As members of Congress continue to battle over a long-term budget plan, they need to consider responsible spending cuts while continuing to look at policy that will bolster job creation.
Many plans have been presented to fix our “fiscal crisis,” and one proposal of interest is the report from the bipartisan National Commission on Fiscal Responsibility and Reform commissioned by President Barack Obama.
The commission issued “The Moment of Truth Report” in December with a mission of reducing the deficit.
The group included in its recommendations plans to cut discretionary spending and reform the tax code, Social Security, Medicare and Medicaid.
Some of the most important points they made include reforming the tax code. Currently, dozens of tax expenditures exist, which are earmarks that amount to $1.1 trillion of spending each year in the tax code, according to the report.
These tax breaks and other incentives for businesses have been written into law thanks to successful lobbying for years, and they need to be wiped out. These credits are the reason why corporations like Bank of America paid no taxes this year.
The commission recommended eliminating all of these tax expenditures, while lowering taxes for all brackets and broadening the tax base.
We can get behind lowering taxes for low- and middle-income Americans, but high earners and corporations should pay their fair share. The only reason they have been able to amass such wealth is due to their ability to lobby for tax breaks. These tax expenditures designed for large corporations reaping billions in profits each year should be eliminated, while tax credits for families with children, people paying mortgages and charitable donations should be preserved for individuals.
Tax incentives for businesses creating new jobs could be considered, but allowing corporations to have tax credits will not equate to new jobs being created or laid-off employees being re-hired.
Another important idea in the report is to “protect the disadvantaged.” We agree. The amount of money the country spends on programs like unemployment, food stamps, Head Start, and other social services pales in comparison to our defense budget and lost tax revenues due to breaks and incentives. These programs provide support for the citizens most in need and cutting that funding would do little to reduce the deficit and put millions of people and children at risk. The commission did not recommend any fundamental changes to these programs.
The commission also made plans to reform Social Security, Medicare and Medicaid ”“ the so-called entitlement programs ”“ to create programs that can survive long-term and provide needed benefits for recipients. While changes may be necessary, these programs are important and need to continue into the future so people who have paid into these systems throughout their working lives can afford to retire. Reform must be done responsibly and not at the expense of those already receiving benefits.
The last recommendation of great importance is to reduce the country’s defense budget. Even for the next fiscal year, President Obama’s proposed defense budget is $708 billion ”“ that’s nearly $1 trillion. Defense spending is important, but we need to draw back from fighting wars around the globe and cut the defense budget to bring it in line with what is spent in other developed countries.
One plan has yet to emerge that would answer all the financial problems facing our country, but parts of many of the plans have merit. We hope as congressional leaders move forward, they will consider the difficult issues and make decisions that protect working Americans and those most vulnerable in this economy, while increasing incentives for job creation and leveling the playing field for corporate taxes.
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