06.27.2012 1

Delaying fiscal cliff better than lame duck fix

Fiscal CliffBy Bill Wilson — Congressional leaders are said to be considering a deal that would delay automatic spending cuts and tax increases at the end of the fiscal year through March, and be tied to a continuing resolution that needs to be passed by the end of the fiscal year on Sep. 30.

Throw in a temporary extension of the debt ceiling, and that may be better outcome than what is produced by Congress in a lame duck session after the Nov. elections. One will recall that the so-called fiscal cliff came into being as a direct result of the 2010 lame duck deal to keep tax rates from automatically increasing.

As a result of that deal, Congress also enacted the payroll tax holiday that has underfunded Social Security, blowing a $230 billion hole in the budget, and guaranteeing the program’s trust fund will be exhausted in 2033 instead of 2035.

The two year extension of tax rates was justified at the time as a temporary patch to make way for a permanent resolution. Instead, with Barack Obama’s insistence on increasing taxes on those he says are too wealthy — which will only raise a few billion a year, doing almost nothing to reduce the annual trillion-dollar deficit — Congress has been unable to get anything done in the past two years.

Couple that with the failed attempts to rein in the nation’s fiscal problems during the debt ceiling debacle, putting all of the hard work off to the Supercommitee, whose failure led to the $500 billion, ten-year reduction in the growth rate of spending.

However, all that will really mean in terms of real dollar cuts is $62 billion less spending in 2013. Every other year spending will increase as the budget blows up to more than $6 trillion, and the national debt to more than $25 trillion, by 2022. And those “cuts”, we’re led to believe, are too severe, too austere.

To be fair, in May, the House voted to replace sequestration cuts related to defense with cuts elsewhere in the budget. It will even result in an additional $240 billion of savings over the next ten years. And certainly, if that’s how the Congress was to proceed in a deliberative manner in 2013 and beyond, such a measure would likely find support with the American people.

But, it underscores the point, which is that when under a crisis-driven deadline, the Congress as currently composed and this Administration have proven incapable of producing a good deal for American taxpayers. Barack Obama, Harry Reid, and John Boehner are not up to the task.

So, they shouldn’t try.

Instead, it would be better for the country if the next Congress and president fresh off of electoral victory were to deal with it. Let this election be about the tax rates, about the sequester cuts, about the overall fiscal direction of the country, and about how deep cuts should be in exchange for increasing the debt ceiling. And then, let the winners represent America in making those choices on how to get our nation back on track.

It would be a slap in the face to American voters for this Congress and Obama to seek a last-minute lame duck deal with no moral authority to a problem they caused and have been unwilling to collectively solve. It’s time to let the new Congress and president have their chance.

Bill Wilson is the President of Americans for Limited Government. You can follow Bill on Twitter at @BillWilsonALG.

Copyright © 2008-2021 Americans for Limited Government