A Wichita business owner contacted my office last week. She, her husband, her son and one employee work in a small, family-run inspection business. The past four years have been hard. The stalled housing market, taxes and regulatory burdens – including Obamacare – have made it difficult to survive, let alone expand. The only “good” news is that economic stagnation has put so many competitors out of business that it helps some. She is frightened.
The fiscal cliff we face on Jan. 1 represents a mix of enormous tax increases and modest spending cuts that badly need to be rebalanced. But focusing on the cliff misses the central point of the debate: Our No. 1 priority must remain restoring economic growth and jobs. To do that, we must stop Washington’s spending binge and reform the entitlement programs that are drowning our nation in debt.
Without spending changes, Medicare, Medicaid, Social Security and interest on debt will consume every federal tax dollar starting just 12 years from now. There won’t be a single dollar left over for our military, veterans, cancer research or anything else you care about. Nothing.
That’s not Republican rhetoric. It’s not partisan polemic. It’s math. Our current spending path is simply unsustainable.
Yet President Obama has asked to spend more now ($50 billion more “stimulus”); borrow more later, resulting in a 2013 deficit of more than $1 trillion (for the fifth year in a row); and tax the so-called rich more. He even wants Congress to give him unilateral power to raise the debt ceiling.
The president is also obsessed with demanding higher tax rates. But eliminating the Bush tax cuts on Americans making more than $250,000 would pay for only 10 percent of the president’s proposed $7.7 trillion increase in deficit spending; he would grow our federal debt from its current $16 trillion to more than $24 trillion. Economists say his tax hikes will destroy some 700,000 jobs.
Why would the president favor that unless he, and his fellow Democrats, care more about raising taxes than they do about the employees who work with the woman who called me about her small company?
There is a better alternative. An economy growing much faster than today’s provides the single best solution to our fiscal woes. By cutting spending, we can unleash the power of the private sector and create an opportunity society.
Last year, Congress and the president agreed to cut $1.2 trillion in spending over the next 10 years, including $110 billion in 2013. It was not nearly enough, but it was a start. Unfortunately, the president now appears to be walking away from even this very modest spending reduction.
Instead of stepping away from fiscal responsibility, the president must lead the effort to reform Medicare, Medicaid and Social Security. So far, he has refused to offer one dime of savings.
The president needs to help make and explain the hard choices that must be made to avert not only the fiscal cliff but, more important, fiscal catastrophe. If he does, we can stop scaring our job creators and have the smaller, humbler federal government that middle-class families and small businesses, like the woman I spoke with, deserve.