From: Mark E. Schneider
Received: Nov. 24
If Congress does nothing, which judging by its recent record has a good probability of occurring, the United States will be thrown back into recession as all taxes will rise, certain benefits will be slashed and spending cuts will be forced on Jan. 1, 2013.
As we approach in the short term this so-called “fiscal cliff” on Jan. 1, it is important to realize that more must be done to solve the long-term, structural problems that face the nation. The fiscal cliff is merely a small wave compared to the oncoming tsunami of spending, interest and debt.
President Barack Obama has won re-election and the American people have given him, along with Congress, an enormous responsibility to find a solution for both the near- and long-term fiscal health problems of our nation.
What the president’s main suggestion has been so far is for the top 2 percent of earners in this country to pay a higher tax rate. The fact that nearly all of the debate of the fiscal cliff centers on this as the be-all and end-all is what is most concerning.
Even if Mr. Obama were to get all of his wishes, the increase in tax revenue he has outlined would be at most $100 billion a year. We have an annual deficit of over $1.1 trillion.
The increase in revenue Mr. Obama has proposed results in our borrowing going from $3.5 billion a day to $3.3 billion a day for the foreseeable future. In other words, it does nothing to solve the real problems that lie ahead.
To get the deficit to a manageable level of $100 billion or $200 billion annually, real, sustainable reform must be done to the tax code, Medicare, Social Security and defense spending. As the bipartisan Bowles-Simpson deficit commission pointed out, if spending and revenues are not dealt with together, the problem will persist to an irreconcilable point in our future.
My fear is that the only bipartisan action we will see with the fiscal cliff is that the president and Congress will, together, ignore the structural issues we face as a nation. We literally and figuratively cannot afford for that to happen if we are to remain the world’s great power of this century.