Information on the Fiscal Cliff

Statement

By:  Andy Harris
Date: Dec. 6, 2012
Location: Unknown

Traveling around the 1st District, many people are asking questions about the fiscal cliff, specifically about federal spending and tax revenue. I respond to one of these questions in my "Ask Andy" segment.

The fiscal cliff refers to the combination of tax hikes and mandatory spending cuts set to occur January 1, 2013. Below is an interesting chart that outlines America's current financial situation to help you better understand the nature of the fiscal cliff.

This chart represents the total number of federal revenue, outlays, and deficits for fiscal years 2007-2012. In 2008 when the economy went into recession, federal revenue dropped. Then in 2009, President Obama dramatically increased spending. Decreases in revenue and dramatic increases in spending led to massive deficits. Subsequently, the President has continued to run trillion dollar deficits in every year of his Presidency. in the last two years as the economy recovers. That is an increase of $233 billion for individual income tax payments; yet, spending has not decreased.

Revenue, Spending & Deficits (Billions)

2007 2008 2009 2010 2011 2012

Revenues $2,568 2,524 2,105 2,163 2,302 2,449

Spending $2,729 2,983 3,518 3,456 3,599 3,538

Deficit -$161 -459 -1,413 -1,293 -1,297 -1,089

% of GDP -1.2% -3.2 -10.1 -9.0 -8.7 -7.0

Sources: Department of the Treasury, Office of Management and Budget, Congressional Budget office.

I believe that the American people want Congress and the President to work together to solve issues like the fiscal cliff. With our economic recovery still in a fragile state we should not be raising taxes on family-owned businesses. America's debt and fiscal cliff exist not because our tax rates are too low, but because Washington has a spending problem and because our economy is stalled.

Our hard-working American families would be better served by a solution that promotes free markets and a limited, efficient government. If we cut wasteful government spending and implement pro-economic growth policies, we will be able to balance the budget and re-invigorate the stalled economy.

I want all Americans to enjoy the benefits of a robust economy. Americans should be able to move up the economic ladder as generations before us have done, and achieve the American Dream, rather than simply make Americans feel more secure in poverty, a poverty of inefficient, big government policies.

House Republicans have proposed a plan to avoid the fiscal cliff--but the President has yet to tell the American people what spending cuts he's willing to make. It's time now for the President to show real leadership on this issue before it's too late.

I believe that the American people want Congress and the President to work together to solve issues like the fiscal cliff. With our economic recovery still in a fragile state we should not be raising taxes on family-owned businesses. America's debt and fiscal cliff exist not because our tax rates are too low, but because Washington has a spending problem and because our economy is stalled.

Our hard-working American families would be better served by a solution that promotes free markets and a limited, efficient government. If we cut wasteful government spending and implement pro-economic growth policies, we will be able to balance the budget and re-invigorate the stalled economy.

I want all Americans to enjoy the benefits of a robust economy. Americans should be able to move up the economic ladder as generations before us have done, and achieve the American Dream, rather than simply make Americans feel more secure in poverty, a poverty of inefficient, big government policies.

House Republicans have proposed a plan to avoid the fiscal cliff--but the President has yet to tell the American people what spending cuts he's willing to make. It's time now for the President to show real leadership on this issue before it's too late.