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Busch: Obama To Miss His ‘Reagan’ Moment

Friday, US Treasury Secretary Timothy Geithner is scheduled to meet with corporate CFOsto discuss changing the current tax structure that is inefficient at best and job killing at worst. This meeting is specifically going to address the corporate tax structure and comes after President Obama’s fiscal reform commission recommended cutting the rate from 35% to 25%. The 35% rate is the highest amongst the major G20 nations.

Unfortunately, it may be just a dog and pony show.

According to The Hill, Valerie Jarrett, a senior White House adviser, acknowledged Wednesday that a push to overhaul the nation’s tax codes could take years. Jarrett is an Obama insider that has been with the President since the beginning and has survived the recent White House economic team shakeup. This indicates that the White House is not going to push for reform in a meaningful way.

President Barack Obama
Photo by: Pete Souza
President Barack Obama

This could’ve been Obama’s “Reagan” moment as tax and social security reform were key successes for the Gipper.

In the 1980s, these changes led to a decade of strong economic growth and stabilized the finances for a major social program.

The same opportunity to make a place in history is currently before President Obama.

Today, the US economic and fiscal structures need major overhaul to generate job growth and to maintain solvency. It would return the United States to global economic prominence, ignite a rally in the stock markets and create prosperity for the country. Since the Great Depression, there is simply no bigger presidential challenge in our nation’s history and demands strong leadership to overcome.

For a president that reformed health care, reformed the financial industry, passed a $862 billion stimulus plan and extended the Bush tax cuts all in 18 months, it is inconceivable that there is not enough time left in his term to pass a tax and fiscal reform law.

While this won’t make major headlines, Jarrett’s comments are the biggest economic disappointment of the day. If no serious action is taken by Obama on fiscal and tax reform, he won’t be remembered for what he did accomplish, but what he failed to achieve.


Andrew B. BuschDirector, Global Currency and Public Policy Strategist at BMO Capital Markets, a recognized expert on the world financial markets and how these markets are impacted by political events, and a frequent CNBC contributor. You can comment on his piece and reach him hereand you can follow him on Twitter at http://twitter.com/abusch.