Wicker: Going Over ‘Fiscal Cliff’ Would Hurt Mississippians
Debt Agreement Is Critical to Preventing Harmful Tax Hikes, Job Losses
Monday, December 17, 2012
It is widely acknowledged that another recession and higher unemployment are likely if Congress and the President cannot agree on a deficit reduction plan before the end of the year. Preventing the “fiscal cliff” of $500 billion in tax increases and across-the-board defense cuts remains the most pressing priority in Washington.
Like the rest of the country, Mississippians will feel the harmful economic impact if the “fiscal cliff” takes effect. According to the Heritage Foundation, taxes would rise by an average of nearly $2,200 in our state next year. Families would see the child tax credit drop from $1,000 per child to $500, and homeowners would lose important tax deductions. In addition to tax hikes, cuts to defense spending threaten more than 11,000 Mississippi jobs.
High Stakes for Small Businesses
Although details surrounding the “fiscal cliff” negotiations between President Obama and congressional leaders are limited, it has become increasingly clear that the President and Senate Democrats are reluctant to get serious about the real drivers of America’s spending. So far, the White House has focused almost entirely on tax increases for some Americans – including about one million small business owners.
According to a recent report from the National Federation of Independent Business, small business confidence is extremely low. Small businesses make up 97 percent of employers in Mississippi. A greater tax burden would only add to the challenges these businesses face in today’s weak economy.
A Sustainable Future
Addressing the country’s immediate needs and looking long-term toward financial solvency should go hand in hand. The devastating reality of the “fiscal cliff” should be an opportunity for constructive dialogue about necessary reforms to our tax code and entitlement programs.
Republicans have serious concerns about President Obama’s demands for $1.4 trillion in tax hikes, as well as the unprecedented authority to raise the federal debt limit without congressional approval and more stimulus spending. After four years of trillion-dollar deficits, Americans deserve better stewardship of their taxpayer dollars – not a plan that taxes and spends without also working to rein in government excess.
Particularly troubling are the recent remarks from Treasury Secretary Timothy Geithner suggesting that the White House is “absolutely” ready to go over the “fiscal cliff” if its demands are not met. Using America’s financial future as leverage distracts from the bipartisan cooperation it will take to reach a sensible agreement for lasting deficit reduction.
Saving Entitlement Programs
A “balanced” plan – which the President promised – must include cost-saving measures. According to budget projections, spending on entitlement programs will continue to skyrocket toward their bankruptcy. Even Medicare’s own trustees admit the program will be insolvent by 2024 unless changes are made.
Reform that promotes flexibility and efficiency is essential to protecting safety net programs for today’s retirees and soon-to-be retirees. Changes for younger Americans can ensure these programs remain viable for future generations.
Medicare Part D prescription drug coverage is a prime example of how market competition can help keep costs low for both seniors and the federal budget. The optional, outpatient prescription drug plan has come in 43 percent below budget, and Part D premiums are 46 percent lower than expected.
Republicans are ready to prevent the “fiscal cliff” and achieve deficit reduction through reforms to both the tax code and entitlement programs. Until both political parties are willing to confront the government’s spending problem, lasting solutions will remain unreachable.