US group to propose US$2 trillion alternative to fiscal cliff
October 2, 2012, 12:05 am TWN
WASHINGTON--The independent watchdog group Taxpayers for Common Sense will unveil a US$2 trillion deficit-reduction proposal in hopes of averting an economic debacle at year's end known as the fiscal cliff.
On Monday, the group plans to detail about 130 specific deficit-reduction steps the U.S. Congress could take to replace across-the-board spending cuts of US$1.2 trillion that are scheduled to take effect on Jan. 2. These would occur just as tax increases for all income groups are due to kick in.
The combination of looming spending cuts and tax increases is commonly referred to in Washington as a “fiscal cliff” because economists say it would knock the struggling U.S. economy back into recession early next year.
Taxpayers for Common Sense noted that Congress and President Barack Obama were responsible for the August 2011 budget and debt limit deal that included the potentially harmful automatic spending cuts scheduled to begin in January with a US$109 billion installment.
“And that's who is going to have to be responsible for defusing the ticking budget time bomb that would cut US$1.2 trillion indiscriminately,” the group said.
Targets of the group's plan include agriculture subsidies, the oil and gas industry and defense projects.
With members of Congress currently campaigning for re-election more than addressing the country's fiscal problems, private groups are stepping up with their own deficit-reduction plans. They fear that if such work is left for a short session following the Nov. 6 presidential and congressional elections, Congress might end up letting the country go over the fiscal cliff.
Many Washington politicians say that remedies for the sluggish U.S. economy — and government budget deficits that have topped US$1 trillion for four consecutive years — should be debated in this election season with the Nov. 6 vote informing Congress on what to do.
Unwilling to wait, Taxpayers for Common Sense is touting a remedy that it argues would cleanse the U.S. budget and tax code of policies it says result in an “inefficient, ineffective or wasteful use of taxpayer dollars.”
The targeted budget reductions would eliminate all government crop subsidies, saving US$56.5 billion over 10 years, end a manufacturing tax break cherished by the oil and gas industry, for a US$17.2 billion savings, and stop production of some big military projects, such as the V-22 Osprey, a tilt-rotor aircraft built by Boeing Co and Bell Helicopter, a unit of Textron Inc.
In its February budget proposal to Congress, the Obama administration said it wanted to cut spending on the V-22 Osprey by reducing the number of aircraft to be built.
Other non-governmental groups, such as the Committee for a Responsible Federal Budget, have been looking at ways to cut U.S. deficit spending by about US$4 trillion over 10 years.
The various ideas circulating in think tanks could be weighed by Congress whenever it finally gets down to addressing the fiscal cliff.