We are at a significant turning point in our nation regarding our economic future and there is a lot of concern among hard-working folks about what it means for our families and our communities. Much of the concern stems from the notion of the fiscal cliff, in which significant automatic tax increases and automatic spending cuts go into effect in early January of 2013 if nothing is done. The notion of this fiscal cliff has job creators and the financial markets spooked and many predicting that, if this cliff is not avoided, our economy as well as economies across the globe could be in for an economic collapse not seen since the Great Depression.
While all eyes seem to be focused on the January deadlines, I felt it was important to remind you that remedies to this fiscal cliff have already been placed on the table and are awaiting action by the Senate. In fact, these options have been on the table for months and seek to avoid a situation orchestrated by the White House and its allies.
The bottom line is that House Republicans remain the only people in Washington so far with an actual plan to avoid the fiscal cliff. The president says he disagrees with our plan, but we have yet to see the specifics of any solution he may propose.
In May, 2012, a majority of my collegues in the House of Representatives and I voted in favor of the Sequester Replacement Reconciliation Act (SRAA), which would replace the $78 billion in automatic defense spending cuts that would be part of the fiscal cliff currently in place with responsible reductions to other federal programs. The SRAA offsets the automatic across the board cuts scheduled to take place due to a process known as sequestration , and the Congressional Budget Office indicates that the bill will result in $242.8 billion in deficit reduction over 10 years. And on August 2, 2012, the House passed the Job Protection and Recession Prevention Act of 2012 that would block the impending tax hikes on all Americans and small businesses and the Pathway to Job Creation through a Simpler, Fairer Tax Code Act of 2012 that would set the stage for a simpler, fairer, pro-growth tax code through long-term tax reform.
But here we are folks because the Senate and the White House refuse to even consider this legislation. Instead, we are being bombarded by rhetoric tarnished by class warfare politics that has placed our nation on the precipice of economic calamity. According to Ernst & Young, we'll have 710,000 fewer jobs if the president's tax hikes go into effect in January. If all the scheduled tax increases occur, the federal government will take another $500 billion per year from families and businesses.
As you have made clear to me over the last four years, you do not want your taxes raised. You understand, as I do, that these tax increases will punish small businesses, slow our economy, and make it even harder to balance the budget and get people back to work.
And let's not kid ourselves. In order to address our debt and spending problems, we have to continue to try and trim government by rooting out waste, fraud, and abuse, but we also must reform entitlement programs if we want to save them so they are around for future generations, something that the president and Senate have thus far refused to do. In fact, last year alone, 65 percent of federal spending was for payments to individuals and since 1975, federal spending has grown nearly 10 times faster than the median household income. Our economy is now smaller than our national debt and that's a serious problem we need to solve.
Time is growing short. We have bills on the table for the Senate and the president to consider. They've had months to do so and it's not right for them to try and play a game of political chicken with the lives of hard-working Americans. My House colleagues and I have offered concrete solutions as a starting point for avoiding higher taxes and devastating cuts to our military. So far, we have been met with silence. The president has spent the last six months talking about moving the country forward, but the only thing we're moving nearer to is the fiscal cliff. It should never have come to this.