel Jack Smith had to say about it. My office will
0:31
seek a speedy trial in this matter, consistent with a public interest and the
0:36
rights of the accused. But here's the thing that got me the most this
0:39
week when I heard Jack Smith talk about the thirty seven thirty eight count We
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have one set of laws in this country and the apply to everyone. And
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my question there is, well, if that's the case, where has the
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Delaware case against the Biden's gone? What's gone on with that? I mean,
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come on, and didn't President Joe Biden actually take documents out and strong
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classified documents out as well, even as Vice president and dare I say,
1:07
Senator, where's the rule of law applying all? If? Right now it's
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only against Donald Trump. Now, I've said before I think there has to
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be some kind of motion against Trump for literally bringing the White House down tomorrow
1:21
lago. But I also believe as a libra imbalance and rule of law being
1:26
applicable to all. But under all of that, there was a big victory
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over the last couple of weeks in Washington that no one really seems to recognize
1:38
or want to recognize it as. But both parties agreed to cut spending.
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That's why this podcast is called the two point one trillion dollars leg Up for
1:49
the American people. That's right, the American people just saw a massive spending
1:57
cut of two point one trillion dollars. How do I know that? Well,
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my next guest, Pete Sepp of the National Taxpayer Union, he's the
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president of the union, join my podcast to talk about just that. And
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I want to get to it right now. And we started with a discussion
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on the default. So let's hear what the president of the National Taxpayer Union
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has to say. Well, a default on debt can take quite the number
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of forms, but for a sovereign government to start defaulting on its debt can
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normally mean that government is unable to make interest payments on its debt, or
2:39
is actually repudiating the principle of the debt, or is unable to borrow any
2:47
more money. Because it lacks the revenue to support it. So there are
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a number of ways default could occur. But in the case of the US
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federal government, as of Ugh Lead two weeks ago, we were on the
3:01
precipice of defaulting, primarily because we would be unable to cover the spending obligations
3:10
of the federal government and the debt servicing obligations at the same time, given
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the revenues that were occurring, and we could not borrow any more money to
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cover the short fall. And did this default have any to do with the
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inflation? I mean, I'm just trying to get a picture because I feel
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like when people read the news, when I read the news, we got
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a debt feeling deal. It looks like we just raised the roof, if
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you will. But there was some progress. But before we got there was
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inflation leading to default as well. I think inflation had an indirect role in
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the problems we were facing. Inflation itself doesn't necessarily mean that your debt is
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going to be in a default situation or your government is. But the fact
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is, we spent way way too much money in fakes like the Inflation Reduction
4:02
Act, on ironically named piece of legislation. Because the federal government overspent,
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that contributed to inflation, which in turn triggered responses from the Federal reserve like
4:15
raising interest rates. Well, once the federal reserve raises interest rates, then
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you set yourself up for problems in servicing government debt because it gets more expensive.
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You have to keep refinancing government debt, and every time you do,
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you're going to have to finance it at a higher rate. And so that's
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the indirect portion inflation and responses to inflation kind of did thank a contribution to
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the current situation that we found ourselves in. Now. Before we went on
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the air, you were telling me that you guys were involved with helping get
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the debt feeling you know done that tell us how you lobby to get this
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deal done. Well, indeed we did. And this was not an easy
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thing for us to go through because there are many many tasks that our government
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and our leaders are going to have to set themselves to in the very near
5:14
future to get this country on a better fiscal path. But the deal that
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could be had right here, right now to not only avoid a debt default
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which would have been catastrophic for financial markets, for retirees. For consumers,
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the options were far more limited. We knew right away that there was no
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immediate appetite to tackle the primary drivers of the deficits we experience every year,
5:43
and in turn the national debt, and those drivers our government benefit programs,
5:48
so called mandatory entitlement programs, those were pretty much off the table during these
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discussions. We also had to maneuver around the top of defense spending. There
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were many so called fiscal conservatives in Congress saying you can't touch defense spending and
6:09
in fact, we need to increase it given all the threats around the world.
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Well, we didn't agree with that. There is plenty of waste and
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poor prioritization in the defense budget, and the Defense Department is one of the
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worst runs in the entire federal government when it comes to having decent accounting practices.
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We also had the obstacle, of course, on the left. No
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one in Congress on the Democratic side seemed to have a big appetite for taking
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a chunk out of federal spending growth, which is the real problem behind deficits
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and debt. There were some in the so called Blue Dog Coalition who were
6:56
willing to at least talk about it, but even they were reluctant until they
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saw what kind of deal was on the table. So knowing we had a
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small portion of the federal budget to work with in order to try and restrain
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the growth of federal spending, knowing we had this deadline that the Treasury said
7:17
was the so called X date when we would default. They probably fudged that
7:25
by a few days, but it was certainly drawing very close. And knowing
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we had a lot of political gaps to bridge between Democrats and Republicans, Memphis
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was going to be a difficult task. It was. I would say overall,
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if I were a taxpayer, I'd be thinking to myself right now after
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passage of this deal, well this is not the greatest thing since lifespread.
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But we at least got our half a loaf, and we could have been
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left with only a few crumbs if we didn't play this right, and I
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think we did largely play it right. You mentioned fudging the numbers. I'll
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tell you what this binding administration has played around with the IRS. As the
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taxpayer Union. You didn't happen to have a role in making short cuts to
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the IRS agents took place? Was that part of your lobbying or we did
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definitely urge a second look at the eighty billion dollars in additional funding that was
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given to the IRS in the Inflation Reduction Act that President Biden and many of
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his Democratic colleagues supported in Congress. Yes, that was, in our opinion,
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a very dangerous move because there were virtually no guardrails on all of that
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money. Certainly, the IRS needs to revise its customer service procedures, update
8:56
its computers, have more people on the phone to answer or questions from taxpayers.
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But this eighty billion dollars that was given to the agency was virtually with
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no strings attached. There were just three paragraphs in the entire Inflation Reduction Act
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that told the IRS how to spend the money. Spend forty six billion on
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enforcement, spend about six billion on customer service, and the rest on business
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systems and support, with virtually no other specific guidance as to how to spend
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the money. That has never before happened in the history of the IRS.
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Every single bill to increase funding for the service has been accompanied with all kinds
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of specific instructions from Congress. And we reminded lawmakers of that and said Look,
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you didn't do your duty when the Inflation Reduction Act passed last year.
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You've got to do it now by giving the IRS funding a haircut and committing
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from this point forward to do better oversight. We've made a number of recommendations
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in that area. In fact, I testified before the Senate Finance Committee just
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two weeks ago with three other folks on how the IRS funding is going to
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have to be better allocated going forward. Would you mind telling us if you
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were talking directly to Speaker McCarthy, because I feel like you can get through
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your Republicans when it comes to on behalf of the taxpayers more than Democrats.
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Personal aside there, But it's kind of true, isn't it. Yes.
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Yes, As I mentioned before, there is the Democratic blue Dog coalition.
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There are some moderate Democrats, especially on the House side, who do support
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some kind of action on deficits and death that go beyond the standard Democratic line
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of let's just raise tax is on the rich. But yes, there was
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a more sympathetic year on the Republican side. However, I would say that
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we did encounter some opposition to the way this deal was coming together from a
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Republican defense hawks who thought that the budget should actually be increased in that area,
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and from others who thought that we needed to go for a much bigger,
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much more expansive deal. I didn't disagree with that notion. I just
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thought, well, looking back these past twelve fifteen years, the success record
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of trying to go big and get everything dot at once has not been a
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good one. When you take a look at how much potential deficit reduction there
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is in this deal that was just enacted two point one trillion dollars total,
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there is not a safe piece of legislation that has done that much deficit reduction
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in the past ten years. You'd in fact have to go back to the
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Budget Control Act of twenty eleven to find a similar number. In fact,
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right around two point one trillion. That was the deal Republicans one. When
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President Obama was in office. A lot of fiscal conservatives, some of whom
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are still in Congress now, celebrated that deal. They said it was a
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real big win for Republicans, and we again reminded Republicans during this current negotiation
12:37
process that looked you took the win back then with that much deficit reduction,
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why not take the win now and commit to do more going forward. Well,
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that is so true. And you know, I honestly was reading about
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the Times because I want to see what Day said and I want to get
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your take on it. They said the deal in twenty eleven with Bayner and
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Obama led us to more financial financial hardship even after the deal. Did you
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see that back then? And do you see this deal being a little more
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smoother if you will. Yeah, I don't know exactly how the Times wants
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to define financial hardship. They may say, well, the budget reductions and
13:28
slow downs in spending increases going forward, Well they were too harsh. I
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certainly don't think that was the case. Do I think that Congress could have
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exercised better responsibility in directing where the funding reductions ought to go. Yeah,
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sure they didn't. And what was called the sequester started to kick in after
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the twenty eleven budget deal, and that meant across the board spending reduction in
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several categories of spending, not the whole budget, but in several broad categories.
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There were across the board cuts or you could also say slowdowns in the
14:13
rate of increase. Again, that something Congress should have accepted responsibility for do
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I think that this deal will make that problem a little less difficult. Yeah,
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because there's a specific provision in this deal that requires regular order appropriations processes
14:35
to start. And before our eyes all glaze over the appropriations processes, what's
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responsible for the part of the federal budget that deals with things like transportation,
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some education, defense, space program the kinds of things you appropriate money for
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every year that are generally not a automatic benefit programs like Social Security and medicare.
15:03
Well, we have not followed the regular order and appropriations for easily two
15:11
decades now. The appropriations process generally gets started in the House or the Senate
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haphazardly. A few bills pass, most don't, and by the end of
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the year, Congress has to come to some kind of omnibus we call it
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ominous spending deal. Well, this new death sealing deal puts new rules in
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place that will make it a lot harder for Congress to dodge it's responsibility and
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not confront the appropriations process. And by doing that, you reduce the risk
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that some kind of automatic cuts are going to kick in that are much more
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haphazard. All right, Well, I'm gonna got a question about this because
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you mentioned all the different programs and the government program as well. Did you
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guys have any role in the work requirements for SNAP And look, I kind
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of agree that people who want to go on these different benefits, if they're
16:14
able to, should be able to work. I mean, were you guys
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in the in the room for those negotiations as well. Yes, yes,
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And we had to be aware of the fact that if we wanted this package
16:27
to get through the Senate, there would have to be some democratic support,
16:33
and even in the House, you would have to have at least some kind
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of democratic support because some Republicans would probably drop off. So what we aimed
16:47
for was broadening work requirements for some adults that are currently receiving food stamps.
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And so what it's going to say is that you're going to have to be
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able to show employment for at least twenty hours a week or meet some other
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kind of criteria to show that you're looking for work. And right now the
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requirement is among able bodied adults eighteen to forty nine. The age limits going
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to increase a little bit, and some of the other definitions of what qualifies
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is work that's going to be titans, so that people are going to have
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to make a little more effort to work, or at least seek work to
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get food stamps. It's a compromise, but I think it's a pretty good
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one. And if you are interested in making incremental progress on this issue,
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I think you would walk away from that deal saying, Okay, there's something
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to work with here. No, it's pet sat. He is the president
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of the National Taxpayers Union. Just mentioned a couple of minutes ago he testified
18:07
with regards of the death ceiling deal. But did you wish you were in
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the room when Biden and McCarthy were negotiating. I mean, you weren't in
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the room when they were actually negotiating and finalizing the deal, right, No,
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not in that room. Now, we of course did have close contact
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with House leaders on both sides of the aisle, including Speaker McCarthy, but
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who knows what went on in that room between the President and the Speaker.
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I have wondered what it would be like to be the so called fly on
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the wall. Then again, there's that old phrase about you should never want
18:52
to look at either how legislation or sausage gets made, and maybe this is
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one of those instances. What should the taxpayer be surprised most about this deal.
19:06
Meaning as we're taxpayers, right, what should be what should be most
19:08
surprised about when it comes to these cuts. I mean, cutting spending is
19:15
music to anybody's here in America. Isn't that a surprising of it dot that
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the government actually agreed to cut spending at the end of the day, Yes,
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it is. I think that should be the biggest surprise. That taxpayers
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could walk away with as much as two point one trillion with a key dollars
19:37
in spending reductions over the next ten years. That's spending reductions or slowdowns in
19:44
the rate of increase. There's somewhat different things, but the point is we
19:49
were on one trajectory and now we have lowered that trajectory by two point one
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trillion dollars. If all of these provisions work as designed, we're talking about
20:03
an average savings over the life of this bill of six thousand, two hundred
20:08
dollars per person in this country or fifteen thousand, eight hundred dollars for average
20:15
household in this country. That's the amount of money the federal government will save
20:22
over the next ten years without raising taxes and cutting or restraining the growth of
20:29
spending in only part, only part of the federal budget. I think taxpayers
20:34
should also be surprised that less than a year after the Internal Revenue Service received
20:42
an eighty billion dollar infusion of cash with virtually no strings attached, we've been
20:48
able to get a haircut of twenty billion dollars of that funding back. I
20:55
did not actually expect we would get that far. And I think what it
21:00
means for the IRS is to say, you've got to sharpen your pencils.
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You're going to have to focus on delivering good service to taxpayers before you go
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out and start twisting arms with a lot more collection tactics. I call this
21:18
podcast the one leg Up with Alexcarey. I feel like we have a two
21:22
point trillion dollars, two point one trillion dollars leg up on the for the
21:26
American people today, and I love I love that. All Right, a
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couple more questions, if I may, I, as a national taxpayer union
21:33
wants to do well by the taxpayer by continuing lobbying. But it's sort of
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like, well, all right, so you got the government to cut spending.
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What next. Yeah, there's a lot that's next. I'm afraid and
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this is the part that's going to be difficult. We have yet to confront
21:51
some of the biggest fiscal problems in the federal government, and by that I'm
21:56
talking about entitlement programs, Social Secure, Purity, Medicare, other benefit programs
22:03
that we're not touched at all by this debt ceiling deal, and we don't
22:07
have a whole lot of time to face facts over those programs. The so
22:12
called trust fund for Social Security is supposed to be insolvent by the year twenty
22:19
thirty three. That's not our projections, that's the projections of the trustees of
22:25
the program itself. So we've got ten years before Social Security will face a
22:32
benefit cut or a tax increase of at least twenty five percent. Now that
22:37
is huge, major implication for a lot of retirees as well as taxpayers.
22:45
Medicare, part A the hospital insurance is in even worse shape. That so
22:51
called trust fund is going belly up around twenty twenty seven, and so we
23:00
need to confront that even sooner. We are going to have to look at
23:04
structural reforms, everything from healthcare vouchers to how we adjust the retirement age,
23:11
to how we adjust the benefit formulas for all the years that you work.
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We can't necessarily do that to current retirees, but we've got to put these
23:22
programs on a more stable path, and we've got to do it soon.
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I'm often reminded of how many years we've been preaching this message. I can
23:34
remember back when there was that funny guy with the ears and the Texas twang
23:41
named Ross Perot in the nineteen ninety two presidential campaign saying we have to do
23:48
something about entitlement, and Bill Clinton at the time agreed, and so did
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George HW. Bush. That's as far as it ever got. It is
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now thirty odd years later. Back then there were folks saying these systems were
24:07
in grave danger, and now they're in even graver danger. We've got to
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face the facts about those programs. Pee, I've loved our conversations of our
24:21
but as a national taxpayer union, how do you protect the taxpayer? Do
24:25
you stand up to the irs on behalf of the taxpayer if they're in trouble?
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In other words, if there are tax troubles for any averaging American,
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can they turn to you for protection if you want them for help? Well,
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the way we work is to challenge the irs in court when it is
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pursuing unreasonable positions. In twenty twenty, we created a public interest litigation arm
24:49
called the Taxpayer Defense Center. We can't defend every taxpayer in court. We're
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seeking cases that have a major preced for all taxpayers. But we also work
25:03
on the congressional side and even the executive branch side. When the IRS makes
25:08
rules and regulations, we put in comments to help shape the way that instructions
25:15
to taxpayers are given when they're filling out tax forms, and we're seeking reform
25:22
legislation as well, things like reconstituting the IRS Oversight Board, which provides a
25:29
whole new level of managerial guidance to the way the agency works. Citizens who
25:36
are having problems from the IRS. We can't necessarily help everybody, but we
25:41
want to hear the problems they're experiencing so that we can then go to Congress,
25:47
the IRS, even go to court to try and rectify some of these
25:52
problems. I love hearing that you are here for the American people. I've
25:56
got to ask you this, though, if we see as in this administration,
26:00
with the tax code being monkeying around with, played around with, can
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you can you come back and talk to us about that. If you see
26:07
any issues with the way they're handling the IRS and even even the tax code,
26:11
oh absolutely, I'd be happy to do so. We could spend a
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whole other segment, and maybe we will in the future on a project called
26:21
Taxpayers for IRS Transformation Cleverly Taxpayers First is the acronym. That's a project where
26:29
we're gathering experts from all over the tax administration field to try and spot these
26:36
kinds of shenanigans at the IRS and make recommendations to shut them down. I
26:44
will be in touch with your people because I love I'd love to have you
26:45
back on. And you know, my dad was an accountant and he actually
26:49
passed away on the traditional tax day this year, and I thought, remaining
26:53
around accounting, what a day to go. I hate to say it's like
26:57
that, but you know, the day we'd run to the post office and
27:00
put in all the returns. That's just a personal story there. So tax
27:07
accounting and taxes are kind into my heart, and I felt that right as
27:11
I'm talking to you here, Because obviously we want our taxpayers to be treated
27:17
well and treated fairly, not only by the art Rest but by Congress and
27:21
I think you guys are working on Megan, sure that happens. Where do
27:23
we see your testimony? By the way, before I let you go,
27:27
it's right on our website at NTU our initials for National Taxpayers Union NTU dot
27:36
org. Scroll down to May sixteenth, and that's when I gave my testimony
27:44
May sixteenths MTU dot org, NTU dot org. Pizzap President of the National
27:49
Taxpayers Union, thank you so much for joining us today on the One Leg
27:53
Ups podcast. My pleasure and we will have the Vackgoon on this network,
28:00
and thanks again for listening out there. We'll drop the SU