Let’s have a splash of reality: America is facing another $1.2 trillion dollar deficit for this year as it has for the past four years. This solution adopted by Congress not only does not reduce this year’s deficit, but it adds to it. According to the official estimate by the Congressional Budget Office, the Senate deal includes more than $330 billion in new deficit spending over the next decade.
Additionally, the bill calls for $620 billion in increased tax revenues over ten years but incredibly includes only $15 billion in spending reductions. That equates to a ratio of $1 in spending cuts to $41 in increased tax revenue, even though the president promised $2.50 in spending cuts for every $1 in new revenue during his campaign. The highly touted Simpson-Bowles Commission recommended a 3:1 ratio.
It should be self-evident that the $60 billion in new revenue annually is woefully insufficient to pay down the deficit. Where will we find the remaining $1.14 trillion to eliminate the deficit? We have a spending problem in Washington, not a taxing problem.
I had been willing to support a compromise that included additional, but limited, tax revenue if the plan also had included significant spending reductions and common-sense entitlement reforms. However the bill lacked that balance.
These concerns were not limited to conservatives. Senator Michael BennetMichael BennetA guide to the committees: Senate Senate advances Trump's Commerce pick Senate Dems move to nix Trump's deportation order MORE (D-Colo.) also opposed the plan on these same grounds, saying, “We want a plan that materially reduces the deficit. This proposal does not meet that standard and does not put in place a real process to reduce the debt down the road.”
In a similar statement, Chairman of the Federal Reserve Ben Bernanke called the current levels of spending “unsustainable,” and cautioned that “fiscal policy must be placed on a sustainable path that eventually results in a stable or declining ratio of federal debt to GDP.”
This plan does nothing to put us on that sustainable path.
Americans once again are being promised spending cuts in the future in exchange for immediate increases in taxes. We’ve seen this movie before – the spending cuts unfortunately never happen.
This has played out twice with similar results:
· In 1982, Congress promised President Reagan $3 in spending cuts for every $1 in tax hikes but the spending cuts never happened.
· In 1990, President George H.W. Bush reluctantly agreed to $2 in spending cuts for every $1 in tax increases but none of those cuts occurred either.
The frustration of this process takes its toll. The final bill was presented in the Senate in the early morning hours and hastily cobbled together. Senators had only minutes to review the legislation before voting on it. According to one Senate aide, their office was emailed a copy of the legislation at 1:36 a.m. and the vote began nine minutes later at 1:45 a.m. The Senate obviously was not given sufficient time to read the bill that was over 150 pages long.
For the Senate to agree to legislation in the wee hours of the morning without a thorough review is not how the process should work. It reminds me of the quote from Nancy Pelosi during the debate over ObamaCare when she said, “we have to pass the bill to find out what’s in it.”
With more time to review the bill, we found that not only does it increase taxes with almost no spending cuts, but it also includes other questionable provisions such as:
· $12.1 billion in tax breaks for wind energy;
· $222 million in loopholes for Puerto Rican rum producers;
· $248 million in incentives for Hollywood studios; and
· $62 million in tax breaks for American Samoa businesses.
America can’t afford this.
As my record reflects, I have already voted to extend the Bush-era tax rates for all Americans and $5.5 trillion in spending cuts –both of which were opposed by the Senate. I will continue to fight to maintain the lowest tax burden for middle class families and small businesses and work to stop Washington’s addiction to spending.
The Senate sent us a bill that contained tax increases, no significant spending cuts, increased the federal debt and then refused to consider any changes from the House. Therefore I had no other recourse but to oppose the final plan.
I am hopeful in the coming months we can move past this end-of-year mess and turn our attention to stopping out-of-control spending. Congress needs to address the real problem facing our country - excessive government spending that will be paid for by our children and grandchildren.
McKinley is a Republican from West Virginia.