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Neal: Congress is motivated not to fall of 'cliff'
Nov. 28,
2012 |
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Rep. Richard Neal
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By G. Michael Dobbs
news@thereminder.com
SPRINGFIELD — Rep. Richard Neal believes Congress won't allow the nation to fall off the "fiscal cliff" that has dominated headlines since the election.
Speaking after the press conference noting the beginning of the work to transform Union Station into a modern multimodal transportation center, Neal told Reminder Publications, "I think everyone understands the peril of not coming to at least a temporary solution."
According to the Congressional Budget Offices' (CBO) economic and budget outlook released in August, the Budget Control Act of 2011 will set in motion on Jan. 3, 2013 mandatory cuts in military and discretionary spending. With a decrease in government spending will come the expiration of current tax cuts that were extended in 2010. The CBO report also noted that there would be "sharp reductions in Medicare's payment rates for physicians' services are scheduled to take effect."
Extensions of emergency unemployment benefits and a reduction of 2 percentage points in the payroll tax for Social Security are scheduled to expire.
The report noted, "Such fiscal tightening will lead to economic conditions in 2013 that will probably be considered a recession, with real Gross Domestic Product declining by 0.5 percent between the fourth quarter of 2012 and the fourth quarter of 2013 and the unemployment rate rising to about 9 percent in the second half of calendar year 2013."
Neal said, "I think the longer term issues of tax reform can't be done in 41 days but I do think you can certainly avert the cliff, avert the peril that will come with cliff by kicking some of the more contentious issues into next year for more thoughtful deliberation.
"What's been frequently lost in this discussion is what happens if you just get that unemployment rate back to the post-war norm of 4.5 or 5 percent. One-third of the deficit goes away. Capital gains go up. Personal income taxes go up. Pressure on social spending goes way down. It's the unemployment rate that's the most difficult challenge for America right now and I think the passions of the election are behind us, calmer heads, I hope, prevail," he continued.
Neal doesn't believe that simply closing tax loopholes, as advocated by some Republicans, will bring the government the revenues it needs.
The appointment of former vice presidential candidates Paul Ryan as the Republican point person in the House for the negotiations that will in the next few weeks doesn't concern Neal.
"The answer now is to put the electioneering aside and move on to addressing the issue that is in front of us," he said.
Neal noted that current situation shows the government could not cut taxes by $2.3 trillion and invade two countries without consequence.
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Comments From Our Readers:
steve
11/30/2012
10:56:27 AM
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Temporary solutions are not solutions, they are duct tape and chewing gum on a machine that is falling apart. When your car has a hole in the gas tank, how long will the tape last? Eventually, the hole will become larger, and temporary solutions will fail faster and faster.
If I used money the same way the US government did, I would have lost my house, my car, and would be living on the street in a cardboard box and a blanket. The real solutions are to cut all discretionary and special interest spending. Do not raise taxes, it is completely unnecessary. The government is not making too little money, they are spending too much. Replace rather than reform the tax code. There are tens of thousands of pages of tax code, which makes more and more loopholes. Make it simple. It should probably cover less than a page. Bring the military home, we are not the world police, and should not be the world police. We are simply making people around the world angry with us, it has caused problems (9/11), and will cause more in the future. Reform or replace the federal reserve, audit them, and give them more supervision.
Doing all of this will remove the government from the private sector and alleviate a lot of stress on the economy. It will give the market more freedom and more breathing room, and activity will pick up. Big government with big money causes big problems as history has shown us. We need less regulation, less power, and less control. |
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