The Edmond Sun

December 29, 2012

Congress, president dance toward fiscal cliff

James Coburn
The Edmond Sun

EDMOND — Anxious Americans hold on to a sliver of hope to avoid the fiscal cliff set for Jan. 1 while Congress and President Barack Obama remain at odds for a strategic solution. A slow to moderate economic recovery following a major recession is at stake.

Families wonder how sequestration will empty their wallets if a compromise is not reached.

“People will have less money to spend if their money is going to the government. It will slow down the economy,” Congressman James Lankford said Friday. The nation is like a bickering family divided over the economy, he said.

“We will not fix our position as a country until we solve our debt problem,” said Lankford, R-Edmond.

Obama met with top Senate and House leaders Saturday after the White House issued a statement that it has no new fiscal plan. After the meeting, Obama said he is “modestly optimistic” that a deal will be made before Tuesday.

“Whatever we come up with is going to be imperfect. Some people aren’t going to like it, some people are going to like it less,” Senate Majority Leader Harry Reid said Friday, according to CNN. Speaker Boehner has been on the phone with the president reiterating his same position to say the House has acted, Lankford said.

“It’s time for the Senate and the president to actually act and respond to something. Create a proposal that will pass,” Lankford said.

Obama’s latest proposal to help pay down the federal debt has been to tax people who earn more than $400,000 or more, while continuing the Bush tax cuts for the middle class, Lankford said.

“There’s no spending cuts in it. That doesn’t solve anything,” he said.

Republicans have also rejected Boehner’s proposal to limit the tax increases to people earning more than $1 million. The proposal was never voted on, Lankford said.

“The key of it is, is there a place to be able to resolve this? Yes,” he said. “But it has to actually solve the problem.” Lankford said Obama is focused on how to get beyond the fiscal cliff.

“That’s not the solution,” Lankford said. The U.S. is spending $1 trillion more than it did five years ago, he said. “That cannot be sustained.”

The president initially asked for more than $1 trillion in tax increases with unlimited debt ceiling increases and to delay sequestration for one year, Lankford said.

“Republicans aren’t about to write a blank check for anything Senate Democrats put forward just because we find ourselves at the edge of the cliff,” Senate Minority Leader Mitch McConnell said, according to CNN. Sequestration is set to cut up to $1.2 trillion during the next 10 years.

Economic Pain

now or later

It doesn’t fix a fiscal cliff to create another fiscal cliff, Lankford said.

“If we can’t find a way to do what’s strategic then it cuts $120 billion a year,” Lankford said. “You just delay sequestration for a year, then next year you have to find $240 billion.”

Beginning Jan. 1, the Affordable Care Act will increase taxes for people earning $200,000 or more a year in interest, dividends, capital gains and payroll tax.

Obama’s recommendations for a tax increase coupled with the Affordable Care Act tax increase calls for $86 billion of additional spending a year, Lankford said. In addition, everybody’s tax rates go up from smallest to largest if a solution is not reached to avert the fiscal cliff, Lankford said. Thirdly, the across-the-board spending reduction Congress demanded in the budget deal will begin.

Lankford said the House passed all the documents it needed to pass for sequestration in May, and the tax policy in August.

“We have waited for the Senate to answer back,” Lankford said. “We are determined but the Senate isn’t doing its work. You can’t just have the House perpetually sending things over to the Senate until the Senate decides what they like.”

Reid has been frustrated that the House isn’t doing what he wants, Lankford said. The House functions with a majority rule. The role of the Senate is to form compromises between both parties to move anything forward, Lankford said. Reid wants the House to continue sending a bill over for a vote, Lankford said.

“We think there is a responsibility for the Senate to actually do its work as well,” Lankford said. “That is the legislative role out there that has to be settled.”

There will be economic slow down, Lankford said.

“We can either have the pain now or we can have the pain later,” Lankford said. “And, we think the pain later is even worse.” | 341-2121, ext. 114