Fayetteville Observer - And it Gets Worse From There

August 5, 2012
Op-Ed & Article
Fayetteville Observer - And it Gets Worse From There

By Rep. David Price

Earlier this week, three Republican senators visiting our community added to the drumbeat of concern about the impact of looming cuts to defense as a result of "sequestration." Largely unmentioned, but equally devastating, is the other half of sequestration - cuts to education, research, infrastructure and innovation - as scores of college presidents, small business owners, local officials and concerned taxpayers have pointed out to every member of Congress in recent weeks.

Our predicament results from the failure of the so-called supercommittee, established in the wake of the debt ceiling crisis manufactured by Republicans last summer, to come up with a deficit reduction plan. This has put us on the path to sequestration, across-the-board cuts indiscriminately slashing more than 8 percent from every national security and domestic account next year.

Cutting with a meat ax instead of a scalpel is the most dangerous way imaginable to set fiscal policy. And these cuts will come on top of the more targeted, but nonetheless significant, $917 billion in cuts and spending caps that the administration and Congress have already locked in as a part of the agreement averting default on the debt. In the case of defense spending, the cuts resulted from a careful strategic review and will save nearly half a trillion dollars over the next 10 years while preserving a nimble, effective fighting force. As for domestic investments in education, infrastructure, research and innovation, these cuts have already gone too far, slowing the recovery and putting at risk our ability to compete in the global marketplace.

Getting past sequestration is going to require a fresh look at how we accelerate our economic recovery and restore our fiscal health. During the 112th Congress, Republicans have been providing a case study in how not to make macroeconomics policy. They started with an unnecessary, confidence-shaking government shutdown crisis aimed at extracting domestic spending cuts, and followed it with the equally needless, months-long debt-ceiling crisis. Their most recent budget would put 4.1 million people out of work, according to the Economic Policy Institute. This is the same brand of austerity that has tipped many European economies back into recession.

Thankfully, with sequestration looming, House and Senate Republicans are belatedly talking half-sense (as oppose to nonsense) on macroeconomics. A substantial portion of the Republican caucus on both sides of the Capitol is coming around to what you might call Defense Keynesianism - the belief that only defense spending creates jobs and that cutting it would result in job losses. In fact, the same argument applies equally to the other half of sequestration: investments in our country's economic future.

Sequestration would devastate our defense, education, infrastructure and research sectors, undermining our economy over the near and long term. It would hobble critical functions, from air traffic control to meat inspection and Social Security claims processing. It cannot be resolved in isolation, or through half-measures. And yet Republicans have proposed staving off only the defense half of sequestration cuts and would pay for it by cutting safety-net programs for the poorest Americans, in addition to locking in a 2 percent Medicare cut. Their plan would victimize the most vulnerable, hinder job creation and jeopardize our ability to compete.

There's a better way forward, and the impending "fiscal cliff," which includes both sequestration and the expiration of the Bush tax cuts, offers an opportunity for all members of Congress to set the talking points aside and act in our country's best interest.

I know we can chart a course to fiscal balance, because we've done it before. In the budget agreements of 1990 and 1993, which set the stage for four years of budget surpluses, the formula was fiscal discipline on all fronts. No area of spending can be sacrosanct. We should focus our limited dollars on boosting the recovery and making critical investments in our future, because the most effective means of deficit reduction is a growing economy. And, as in the 1990s, revenue must be a part of the solution. The president has already proposed a sensible plan allowing the Bush-era tax breaks to expire on income over $250,000. Extravagant tax breaks for various special interests must be ended. The revenue raised could be used to reduce the deficit and help pay for the investments in education, research, infrastructure and innovation critical to economic growth.

Most Americans agree with this comprehensive approach. Why, then, are most Republicans still hiding behind their anti-tax pledges? Their insistence that no additional revenue can ever be raised, for example, by ending tax loopholes for oil companies or asking millionaires to return to their Clinton-era tax rates, is still the biggest obstacle to a sensible budget compromise in Washington. As we approach the fiscal cliff, that fever has got to break. We must find our way to the comprehensive, balanced approach that will enable our country - and all of our people - to prosper.

Rep. David Price, a Democrat, represents North Carolina's 4th Congressional District, which includes parts of Cumberland County.