By Adam Gerard
Opinion Editor
As our nation’s fiscal situation continues to worsen, the government must make one of two choices: increase taxes or cut spending. In times of recession, cutting spending is not a feasible economic option.
Most Republicans and Democrats agree that our nation’s growing debt will represent a great problem to our nation in the future. However, they disagree on how this problem should be combatted. The resulting inability of our legislators to compromise has led to a series of potential default economic actions that has been popularly labeled the “fiscal cliff” by the media. This “cliff” means that if the budget issue is not appropriately addressed, automatic spending cuts and tax increases will go into effect in the beginning of January.
This mechanism was haphazardly created in order to pressure a compromise earlier in the year. Many economists agree that if the cuts in spending and increase in taxes are put into effect, the United States will plunge back into recession. The only way this can be averted is if the Republican Party agrees to increase taxes on the richest Americans and to close tax loopholes.
Yet, Republicans in Congress and governors’ mansions across the country have signed an anti-tax pledge, which means they can neither vote to raise taxes nor close loopholes, both of which are needed in order to raise revenue. The official name of this pledge is the Tax Payer Protection Pledge, and it is sponsored by the Americans for Tax Reform, which is led by activist Grover Norquist. This pledge is incredibly flawed and outdated, and its influence within the GOP threatens to destabilize the American economy in the coming fiscal year.
This pledge has resulted in the Republicans asking for concessions from the Democrats on spending without the ability to offer anything in return. These concessions include traditional Democratic social programs such as Medicare, Medicaid and Social Security. While it is true that these entitlement programs need reform, this pledge and Republican unwillingness to negotiate taxes have led to a standstill in negotiations and, thus, caused the “fiscal cliff.”
In order to prevent tax hikes on all Americans, along with the draconian cuts that would result from the triggering of the “fiscal cliff” mechanisms, the Republican Party must abandon Norquist’s pledge and raise taxes on the richest 2% of Americans. President Obama has already laid out a comprehensive plan that will reform government spending if the Republicans agree to meet him halfway regarding tax.
By raising the marginal tax rates to the levels they were at under President Clinton, the disaster of the “fiscal cliff” can be prevented, and America’s economic future can be secured. The Republican Party just has to agree to come to the table.
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