WASHINGTON - The Senate passed legislation on Aug. 2 to increase the debt ceiling and avoid a catastrophic default on our national debt while reducing the deficit. To say that this legislation was not ideal is truly an understatement.
The notion that our deficit problem can be solved solely by cutting spending, as this legislation does, ignores the fact that unwise tax cuts for the wealthy and egregious tax loopholes are significant culprits in our fiscal crisis. I believe too many members of Congress are influenced by an ideology so extreme that they promised to wreak economic havoc if they did not get their way. "No additional revenues" became the battle cry, an approach that prevented the balanced deficit reduction that the American people rightly support.
But no public policy exists in a vacuum. Despite its many flaws, this legislation had to pass.
By Sen. Carl Levin
The choice we faced was between a faulty piece of legislation, on the one hand, and severe damage to our economy and even greater joblessness on the other. Had it not passed, the United States, the globe's preeminent economic power, would have defaulted on its obligations to senior citizens, students and veterans, as well as to those who have invested in our country by the purchase of our bonds and Treasury notes.
Despite this bill's imbalance in focusing solely on spending cuts, it does contain a mechanism that can force acceptance of what too many of my colleagues have refused to accept: the reality that revenue must be a part of real deficit reduction.
I have supported commonsense steps to address the failure to include more revenue and promote shared sacrifice: rolling back unnecessary tax cuts for the wealthiest among us; the end of tax breaks for the highly profitable oil companies; closing loopholes that now allow tax dodgers to hide income and assets in overseas tax havens to avoid the taxes they rightly owe; and an end to tax breaks that let highly paid hedge fund managers pay taxes at a lower rate than their employees.
So far, too many have denied the need for these changes. But under this legislation, we will face a stark choice: We must agree before the end of this year to deficit reduction of at least $1.2 trillion over 10 years or stand by as an automatic budget cut kicks in to accomplish that goal.
A bipartisan joint committee of 12 members of Congress will meet and develop a deficit-reduction plan to avoid those automatic cuts.
That joint committee will have broad powers to review and propose changes to spending and to the tax code and to add revenues. Revenues will finally be back on the table.
Meeting the $1.2 trillion goal will not be easy, but it is achievable - if those who have so far been unwilling to compromise can recognize that revenue must be part of the equation. Nobody should be eager for those automatic cuts to take effect. Many would be unacceptably painful and damaging. But the very idea of those automatic cuts is that they are so unacceptable that few of us will want to see them enacted, and most of us will be willing to compromise in order to avoid them.
Congress has used this approach before. In 1985, we passed Gramm-Rudman-Hollings, which set forth specific deficit targets and required cuts if those targets weren't met. Under that law, in 1990, when facing the possibility of unacceptable cuts in important programs, President Bush and bipartisan leaders in Congress adopted a balanced deficit-reduction plan that included significant new revenues.
Now, under the legislation we have just approved, the members of the joint committee must truly be willing to lead, to put aside rigid ideology, if we are to avoid triggering unacceptable cuts.
It is my hope that we have reached the high tide of an ideological movement that has sought to hold tax cuts for the wealthy sacred, while imposing increasingly draconian cuts on American families, and threatened economic calamity if that movement did not get its way. The era of slashing programs that help middle-class Americans, with no shared sacrifice by the wealthiest among us, must end, and give way to an era in which fairness and balance guide our efforts.
Passing this legislation hopefully will drive us to make that transition.
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Carl Levin is the senior U.S. senator from Michigan.