Brooks: Under Obamanomics, "Rich Makers Are Redistributed To The Rich Takers"
Arthur Brooks, president of the American Enterprise Institute, discusses the fiscal cliff deal on CNBC's "Squawk Box."
JOE KERNEN: The fiscal cliff fight's over, a battle that is still looming large. Our guest host today is Arthur Brooks, president of the American Enterprise Institute, author of "The Road to Freedom." Arthur, I want to just start just quickly with you. OK, your point -- and we were talking about it in welcome, it's good to see you -- out of the $62 billion, we've got a trillion dollar deficit, this raises how much in revenue? $62 billion or so?
BROOKS: About $62 billion a year, $620 billion over 10 years.
KERNEN: Your work is that $50 billion out of $62 billion is to corporate cronies?
BROOKS: Yeah, the first two years, $100 billion is going to corporate cronies, payoffs to corporate clients of the government effectively. And all kinds of crazy stuff: algae producers, rum producers.
KERNEN: Renewable crap.
BROOKS: Yeah, yeah. The wind guys that are a big deal with the Obama administration. Effectively what it means is that 80 percent of the new tax revenues are going right into the pocket of corporate cronies.
KERNEN: So people that call him a redistributionist, it just sounds good to him that he's trying to help the -- he always calls them 'folks' I think. Rich folks got to pay a little bit more --
BROOKS: To rich folks, to other rich folks.
KERNEN: But the rich folks are actually paying to other rich folks. Redistribution from the 2 percent to the corporate --
BROOKS: The corporate 1 percent. So it's basically the rich makers are redistributed to the rich takers. That's basically what Obamanomics is all about in a nutshell. That's how it works. And he talks about redistributing to poor people and working people and helping people and all that.
BROOKS: Yeah, yeah, that's right. And he's going to come back for another bite in two months. This has only started. He says if you guys want any spending reform or entitlement reform. In other words, if you have any ambition to save the country, what we're going to take as a quid pro quo is another bite out of the apple.
SORKIN: Just walk through the 80 percent number. You're saying 80 percent is going to corporations. The whole conversation about the poor and the middle class getting anything out of this--
BROOKS: Yakkity Yak is what it is. We've got $620 Billion over ten years in new revenue. There's about $100 Billion in new spending or continued spending to corporate payoff in the first two years. So that's about $50 Billion out of each -- out of 62 -- renewable energy and the like. Anything made in American Samoa, for example, gets this discount, this tax writeoff, et cetera. That's how corporate cronyism works.
QUICK: Why American Samoa?
BROOKS: That's a good question. The best guy to look at on this is a guy name Tim Carney, who writes for the Washington Examiner. He's my colleague from the American Enterprise Institute. And he does all the reporting on this stuff. He'll trace it all the way back to somebody's friend, somebody's brother, etc. But the bottom line is, it's not right. It's not what we're actually trying to get the government to do. Even if you're a liberal, you think that everyone should be helped and that the rich should pay something like whatever we call their fair share. Nobody thinks that their fair share should go into the pocket of another rich guy who simply has a better lobbyist. That's just not right.
KERNEN: Do you have that chart, Greco?
QUICK: This is a call for corporate tax overhaul and for just tax overhaul in general. Because if you can't find a way around these things, if you can't get a better tax deal by doing something with a better lobbyist, you wouldn't be able to do that.
KERNEN (referring to chart): Here's the $62 Billion, that's the annual tax increase. There's out budget deficit. That's probably not to scale. The one on the right needs to be a lot higher. So, and out of that $62 billion, we were hoping that some of that would go, i guess, well... Intentions are always great, and that's not even going where it's intended.
BROOKS: Eighty percent of that is going to the kind of spending that is the biggest problem in the deficit to begin with. We haven't done anything. Actually, we've kicked the can down the road in a massive way. And the whole idea is to get people like us to stop paying attention. To stop being outraged. To stop being fearful for the future of the country.