A Road Map for Real Bipartisan Tax Reform

Senator John Cornyn
2012-11-28 14:20:55
If you are having trouble viewing this E-newsletter, please visit [cornyn.enews.senate.gov/mail/util.cfm for the Web Version. THE LONESTAR WEEKLY Senator Cornyn�s E-Newsletter *A Road Map for Real Bipartisan Tax Reform* *A truly balanced approach would have to include major spending cuts and entitlement reformsIf the president is going to claim a mandate for governing, then he has a responsibility to offer a genuine solution to America�s fiscal challenges.�* *The following op-ed appeared in *The Dallas Morning News [link 1]*.* [image = cornyn.enews.senate.gov//images/user_images/sizeoffiscalproblem.png] [link 2] *�Click here [link 3] to watch a video outlining the severity of the fiscal challenges facing our nation.* The American people have spoken �and once again, they have given us divided government in Washington. Divided government means that neither Democrats nor Republicans will be able to pass legislation along strictly partisan lines. It means that bipartisan compromise is the only way to avoid further gridlock. In the past, divided government has yielded some historic results. It produced landmark tax reform in 1986 and a sweeping overhaul of our welfare system 10 years later. Of course, we�ve had divided government since January 2011, and thus far it has produced legislative stalemates and bitter recriminations. Why should we expect things to be any different this time around? Quite simply, I believe there is now a bipartisan recognition that our current fiscal path is unsustainable. We cannot keep running trillion-dollar deficits. We cannot keep postponing structural changes to our largest entitlement programs. And unless we are happy with a tax code that wastes economic resources, stifles job creation and promotes crony capitalism, we cannot keep delaying genuine tax reform. We don�t have to speculate about what bipartisan tax reform might look like. In 2010, two separate bipartisan commissions recommended lowering the rates and broadening the base, which is exactly what Congress did in 1986. Yet before we can implement 1986-style tax reform, we need to prevent the largest tax increase in American history, which is scheduled to take effect on New Year�s Day and could easily trigger a new recession. All that Republicans are asking is to maintain the current rates until we adopt real bipartisan tax reform. Remember: These are the same tax rates that President Barack Obama signed into law two years ago. They are the same tax rates that received 81 votes in the Senate at a time when U.S. economic growth was much stronger than it is today. Indeed, if you were worried about the economic impact of a massive tax hike in 2010, you should be even more worried about it in 2012. The president says raising tax rates would help solve our long-term debt problem, but it�s hard to take this argument seriously, for two reasons. First: According to the president�s own Treasury Department, the tax increases he is advocating would generate $85 billion in new revenue next year. By comparison, the monthly budget deficit in October was about $120 billion, and the total deficit for fiscal year 2012 was roughly $1.1 trillion. In other words, the proposed tax hikes would still leave us with a trillion-dollar deficit. Meanwhile, they would do significant damage to our fragile economic recovery. Simply put: We cannot tax our way back to budget surpluses and economic prosperity. Without major spending cuts and entitlement reforms, we will continue running huge deficits, regardless of what we do on the revenue side. After all, our unfunded liabilities over the next 75 years total nearly $100 trillion �that�s trillion, with a T. Those liabilities are separate from our $16 trillion national debt. In the most recent fiscal year, the federal government spent about $220 billion on interest payments alone. Under the president�s latest budget proposal, the annual cost of debt service would reach $804 billion in 2022, an amount greater than total U.S. defense spending in 2012. This brings me to my second point: Four years after taking office, the president still has not given us a realistic plan for deficit and debt reduction. Last February, his Treasury secretary told the Republican chairman of the House Budget Committee: �We�re not coming before you to say we have a definitive solution to our long-term problem. What we do know is, we don�t like yours.� It�s easy for the president to talk about the need for a �balanced approach.� But a truly balanced approach would have to include major spending cuts and entitlement reforms. There�s nothing balanced about continuing to spend money we don�t have and piling up trillions of dollars in new debt. If the president is going to claim a mandate for governing, then he has a responsibility to offer a genuine solution to America�s fiscal challenges. Until he offers such a plan, his posturing over the deficit should not be taken seriously. The Lonestar Weekly* Texas Times Column* *November 20:�*A�Message of Thanksgiving [link 4] *September 14:**�*Cowtown On The Open Seas: Commissioning the USS Fort Worth [link 5] August 29:�*A Texas Town with an Abundance of Books [link 6] *August 10:�*Back To School On The Texas Frontier [link 7] *July 27:�*Don�t Mess With Texans� Hard-Earned Success [link 8] *July 2:�*Remembering The Sacrifices Behind Independence Day [link 9] June 15:�*The Hero From Eden, Texas [link 10] May 24:� [link 11]*A Bittersweet Trip on the Honor Flight Network [link 12] May 14:*�Saluting Unsung Heroes: Military Spouses [link 13] April 30:�*The Hero of Cinco de Mayo [link 14] *March 29:*�Honoring the Life and Legacy of Hector P. Garcia [link 15] *March 14:*�The Texas Bluebonnet: A Blossom of Renewal [link 16] News Releases* November*�28**:�*Cornyn Offers Legislation to Fight National VA Claims Backlog [link 17] *November 28:�*Thousands of Ballots Unlikely to Reach Military Voters [link 18] November 28**:*�Cornyn Op-Ed: A Road Map for Real Bipartisan Tax Reform [link 19] *November 27:�*Sen. Cornyn Congratulates John Steen On TX Secretary of State Appointment [link 20] *November 27:�*Senate Passes Cornyn-Blumenthal Child Protection Act of 2012 [link 21] *November 16:�*Cornyn Statement on Tragic West Texas Train Collision [link 22] *November 15:*�Cornyn: We Need the Truth on Benghazi [link 23] *November 15:�*Sens. Cornyn, Warner Introduce Resolution Celebrating Diwali [link 24] November 14**:�*Cornyn Statement on Sen.-Elect Ted Cruz Selection as NRSC Vice Chair [link 25] November 14*:�*Cornyn Statement on Senate Republican Leadership Elections [link 26] *E-MAIL UPDATES* *Yes, please periodically send me e-mail updates.** Click Here [link 27] *By subscribing to my e-mail updates, you are authorizing me to send regular e-mail updates from my office to your e-mail account. Social Media* Sen. Cornyn regularly updates his profiles with the latest news and developments from around Texas and Capitol Hill. [image = cornyn.enews.senate.gov/images/twitter.gif] [link 28]� [image = cornyn.enews.senate.gov/images/facebook.gif] [link 29]� [image = cornyn.enews.senate.gov/images/youtube.gif] [link 30]� [image = cornyn.enews.senate.gov//images/user_images/Flickr.png] [link 31]

A Road Map for Real Bipartisan Tax Reform
‘A truly balanced approach would have to include major spending cuts and entitlement reforms…If the president is going to claim a mandate for governing, then he has a responsibility to offer a genuine solution to America’s fiscal challenges.’

The following op-ed appeared in .

  to watch a video outlining the severity of the fiscal challenges facing our nation.

The American people have spoken — and once again, they have given us divided government in Washington.

Divided government means that neither Democrats nor Republicans will be able to pass legislation along strictly partisan lines. It means that bipartisan compromise is the only way to avoid further gridlock.

In the past, divided government has yielded some historic results. It produced landmark tax reform in 1986 and a sweeping overhaul of our welfare system 10 years later.

Of course, we’ve had divided government since January 2011, and thus far it has produced legislative stalemates and bitter recriminations. Why should we expect things to be any different this time around?

Quite simply, I believe there is now a bipartisan recognition that our current fiscal path is unsustainable. We cannot keep running trillion-dollar deficits. We cannot keep postponing structural changes to our largest entitlement programs. And unless we are happy with a tax code that wastes economic resources, stifles job creation and promotes crony capitalism, we cannot keep delaying genuine tax reform.

We don’t have to speculate about what bipartisan tax reform might look like.

In 2010, two separate bipartisan commissions recommended lowering the rates and broadening the base, which is exactly what Congress did in 1986.

Yet before we can implement 1986-style tax reform, we need to prevent the largest tax increase in American history, which is scheduled to take effect on New Year’s Day and could easily trigger a new recession.

All that Republicans are asking is to maintain the current rates until we adopt real bipartisan tax reform. Remember: These are the same tax rates that President Barack Obama signed into law two years ago. They are the same tax rates that received 81 votes in the Senate at a time when U.S. economic growth was much stronger than it is today. Indeed, if you were worried about the economic impact of a massive tax hike in 2010, you should be even more worried about it in 2012.

The president says raising tax rates would help solve our long-term debt problem, but it’s hard to take this argument seriously, for two reasons.

First: According to the president’s own Treasury Department, the tax increases he is advocating would generate $85 billion in new revenue next year. By comparison, the monthly budget deficit in October was about $120 billion, and the total deficit for fiscal year 2012 was roughly $1.1 trillion.

In other words, the proposed tax hikes would still leave us with a trillion-dollar deficit. Meanwhile, they would do significant damage to our fragile economic recovery.

Simply put: We cannot tax our way back to budget surpluses and economic prosperity. Without major spending cuts and entitlement reforms, we will continue running huge deficits, regardless of what we do on the revenue side.

After all, our unfunded liabilities over the next 75 years total nearly $100 trillion — that’s trillion, with a T. Those liabilities are separate from our $16 trillion national debt. In the most recent fiscal year, the federal government spent about $220 billion on interest payments alone.

Under the president’s latest budget proposal, the annual cost of debt service would reach $804 billion in 2022, an amount greater than total U.S. defense spending in 2012.

This brings me to my second point: Four years after taking office, the president still has not given us a realistic plan for deficit and debt reduction. Last February, his Treasury secretary told the Republican chairman of the House Budget Committee: “We’re not coming before you to say we have a definitive solution to our long-term problem. What we do know is, we don’t like yours.”

It’s easy for the president to talk about the need for a “balanced approach.” But a truly balanced approach would have to include major spending cuts and entitlement reforms. There’s nothing balanced about continuing to spend money we don’t have and piling up trillions of dollars in new debt. If the president is going to claim a mandate for governing, then he has a responsibility to offer a genuine solution to America’s fiscal challenges. Until he offers such a plan, his posturing over the deficit should not be taken seriously.

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