December 7, 2012
Dear Friends,
Today we remember the “date which will live in infamy” – the 71st
anniversary of the attack on Pearl Harbor that killed thousands and propelled
the United States in to World War II. We pay special tribute to those who lost
their lives in the attack and to those who served our country during the
war.
We are also again reminded of the ideals upon which this nation was founded,
and of the might of our strength and depth of our spirit. The sacrifices of our
forefathers and the greatest generation should be forefront in confronting the
critical issues we face today. We must not let them down and we must work for a
better and brighter future for our children and grandchildren.
Fiscal Cliff
I have said repeatedly that the United States is in a very dangerous position
if we do not act now to address the fiscal cliff by Dec. 31, 2012. Tax rates
will increase to 15 percent on the bottom end and to 39.6 percent on the top
end of the spectrum, the capital gains tax rate will rise from 15 percent to 20
percent, the estate tax will increase to 55 percent, the dividend tax rate will
increase to the marginal rate of the taxpayer and the child tax and earned
income credits will expire.
This week, Senate Minority Leader McConnell, R-Ky., offered Majority Leader
Reid, D-Nev., the opportunity to vote on the president’s $1.6 trillion tax
proposal, but Sen. Reid declined the offer. I am concerned that the president
is not acting in good faith and actually wants us to go off the fiscal cliff,
let tax cuts expire, cut defense spending and then turn around and cut taxes on
just a few later on in order to gain exactly what he has wanted all along while
looking as though he has single-handedly rescued the country.
I said as much this week on “
The
Daily Rundown with Chuck Todd” on MSNBC. I believe that it is time to sit
down and get serious because if we don’t address the current fiscal cliff in
this lame-duck session of Congress, we will put the nation in a precarious
position.
Additionally, the president’s initial offer that was rejected by Majority
Leader Reid, gave the president unilateral power to increase the debt limit
without Congressional oversight. As a result, I joined with Sen. Rob Portman,
R-Ohio, and 42 other senators in sending a letter to President Obama
underscoring the need for any deficit reduction deal to ensure that the
people’s elected representatives will continue to have a say over the nation’s
debt limit. The letter points out that President Obama himself has said that
“substantial increases in the national debt are ‘irresponsible’ and
‘unpatriotic,’” and that he personally pledged to cut the budget deficit in
half. We agree with him and that is precisely why we oppose his move to
eliminate Congress’s role in establishing a federal debt limit.
I’m not in favor of patchwork solutions to a macro problem. We all already
agree that we must address this issue by tackling three things: spending,
revenue and so-called entitlements.
In terms of spending, we should cut discretionary spending, but that alone
will not solve our debt and deficit problem. Congress should return to a
responsible budget and appropriations process focused on savings and
accountability. As for defense spending, the consensus is that arbitrary cuts
would be devastating to our defense. Instead, we should cut spending through a
responsible, strategic approach.
When it comes to Medicare and Social Security, I don’t consider these
programs to be “entitlements” because Americans have paid into them their
entire working lives. That’s why we must take steps to preserve these programs
for those who have paid into the system and for future generations as well. I
propose extending the age of eligibility for Social Security for our children
and grandchildren, just as President Reagan and House Speaker Tip O’Neill did
in 1983. Medicare is a tougher issue, but converting from a fee-for-service
program to premium support and means-testing is a first step.
As for the tax code, I do not favor raising tax rates. It would not be
difficult to come up with a plan that lowers rates and raises revenues. For
example, a possible solution could be means-tested deductions. The fiscal cliff
could be averted by reducing tax rates and reforming the tax code in a
comprehensive manner so that we would have a lower tax rate applied against a
larger base, and that would produce revenue.
I remain ready to sit down at the table with anyone who is acting in good
faith in order to solve this problem. We need a game plan for the next decade
to reduce our deficits and reduce our debt.
Arms Smuggling in the Gaza Strip
On Wednesday, I joined Sen. Ron Wyden, D-Ore., and a bipartisan group of 16
other senators in sending a letter to Egyptian President Mohamed Morsi urging
him to
step
up efforts to stop arms smuggling through the Sinai and into Gaza that
could reignite the conflict between Israel and Hamas. Morsi was instrumental in
brokering the cease-fire that ended the eight-day conflict between Israel and
Hamas in Gaza last month. Recently, there have been statements from Hamas and
Iranian leaders acknowledging that Gaza is being supplied with weapons from
Iran, including long-range Fajr-5 missiles. In the letter, we wrote, “In order
for the ceasefire to hold, it is imperative that your government bolster its
efforts to halt all weapons smuggling taking place via both overland and
underground routes.”
What’s on Tap?
Next week, the Senate will resume consideration of a bill, S.3637, that
would extend for two years the Federal Deposit Insurance Corporation’s
Transaction Account Guarantee (TAG) program, which provides unlimited deposit
insurance coverage for non-interest-bearing transaction accounts.
Sincerely,
Johnny Isakson
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