If one-hundred people were drowning and you had the ability to save ninety-nine, would you? Of course you would. We didn't do anything nearly as heroic in Congress last week but the question of saving as many as we can from a potentially devastating consequence was relevant. The question was: do you stand aside and let taxes increase for everyone, or do you try to save as many taxpayers as possible before they do?
I chose to try to do something.
If our nation had gone over the "fiscal cliff" on January 1, the average Kentucky family would have paid $2,200 more in taxes. Important federal priorities like the Department of Defense and the National Institutes of Health would have suffered from indiscriminate cuts. According to the Congressional Budget Office, the combination would have sparked a prolonged recession and further unemployment.
There is no doubt that this situation was unfolding at the end of the year due to a severe lack of leadership in the White House. Some in my political party counseled that because the President would achieve the tax hikes he campaigned for by doing absolutely nothing; we should just stand aside and let him own the resulting chaos. The thought was that Americans would personally experience the damage of the President's agenda and urgently understand the need to go in the other direction.
I had to try to do something to prevent Kentucky families from incurring massive income tax hikes. Voters may have reelected President Obama but my constituents didn't, and I wasn't willing to force Kentucky families to pay a $2,000 price so we could make a political point.
I knew that out of 4.4 million residents in the Bluegrass State, only about 5,800 tax filers have an income above $500,000. If I was able to persuade Vice President Biden to cut taxes for everyone below $450,000 for married couples and $400,000 for individuals, I could ensure that 99.7% of Kentuckians were spared from an income tax increase. It worked.
We also made the tax rates permanent so in the future taxpayers would not be subjected to the uncertainty of expiring rates, and we permanently extended existing rates for dividends and capital gains. I also was able to negotiate a permanent reduction in the death tax to provide family farmers and owners of small businesses the ability to pass their life's work down to the next generation.
Was the deal perfect? Absolutely not. Was it necessary? Yes. Did it solve our financial problems in Washington as the President suggested during the campaign that it would? Not by a long shot.
The real problem is Washington's out-of-control spending. We have a $16.4-trillion debt and an Administration that hasn't seen a federal spending program it's willing to part with. If the President refuses to act responsibly and work with us to rein in spending then we will do everything in our power to force him.
The tax issue is behind us. Now is the time to focus on cutting spending in Washington so we can preserve the country we love for future generations to enjoy.