by Timothy Wolfe, 2012 GOP candidate for IL 9th Congressional District

As the media is wont to do, they have overstated a looming problem. Don’t get me wrong, we are facing a big problem. However, given that we have breezed past $16 trillion in debt, Social Security and Medicare are both running at a deficit, and our leaders won’t stand up and do their jobs, I would say we have already fallen off the cliff. The real question is will members of Congress and our President take this occasion to think about the country instead of the next election  (about which, believe it or not, people are already talking ) and make tough decisions by undertaking significant corrections to our wasteful governmental spending.  If we continue on the present path, it will only become harder and harder to recover.

The so called fiscal cliff is the convergence of five major events happening at the end of 2012-beginning of 2013: the 2% Social Security payroll tax holiday expires, the Bush tax cuts expire (why aren’t they called the Obama tax cuts since President Obama extended them in 2010?), other Obama stimulus related tax breaks will also expire, new Obamacare tax hikes will become effective and across the board spending cuts will take effect with the Department of Defense taking the biggest hit.

Most of these events have been allowed to linger because of the recent election and the lack of courage of our leaders to do what is right for this country.

So what should we do and why does my opinion matter? Let me tackle the later first and then you can decide on the former. I am a Certified Public Accountant by trade and so I know something about taxes, budgeting and the economy. And I was the Republican candidate for the US House of Representatives in the Illinois 9th District in 2012. The reason I ran for office was that the incumbent member of Congress in the 9th District is an advocate for growing the Federal government, waste and all, and I believe that we must reduce the size of government, prioritize our expenditures and reverse, or at least halt, our movement towards European socialism and reverse direction, back towards a free market economy,

So here is my proposal for what we should do:

  1. Extend the      Bush/Obama tax cuts for a year. By painting ourselves into a corner in      terms of time constraints, it becomes too easy to make bad decisions. So      over the next 12 months there should be committed efforts to rework the      tax rates and the tax code.
  2. Eliminate      the payroll tax holiday over 2 years by increasing the Social Security      rate by 1% in each of the next two years. Although it would be easy to      continue the payroll tax holiday without change, we cannot continue to      exacerbate the Social Security deficit spending problem. Fixing Social      Security is a whole subject unto itself but we cannot continue to make      matters worse.
  3. Begin to      put spending in order by restructuring the basic Federal methodology from      a baseline budgeting system to a zero-based budgeting system. Our current      system tends to make permanent the overspending in prior years by      encouraging fully spending a budget instead of spending only what is      necessary. The base line budgeting approach takes a year of potential      overspending and increases that spending to come up with the budget for a      new year, hence making prior inefficiencies permanent. On the other hand a      zero-based budgeting system requires an analysis of prior spending so      that, going forward, a budget number has been developed that is more      realistic and does not encourage overspending, because all spending must      be justified not simply accepted.
  4. Eliminate      duplicative programs.
  5. Eliminate      programs that are outside the Constitutional mandate of the Federal      government.
  6. Eliminate      waste, fraud and abuse by hiring professionals in these areas and use      savings to pay for their services.
  7. Reduce the      size of the Federal payroll, including eliminating positions, and bringing      the compensation packages in line with the private sector.

Once we have implemented current spending cuts that we can measure, and make a determination of their effectiveness, we can then make a better decision as to whether to initiate more spending cuts, or if we must consider raising revenues or a combination. Too often we have taken the easy way out of raising taxes currently with a vague and unenforceable promise of cutting spending in the future. We must cut spending first! There is a reason Congress has a 90% disapproval rating. It is probably because 90% of its collective thinking is wrong!