Who’s to blame if we go over the fiscal cliff?

Jacqueline Larma/AP

Sen. Pat Toomey, R-Pa., on Tuesday shot back at a Democratic colleague with whom he pursued a bipartisan budget deal in 2011 on the unsuccessful super committee. Toomey labeled as “cynical” the suggestion by some Democrats that Congress should do nothing to head off the coming expiration of the 2001 and 2003 tax cuts rather than sign onto a plan that fails to raise revenues.

Toomey was invited to appear before a panel of tax and budget experts at the Brookings Institution after Sen. Patty Murray, D-Wash., speaking there on July 17, characterized Toomey’s 2011 proposal to break the fiscal stalemate as “offensive” for containing “vague loophole closings [and] fuzzy revenues.” Murray called Toomey’s plan a “gimmick, a bait-and-switch.”

In describing his own proposal for avoiding the series of tax, spending and debt deadlines known as “the fiscal cliff,” Toomey said: “We need to have an honest debate on facts, which means history, arithmetic and actuarial tables. Then, if we can find common ground, we end up with a deal, not just another fight.”

The key, in Toomey’s view, is curbing entitlement spending. He quoted President Obama from a July 2011 press conference agreeing that changes were needed to stabilize Social Security, Medicare and Medicaid. Their growth -- about 5 percent annually in Social Security and Medicare and 11 percent in Medicaid, Toomey said -- is “pretty close to the definition of unsustainable, and no significant program can grow faster than our economy.”

Going into the super committee talks, Republicans were willing to consider new revenues, but only if the agreement included “architectural entitlement reform,” Toomey said. “I didn’t feel revenues were fiscally necessary, but I did recognize they were politically necessary, essential for our friends on the other side.”

But Republicans were disappointed with the Democrats’ counteroffer, which Toomey described as $1 trillion in tax increases, $1 trillion in mostly unspecified spending cuts (mostly to health care providers) and no entitlement reform. So he asked himself whether “there was another paradigm for common ground,” and the Republicans “gave up on architectural entitlement reform, a big concession,” he said.

He then designed a $1.2 trillion package that, while avoiding any increases in marginal tax rates, included “meaningful entitlement curbs,” such as means testing Medicare and recalculating the inflation adjustments for Medicare and Social Security benefits (the so-called chained Consumer Price Index). The plan offered revenue raisers in the form of fees and asset sales along with spending cuts -- the “low-hanging fruit”-- drawn from the work of previous fiscal commissions and study groups, all at the same 3-1 ratio of spending cuts to revenue hikes that the Simpson-Bowles fiscal commission called for in 2010.

Toomey described his tax plan as “progressive” in that it would raise revenue only from the top two brackets, though it included a previous Senate proposal to reform and trim the estate tax. “I’m being candid here, and you cannot say it would be taking from middle class to pay for tax cuts for the rich,” he said. “We met the Democrats halfway on the scoring of revenue.” He called all the components “dialable,” meaning they can be adjusted. The plan “would have demonstrated to American people that we are capable of governing,” Toomey said.

The Democrats' decision to balk, he said, shows that they were “motivated by politics and ideology and a certain level of cynicism.” Their flirtation with allowing all the impending tax and spending cut deadlines to expire at the end of this year “would do unclear damage” to the economy that might be difficult to reverse, he said, and it could easily cause a new recession.

The best solution now, Toomey said, is to extend all the current tax rates one more year and “use the time for pro-growth” tax reform. “I know I won’t get my way on everything, but we do have to agree on the fundamental problem,” he said. “A strong economic recovery is well within our reach, but it’s up to us.”

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

    Download
  • Cyber Risk Report: Cybercrime Trends from 2016

    In our first half 2016 cyber trends report, SurfWatch Labs threat intelligence analysts noted one key theme – the interconnected nature of cybercrime – and the second half of the year saw organizations continuing to struggle with that reality. The number of potential cyber threats, the pool of already compromised information, and the ease of finding increasingly sophisticated cybercriminal tools continued to snowball throughout the year.

    Download
  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

    Download
  • GBC Issue Brief: The Future of 9-1-1

    A Look Into the Next Generation of Emergency Services

    Download
  • GBC Survey Report: Securing the Perimeters

    A candid survey on cybersecurity in state and local governments

    Download
  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

    Download
  • eBook: State & Local Cybersecurity

    CenturyLink is committed to helping state and local governments meet their cybersecurity challenges. Towards that end, CenturyLink commissioned a study from the Government Business Council that looked at the perceptions, attitudes and experiences of state and local leaders around the cybersecurity issue. The results were surprising in a number of ways. Learn more about their findings and the ways in which state and local governments can combat cybersecurity threats with this eBook.

    Download

When you download a report, your information may be shared with the underwriters of that document.