One of the many buzz words for 2012 without a doubt was "fiscal cliff," a phrase used to describe the expiration of various tax provisions, namely the Bush-era tax rates, and indiscriminate budget cuts commonly known as "sequestration." Most economic experts warned that allowing the combination of both to take effect would wreak havoc on the nation's fragile economy. According to the non-partisan Congressional Budget Office, failing to extend the current tax structure alone would have reduced national employment by upwards of 3.4 million jobs.
For this reason, on Jan. 1, 2013, I voted to support H.R. 8, the "Job Protection and Recession Prevention Act of 2012," which averted immediate sequestration and achieved permanent tax relief for 99 percent of Americans, by extending the lower tax rates enacted in 2001 and 2003, under President Bush and extended again under the Obama Administration in 2010.
Some individuals, Republicans and Democrats, take issue with particular parts of the compromise. While the agreement is not perfect, and there are many parts of the bill I would not have included, its passage prevented the possibility of relapsing into recession, which is not something I was willing to risk.
Rep. Glenn 'GT' Thompson
Many of my Democrat colleagues pointed to the Bush-era tax laws as beneficial only to the so-called "rich." To the contrary, 60 percent of the tax relief went directly to middle and low-income earners.
I cannot blame my Republican colleagues for wanting comprehensive debt reduction included as part of the package. Regrettably, today the national debt is at the same level as the day we voted, however I was not willing to stage a symbolic protest of the imperfect in favor of a $3,000 tax increase for the average American household.
Unfortunately, the rhetoric from the detractors tends to lend more insight to campaign platforms and clamors for reelection, rather than doing what is best for the country. The fact of the matter is the fiscal cliff posed a serious threat to our economy and it needed to be averted. But the threat of the fiscal cliff pales in comparison to the more pressing issue of America's looming debt crisis.
Deficits have grown due to the costs associated with two wars, increased spending on health care and programs such as Medicare and Social Security, and government responses to the 2008 recession, such as the 2009 economic stimulus package. Low employment has substantially depressed tax revenue, adding to yearly deficit totals. Underemployment continues to plague a significant amount of the workforce. Even as our economy shows signs of strengthening, our revenues simply cannot keep pace with spending. In the coming decade, health care spending is projected to soar at the same time as more and more Americans will retire and live longer. This will exponentially increase the cost of our social safety net programs, which already consume close to two-thirds of the federal budget.
Today, the national debt, which is an accumulation of yearly deficits, is $17 trillion. Without spending reforms, by 2020, the interest alone paid on the debt by American taxpayers will cost $1 trillion per year, money that could otherwise be used to educate our kids, invest in research, or put aside for those most in need.
While President Obama has encouraged deficit reduction, he has not offered concrete solutions nor encouraged the Democrat-lead Senate to face this challenge. Only the Republican led House has put forward reforms that, while politically unpopular, are necessary to prevent drastic and harmful cuts at a later date. We have put forth priorities for the public to see: Our plans to control spending, to maintain our promises to the nation's seniors by reforming Medicare and Social Security to ensure their longevity, and to reform an outdated and cumbersome tax code. Unfortunately, all-too-many of my Democrat colleagues have used these proposals not to begin a discussion about America's fiscal imbalance but instead as a platform for political attacks.
Most would agree that borrowing on the backs of our children to pay for promises our government cannot honestly keep must end. In order for the nation to change its course will require less political posturing, more informed debate, and a focus on the cold, hard fact that America is headed for economic decline unless we act to prevent this true fiscal cliff.
It is only together that we can continue to ensure America remains a great nation for future generations to come.
U.S. Rep Glenn "GT" Thompson represents the Fifth Congressional District, which includes Mount Union Borough.