Look to Mass. as a model for growth agenda
DURING MY travels across Massachusetts in the past few weeks, residents have expressed frustration and outright disgust with Washington. They don’t need Standard & Poor’s to tell them what they already know: Washington spends too much, borrows too much, and has for the most part been unable or unwilling to address our debt and deficit challenges in a bipartisan way.
We need to stop the finger-pointing and come up with a bipartisan and bicameral compromise to solve the nation’s fiscal problems. There are three key steps we need to take: cut spending, create a sound long-term fiscal plan, and enact a pro-jobs legislative agenda. In each case, recent history in Massachusetts can be a useful guide.
First, we need to stop spending so much.
In 2001 to ’02, the bursting of the technology bubble hit the Massachusetts economy hard. Our unemployment rate was growing faster than any other state in the country, and we faced a fiscal crisis that many experts said was the worst since World War II. The projected deficit for 2003 was nearly $3 billion.
But instead of raising taxes, Democrats and Republicans worked across the aisle: We tightened our belts and balanced the books by cutting spending. It wasn’t easy, but after some tough negotiations and re-setting of priorities, we turned our deficit into a surplus and the economy and jobs started coming back.
In Congress, we need to stop dithering and start looking at every opportunity for savings - both big and small. We can save at least $5 billion by stopping the ethanol subsidy, $15 billion by selling unused federal properties, and $150 billion by addressing the duplicative programs and improper payments recently brought to light by the Government Accountability Office. These are just a few examples of the waste that steals money from worthy projects. These are the types of bills we need to send to the president.
Second, Washington needs a solid long-term plan to get the $14.5 trillion federal debt under control.
In 2005, when S&P upgraded Massachusetts’ credit rating, it cited two key factors: reduced spending and greater budget certainty. Washington needs to do the same thing.
Many businesses in Massachusetts say they are paralyzed by uncertainty about Washington’s next move and overregulation. They can’t plan, and they are too nervous to hire new workers.
Congress needs to take a hard look at the long-term drivers of our debt - entitlements, the defense budget, annual spending, and our tax code, and have an honest conversation with the American people about how their money is being spent. Both Democrats and Republicans will have to accept less than 100 percent of what they want to get a big deal done, but that deal would give our job creators some of the stability that they are craving. And we must ensure that in crafting reforms, those at or near retirement do not see changes to their promised benefits.
Finally, we need to implement a broad, pro-growth agenda.
In decades past, Massachusetts was often cynically referred to as “Taxachusetts’’ and derided for its anti-business environment. But when the Legislature was faced with those daunting deficits in 2003, we didn’t panic and increase taxes. By holding the line, Massachusetts’ national tax burden ranking improved. We can do the same thing in Washington to compete globally. With personal income tax rates about to increase for millions of Americans in 2013, we need a broad tax reform package that eliminates the special loopholes, simplifies the tax code, and lowers rates.
We should finally get moving on the stalled trade agreements with Korea, Panama, and Colombia that will open new markets to our products. And we should implement a common-sense approach to regulation that tells the world (including our own entrepreneurs) that America is open for business.
Americans know that borrowing 42 cents out of every dollar we spend is unsustainable, and that a record $14.5 trillion debt threatens our economic stability and future. However, despite our current challenges, America still has more potential for economic growth and job creation than any other country on earth. It’s time for us here in Congress and the administration to put our differences aside and do our job.
Scott Brown is a Republican US senator from Massachusetts.