Tuesday, January 15, 2013

Open Letter to House Republicans

Dear House Republicans –

You need to pass a comprehensive budget and debt ceiling increase ASAP.

Stay in Washington and work seven days a week until a budget and long term debt ceiling resolution is passed.  Disprove your reputation as a bunch of right-wing ideologues and show American that you can step up and make the hard decisions that the White House and Senate have failed to make for years.  In other words, stop the posturing and govern.     

Sitting on your hands while also lamenting how irresponsible it is for the Senate to have not passed a budget in more than 4 years is weak and hypocritical.  Take the lead and put the ball in the hands of the Senate and President.

Take Paul Ryan’s budget that you’ve previously passed, amend it so that it further reduces the deficit through significant spending cuts and slight increases in tax revenue (proving your serious and show compromise), and pass it.  Any budget must significantly reduce deficit growth in order to normalize the debt to GDP ratio to a reasonable percentage (and be scored as doing so by the CBO).  Sell it as the balanced approach that the President wants and call his bluff.

The slight increase in tax revenues should come from tax reform, not further increases in marginal tax rates.  Reforms should reduce complexity in the code and must eliminate the carried interest loophole and reform credits and deductions (get rid of some, limit others in the aggregate).  Corporate taxes should be similarly reformed by eliminating or limiting special credits and deductions in conjunction with lowering our internationally uncompetitive rates.  The rate should be lowered to an amount that significantly offsets any gain in revenue so that the reform is ultimately deficit reductive.  These reforms may not generate huge amounts of additional revenue, but they will deflect any “fair share” and “balance” rhetoric from the Democrats – rhetoric that has proven very successful over the past two years.

The bulk of the deficit reduction could come from rationalizing federal government spending.  Once and for all, cut government programs that are redundant and ineffectual and freeze all other spending at 2012 levels (including defense, entitlements, and other domestic programs).

You will be labeled as slashing funding for teachers, firefighters, policemen, Medicare, Medicaid, the poor, children, Santa Clause and the Easter Bunny, but a clear explanation by Paul Ryan in a press conference should highlight that all programs will continue to be funded at the historically large 2012 levels.  Anytime you’re challenged about cutting programs, there is a simple answer:  “Every dollar that was spent on these programs in 2012 will be spent again in 2013 and 2014.  We are not cutting programs, we’re simply asking them to live within their means until our fiscal situation is stabilized, just like every household in America is forced to do.”   This is a very important fact that gets lost in the public debate on budgets, but if everyone sings from the same hymn sheet - frequently and loudly - the public just might applaud the serious effort to address our problems in a responsible manner.    

Please ignore the primary challengers to your right, and any previous “pledges” and worry about what your voters sent you to Washington to do, and what every American needs you to do.  Kicking the can slowly towards Europe is to betray our children, grandchildren and every vote cast in your name.  Do what’s right, and Americans will thank you at the ballot box.

Not only is this the right thing to do for the country, but it’s also a political slam dunk.  By doing your job, you’ll force the President and the Senate to do theirs.  The Senate hasn’t passed a budget for years because it knows it can’t keep its promises without significantly raising taxes on the middle class or exploding the debt.  Force Harry Reid and President Obama to make the tough decisions required to balance a budget.

There is no alternative and time is running out.  Playing games with the debt ceiling and our borrowing costs by threatening to shut down the government is the wrong approach.  Rise above the fray and govern.  We know that’s a foreign concept in Washington these days, but the first group of people (NoLabels??) who are seen to be solving the problem instead of creating it will get rewarded in 2014 and 2016, and will set the agenda going forward.  


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