I have a question for President Barack Obama and House Minority Leader Nancy Pelosi: If former President George W. Bush was 98 percent right, does that mean you’re 98 percent wrong?
In the weeks leading up to the November election, then-candidate Barack Obama bombarded the airwaves with a campaign ad claiming that the Bush-era tax cuts led to the economic crisis. On Dec. 5, he told the Business Roundtable we must “make sure that 98 percent of Americans don’t see a single dime in tax increases next year.”
For years, Democrats led by Nancy Pelosi cast the Bush tax cuts as “tax cuts for the rich.” If that’s true, then allowing them to expire would only impact the rich, right?
In a press conference last week, Pelosi accused Republicans of holding the middle class “hostage” and called for passage of “middle income tax cuts.” For the better part of the past decade, she called them tax cuts for the rich, but now, suddenly, they’re “middle income tax cuts?”
Barack Obama and Nancy Pelosi can’t have it both ways.
The most telling piece of selective rhetoric is when Democrats suggest tax rates for the 2 percent should return to the Clinton-era tax rate of 39 percent. But if the Clinton-era rates are so great and the Bush tax cuts are so bad, why aren’t Democrats making the case that all rates for all people should return to the Clinton-era tax rate? Because if they did, it would result in a tax increase on the middle class and the working poor in America.
That’s the ugly truth that Democrats don’t want to admit and so they instead embrace the politics of envy to act as a substitute for substance. Like it or not, we are all in this fiscal crisis together.
The nonpartisan Tax Policy Center has released a study finding that “taxes would go up by a collective $536 billion next year, or about $3,500 per household.” For the middle class, that means a tax increase of almost $2,000. The truly devastating part – the lowest earners in America would be hit the hardest.
This isn’t a fiscal cliff, it’s a tax mountain. Therefore, raising taxes on the 2 percent will only allow us to scale 2 percent of the tax mountain.
We can all acknowledge that there are inequities in the existing tax code and that closing those loopholes should be at the center of tax reform, but that in itself is not the real problem. As former Clinton White House Chief of Staff and Democrat Erskine Bowles pointed out this past weekend on CBS’ Face the Nation, “Even if you raise the top rates back to the Clinton rates, that only creates about $400 billion over 10 years. That’s $40 billion a year. We have a trillion dollar a year deficit.”
The solution isn’t taxing more, it’s spending less. And yet for all of the selective bravado about returning to Clinton-era tax rates, where is the conversation about returning to Clinton-era government spending rates? When President Clinton left office in 2000, government spending accounted for only 18.2 percent of GDP. During the past four years of the Obama presidency, government expenditures have averaged 24.4 percent of GDP.
At the end of the day, the goal needs to be reducing the deficit and balancing the budget. The most immediate way to do this is to look inward at government and achieve meaningful savings.
Whether it is $100 billion spent funding duplicative programs or $535 million steered towards companies like Solyndra, taxpayers know that the federal government flushes billions of their dollars down the toilet every single year.
When you break it down, it’s pretty simple. Next month, everyone’s taxes will go up. Republicans in Congress are fighting for tax cuts that will benefit 100 percent of taxpayers and for a meaningful reduction in government spending that will address the true root causes of our fiscal instability. The only real question is whether or not Barack Obama and Nancy Pelosi will allow us to go over the fiscal cliff because they didn’t get 100 percent of what they wanted.
Rep. Darrell Issa (R-CA, 49th Dist.) is Chairman of the House Committee on Oversight and Government Reform.