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Toomey: 'Fiscal Cliff' Spending Cuts 'Trivial' Compared to Looming Budget Crisis

U.S. Sen. Pat Toomey tells Valley Chamber of Commerce that without reform, current federal deficit spending will lead to much more painful cuts.

U.S. Sen. Pat Toomey spoke to members of the Greater Lehigh Valley Chamber of Commerce at a breakfast gathering Monday at DeSales University and neither the eggs nor the message was sunny side up.

The Pennsylvania Republican and well-known deficit hawk addressed the so-called “fiscal cliff” the U.S. government is facing Jan. 1 if Congress and the Obama administration cannot make a deal to avert tax increases and spending cuts that will automatically kick in.

But Toomey, whose family lives in Upper Milford Township, said that the across-the-board spending cuts slated for Jan. 1 look mild compared to future actions that will be needed if the nation doesn’t start shrinking the federal deficit and paying down the debt.

The fiscal cliff would precipitate spending cuts that would be less than 2 percent of total federal spending, he said.  

“In my view it’s trivial in the scheme of things,” Toomey said. “It’s trivial as a percentage of the $3.7 trillion budget, it’s trivial in the context of a $16 trillion economy...That’s not going to harm the economy. We actually need much more than that.”

But, he said, the cuts have been “badly designed, falling disproportionately on our defense budget.”

The fiscal cliff was set in motion in August 2011, when Congress and the president ended a standoff over increasing the nation’s debt limit with a budget agreement that would cut spending by $1 trillion over 10 years and identify another $1.2 trillion in reductions by January 2013, according to a New York Times story.

Without a deal, more than $500 billion in tax hikes and across-the-board spending cuts are to take effect Jan. 1 unless Congress and the president can reach an alternative solution.

“The real problem is we have a completely unsustainable fiscal path that we’re on,” Toomey said.

Federal spending in the last decade has doubled so it is now almost 25 percent of Gross Domestic Product (GDP), he said.

Entitlement programs such as Medicare, Medicaid and Social Security and the interest on the federal debt are growing so fast that in 10 years they will consume 90 percent of government revenue, Toomey said.

Spending on food stamps has doubled in the past four years, he said. “This is not because so many more Americans have fallen into poverty,” he said. “We’ve changed eligibility, we’ve expanded it dramatically.” 

If the government grows faster than the economy, “eventually it will consume everything in its path,” he said.

With the Bush-era tax cuts slated to expire in January, capital gains and estate taxes are scheduled to increase and that will discourage investment in businesses, he said. 

Toomey said the budget problems can’t be solved by a tax increase on the top 2 percent of taxpayers, which the president favors. “The folks in the accounting for the federal budget have told us that will reduce the projected deficit over the next 10 years by 8 percent,” he said.

“It’s a very cheerful message this morning,” Toomey added to chuckles from the crowd.

Toomey's district office is in Salisbury Township.

SWT Resident November 20, 2012 at 02:10 PM
Mr. Trinkle...what Tommey is showing you is nothing more than 'face time'. A TRUE politician gets the job done. Does not matter of he/she is Republican or Democrat. Today politicians are too beholding to other issues than who they are SUPPOSE to represent...the American people. Don't let a little political 'pat on the back' sway how you feel about our elected officials. If you are retired, get ready for a belt tightening. If you are soon to be retired take off the belt and use a piece of cheap rope. Think of your kids and grand children, First problem is a college education. Who is going to pay for theirs and how many of thousands of dollars more than 5 years ago will it cost? Then once they do graduate with $100,000 in college bills is a $40,000 a year job going to be enough to start a family, pay off college debt, and save for a future? Mr. Trinkle, times have changed but our elected officials are playing the same political games. Our state and federal government is a large cost to the American taxpayer. Our Constitution(s) are clear: elected officials are to earn a fair wage and mileage reimbursement. Not taxpayer funded pensions and cars and gas money and thousands of dollars in per diem expenses, etc. These people have built an entire industry paying themselves on the taxpayers back. And for what??? What have they given us? Broken promises. Increased the homeless in this nation. Gave third world countries our good jobs so the biz owner could get rich? Govt is broken.
Jennifer Moyer November 20, 2012 at 04:21 PM
U.S. Senator Pat Toomey's message about the looming budget crisis is the most important subject for national leaders. One of the more important local subjects is Upper Saucon Township Supervisor Dennis Benner proposing to have Upper Saucon Township sell more than 200 acres of municipal owned land to himself or alternatively to Toll Brothers with which Mr. Benner has a business relationship. Prior to the sale Mr. Benner would have the township prepackage the zoning to high density. This is news that is important to the public and can be well established through written documents.
Jon Geeting November 20, 2012 at 08:26 PM
Presumably to be a deficit hawk one must care about the deficit, no? We have not heard anything from Pat Toomey indicating that he cares about the deficit. Every "deficit reduction" proposal he has offered has taken the form of "let's cut taxes now, and do some other stuff later". Toomey cares about one thing alone - low tax rates on rich people. There is no evidence in his proposals that he is concerned about the deficit.
Amend November 20, 2012 at 09:58 PM
The language most republican use to describe letting the Bush era tax cuts as a "tax increase" is rather disingenuous, as is their finger pointing when it comes to the depth of the deficit. Letting those cuts cuts expire isn't a tax increase. It's saying that the attempt to spur the economy thru those cuts has failed, and as such, they should end. As for the deficit, the republicans "own" 5/8ths of that $16 trillion. It's also interesting that the only cuts the republicans are willing to discuss are to those that benefit the most needy. Defensive spending is taboo apparently, and never mind the savings that could be realized if the war on drugs were ended. Hopefully, both sides of the aisle can come together to avoid making things worse. Gamesmanship such as Toomey's affords one little confidence.
Frediano November 20, 2012 at 10:28 PM
Clearly, this divided nation is broken, we can't even communicate using the same math, economics, principles or logic, and so, it's just going to break. We've been successfully divided up and conquered. But no worries; they have all of us worried about 'austerity' now, defined as, the federal government cutting its overhead from over 25% of GDP while 'running the economy'... into the ground. JFK's America. Paul Krugman lauded JFK's economies, and cherry picked the highest marginal rate paid by 6 rich guys with lousy CPAs. He noticeably ignored the payroll tax back then. He noticeably ignored the small bite taken out of the nation's hide by government in a nation then of 180 million people vs. todays 320 million people, barely twice as big: JFK had a $100B budget, over half of which was for defense at the peak of the Cold War; today we are pushing $3800B, and the nation is barely not even twice as large. Inflation only accounts for a factor of 7.5, population, barely time 2.0. JFK's $100B fully adjusts, and then some, to $1500B/yr today...not $3800B/yr. Barely twice as big....thirty eight times more federal spending. Ask the graduating class of 1962 and ask the graduating class of 2012, who entered better economies, with more hope for the future, and was actually inspired by what their government was doing. 18% of GDP...not 25%+. What species does this to their young?

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