Westerville News & Public Opinion

Fiscal cliff talks

Tiberi before chamber: Focus should be on reform


While the national debate about the so-called "fiscal cliff" has focused on taxes and budget cuts, legislators and the president should be talking about entitlement and tax reform, said U.S. Rep. Pat Tiberi (R-Genoa Township).

As he does every December, Tiberi spoke to members of the Westerville Area Chamber of Commerce during the chamber's quarterly meeting Monday, Dec. 10.

Tiberi's 45-minute talk this year centered entirely on the fiscal cliff: The end-of-year deadline by which legislators must act to avoid the automatic expiration of tax cuts passed 12 years ago and billions of dollars in budget cuts.

Democrats and Republicans have yet to agree on how to avoid the fiscal cliff, as both sides want to spare tax increases on most Americans while reducing the budget deficit.

The president has put forth a plan to renew the tax cuts for everyone except individuals who make more than $200,000 a year and couples who make more than $250,000 a year.

Republicans, meanwhile, have said they want to renew the tax cuts for everyone, while increasing revenue by eliminating tax loopholes.

"Some say just let it happen, let us go over the cliff. We all don't know what that means," Tiberi said.

There has been speculation that if a deal is not reached, tax rates rise and federal budget cuts move forward, the country will slide back into a recession.

Tiberi said he does not favor letting that happen, and the problem with the president's plan is that the tax increase would impact not just wealthy Americans, but small business owners who employ others.

As part of the deal, the president also has requested another stimulus package and billions of dollars in aid for victims of Hurricane Sandy.

Those expenses would not be covered by the revenue generated by a tax increase on wealthy Americans, Tiberi said, meaning that the president's plan would not address the country's deficit problem.

"It doesn't do anything to solve the problem. That's what's so sad about this," Tiberi said. "You can't fix the problem if you don't touch mandatory spending."

The real problem with the nation's budget, Tiberi said, is that a growing majority of the budget is devoted to mandatory programs like Social Security and Medicare.

There are too few earners to support the growing numbers of retirees collecting Social Security, and people pay too little into Medicare to fund the program, meaning both must be supplemented by the government's general fund.

Without reform to those and other mandatory programs, the government cannot really address its deficit problem, Tiberi said.

"If we keep our heads in the sand, we are going to have a real, real problem," Tiberi said. "Our system is going bankrupt. We can't continue down this road."

While many people favor cuts to help balance the budget, reform could cut costs while preserving the quality of the programs, Tiberi said.

"It sounds great: Let's cut. We need to cut.

"Or, we could reform. I'd rather have reform," he said.

Tiberi told the audience at the chamber luncheon he doesn't know what will happen with the fiscal cliff, whether a deal will be reached in time or whether the new year will begin with automatic tax increases and spending cuts.

However, he said he was heartened by the fact that President Barack Obama and Speaker of the House John Boehner (R-West Chester) met Dec. 9, though details of that talk were not revealed.

"I'm not sure where we're going to end up. We need a deal with the president on entitlement reform. We need tax reform," Tiberi said.