Election will determine fiscal cliff solution, say lawmakers
October 17, 2012
The Wall Street Journal Market Watch
Though Democrats and Republicans remain far apart on how to solve the fiscal cliff, lawmakers from both parties said Tuesday the results of the fall elections will determine the direction the solution takes.
Democratic Rep. Allyson Schwartz of Pennsylvania joined Republican Rep. Peter Roskam of Illinois for a debate at the Newseum about the fiscal cliff, a combination of automatic spending cuts and the expiration of Bush-era tax cuts and some tax breaks for businesses that could happen at the end of the year unless Congress acts.
The two differed sharply on how the government should prevent the country from going off the cliff, which many have warned could throw country back into recession.
Roskam said the election outcome will have a huge “disposition” on the country’s route of solving budget issues.
“It is my hope that we can forgo the drama around the fiscal cliff, that we can move those sequestration alternatives of what the House has done, that we can bridge and extend the rates for another year and move this debate into tax reform,” Roskam said. “But the Nov. 6 election is going to be incredibly consequential in terms of the energy that comes out of the election and the trajectory of what the public wants.”
Schwartz agreed. She said whoever wins the election will “obviously have an impact” on the possible solutions. The negotiation between both parties is expected to begin after the elections and could extend into the end of this year, she added.
“I don’t think we will go over the fiscal cliff,” Schwartz said. “But we need to have some compromise. We need to be able to get some revenue.”
Serving on both the Committee on Foreign Affairs and the Committee on the Budget, Schwartz insisted on the Democrats’ approach of raising taxes on the wealthiest and letting the current tax cut on higher-income taxpayers expire to increase revenue.
“All of us would like to be able to say that we’re going to just get revenue through economic growth,” she said. “The plan is to reduce the tax for the wealthiest; we did that for 10 years and it got us in this mess.”
“Economic growth is always a part of how we’re going to raise revenue, but is that really enough without any detail about how we get there?” she asked.
Roskam, now serving as the Republican chief deputy whip, argued that raising taxes at any level will not only hurt individuals but also harm manufacturers.
“It’s going to have an adverse impact on their willingness to take on more risks, take on more employees, and to do the type of expansion that everybody recognizes as necessary,” Roskam said.
Schwartz said the Democratic Party is willing to compromise, but she warned that any solution must be practical as she urged Republicans to lay out concrete steps.
“We do still have some responsibilities to each other and to our economic competitiveness in the future,” she said.