2005 To Bring New Reforms
By Congressman Joe Pitts
The Bureau of Labor Statistics (BLS) reported this week that our economy added 337,000 jobs last month. Altogether, more than 2.2 million jobs have been created since August 2003. It is clear that by the barometers we use to measure economic strength the economy is growing and becoming stronger every quarter.
I agree with President Bush, however, that our work has only just begun. In his first press conference following the election, the President cited fiscal and economic issues among our top priorities heading into 2005.
It is important to keep in mind that government does not create jobs. However excess regulation and taxation can destroy jobs and force businesses to close. So, our aim in Congress was to work with the President to make America a better place to do business by decreasing the burden government places on small business owners and allowing workers and their families to keep more of the money they earn. This increases the freedom people have to save and invest in their businesses and families.
That is why Congress will work to make the tax relief permanent. Because of an arcane Senate rule, we had to allow the tax cuts to expire in ten years. If we do not act tax rates will snapback to their previous levels. This specter of automatic tax hikes hinders the ability to plan for the future.
In addition, our tax code has become so burdensome that it actually harms our economy regardless of where the tax rates are actually set. The resources it takes to fill out forms and comply with this quagmire of regulations siphons billions out of our economy every year. There's just no way around it: our tax code is a mess.
The vast network of loopholes and special handouts enable the wealthy and large corporations to evade paying taxes. In fact, there is a multi-billion industry centered around evading taxes by capitalizing on loopholes. That needs to change. Over the years, leaders in both parties have recommended changes to the tax code and there ways to accomplish fundamental reform. By doing so our intent is to make the tax code flatter, fairer, and simpler.
Secondly, we need to strengthen Social Security. Unless the system is strengthened, this country will one day awaken to a stark choice: either a drastic rise in payroll taxes, or a radical cut in retirement benefits. Either option is unacceptable, which is why something must happen. Social Security is a solemn promise from the United States to her citizens - a safety net for all Americans.
The problem is Social Security has remained relatively unchanged since its inception in 1935. Once the baby boomer generation begins to retire, fewer workers will be paying into the system and more retirees will be receiving benefits. This will cause the trust funds to be depleted, and eventually force the program into bankruptcy. It is important that we improve the way Social Security funds are managed.
Congress and the President need to make some fundamental decisions in the coming years about Social Security. Before new proposals are considered, the federal government must ensure the benefits and cost of living adjustments (COLAs) for current retirees are not imperiled.
While preserving Social Security for those at and near retirement, I also believe we should begin to seriously investigate long-term, structural reforms to Social Security so that this important program will be around for generations to come.
It is possible to design a safe system of voluntary, personal investment accounts that will allow individual workers the option of investing a portion of their current payroll taxes in accounts they own. These accounts would be available for younger workers and would grow over time, and upon retirement, provide future retirees greater benefits than Social Security currently provides.
These two issues will form a large part of our agenda in Washington over the next two years. To ensure the long term health of our federal budget and economy, Congress must act.