[Congressional Record (Bound Edition), Volume 158 (2012), Part 12]
[House]
[Pages 16134-16135]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       WHAT IS THE FISCAL CLIFF?

  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
Oklahoma (Mr. Lankford) for 5 minutes.
  Mr. LANKFORD. Well, in a few days, we're going to have to resolve the 
fiscal cliff--ironically enough, something that the House of 
Representatives passed last May. In April, we set out a tax plan. In 
May, we set out a sequestration plan, passed it through the House, sent 
it to the Senate who said, We will see you during the lame duck time 
period.
  We are in the lame duck now, and this has to be resolved. We have to 
solve the problem. But quite frankly, the first thing we need to do is 
to be able to define what the problem even is. It seems that one group 
is talking about how the real problem is the fiscal cliff, and the 
other group is talking about how the real problem is the debt

[[Page 16135]]

and the deficit. Well, what is the problem? The issue is, we have $16.3 
trillion in debt as a Nation, $1 trillion or more in overspending each 
year for the last 4 years.
  Let me set the example of what this really means: in 2007, our tax 
revenue--how much we are bringing into the Treasury--was almost exactly 
what it is in 2012. From 2007 to 2012, the revenue is almost identical. 
The difference is, our spending has gone up $1 trillion a year from 
2007 to 2012, so now that's $1 trillion total over the course of that 
time that's slowly built up. But each year, we've been over $1 trillion 
in spending. While our revenue has stayed consistent, basically, from 
2007 to 2012, that dramatic spending increase has happened.
  We seem to identify that as the real problem. We're overspending. And 
until you deal with that issue, you cannot raise taxes enough to be 
able to keep up with $1 trillion of accelerated spending.
  So what is the cliff? And I have to tell you, I have so many people 
from my district and other places that catch me, pull me aside quietly 
and say, We hear about the fiscal cliff. We're not even 100 percent 
sure of what it is. Well, it's really the combination of three things:
  The first of them is, the ObamaCare taxes begin January 1 of next 
year. Those taxes will hit the middle class and the upper brackets. 
Those taxes, when they kick in, will raise the rates on people making 
$200,000 or more and will also remove deductions from the middle class, 
things like the flexible spending accounts. For those that have high 
medical bills, their taxes will now go up. For people that have high 
medical bills and are able to offset some of the taxes they pay because 
they pay more than 7.5 percent of their own income in medical bills, 
they will now have their taxes go up. So people like diabetics, heart 
patients, stroke patients, people with special needs children, their 
taxes all go up January 1, as well as people making $200,000 or more, 
their tax rates will also go up on January 1. That's the first part of 
the fiscal cliff.
  The second part of it is the spending decrease that this Congress and 
the President agreed to last summer. We have dramatically increased 
spending; we have to reduce that spending. That spending decrease that 
was agreed to had a deadline by the end of this year. If it didn't, 
there would be across-the-board cuts. The House passed all of our 
spending decreases in May. The Senate has yet to pass any. So with 
that, we're stuck with across-the-board cuts that kick in early 
January.
  The third part of that is the expiration of the tax rates for all 
Americans. In 2001, in 2003, and then extended during the lame duck of 
2010, every American's tax rates were extended out to expire the 31st 
of December. Every tax rate from the lowest to the highest is set to go 
up.
  Now some people see that the problem is that we're not taxing enough, 
and so that solves the problem--to just go off the fiscal cliff, and 
everyone will be taxed more. Some people see that we don't take enough 
from one group and give to another group, so we can solve that. Some 
people have even said, Let's go back to the Clinton tax rates; with the 
Clinton tax rates, we had a booming economy, and we were creating more 
jobs. Well, to that, I would say, well, if increasing taxes increases 
economic activity, why don't we go to a 95 percent tax rate, and then 
we'll really have a booming economy. The reason that no one proposes 
that is because no one really believes that. That is why the 
accelerated tax rate that is being recommended by the White House is 
also being proposed with a stimulus plan, another spending plan to 
offset the damage that's going to be done with the tax increases.
  Here is the example that I can talk about with this: when people talk 
about, just raise taxes on the upper 2 percent, well, let me give you 
an example of what's being proposed by the President. Capital gains 
will go from 15 percent to 23.8 percent next year. Dividends would go 
from 15 percent to 43.4 percent.
  Now I have a lot of people that will say to me, just raise it on the 
upper brackets. But when I tell them, can I tell you what that means--
their taxes go from 15 percent to 43.4 percent--I have yet to have 
anyone stop me and say, Oh, that sounds fair. It doesn't. It just 
sounds so much easier to say, raise it on someone else, not on us.
  We have to solve the problem. Just raising taxes doesn't solve the 
problem. We're spending $1 trillion more than what we did 5 years ago 
with a tax revenue the same. If we do not focus on spending, we will 
never solve the problem.

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