US debt: We can run, but we can't hide (Obama tax deal or not)
Tackling the $13.8 trillion federal debt isn't a partisan issue. It's a matter of America's future prosperity. Extending Bush-era tax cuts may make economic sense now, but President Obama and Congress must come together and make tough decisions to cut spending and raise revenue.
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The need to enact these recommendations is made ever more critical by the emerging political consensus to help jumpstart the economy by extending the Bush tax cuts another two years. This adds yet another $900 billion to the deficit. While the jobs outlook is so bleak that the deal makes economic sense in the short run, it is irresponsible for Congress to pass it without simultaneously committing to take the political castor oil required to rein in the deficit longer term.Skip to next paragraph
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While liberal lawmakers make passionate promises never to cut Social Security or tax Medicare benefits and conservatives continue to sign tea party-inspired blood-oaths never to raise taxes, reality demands we do both.
Both parties made the bad decisions that created this mess. Both must now work together to solve it. No politician should enter this debate without being prepared to sacrifice something valued by his or her constituents.
Making painful decisions
Trillion-dollar deficits are so large that they can’t be solved just by getting people back to work or by sharp cuts in government spending, as important as doing both is. Taming our deficits will also require dramatic and painful entitlement reform. And when both are done, we still must change our tax system in a way that yields more, not less, revenue. If we choose to keep the Bush tax cuts in place for another two years, we must then undertake comprehensive tax reform that raises revenue, as President Obama now suggests, or simply let them all expire. The hard reality is we can’t afford any of them long term.
As the CEO of a publicly-traded company before I was elected to Congress, I led my business through three recessions by pruning every expense from top to bottom. I cut my own salary first, gave up my bonus, flew coach, and shared motel rooms with other executives on business trips. Before the government asks the electorate to cut back and make sacrifices, elected officials must first demonstrate a similar willingness to do the same. Congress can start by eliminating earmarks, giving the president a constitutional version of the line-item veto, cutting its own salaries, and passing a budget with a five percent across the board reduction in Defense, Homeland Security, and all discretionary spending. No exceptions and no sacred cows.
If the president and the Congress fail to make tough decisions like these and those outlined by these two bipartisan panels, I fear for our country. Perhaps soon, China and Middle Eastern oil states will stop supporting our insatiable appetite to spend beyond our means by refusing to buy our debt. Our bond rating would fall, the dollar’s value would plummet, jobs would disappear, and the next generation of Americans will be the first to have a lower standard of living than their parents.
Unless we act, our nation’s future looks dark. Now, while there is still time, we must get serious about our debt and heed the recommendations of the deficit commission and other experts. Failure to do so risks condemning the leaders of both parties to the same scorn vested on President Hoover and the Congress after the dark days of 1929.