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Sunday, January 27, 2013

Averting the Real Fiscal Cliff

Averting the Real Fiscal Cliff

U.S. Representative Glenn ‘GT’ Thompson

Political Posturing Slows Nation’s Path to Fiscal Solvency

By U.S. Representative Glenn ‘GT’ Thompson

One of the many buzz words for 2012 without a doubt was “fiscal cliff,” a phrase used to describe the expiration of various tax provisions, namely the Bush-era tax rates, and indiscriminate budgets cuts commonly known as “sequestration”. Most economic experts warned that allowing the combination of both to take effect would wreak havoc on the nation’s fragile economy. According to the non-partisan Congressional Budget Office, failing to extend the current tax structure alone would have reduced national employment by upwards of 3.4 million jobs.

For this reason, on January 1, 2013, I voted to support H.R. 8, the “Job Protection and Recession Prevention Act of 2012,” which averted immediate sequestration and achieved permanent tax relief for 99% of Americans, by extending the lower tax rates enacted in 2001 and 2003, under President Bush and extended again under the Obama Administration in 2010.

Some individuals, Republicans and Democrats, take issue with particular parts of the compromise. While the agreement is not perfect, and there are many parts of the bill I would not have included, its passage prevented the possibility of relapsing into recession, which is not something I was willing to risk.

Many of my Democrat colleagues pointed to the Bush-era tax laws as beneficial only to the so-called “rich”. To the contrary, 60 percent of the tax relief went directly to middle and low-income earners.

I cannot blame my Republican colleagues for wanting comprehensive debt reduction included as part of the package. Regrettably, today the national debt is at the same level as the day we voted, however I was not willing to stage a symbolic protest of the imperfect in favor of a $3,000 tax increase for the average American household.

Unfortunately, the rhetoric from the detractors tends to lend more insight to campaign platforms and clamors for reelection, rather than doing what is best for the country. The fact of the matter is the fiscal cliff posed a serious threat to our economy and it needed to be averted. But the threat of the fiscal cliff pales in comparison to the more pressing issue of America’s looming debt crisis.

Deficits have grown due to the costs associated with two wars, increased spending on healthcare and programs such as Medicare and Social Security, and government responses to the 2008 recession, such as the 2009 economic stimulus package. Low employment has substantially depressed tax revenue, adding to yearly deficit totals. Underemployment continues to plague a significant amount of the workforce. Even as our economy shows signs of strengthening, our revenues simply cannot keep pace with spending. In the coming decade, health care spending is projected to soar at the same time as more and more Americans will retire and live longer. This will exponentially increase the cost of our social safety net programs, which already consume close to two-thirds of the federal budget.

Today, the national debt, which is an accumulation of yearly deficits, is $17 trillion. Without spending reforms, by 2020, the interest alone paid on the debt by American taxpayers will cost $1 trillion per year, money that could otherwise be used to educate our kids, invest in research, or set aside for those most in need.

While President Obama has encouraged deficit reduction, he has not offered concrete solutions nor encouraged the Democrat-lead Senate to face this challenge. Only the Republican led House has put forward reforms that, while politically unpopular, are necessary to prevent drastic and harmful cuts at a later date. We have put forth priorities for the public to see: our plans to control spending, to maintain our promises to the nation’s seniors by reforming Medicare and Social Security to ensure their longevity, and to reform an outdated and cumbersome tax code. Unfortunately, all-too-many of my Democrat colleagues have used these proposals not to begin a discussion about America’s fiscal imbalance but instead as a platform for political attacks.

Most would agree that borrowing on the backs of our children to pay for promises our government cannot honestly keep must end. In order for the nation to change its course will require less political posturing, more informed debate, and a focus on the cold, hard fact that America is headed for economic decline unless we act to prevent this true fiscal cliff.

It is only together that we can continue to ensure America remains a great nation for future generations to come.


Anonymous said...

With an estimated 456 government agencies with an average of 47 bureaucracies each that we have to pay for without choice maybe that would be a good place to start saving some money.... Federal government workers reportedly averaged more than twice the salary and benefits of an average private sector worker. Even more unbelievably, there are fully 459,016 federal workers who make over $100,000 in salary –one in five federal workers. Lets not forget they retire earlier with amazing pensions and full health care for the rest of their lives paid by US! And I dont even want to get into the 50 paid days off a year and insurance...regardless, the DEMOCRAPS will just keep crying "bush did it"

Chris Carpenter

Anonymous said...

We went off the cliff long ago. Can anyone honestly tell me that they think we will someday pay off nearly 18 trillion dollars when it is costing over 4 billion dollars a day just to fund the government. Come on...

Anonymous said...

Social Security doesn't add to the deficit; it's funded by FICA contributions and isn't subsidized from general tax revenues (yet).
Medicare is subsidized and Medicaid is expanding beyond control. Health care is the biggest cause of the expansion in govt costs and will continue to be.

But we aren't living longer as GT says. For the first time in decades, the life expectancy for males in the U.S. is declining, especially those in blue collar jobs. Even politicians recognize this as they are trying to make allowances for people in physically demanding jobs when they raise the retirement age.

It's going to be that you'll work until 70 to get what Social Security is left and you'll be expected to live only six or seven years beyond that. Good for the trust funds, but bad for you.

Anonymous said...

Jobs should be the priority, not cuts. 8% unemployment should never, ever be considered the new normal.

Lets put Americans back to work first and then consider cuts and reforms.

Anonymous said...

How much of your tax dollar is left to actually help the American people after salaries/benefits and the cost of maintaining the buildings of our governmant?

Anonymous said...

There are many things we can look at to help aid in reducing the deficit - things the GOP does not want to consider. When are we, the taxpayers going to stop subsidizing the oil and gas industry? They already make billions of dollars in profits every quarter. Yet our tax dollars subsidize those industries. Seems like a good place to start. The problem with the House plan for reducing the deficit is that they want to do it all by eliminating or cutting back on social safety nets, education and research, things that are crucial to this country. They never mention the industries that contribute to their campaign coffers.

Anonymous said...

Republicans? Heres a few of Obummers campaign donors: solyndra, Ener 1, beacon power, abound energy, amonix energy, spectra watt, eastern energy. Now what was it about repubs giving incentives to energy companies?

Anonymous said...

The oil and gas industry is profitable without incentives. Major incentives which also, effectively, crowds out alternative energy programs from entering the markets in any meaningful way.

Anonymous said...

You are right. To a point...But when you have to pay 40,000 employees a month to work at the ss administration, thats where you loss comes in to play

Anonymous said...

sounds like someone had their disability application denied. the agency (SSA) once had 80,000 employees. The work has increased as we age to the point where they can n o longer keep up. Probably not what you want to hear, but you really don't know what you're talking about.