Now or Later, We Must Go Big to Solve Fiscal Challenges
Time ran out for the debt supercommittee to find at least $1.2 trillion to $1.5 trillion in savings over the next decade. While the committee failed to meet the initial deadline this week, its work can and should continue. Congress still has until December 23 to pass a plan and avert deep, automatic cuts called sequestration. By missing this week’s deadline, Congress will only have forfeited the filibuster-proof protections. And the committee can still pass a deal, even a smaller one—that would represent progress.
Without question, the challenge confronting the supercommittee is massive—but so is the opportunity. That’s why the U.S. Chamber of Commerce has all along pressed the panel to act boldly—to rise to this historic moment, exceed its mandate, and set in motion the kinds of fundamental reforms that would help put our nation on a sustainable fiscal path. No matter the outcome this week—now or later—we will have to go big in pursuit of fiscal responsibility.
To that end, we must reform two major elements that are driving us into the fiscal abyss. The first are entitlement programs. Entitlements are the government’s largest expenditures. Even with so many of our resources pouring into those programs, they are unsustainable and will go bankrupt without reform. More than 70 million baby boomers are starting to retire this year, and the influx of recipients will further overwhelm the system. We must reform these programs to save them.
The second is our byzantine tax code. We haven’t fundamentally restructured our tax system in 25 years, and its complexity and unpredictability are dragging down the economy and our competitiveness. Tax reform must lower rates for everyone—corporations and individuals alike. Reforms should simplify the code, reduce compliance burdens, increase certainty by making provisions permanent, and put in place realistic transition rules. And the tax code cannot penalize any one industry, sector, or income group. Together, these tax reforms would foster economic growth, job creation, investment, and competitiveness.
There’s a lot riding on successful deficit reduction. And it goes beyond the nation’s fiscal health—it’s a test of political resolve, bipartisanship, and America’s can-do spirit. Failure would come at a high price for lawmakers as well. Congress already holds the dubious distinction of having the lowest approval rating in recorded history—9%. Americans are in no mood for inaction.
Whatever supercommittee outcome we face, there will still be a long, steep climb on the path to fiscal health. Our problems aren’t going to stop if congressional efforts do—so let’s press on.