Goal for New Congress: Cut Spending, Cut Taxes
It is often said that: “Those who cannot remember the past are condemned to repeat it.” Congress would be mindful to remember these wise words as we move forward to address the country’s most critical problems in the new session of Congress.
The last Congress, led by an overwhelming Democratic majority in both the House and Senate, pursued a legislative agenda that moved against the tide of public opinion, economic realities, and budget constraints. They forced through a government takeover of our health care system, a failed economic stimulus bill, and tripled the federal deficit. Not surprisingly, unemployment continues to hover near 10 percent.
After nearly two years of rising jobless rates and record deficits, on November 2, 2010, voters said, “enough.” The Democrat leaders in Congress did not prioritize the country’s greatest concerns: job creation and the soaring federal deficit, and many paid the price at the ballot box for out-of-control spending and their role in growing the size of the federal government.
In the final weeks of the 111th Congress, key votes on taxes and spending give us some reason to hope that job-creating policies and fiscal restraint will be priorities moving forward.
During a lame duck session in December, Congress passed a compromise two- year tax agreement which prevented a massive, job-killing tax increase on New Year’s Day. Raising taxes during an economic recession is unthinkable. Although the agreement was not perfect, I believe it was necessary and ultimately a victory for all Americans.
The tax agreement maintains the current tax policy. It blocks higher taxes on capital gains and dividends, extends relief from the marriage penalty, preserves the $1000 per child tax credit, and protects at least 21 million additional families from the Alternative Minimum Tax. And it also alleviates the burden of the death tax, an egregious policy that punishes families and small businesses for success and ultimately discourages the American dream.
After holding the line on tax increases, Senate Republicans stood united in opposition to the 2,000 page, $1.3 trillion dollar omnibus spending bill. Passage of the omnibus would have cemented spending increases for the next year and tied Republicans hands in the next Congress by making fiscal reforms and budget cuts more difficult.
Later this month, the newly elected Republican majority in the House and the strengthened Republican ranks in the Senate will now have greater influence in future spending decisions. With the start of the new Congress, Republicans have the opportunity to take the lead on budget issues and make the tough yet necessary decisions to cut federal spending and put our country back on a sustainable and responsible fiscal track.
There is much the United States can and should learn from history regarding deficit reduction. In a research study by the American Enterprise Institute, building off the earlier work of two Harvard economists, analyzed the policies employed to fix unsustainable government spending by 21 countries. Their findings clearly show that successful reform efforts to balance budgets were almost entirely done by cutting government spending, while failed attempts predominantly focused on tax increases.
The federal government has been spending at the expense of economic growth and job creation, as well as stability and credibility in global financial markets. Ultimately future generations of Americans will bear the greatest cost. We have an opportunity to restore fiscal sanity to the federal budget and make the tax cuts permanent. This will allow businesses to have certainty for their future planning which will spur hiring and job creation. The American people expect Congress to have learned from the mistakes of the recent past-and not repeat them.
Kay Bailey Hutchison is the senior U.S. Senator from Texas and is the Ranking Member of the Senate Committee on Commerce, Science, and Transportation.