Don't trade a cliff for an iceberg
Dec 4, 2012 -
Congress has returned to Washington after the Thanksgiving holiday to work on the “fiscal cliff.” Any deal that fails to tackle the structural causes of our debt will land us back in the same predicament in a few months or years. We should not trade the cliff for an iceberg waiting to sink us.
The fiscal cliff is a combination of expiring tax provisions and across-the-board spending cuts. It includes the end of the current tax rates, and spending cuts from last summer’s debt ceiling agreement – also known as sequestration.
Currently, the US debt is on track to reach 187 percent of GDP by 2035. But unlike Greece, there is no “Germany” to bail us out. If our debt reaches this level, an international economic crisis could ensue.
The President and Congressional Democrats have called for a “balanced” approach to reducing the deficit.
But their approach has been anything but balanced. The President’s “offer” included $1.6 trillion dollars in taxes and $400 billion in spending cuts. That’s neither balanced nor helpful for our economy. When spending on entitlements is 62 percent of our budget, the President’s focus on tax increases is not going to cut it.
We can’t solve our debt problem without economic growth, and tax hikes could cost 710,000 jobs according to an independent Ernst &Young study.
Instead, Republicans have suggested broad-based tax reform. Reform can actually encourage growth, and with it, more tax revenue. This reform also means finding new revenue through capped deductions and closed loopholes.
It is time to make a critical economic decision: surrender to the fate of Greece or turn this ship around. Our country did not get here overnight and it won’t change overnight.
We can’t, however, allow a bad deal to cause a future national decline. This is not just an economic decision, but a moral one. Are we willing to spend money on ourselves and send the bill to our children and grandchildren?
We all agree that we must avert the fiscal cliff. The stakes are too high, and we cannot allow this responsibility to our citizens to go unmet. Achieving a broad compromise – one that will truly address our strained economy – will neither be comfortable nor easy, but I believe it is possible.
But in our efforts to resolve the fiscal cliff, we must not allow the true roots of our debt crisis to persist and we must focus on the long-term economic outlook.
Our ballooned government spending is fueling unprecedented borrowing. Without spending reform, higher revenue will just fund more out-of-control spending.
When I first began serving in Congress, I made a commitment to my constituents to reject tax hikes that hurt our economy and leave Americans with less of their hard-earned money.
I recently heard from a constituent frustrated with the President’s repeated calls for higher taxes. He is in the sales business. His customers are pulling back from purchases and holding on capital investments for fear of higher taxes next year. His story is a reminder of why I made that commitment, and why we should not accept a rash deal that will cripple our economy with higher taxes and prolong our debt crisis by excluding credible spending reform.