U.S. Sen. Johnny Isakson believes Congress and D.C. will act before falling off the fiscal cliff at year end

By Maria Saporta

The prospect of the fiscal cliff could actually lead to action in Congress and Washington, D.C.

At least, that’s what U.S. Sen. Johnny Isakson (R-Georgia) believes.

Isakson was the breakfast speaker Thursday morning at the Commerce Club where he talked about the dangers and opportunities that face the nation.

“The challenges before us are huge. We have just a few more weeks before we cross the fiscal cliff,” Isakson said of the perfect storm of expiring Bush tax cuts, the end of the payroll tax holiday, the return of estate taxes as well as the mandated “sequestration” where 10 percent of the federal budget would be slashed across the board. “Everybody…has been waiting for us to make some decisions. I don’t think that the majority of Congress will fail to do the right thing — to deal with the fiscal cliff.”

Isakson, who preferred to talk of the future rather than the results of Tuesday’s election, said a new tone could take over nation’s capital.

“We’ve got the inspiration of desperation,” Isakson said. “There’s no escape hatch. The damage is terrifying. The cost of going off the cliff is far greater than the cost of dealing with it.”

Although Congress and the White House have been in a stalemate for years, Isakson said the prospect of going off the fiscal cliff finally could bring the different parties together to find areas of consensus in the areas of taxes, spending and entitlements.

“The solutions are obvious. Congress just hasn’t had the guts to stand up” and implement them,” Isakson said.

He then provided a roadmap of how some of the thorniest issues could be resolved.

First, the tax code needs to be reformed. “You put every deduction and every credit on the table.”

Then the federal government should go through a “cost-benefit analysis” to decide which ones should remain and which ones should go. In Isakson’s mind, the goal would be to take the top marginal tax rate from its current 35 percent to 28 percent. If the tax code is simplified and some deductions and tax credits are eliminated, the net result will be more revenue for the country.

Spending is another area of focus, but there’s less opportunity there.

“Congress does spend too much,” Isakson said. “But in the last 12 months, our spending was $1.18 trillion and our deficit was $1.2 trillion.”

In other words, one could cut the entire federal budget and still not be able to solve the nation’s deficit.

“The third rail is entitlements,” Isakson said, even though he said he doesn’t view Social Security and Medicare as entitlements because “Americans have been paying into the system.”

But given the fact that people are living longer and the fact that the number of retirees is out of balance with the number of workers, it will be necessary to raise the retirement age for younger generations.

“Medicare is harder, but it’s doable,” Isakson said, adding that it will require “some means testing.” But the federal government does have a responsibility to provide a safety net for those who are in need.

“When you put entitlements on the table, the tax code on the table, and when we put spending on the table, we can get there,” Isakson said. “Our debt is $16 trillion. Our net worth is $16 trillion. We’re broke. We need to amortize our debt. The good news is that we can solve the problem.”

Then Isakson gave his personal prediction of what he thought would happen over the next two months.

“I can’t believe that Congress, in the majority, won’t face the fiscal cliff,” he said. “I do believe the tax rates will be extended for another year. There may be a debate on the top rate. We can’t just keep kicking the can down the road.”

But he does think payroll taxes will go back up but that all the other rates will stay in place for another year.

About sequestration, Isakson quoted a recent comment by President Barack Obama, who said: “It ain’t going to happen.”

“We aren’t going to cut $1.2 trillion across the board,” he said, adding that some subsidies, such as the one for ethanol should be removed. “We need to do a solid cost benefit analysis” of all spending. “We have run the clock out for too long,” Isakson said. “The election is over. It’s time for us to do the tough things.”

Isakson then pledged that he will be going “back to Washington committed,” and ready to “do the tough things and the right things. I’m ready to go.”

In one of his few comments about the election, Isakson said it was important for the Republican Party to “operate under a big tent.” The “polarized primary situation” ended up nominating candidates who were not able to win the general election. “It’s one thing to win a battle and another thing to lose the war,” said Isakson, urging people at the breakfast to encourage bi-partisanship. “If you don’t demand a bi-partisan approach, you are going to get what you elect,” he said.

During the question-and-answer period, the senator was asked about his colleague, U.S. Sen. Saxby Chambliss (R-Georgia), an original member of the Gang of Six — an equal group of Republican and Democratic senators who have been trying to come up with a plan to reduce the nation’s debt. Isakson said that today, 46 senators have signed on to the effort, which has been based on the recommendations of the Simpson-Bowles deficit reduction commission. Chambliss has been criticized by some members of his party for his willingness to work across the aisle.

“I’ve never seen a time when I took a position of leadership and didn’t get criticized,” Isakson said. “Saxby Chambliss has done what’s right.”

Isakson then quoted Mark Twain: “When confronted with a difficult decision, do what’s right. You’ll surprise a few. You’ll amaze the rest.”

The one time Isakson criticized Obama during his talk was over the recommendations presented by Simpson-Bowles, a commission that was put together by the White House.

“I’ll never understand why the president didn’t bring Simpson-Bowles to the Congress,” said Isakson, adding that if he had, it would have helped his re-election. But now he has a second term to work on these tough issues.

“I’m sure he would want to leave a legacy,” Isakson said. “Simpson-Boyles is the footing upon which you can build a house that will last. We have got to get off the partisan divide.”

And then he added that the climate has changed significantly from two years ago (when the top priority of some Republicans was defeating Obama’s re-election).

“We all share the same problem,” Isakson said. “And that’s why I’m so positive and optimistic.”

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13 comments
dmacado
dmacado

Isakson says that , "We all share the same problem".  That's because Isakson gave us deregulated banks; they crashed the credit markets.  That's because Isakson gave us endless wars; they bankrupted our Treasury.

dmacado
dmacado

Isakson says that , "We all share the same problem".  That's because Isakson gave us deregulated banks; they crashed the credit markets.  That's because Isakson gave us endless wars; they bankrupted our Treasury.

dmacado
dmacado

The rich already pay less than at almost any time since the beginning of the 20th Century!  Romney paid only 14% in taxes, I paid twice that rate!  What rate does Isaksaon pay?  

Where's the plan to address the growing poverty rate!  Where are the jobs programs!  

We should be expanding Medicare to cover all Americans.

Isakson wants the non-rich to do with less, less, less while he wants more, more, more!

NO MORE!

dmacado
dmacado

The rich already pay less than at almost any time since the beginning of the 20th Century!  Romney paid only 14% in taxes, I paid twice that rate!  What rate does Isaksaon pay?   Where's the plan to address the growing poverty rate!  Where are the jobs programs!   We should be expanding Medicare to cover all Americans. Isakson wants the non-rich to do with less, less, less while he wants more, more, more! NO MORE!

dmacado
dmacado

The plutocrat, Isakson wants us all to share in the pain of austerity.  Except that he will enjoy yet another tax cut, while the rest of us learn to live with less.  He is a fraud and a liar. 

dmacado
dmacado

The plutocrat, Isakson wants us all to share in the pain of austerity.  Except that he will enjoy yet another tax cut, while the rest of us learn to live with less.  He is a fraud and a liar.

conorsen
conorsen

RT @SaportaReport: U.S.Sen. Johnny Isakson believes Congress and D.C. will act before falling off the fiscal cliff:: http://t.co/N0nq3nxf

Burroughston Broch
Burroughston Broch

Cite the sources for your assertion that "The rich already pay less than at almost any time since the beginning of the 20th Century."

Don't forget that the Federal income tax (16th Amendment) was not ratified until 1913.

The richest citizens now pay a greater percentage of the total income tax payments than at any time in our history.

Burroughston Broch
Burroughston Broch

Cite the sources for your assertion that "The rich already pay less than at almost any time since the beginning of the 20th Century." Don't forget that the Federal income tax (16th Amendment) was not ratified until 1913. The richest citizens now pay a greater percentage of the total income tax payments than at any time in our history.

Burroughston Broch
Burroughston Broch

 @dmacado What makes you believe that he will enjoy a tax cut? According to President Obama, all taxpayers will see an increase. Yet, he will still leave about half of income tax payers paying no income tax - the infamous 47%. It burns me no end that I will have to pay more while almost half pay nothing or receive what amounts to a welfare check.

Of course, that is the Democrat's grand strategy - bribe the cheapest half to buy their votes and stay in power.

Burroughston Broch
Burroughston Broch

@dmacado What makes you believe that he will enjoy a tax cut? According to President Obama, all taxpayers will see an increase. Yet, he will still leave about half of income tax payers paying no income tax - the infamous 47%. It burns me no end that I will have to pay more while almost half pay nothing or receive what amounts to a welfare check. Of course, that is the Democrat's grand strategy - bribe the cheapest half to buy their votes and stay in power.