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Going Over the Fiscal Cliff


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We have just over a month left with a lame--duck Congress. There is much work to be done. Much of the discussion in the national media asserts that we must not "go over the cliff." I think that analysis is far too short--sighted.

Spending: The So-Called "Sequester":

While the election is now over, our work to bring fiscal sanity to Washington is just beginning. Financially, nothing has changed. The federal government borrows more than one out of every three dollars it spends. Our yearly deficit has topped $1 trillion in each of the past four years, with massive deficits forecasted for years to come. The overall national debt now stands at over $16 trillion--which is larger than our entire economy. This stark reality continues to threaten America's future.

Last year, Congress and the President took on this problem by agreeing to cut $1.2 trillion in spending over the next 10 years. In 2013, this means the federal government would actually cut $110 billion--representing the first real overall cut to discretionary spending in decades. It was not nearly enough, but it was a start. Unfortunately, President Obama is, it now appears, walking away from this very modest deal.

Although I would prefer to tackle reforming our mandatory spending programs -- which now consume 2/3rds of our budget and are the main drivers of our deficit -- instead of the proposed cuts, we should not accept anything materially less than the $110 billion in cuts currently in law. In 2011, when agreed to, they were scoffed at "as too little to matter" -- today to hear President Obama talk--they are draconian. The President may think it is okay to play politics with our nation's future, I do not. You sent me to Congress to fix a problem, and that is what I will work to do for the next 34 days and beyond.

Taxes: "You Don't Raise Taxes in a Recession":

The quote above is not from a Tea Party Republican, but from our President. Yet, now, he must either believe the economy is good (which we all know not to be true) or he has changed his mind to engage in class warfare.

On January 1st, nearly everyone's taxes increase. Marginal income tax rates go up. Capital gains and dividend taxes go up. The marriage tax penalty returns. Payroll taxes go up. The estate (death) tax goes back up to a confiscatory 55%. Finally, the Alternative Minimum Tax (AMT) captures 800% more Americans. With 7.9% unemployment and economic growth below 2%, I fear these tax increases will send the country back into a recession.

We may well need additional revenues to address our nation's debt, but Congress can get that through eliminating special interest deductions and, most importantly, by growing the economy. Right now our economy is buried under the weight of the federal bureaucracy and costly regulations. A healthy, rapidly--growing economy is the fastest way to pay down our debt, which is why regulatory reform--starting with eliminating Obamcare--must be on the table as Congress and the President negotiate a solution to our fiscal problems.

Significant challenges confront our nation, but I believe Congress has a real opportunity to restore America's future. It will not be easy, and clear choices will have to be made. If we choose freedom and limited government, then the least amongst us will have opportunities that are large and immediate. This is the direction our nation must go to once again get our economy growing.

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