A Balanced Approach to Averting the Fiscal Cliff
John Boehner, Dec 7, 2012
Just weeks away looms the ‘fiscal cliff,’ a combination of automatic tax increases and spending cuts that everybody in Washington claims they want to avoid.
Republicans want to work with the president to steer our economy clear of the fiscal cliff in a way that finally begins to solve the problem of our nation's debt.
We have a huge national debt because Washington spends too much, not because it doesn’t tax people enough.
During the campaign, the president spoke of a ‘balanced’ approach to the fiscal cliff and our debt -- a combination of new tax revenues and spending controls, used in tandem to reduce the deficit.
When the president says ‘new revenues,’ he means raising tax rates. Republicans are opposed to that because it will hurt small businesses and destroy jobs.
But there's another way to get the president the revenue he seeks. By cutting spending and closing special-interest loopholes in the tax code instead of raising tax rates, we can avert the fiscal cliff in a way that helps our economy instead of hurting it.
Accordingly, Republicans have signaled our willingness to accept some new revenues, if they come from tax reform instead of higher tax rates and are accompanied by meaningful spending reforms that begin to address the drivers of our country’s debt.
In re-electing a Democratic president and a Republican majority in the House, the American people gave both parties a mandate -- not to raise tax rates, but to find common ground and act in the best interests of our country.
I’ve cited the 1986 tax reform agreement between a Republican president, Ronald Reagan, and a Democratic Speaker of the House, Tip O’Neill, as one model of such a bipartisan accord. That agreement helped to pave the way for the strong economic growth America experienced in the years that followed.
A more recent model exists as well, in the form of the proposal President Clinton’s former White House chief of staff, Erskine Bowles, presented last year to the bipartisan Joint Select Committee on Deficit Reduction (‘supercommittee’).
The proposal is basically this: both parties would agree to a balanced deficit reduction package that includes significant spending cuts as well as $800 billion in new revenues.
To avoid doing harm to the economy, the new revenues would be achieved not through higher tax rates, but through pro-growth tax reform that closes special-interest loopholes and deductions and lowers rates.
On the spending side, the plan would cut $900 billion in mandatory spending and another $300 billion in discretionary spending. These would be cuts over and above the spending reductions enacted via the 2011 Budget Control Act.
This plan is a middle ground that would enable us to avert the fiscal cliff without doing harm to the nation’s economy.
On December 3, we sent this plan to the president as our counteroffer to his own fiscal cliff plan.
The president's plan calls for a $1.6 trillion tax hike -- double what he campaigned on -- as well as billions in new ‘stimulus’ spending and the authority to raise the nation's debt ceiling to infinity.
The huge revenue increase in the president's plan would be achieved through higher tax rates on small businesses and others. And where are the spending cuts the president promised?
Republicans won't be party to an agreement that shields big businesses and preserves special-interest tax breaks while raising tax rates on small businesses and hurting our economy.
Our proposal instead offers a way for Democrats to get the revenue they seek along with meaningful spending reforms, without tax rate hikes that will cost jobs.
To date, though, the president has refused to consider our plan, while also refusing to offer a viable alternative.
The proposal put forth by House Republicans is a reasonable framework. If the president won't accept it, he has a responsibility to offer a plan of his own that can pass both chambers of Congress.
Slow-walking our economy to the brink of the fiscal cliff is not a strategy worthy of the White House. For the sake of our country, the president must lead.
Congressman John Boehner is the Speaker of the House of Representatives. Boehner, a Republican, represents Ohio's Eighth Congressional District, which includes Miami, Butler, Preble, Darke, and Mercer Counties.
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