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5th District Mailbox: The "Fiscal Cliff"
Welcome to the first edition of “5th District Mailbox,” a periodic update from Washington where I will choose a notable piece of constituent mail and share with you my response through online video. This week’s topic is an important one that I’ve heard from many of you on: the so-called "Fiscal Cliff."
5th District Mailbox, The Fiscal Cliff: Click Here
This is the first edition of “5th District Mailbox,” a periodic update from Washington where I will choose a notable piece of constituent mail and share with you my response through online video.
This week’s topic is an important one that I’ve heard from many of you on: the so-called “fiscal cliff.”
As you may know, the fiscal cliff is a combination of expiring tax provisions and scheduled spending reductions commonly known as sequestration, both set to take effect at the end of this year
On the tax side, tax relief for all income levels created in 2001 and 2003, and extended under the Obama Administration in 2010, are scheduled to expire on December 31, 2012.
On the spending side, in order to address the national debt crisis, last year Congress passed the Budget Control Act in 2011, which provided for $2.1 trillion in spending reductions over 10 years. The law included an initial $917 billion in deficit reduction through statutory spending caps, which are now being implemented. In order to resolve disputes over the remaining reductions, the law created a bipartisan committee of House and Senate members, also known as the “Super Committee.”
The law also included a provision to incentivize action. Should the Super Committee’s negotiations break down, the law would trigger deep across-the-board cuts which would devastate our national defenses. Despite this enforcement mechanism, the Super Committee failed to reach agreement.
Most economists agree that a combination of tax increases from expiring provisions and non-target spending cuts from sequestration will cause substantial damage to our already fragile economy.
For these very reasons, I voted in favor of H.R. 5652, the Sequester Replacement Reconciliation Act of 2012, on May 10, 2012.H.R. 5652 would avoid the across-the-board cuts to national defense and domestic programs by replacing it with targeted spending reductions that achieve the same level of deficit reduction – $1.2 trillion.
Additionally, on August 1, 2012, I voted in favor of H.R. 8, a bill which passed the House with bipartisan support and would extend current tax provisions for another year, and set a framework for comprehensive tax reform.
Unfortunately, the Senate has failed to act upon the House passed measures or put forth a proposal to avoid the large number of tax increases set to hit all income levels on January 1, 2013.
Despite the Senate’s inaction, the urgency of these challenges could not be greater.
By restructuring our tax code to promote economic growth and reforming spending in a manner that secures the long-term financial sustainability of the country, we can avoid the fiscal cliff without raising taxes or asking American families and our troops to sacrifice even more than they already have.
In the weeks ahead, I will continue to advocate for responsible policies to achieve real deficit reduction and encourage economic growth. As these discussions move forward, please be assured that I will keep your specific thoughts and concerns in mind.
Thanks for tuning in to the “5th District Mailbox.”Please visit my website at www.thompson.house.gov to sign up for the Thompson Times Newsletter and additional updates from the Washington and the 5th District.
I look forward to hearing from you soon.