Wicker Calls on New Congress to Work Toward Budget Solutions
Meaningful Deficit Reduction Should Follow ‘Fiscal Cliff’ Agreement
Monday, January 7, 2013
On January 1, Congress passed legislation protecting 99 percent of Americans from massive tax hikes and delayed harmful cuts to defense programs that could have cost more than a million American jobs. The drastic tax increases and severe defense cuts – also known as the “fiscal cliff” – briefly went into effect at the beginning of this year but were reversed by a bipartisan agreement.
Economists had long warned that the onset of the “cliff” would send the country into another recession and worsen already high unemployment. According to the Heritage Foundation, Mississippians would have seen their taxes rise by an average of nearly $2,200 this year had nothing been done. Based on the latest numbers from the Internal Revenue Service, the “fiscal cliff” agreement prevents an income tax rate increase on more than 1.2 million Mississippians.
Work Left to Do
Permanently extending tax rate cuts for the majority of Americans is a positive step toward rebuilding the confidence and certainty necessary for economic growth. At the same time, there is a great deal of work left to do for a lasting economic recovery. Although the most devastating impacts of the “fiscal cliff” were averted, the new Congress must work constructively to find budget solutions and ways to empower job creators.
America faces $1 trillion-plus federal deficits and a soaring government debt. Twelve million Americans remain without work, and millions more are underemployed or have dropped out of the labor force completely. Unsustainable entitlement programs are in desperate need of meaningful reform.
Reining in Spending
Responsible measures to reduce spending and stabilize the government debt are imperative in the coming weeks. Currently, the Treasury Department is taking action to avoid a default on federal obligations. On December 31, the government reached its borrowing limit of $16.4 trillion.
In August 2011, failure to address the country’s growing debt problem caused Standard & Poor’s to downgrade America’s perfect credit rating. Other credit agencies have issued downgrade warnings. A lower credit rating could result in higher interest rates, hampering the government’s ability to pay back what it owes and aggravating the debt crisis in the long run. As Congress debates the government’s borrowing ability, sensible budget savings must be part of the conversation.
Passing a Federal Budget
An essential component of government accountability is a federal budget, which Senate Democrats have failed to pass in nearly four years. It is inexcusable for the majority party to ignore this basic obligation of federal law. American taxpayers deserve to see the federal government’s spending priorities every year.
Similarly, President Obama should show a commitment to debt reform in his own budget proposal. For the past two years, the President’s budget has been rejected by Republicans and Democrats in Congress for its excessive spending, taxing, and borrowing – increasing the federal debt and its burden on future generations.
Last year, Senate Budget Committee Chairman Kent Conrad (D-N.D.) suggested that voting on a budget before the election was the “wrong time.” Unfortunately, an honest debate about out-of-control government spending is long overdue.
There are important differences between Republicans and Democrats when it comes to budget issues, but the well-being of Americans is our greatest priority. Charting a better economic future for the country in the coming year will take leadership and tough decisions. Pro-growth policies and budget reform should be at the top of the agenda.