In business, I found that a challenging environment often produced our best opportunities. Perhaps that’s why I see the “fiscal cliff” of year-end spending cuts and tax increases not as an impassable precipice but as our best opportunity to finally enact meaningful fiscal reform.
I hear Washington watchers and people in the hallways of Congress saying there is not enough time to get this done this year. I disagree. The hard part has already been done. In the past two years, the options for reaching a $4 trillion deficit reduction deal have been drafted, charted, graphed, circulated, evaluated, dissected, leaked, reported, debated and then put on the shelf for another day.
That day has come.
The fiscal cliff is a deadline of the 112th Congress’s making. We have had two dry runs during the past two years. No Congress is better suited to address these issues than this one. It is our responsibility to solve these problems now.
Kicking the can down the road — setting up a process for token deficit reduction today with the promise of more reforms later — is misguided and irresponsible, and shows a total lack of courage.
At best, a “small” deal will leave us facing another cliff, selecting down the line from the same menu of policy options before us today. The only difference will be that the hole we’re digging out from will be even deeper. Instead of debating a process to employ during future negotiations, let’s choose from the options before us, which are more plentiful and less draconian than they will be down the road.
I have shared with House and Senate leaders as well as the White House a 242-page bill that, along with other agreed-upon cuts that are to be enacted, would produce $4.5 trillion in fiscal reforms and replace sequestration. While I know this bill can be improved, it shows clearly that we can do what is necessary, today, with relatively simple legislation. The proposal includes pro-growth federal tax reform, which generates more static revenue — mostly from very high-income Americans — by capping federal deductions at $50,000 without raising tax rates. It mandates common-sense reforms to the federal workforce, which will help bring its compensation in line with private-sector benefits, and implements a chained consumer price index across the government, a more accurate indicator of inflation. It also includes comprehensive Medicare reform that keeps in place fee-for-service Medicare without capping growth, competing side by side with private options that seniors can choose instead if they wish.
Coupled with gradual age increases within Medicare and Social Security; the introduction of means testing; increasing premiums ever so slightly for those making more than $50,000 a year in retirement; and ending a massive “bed tax” gimmick the states use in Medicaid to bilk the federal government of billions, this reform would put our country on firmer financial footing and begin to vanquish our long-term deficit.
I am encouraged that leaders of both parties have shown openness toward a long-term solution. House Speaker John Boehner has pledged to put raising revenue on the table as long as it is accompanied with fundamental reforms to entitlements, especially Medicare. And President Barack Obama has indicated a willingness to tackle entitlement reforms if accompanied by revenue.
The challenge we face isn’t one of intellect, aptitude or time; it’s a test of political courage.
The 112th Congress can be remembered as responsible elected leaders who put America on a path to fiscal solvency, unleashing a period of economic growth, job creation and innovation — a tremendous legacy. Or we can be known as a feckless Congress and a feckless president who abdicated this responsibility and continued to saddle the country with debt, uncertainty and a void of leadership. If we choose to rise to the occasion and place this fiscal issue firmly in the rear-view mirror, we can begin next year focusing on those things that ensure America’s greatest days still lie ahead.
Bob Corker is a Republican senator from Tennessee and a member of the Senate Banking Committee.
I have a plan for avoiding the fiscal cliff. Buy American, put America back to work and paying taxes again. Budget problems solved. Next dilemma?
What’s funny is that those who have been screaming the loudest about the debt are the same ones wanting to avoid the “fiscal cliff” (a misnomer). The “fiscal cliff” does exactly that, it fixes the debt. It raises new revenue and cuts spending, so why are those deficit hawks seeking to avoid it? Because they’re nothing but hacks who were using the debt for political purposes — they care nothing about the debt.
We need to cut Defense spending and raise taxes to the rates they once were, ESPECIALLY on capital gains. We should not be discouraging labor — that’s exactly what we do when we tax labor drastically higher than we do investments.
Except even Bill Clinton realized his tax hikes hurt the economy. This is why he slashed the capital gains rate leading to a robust economy and more federal revenue.
Then why didn’t things really boom when the rates were slashed down to 15%?
Because taxes have little or no effect on the economy except in very rare circumstances. Clinton never “realized” that his tax cuts hurt the economy. Had they he would have reversed them not giving the wealthy another tax break.
Um, they did. We still generate more federal revenue now than when the Clinton tax rates were in effect – and this is with a terrible economy.
This is a common sense solution which is basically what Romney proposed. I don’t expect our liberal friends to support it. I expect them to demagogue over tax rates paid by the rich even though they know raising taxes on the rich does nothing.
Deep down I think the left is prepared to embrace this fabricated “crisis”. It allows them to raise taxes on everyone, it allows them to slash defense spending and it allows them to cut domestic spending all while being able to blame the GOP for the consequences. What is there not to like from their point of view? This will also give Obama his next excuse for why the next four years will be just like the last four years or worse. It is a win win for liberals.
The problem they are faced with is that economists have explained to them that higher taxes do not lead to more federal revenues. The opposite is true. The higher taxes would decimate our already miserable economy and they would be handing the next couple of elections to Republicans who would be able to campaign on real tax reform. And unless the Dems can find another charismatic black candidate, free cell phones and free birth control pills won’t be able to make up the difference next time.
I believe that the American people voted on the Romney/Ryan proposed plan recently and the overwhelming votes were against that. The American people made a decision to keep the Great Society great by everyone contributing their fair share. Many cuts can be made to the bloated defense budget, reducing military spending overall, not to mention the outrageous handouts of taxpayer money to corporations, corporate welfare, and the billions of dollars of subsidies given to Big Oil before considering any cuts in education, infrastructure,or social programs.
This is no solution. Doesn’t address the problem which is Republican irresponsible spending and criminal tax policies intended to bankrupt the country to force the elimination of Social Security and Medicare.
The GOP is engaged in a Fiscal Bluff over the Fiscal Cliff.