Both Democrats and Republicans want tax cuts. But as Rep. Bill Archer's tax bill, marked up last week in the Ways and Means Committee, shows, Republican tax plans tend to give the biggest windfall to those who already have the most. They claim this is fair because the wealthy pay more income tax. What they fail to realize is that eight out of ten Americans pay more in payroll taxes than income taxes. This federal tax burden reduces the money that people who work hard every day have to spend on their families. Democrats feel these families are enti tled to relief too. We would propose tax cuts be more focused on helping the middle class.
We have a duty to do not just what is politically popular but what is fiscally responsible for the country. The responsible course is save Social Security and Medicare first and pay down debt before enacting massive tax cuts.
Federal Reserve Chairman Alan Greenspan has testified that we must consider our long-term problems such as the challenges that Social Security and the debt pose before turning to tax cuts. "The large surpluses projected over the next 15 years, if they actually materialize, can significantly reduce the fiscal pressures created by our changing demographics," he told the Senate Budget Committee in January.
Ways and Means Chairman Archer says [op-ed, July 14] that "we are at a crossroads in our country's history." He's right. We have a rare opportunity as a nation to get our books in order. Instead of young people worrying that Social Security and Medicare may not be there for them, we have an opportunity to put the programs on solid financial footing.
I have praised Archer for both his work and words when it comes to saving Social Security. I do not agree with many details of the Social Security plan he and Rep. Clay Shaw have proposed, but I applaud their courage in proposing it. Bill Archer gave an impassioned plea to our committee, saying we must not squander this historic opportunity to ensure the solvency of Social Security. We have never agreed more.
But his tax bill would throw away that opportunity. The Archer-Shaw Social Security proposal would utilize general revenue funds aggregating $1.1 trillion over the next 10 years to ensure Social Security solvency. Those funds simply would not be available if Congress enacted Archer's tax bill.
The chairman's answer is that the resources in the Social Security surplus are enough for saving not only Social Security but Medicare as well. That is just not so. The Social Security surplus is needed to pay current beneficiaries. It is already spoken for.
There is no getting around it. The resources necessary to secure and strengthen Social Security and Medicare are the very same funds that fuel Archer's nearly trillion-dollar tax bill. By forcing this colossal tax bill through the House, Republicans would force members to choose between decent retirement security and health care for our nation's seniors, and tax cuts.
If we proceed in a fiscally responsible manner, as the president has laid out for us, we can address the challenges of Social Security and Medicare and still provide targeted middle-class tax relief up to a quarter-trillion dollars. The plan the president proposes would address the Social Security and Medicare challenges in such a way that the debt owed to the public would be reduced significantly, and seniors strapped by their inability to pay for new prescription drugs would get some needed assistance.
Bill Archer says that if "the money stays in Washington, the politicians will surely spend it." It's unfortunate that Republicans have resorted to such a cynical argument to justify his unwieldy tax package. If they are right, it means we are stuck with massive debt, Social Security and Medicare problems forever because, according to their logic, politicians are simply unable to act responsibly.
But it was politicians, especially Reagan administration budget officials, who ran up the national debt, and it is politicians who have the responsibility to pay the debt down.
Instead of taking the politician's easy street and passing massive tax cuts that promise big things to big people, we should keep the promises we have already made. The American people have entrusted us to make responsible decisions about how to allocate scarce public resources. We must not shirk that responsibility.
The writer, a representative from New York, is the ranking Democrat on the House Ways and Means Committee.