What's at Stake if We Go Over the Fiscal Cliff?
A hundred thousand fewer kids in Head Start. Thousands of fewer agents securing our borders. More than 2,000 fewer research grants to combat cancer, Alzheimer’s and other diseases. And a $2,200 tax hike for the average American family.
Those are just a few of the consequences scheduled to take effect at the end of this month if Congress and the President do not reach an agreement to stop the United States economy from barreling off the fiscal cliff.
The fiscal cliff is a combination of automatic spending cuts and tax increases. The automatic cuts in both defense and domestic spending would limit vital services and lead to thousands of layoffs. The tax increases would cut into every paycheck, leading consumers to spend $200 billion less and send our economy back into recession.
I know how important it is to get our budget deficits under control and start paying down the national debt. In fact, I was one of only 38 members of Congress from both parties to vote for a budget this year that would cut the deficit by $4 trillion over 10 years.
I favor a bold and balanced plan—but there must be a plan. The spending cuts and tax hikes that come with the fiscal cliff are reckless and would undermine our already-fragile economic growth.
What is at stake if we go over the cliff? Here are just a few examples:
- School districts that serve large numbers of military families and Indian tribes like Oak Harbor, Marysville and Ferndale will get a huge cut in funding, directly hurting kids in the classrooms.
- Seniors in Snohomish County would for the first time face a waiting list for Meals on Wheels, which would have to cut 10,000 meals a year.
- More than 24,500 Homeland Security personnel would lose their jobs, leading to longer wait times at the borders and a decreased ability to stop the flow of illegal drugs into our communities.
- Cuts to the Federal Aviation Administration would lead airlines to scale back their operations. If Delta and United buy fewer planes, we’ll see job losses at all our aerospace manufacturers, from Boeing down to small suppliers.
So what should we do?
First, we need to make middle-class tax cuts permanent, providing economic certainty to families and preventing another recession. The Senate has already passed legislation extending these tax cuts. Leaders of the House of Representatives have so far refused to allow me and my colleagues vote on this bill.
Second, we need to restore the tax rates for the richest 2 percent to what they were in the high-growth 1990s. This is not about class warfare; it is about fairness. Throughout the recession, middle-class Americans have suffered layoffs, wage stagnation and the loss of property value. But the richest have continued to do well, while not being asked to chip in to tackle our deficit.
Third, we must maintain the vital investments that help our economy grow. Repairing our roads, bridges, highways and ferries does not just create jobs today, but it builds the foundation for long-term growth. Expanded Pell Grants and subsidized student loans help kids go to college today, and prepare them to contribute more in the workforce tomorrow.
Finally, we must get serious about strengthening Medicare and Social Security for future generations. To preserve Social Security, we should end the cap on earnings that is subject to the Social Security tax. Currently all income above $110,100 is exempt from the tax. That means that someone making $10 million a year pays the same amount into Social Security as someone who makes a hundredth of that.
As it stands, Medicare will be insolvent by 2024. We have several opportunities to save money in Medicare while improving patient care and preserving the guaranteed benefit for all. That includes expanding efforts to root out fraud and expand pilot initiatives that tie Medicare payments to the quality of care, rather than the quantity of care delivered.
There are no sacred cows. Both Democrats and Republicans must commit to a balanced approach that will cut the deficit in a meaningful way without undermining economic growth. There is no doubt that we are going to feel pain in the next few years. But if we do this right, a decade from now we will be a stronger country for the work we do today.