Former Wyoming Senator Alan Simpson (R-WY) on Friday said that President Trump’s tax reform plan is costing billions and discussed why the U.S. debt will continue to rise.
“You can’t get a tax cut that’s revenue neutral. Whatever they are planning right now is costing billions,” he told FOX Business’ Neil Cavuto on “Cavuto: Coast to Coast.”
The former Wyoming politician, though critical of Trump’s tax plan, is in favor of the president lowering the corporate tax rate from 35% to 20%.
In 2010, Simpson along with Erkine Bowles put forward a bipartisan report on the best way to fix the U.S. national debt. The Simpson-Bowles deficit reduction plan offered six steps that could have reduced the budget deficit, which in turn would have lowered the national deficit, but never came into fruition.
Simpson explained why the debt will continue to increase and what will cause it to reach the “tipping point.”
“Five and a half billion here for the hurricane, 10 billion here for Puerto Rico, nobody is talking about pay as you go, all of those things add to the debt,” he said. “The tipping point is very simple, it’s when the people who we owe 21 trillion bucks say we want more money for our money, you have a dysfunctional government, you are addicted to debt and then inflation will kick up, interest rates will go up, it’s not going to stay at 2 or 1 ½ or 3 it’s going to go historical places like 5 and when it does just a hop like that. I’ll tell you who gets it in the shorts, the little guy.”