Dysfunctional Washington
www.Heritage.org
Within one year of being elected, Governor Scott Walker (R) reformed the state's public sector pension system, eliminated a $3.6 billion budget deficit without raising taxes, saved taxpayers hundreds of millions of dollars, and helped create the conditions that have allowed Wisconsin's economy to grow again. Meanwhile, thanks to the dysfunction in Washington, America continues to suffer high unemployment, out-of-control spending, and faces a historic tax hike that could send the country over a fiscal cliff.
Last week, Americans received more bad news on the country's economic performance. According to the latest Department of Labor jobs report, the U.S. economy created only 69,000 net jobs in May, and the unemployment rate increased to 8.2 percent. To add insult to injury, it was also reported that employers created 49,000 fewer jobs than originally estimated in March and April. Put it all together, and we see that the U.S. economy is approaching stall speed.
If Washington doesn't act, things could get much worse, not better. That's because of a massive $494 billion tax increase set to hit on January 1, 2013. Known as "Taxmageddon," the tax hike will be the result of the expiration of the 2001 and 2003 tax cuts, the termination of other tax policies, and the imposition of new taxes, such as those under Obamacare. Economists say that Taxmageddon will spell further doom for the U.S. economy, and this week, even former President Bill Clinton agreed that Washington should temporarily extend the 2001 and 2003 tax cuts. House Speaker John Boehner (R-OH) has said the House will vote on extending the tax policies before the November election, but President Barack Obama and Senator Majority Leader Harry Reid (D-NV) have so far ignored the pending crisis. Meanwhile, the economy is in limbo, waiting for Taxmageddon to strike.
On top of a massive tax burden, America is careening toward a European-style spending and debt crisis. Heritage's Alison Fraser explains:
The sad fact is that U.S. federal debt soon will reach economically damaging levels, and spending will be the driver of that explosion. The three major entitlements--Social Security, Medicare, and Medicaid--will accelerate spending growth in the future due to demographic changes and rising health care costs. In 2012, they comprise approximately 45 percent of total federal spending, or 10 percent of GDP. By 2035, they will reach approximately 16.5 percent of GDP. Left alone, they will devour all tax revenues by 2045, assuming the historical level of taxation.
What's Washington doing about it? Conservative senators and representatives have put forward serious proposals to tackle the debt and spending crises, chief among them being Senator Mike Lee's (R-UT) budget, which mirrors the bold and thorough reforms The Heritage Foundation first proposed in its Saving the American Dream plan. Though the House has passed a budget, the Senate has not passed one in 1,135 days. And as for the president's plan, the Senate voted it down 99 to nothing.
The dysfunction in the U.S. Senate has reached a new low under Majority Leader Reid, who is using tactics to rule with tyranny, restricting senators' rights to participate in debate and offer amendments. Heritage's Brian Darling explains in a new paper how this has impacted the political process:
Stripping Senators of the right to bring issues up for debate in the form of amendments has dramatically affected the national debate from entitlement reform to gun rights. If Senators are not allowed to offer amendments to bills, those issues are often never debated by the American people. When Members chose to filibuster bills to open legislation to a free amendment process, they are demonized by leadership and left-wing groups.
So while unemployed Americans suffer record joblessness, as families and businesses brace themselves for a massive tax increase, and as the United States heads toward a fiscal meltdown, some in Washington are unable or unwilling to take action to turn the country around. There are good and honorable leaders in our nation's capital who have proposed the kinds of policies needed to set America on the right track, yet there are others who prefer gridlock to action. Sadly, the business-as-usual gridlock in Washington is the mirror opposite of the action taken in places like Wisconsin's state house, and the American people are paying the price.
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