Tennesseans could wake up to find a lump of coal in their stockings if the fiscal cliff isn't addressed before the holidays. According to a new report from the White House, taxes on middle class families will increase by $2,200 per year, resulting in a loss of $200 billion in consumer spending, if the fiscal cliff is not addressed. Similarly, the Organization for Economic Cooperation and Development stated that, if not avoided, the fiscal cliff could lead to a global recession.
This very serious situation can and should be avoided. The President is demanding tax increases to solve our debt crisis, but East Tennesseans know that Washington doesn't have a revenue problem, it has a spending problem. Any potential deal we reach must begin with real spending cuts and meaningful reforms to entitlement programs. According to the Heritage Foundation, 62% of total government spending goes toward entitlements, with about 44% of those dollars going to three programs--Medicare, Medicaid, and Social Security.
Likewise, it is our responsibility as members of Congress to ensure that hardworking, middle-class families do not see their taxes increased in the New Year when about 40% of their total income already goes toward taxes. Additionally, we must set the table for economic growth and help ensure that small businesses have the confidence to hire.
It would be irresponsible for Congress to further burden taxpayers if the government's spending addiction can't be curbed. For example, President Obama's budget projects that, even if we were to raise taxes on individuals making over $200,000, we would still add $6.7 trillion to the national debt over the next decade.
It is past time for the President to show the American people his plan to address this crisis. We know that he wants tax increases -- but we also know that the tax increases he is seeking won't be enough to avoid the fiscal cliff. Only strong leadership that makes hard choices will be able to avoid these catastrophic consequences.
For too many years, the government has written blank checks and now is the time to stop kicking the can down the road and do what's best for this country. As negotiations continue, you can rest assured I will look closely at any responsible proposal put forth to avert the fiscal cliff and put our country back on the path to a prosperous future.