In the debate over avoiding the “fiscal cliff,” an important point has been forgotten: when it comes to solving our debt, government spending is the problem that must be addressed.
Republicans have offered a balanced, pro-growth solution that would avert the fiscal cliff by making needed spending cuts and reforming our tax code in ways the president previously supported. This kind of plan – backed by a majority of the American people in survey after survey – would help address our debt and pave the way for long-term job growth.
President Obama and Democrats, on the other hand, want to punish small businesses with higher tax rates while increasing spending. The president has demanded as much as four times in tax hikes versus spending cuts, which are dwarfed by new ‘stimulus.’ This isn’t balanced. And it won’t do any good.
The chart above – prepared by Chairman Paul Ryan (R-WI) and the House Budget Committee – shows what happens to projected levels of tax revenue (green) if President Obama’s tax increases kick in (blue), and compares that with recent and projected spending trajectory (red). As you can see, if the president gets his tax hikes, we still face a mountain of spending-driven debt.
Even Democrats like Erskine Bowles admit, “We have to cut spending.” As said on CBS Face the Nation, “Even if you raise the top rates back to the Clinton rates, that only creates about $400 billion over 10 years. That's $40 billion a year. We have a trillion dollar a year deficit.”
Spending is the problem. Republicans want to make needed spending cuts; Democrats are silent. And that’s why there’s still no agreement on averting the fiscal cliff.