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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.

LoMac Res November 20, 2012 at 11:40 AM
Senator Toomey: We only need to look at what has happened in Europe over the past three years to see that austerity is not the way to escape recession or debt. Europe's austerity programs are creating a negative spiral. You can't shrink your way out of a recession. America's financial priority is to recharge growth, which will lead to more jobs, which will lead to more revenue, which will stabilize debt and give us a chance to reduce debt. We need only look back as far as the Clinton administration to see a government with a balanced budget, and tax rates higher than they are now. Your job, in the scenario we have now, is to work with everyone, Republicans and Democrats, to help America outgrow the recession and to get into a position of strength to work on the debt. We achieved the debt we have now by putting two wars on the credit card, and via massive tax cuts that didn't magically stimulate the economy the way you predicted.
THOMAS P. TRINKLE November 20, 2012 at 01:29 PM
Two political advocates I remember were Forbes saying no income tax at all changed to a no deductions sales tax. Then Ross Perot saying if you don't have the money don't buy it. Quite a contrast to our current Congress. One comment seen recently is that entitlements are virtually the government writing the receiver a check in dollars. As for Senator Toomey he takes a lot of heat for his conservative views. Prior to his first House of Representatives campaign I had a problem with the absentee ballot system where on receipt of the ballot it was too late to return by the deadline. He sent me a personal message saying if elected he would work on it. He won and he did. That was umpteen years ago and not forgotten. After keeping his two term limit promise and out of office I sent a message to suggest he run for office once again. Once again he sent a personal message of appreciation. No other political figure has ever replied to my concerns except for recorded messages. I wish the Senator the best and hold tremendous respect for showing his concern on my behalf. That to me is a true politician.
Walter November 20, 2012 at 01:40 PM
Here it comes. Dig Deep.
SWT Resident November 20, 2012 at 02:00 PM
As many qualified decision makers have said 'changes must be in the form of tax increases and cost cuts'. I'm all for shrinking the size of our states and federal gov by 20% minimum especially state and federal House members. What have we seen our elected officials do the past 4-5 years? Agree on setting a line in the sand with cuts and tax increases and now it is determined it is a fiscal cliff? Toomey...you were part of that meeting at the time!! Now the decisions you all made at that time to pacify the taxpayers can't be done? What a crock! Typical politics. Why is it the American people, those that keep the wheels spinning for this nation, the non-union members of society are the ones that continually take it in the shorts? I have not had an increase in my income for 5 years. But through every excuse in the book, mainly union pensions for teachers and state workers, my cost has gone up 45% in the last 5 years! I don't see our elected officials, a drag on our GNP to begin with, standing up and saying: because we can't agree on a resolution to fix at least some of the issues affecting the people we represent we will take a 5% pay cut EVERY YEAR until we do have sustainable resolve. You guys aren't feeling the pain. Its us at $40,000 a year that are feeling the pain. I could live damn comfortable collecting Justin Simmons $82,000 a year as the cheapest elected cost to the taxpayer. I recommend all you elected officials open you eyes and stop the excuses. And damn soon!!!
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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