(Bloomberg News) New York Mayor Michael Bloomberg called for eliminating Bush-era tax cuts for the wealthy and farm and energy subsidies, and an end to what he called "tax loopholes" on carried interest enjoyed by hedge fund partners.
In advocating the U.S. return to higher income-tax rates set by President Bill Clinton, the independent mayor of the most populous U.S. city said rising deficits and political inaction have paralyzed business and discouraged investment.
Under current policies, the national debt will grow to $21.5 trillion from $10.3 trillion in 10 years, or $72,000 per U.S. resident, the mayor said. That crisis may best be averted through a combination of taxes and reduced spending on health care and Social Security as outlined in President Barack Obama's committee headed by former Senator Alan Simpson and Erskine Bowles, once Clinton's chief of staff, Bloomberg said.
"The spending cuts in Simpson-Bowles, plus Clinton-era tax rates, plus closing some tax loopholes and ending wasteful subsidies would save $8 trillion and effectively bring our budget into balance by 2021," Bloomberg said in an economic- growth speech in Washington, D.C.
The billionaire mayor, 69, founder and majority owner of the financial information and news company Bloomberg LP, called upon the bipartisan Congressional Super Committee to exceed a $1.2 trillion goal for spending cuts and revenue increases. The committee's recommendations are due Nov. 23.
'Throw Politics Aside'
At a bipartisan forum sponsored by the Center for American Progress, a policy research group affiliated with Democrats, and the Republican-oriented American Action Forum, Bloomberg also called upon Obama to be more forceful.
"I recognize that allowing the Bush tax cuts to expire is not a step the Super Committee is likely to take," Bloomberg said in prepared remarks. He urged Obama to veto any further extensions, and "throw politics aside and lead -- not follow -- the conventional wisdom."
Social Security's eligibility age should be raised gradually over the next six decades as part of several cost- cutting moves, he said.
Last week, Bloomberg hosted a dinner at Gracie Mansion, the mayor's ceremonial home, for a bipartisan group of U.S. senators and New York City business leaders, at the suggestion of U.S. Senator Michael Bennet of Colorado.
"We had a very frank discussion about the economy and how Washington is handling it," Bloomberg said. "Generally speaking, major American companies are not short on cash. But one of the big reasons they are not investing is that they are short on confidence in the federal government's ability to manage macroeconomic policy."