Toomey pitches his plan to solve fiscal cliff
With congressional Republicans and President Barack Obama struggling to agree on higher taxes and spending cuts, U.S. Sen. Pat Toomey says he has the right barrier to block a fall off the "fiscal cliff."
His plan would trim the deficit by an estimated $1.45 trillion over the next 10 years, he said.
Toomey pitched a version of the plan when he was a member of the joint congressional committee - the supercommittee - that was supposed to come up with $1.2 trillion in deficit reduction over 10 years before the end of 2011.
"I still maintain that the basic framework that I laid out in the supercommittee is a framework that can get us to an agreement, can avoid the fiscal cliff and get us on the road to avoid this fiscal train wreck while encouraging economic growth at the same time," Toomey said during a Monday afternoon conference call with reporters.
Toomey's plan is a mix of increased tax revenues through closing loopholes but not higher tax rates, a 20 percent cut in everybody's tax rate and cuts to the future growth of Medicare, Medicaid and Social Security spending.
"My main message here is we still have time to solve this problem," he said. "Going over the fiscal cliff, contrary to what some of my colleagues in this body seem to believe, that's a really bad idea. We don't need to do that and we shouldn't do that. ... This is going to require that the posturing end and the substantive discussions begin and we don't have any time to lose here."
The fiscal cliff refers to Jan. 1 when the tax cuts under President George W. Bush and Social Security payroll tax cuts under President Obama expire, and automatic across-the-board spending cuts go into effect. The spending cuts will go into effect because Jan. 1 was the deadline set for automatic cuts if the supercommittee failed to find cuts earlier, which is what happened.
Economists say allowing the spending cuts and tax increases to happen could produce another recession.
Toomey called Obama's proposal, which includes tax increases on the wealthiest Americans, "not serious" because that would "maximize the harm done to the economy."
"I acknowledge that elections have consequences and the president is absolutely insistent on raising taxes despite the fact that that won't accomplish a solution here," Toomey said, referring to Republican refusals to accept a tax hike.
Increases in tax revenue should only happen through "pro-growth" tax reform, he said.
"We've got to start bending the cost curves, reducing the rate of growth of the big mandatory programs," he said. "The opportunity of this moment is we don't have to slash and burn anything. We don't have to make draconian cuts that kick in tomorrow. What we can do is make modest structural changes that will begin to slow the rate of growth and over time the savings add up to hundreds of billions of dollars."
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