Representative James Lankford (R-OK) issued the following statement after yesterday's report released by the Congressional Budget Office (CBO), which stated that the impending tax hikes coming at the beginning of 2013 could send our economy further into a deep recession and could increase unemployment.
"This CBO report highlights the desperate need for major tax reform in the United States in order to avoid high-stakes gambling with American families' tax rates," said Representative Lankford.
"House Republicans passed legislation to ensure tax rates do not increase on American families at the end of the year. For two consecutive fiscal years we proposed plans to simplify our tax system. Unfortunately, Senate Democrats fail to see the urgency in acting to prevent us from falling over the edge of the fiscal cliff. President Obama himself said that raising taxes in a recession is bad policy. By that same logic, the notion of raising taxes, which CBO has shown to be the pathway to recession, also seems ill-advised."
The report highlights that the FY 2012 budget deficit will be $1.13 trillion, marking the fourth year in a row of trillion-dollar deficits under President Obama. Gross federal debt will soon surpass $16 trillion and reach a staggering 103.5 % of GDP for 2012. Unemployment in the Obama economy is expected to remain above 8% until mid-2015, and real GDP growth will again stay at meager levels with CBO predicting it just over 2.0%.
"Based on CBO's findings, allowing the 2001/03 tax policy provisions to expire and allowing sequestration to continue WILL cause a recession," observed Representative Lankford. "If that happens, unemployment could rise to 9.1% by late 2013, and real GDP would likely decrease by 0.5% during the year. This is simply an unacceptable outcome.
"This CBO report should be the proverbial nail in the coffin in the mission to deal with this fiscal crisis as soon as possible, rather than waiting until the last minute. Americans expect Congress to act now to avoid the fiscal cliff. House Republicans have already passed legislation to avoid both the tax hikes and sequestration. I urge our colleagues in the Senate to seriously consider our proposals or come up with viable alternatives that do not lead to more uncertainty," concluded Representative Lankford.