In the coming months, our country is facing crucial decisions that will determine how soon we can be put back on a path to prosperity. Unless President Obama and the Democrat-controlled Senate put politics aside, our businesses and job creators will continue to face economic uncertainty and a tax hike that threatens to eat up the capital that could be used to keep Americans employed.
Because of sequestration, an automatic $98 billion across-the-board budget cut is set to take effect on January 1. About half of this will come out of defense spending, which will have disastrous consequences for our soldiers, veterans, national security and the economy. Even members of the Obama administration have warned of what is to come. Secretary of Defense Leon Panetta opposes these cuts, stating they will be "devastating" to our military. Secretary of Veterans Affairs Eric Shinseki likewise confirmed that under sequestration, the VA would face cuts that could affect the administration of veterans' benefits and services.
To shine a light on what sequestration will mean to various agencies, on July 16, the House passed H.R. 5872, the Sequestration Transparency Act. This legislation requires President Obama to submit a report to Congress thirty days after the date of enactment detailing how the administration plans to implement the budget sequestration cuts required to take place in January. Now that the Senate has also passed the bill, I hope the president signs the bill into law and gets to work on sharing his plan for these cuts.
Also, on January 1, 2013, a $494 billion tax increase is scheduled to take effect when the tax cuts enacted in 2001 and 2003 expire. Allowing this tax increase will idle job creation and stall economic growth. Still, the president refuses to put politics aside and give Americans, including job creators, certainty that their taxes will not rise in the New Year. This week, the House will vote on H.R. 8, the Job Protection and Recession Prevention Act of 2012 to extend all current tax cuts for 2013.
I believe that we have an opportunity to come up with a simpler, fairer tax code that will incentivize job creation and grow our economy. That is why this week the House will also bring forward H.R. 6169, the Pathway to Job Creation through a Simpler, Fairer Tax Code Act of 2012. This legislation will require a tax code simplification package to be brought to the House floor by early next year and prevent it from being filibustered in the Senate. Everyone should be able to agree that protecting a confusing, complicated tax code with procedural gimmicks is counterproductive.
Because Congress has yet to reach agreement on how to fund government operations for the coming year, we once again face the potential of a government shutdown at the end of September. In April, the House passed the Path to Prosperity, a budget blueprint that will help restore jobs and put our country back on a fiscally sustainable path. Senate Democrats rejected this blueprint and have refused to try to find a plan that can pass their body. Despite this irresponsible stance, leaders of the House and Senate are working to craft a plan that will keep the government running until early next year, allowing whichever administration is in office a chance to craft its blueprint for the country.
We still have a lot of work to do, and I encourage President Obama to sit down with leaders in the House and Senate--both Republican and Democrat--to find a path forward for our country. I will continue to support solutions that address our debt crisis, adequately fund our military and ensure that all Americans aren't faced with a tax hike January 1.