We must avoid the fiscal cliff. We cannot reduce the deficit by over $500 billion without causing a recession, according to the nonpartisan Congressional Budget Office. Congress must avoid the fiscal cliff by postponing and eliminating some spending cuts, and by bringing in more revenue through careful tax increases.
A faithful federal budget must
- protect the most vulnerable through strong safety-net programs,
- maintain core government services and programs to promote the common good,
- provide adequate resources for shared priorities through a just tax system, and
- fairly balance funding for the military against other vital needs at home.
Spending: Congress must continue to fully fund the safety net and core government functions while going forward with planned cuts in military spending.
Background: In recent years, military spending has risen rapidly, up by nearly 50% over the past decade not including special funds for the Iraq and Afghanistan wars. At the same time, spending on the safety net and core government functions – like environmental protections, education, the federal courts, energy programs, and public health – has risen more slowly or has even been cut. Next year’s planned military cuts including the “sequester” would reduce military expenditures to the level of 2007, a year when the U.S. was actively fighting two wars which are now ending. Experts say the Pentagon can absorb these cuts without negatively impacting national security. Congress must go forward with cuts in military spending while continuing to fully fund the safety net and core government functions.
Taxes: Congress must end the 2001 (Bush) tax cut for higher income households, that is, Congress must raise tax rates on wealthier households (usually defined as the 2% with annual incomes over $250,000 for couples, $200,000 for singles) but, at this time, continue the tax cuts for other households.
Background: In the last five years, federal revenues as a share of national income have fallen to their lowest level since 1950. More revenue is needed. Congress must end the 2001 (Bush) tax cut for higher income households, that is, Congress must raise tax rates for these wealthy tax payers, usually defined as the 2% with annual incomes over $250,000 for couples, $200,000 for singles. But, for now, Congress should continue the tax cuts for other households.