OPINION-EDITORIAL – You’ve probably heard the news: The “fiscal cliff” has been averted, scheduled tax increases avoided and bipartisanship revived. The American people have been saved from economic calamity. But behind the smoke and mirrors of the fiscal cliff deal is this reality: Congress merely maintained the vast majority of a dysfunctional system. Almost no one who voted for the bill liked it, but that didn’t stop nearly two-thirds of Congress from saying it was “good enough.”
In fact, the fiscal cliff deal failed to improve on our broken status quo, and what little change it did made it worse.
By essentially affirming the status quo on taxes, Congress left in place a system that has made a mess of our economy. Unemployment remains unacceptably high and workforce participation near historic lows. A Pew Research Center study last summer found that the last 10 years have been the worst decade in modern history for middle-class families. Since 2001, the median household income and household net worth have fallen. Those Americans lucky enough to have seen any wage gains in recent years have seen them swallowed up by exploding health care costs and collapsing home values.
Corporate profits rising to new heights in this same era is not bad news; profits are welcome at any time. But it does indicate that our policies are not serving everyone equally. And as we ring in 2013 under supposedly “new” tax laws, the federal tax code will still divide the American people picking winners and losers arbitrarily pitting us against each other.
The system continues to double-tax the capital investments that create new businesses and jobs and to mistreat American parents, our ultimate investor class. It will also impose new marriage penalties on high-income earners. It continues to subsidize the unsustainable spending of America’s most reckless city and state governments. It continues to reward rich corporations lobbying for government handouts while punishing lower-income families trying to work their way off of them.
The fiscal cliff deal raises taxes on successful small-business owners, threatening the jobs of hundreds of thousands of Americans who work for them. As a result of the deal, the top federal tax rate on small businesses will be higher than the rate on large corporations. There is the strange bipartisan agreement to silently endorse the snap-back increase of payroll taxes on every working American.
In other words, the substance of the fiscal cliff deal is an endorsement of our failed status quo, with tax hikes on small businesses and working families thrown in for good measure. Unfair and anti-growth: This is what Washington calls a “balanced approach.”
Meanwhile, the fiscal cliff has conveniently distracted the public from all of the new Obamacare taxes that kicked in on Jan. 1. Tax hikes on over-the-counter medicines, out-of-pocket medical expenses and flexible spending accounts popped into the code this week, as did the new Medicare surtax.
In exchange for this tax-hiking compromise, the deal also postponed scheduled spending cuts. The modest cuts agreed to in 2011 were put off for three months (so we can all look forward to “Fiscal Cliff Part II,” coming in March). More than that, the deal actually increases the federal budget with brand-new stimulus spending, including $1.5 billion for Hollywood, a special NASCAR tax break and green energy and other tax credits and incentives.
This is why the actual text of the 153-page mess of a bill was hidden from senators until 1:36 a.m. on Jan. 1, just six minutes before the vote. And it’s why Sen. Lee voted no.
Everything about this bill was a failure; what Congress did, how Congress did it and what Congress failed to do. It will raise taxes, kill jobs and stifle growth. It was produced by a secretive, undemocratic process and passed in the dead of night with very few members of Congress having read it. And it leaves untouched every major problem that has smothered our economic recovery. The American people deserve better.
To transcend our dysfunctional status quo, we need to transcend our dysfunctional systems. We need to fundamentally rethink and reform federal taxes, regulations, spending and entitlements. We need to empower individuals, families, communities and businesses to provide the growth, security and opportunity big government never will.
The lesson we should all take from the fiscal cliff debacle is that Washington D.C.’s idea of “good enough” just isn’t enough anymore.
Submitted by: Sen. Mike Lee.
Sen. Mike Lee, a Republican representing Utah, is a continuing member of the Joint Economic Committee, Judiciary, Energy and Natural Resources, and will join the Senate Armed Services Committee as well for the 113th Congress.
“I am pleased to continue the good work being done on the Judiciary, Energy and Natural Resources, and Joint Economic Committees, and look forward to joining my new colleagues on the Armed Services Committee,” Lee said. “Utah maintains two important military installations in Hill Air Force Base and Tooele Army Depot, which are both critical to America’s defense. As a member of the Armed Services Committee, I will make sure Utah has a seat at the table as the Pentagon continues to strengthen and modernize our national defense.”