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The president took stock of American progress in his State of the Union address last night. While the growing American economy was rightly celebrated, there was something notably missing: the nation’s massive debt and deficit.
Here’s our take on the great successes, areas needing improvement and America’s next big policy test:
Success: The economy is growing
Lower taxes combined with reductions in regulatory burdens have undeniably led to significant economic growth. Wages are up, unemployment is at historic lows and there are more open jobs than there are people to fill them.
Since the implementation of the Tax Cuts and Jobs Act, our economy has maintained momentum. Nine out of 10 people saw a tax cut or no change in what they paid. When Americans can keep more of their hard-earned paychecks, they put that money back into their communities.
The main thing holding back growth now is our government getting in its own way – and the failure of either political party to get serious about overspending.
Room for improvement: Poor spending habits
Washington’s reckless, wasteful spending is one of the biggest obstacles holding Americans back. While tax cuts are beneficial, they must be paired with spending cuts to put the nation on a path to fiscal responsibility.
The Congressional Budget Office’s latest outlook is more than gloomy. Last year, the federal government brought in $3.5 trillion in tax revenue. Yet it still spent a record-high amount of money — nearly $4.5 trillion resulting in a deficit of almost $1 trillion. At the end of last year, total federal debt was nearly $23 trillion, or $184,000 per household. Reforming Social Security and Medicare would both reduce the deficit and ensure the programs are around for today’s seniors, as well as for future generations.
Corporate welfare continues to be a black hole for taxpayer dollars — funds get sucked in without returning in any beneficial form. Tax extenders and the crony Export-Import Bank are the two most notable black holes. Lawmakers should legislate the end of both.
The next big test: Infrastructure
The House Ways and Means Committee met last week, taking the first step in deciding how to pay for America’s roads, bridges and tunnels that require repair. When confronted with this question, lawmakers have a bad habit of attempting to hike the federal gas tax.
If lawmakers want next year’s State of the Union address to be even more positive than this year’s, a gas tax hike should be rejected outright. The fact is, our nation can address our infrastructure needs with sensible reforms to the way we do business, and without digging back into the pockets of hardworking taxpayers.
Here’s how to address infrastructure the right way:
“The best deal for the American people would be to take a gas tax hike off the table right now and to protect the historic achievement of the most significant tax relief in a generation,” AFP Chief Government Affairs Officer Brent Gardner said last year. “Anything to undermine that progress should be a nonstarter with both parties. Congress has the money they need to improve roads and bridges – they just need to be smarter spenders.”
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