Protecting the Middle Class From the Fiscal Cliff
This is a very critical moment in America, and I continue to be concerned over the plight of the hardworking middle class during these trying times. The effects of the looming fiscal cliff crisis will go into effect on Jan. 1, should Congress fail to act. This is not an abstract theory and it is not Washington rhetoric. If we fail to act, there is not a single American who will not be affected by the consequences of increased taxes and across-the-board cuts ‚Äì which are both inefficient and irresponsible.
We must act now to protect our seniors who depend on Social Security, Medicare and Medicaid. We must protect the hardworking middle class, many of whom are still struggling to make ends meet. Congress must act to ensure that we avoid the fiscal cliff and strengthen our economy, so we can focus on creating a healthier environment for businesses to hire and expand. Medicare and Social Security will not be there for our children, if we do not save these programs.
We got to this crisis because of Washington‚Äôs wasteful spending. It‚Äôs time we got serious about eliminating wasteful spending. Congress must start by going through the budget line by line and dollar by dollar, keeping what works and cutting the waste.
We should also take a serious look at ways we can make our government more efficient. I believe that we must prevent the fiscal cliff from harming middle class taxpayers through more efficient government and eliminating unnecessary tax loopholes for special interests. I support a bipartisan solution through eliminating waste and fraud without harming middle class programs like Social Security, which is consistent with the ‚Äúbalanced‚Äù approach President Obama says he wants.
House Republicans have offered to accept some new revenues as part of an agreement to avert the fiscal cliff, provided the revenue comes from tax reform and lower spending.¬†Our country‚Äôs massive debt exists, not because tax rates are too low, but because government needs to reform the way it spends your tax dollars.
Unfortunately, the President‚Äôs solution would raise two income tax rates, which would harm small business owners, their employees, and their families, while funding the government for only five days in 2013 ($53 billion).¬†Any tax increase raising rates will harm everyone, including the middle class and the poor, because it results in less jobs and economic growth for everyone. Now is a time we need to be protecting those who have jobs, not putting those jobs in danger.
The accounting firm Ernst & Young found that raising these rates would destroy over 710,000 American jobs. According to the study, if the President‚Äôs tax increase occurs:
- Employment in the long run would fall by 0.5 percent, meaning roughly 710,000 fewer jobs in today‚Äôs economy.
- Real after-tax wages would fall by 1.8 percent, reflecting a decline in middle class workers‚Äô living standards.
- The economic growth in the long-run would fall by 1.3 percent, or $200 billion in today‚Äôs economy.
Even with the president‚Äôs proposed tax hike, deficits would still average $715 billion a year during a second Obama term, according to his own budget. Even with his tax hike, the White House still plans to increase the national debt by $4.1 trillion in his second term.¬†This is on top of the $4 trillion, which was added during his first term.
The year 2013 should be the year we begin to solve our nation‚Äôs debt problem through tax and spending reform, without harming those who depend on programs like Social Security. Such reforms are essential to achieving economic growth, without which our nation‚Äôs debt problem cannot be solved.
The House has already passed a bipartisan bill stopping all of the looming tax hikes.¬†Republicans want to reach a bipartisan agreement that can pass both chambers of Congress. The fiscal cliff is approaching, and is now less than four weeks away.
We must now work together to restore personal economic security, confidence in our future, and in our American way of life. We cannot accept anything less, and we can no longer afford to wait. The small business owners and the middle class are the heart, soul and strength of this country. Congress must act now to ensure that they remain so by avoiding going over the fiscal cliff. We‚Äôre not fighting for ourselves, we‚Äôre fighting for America‚Äôs children: America‚Äôs future.