Senator Murkowski is working hard to ensure that a reasonable solution is reached before the nation reaches the “fiscal cliff”. The fiscal cliff consists of significant personal and business tax increases, and dramatic reductions in federal spending, all scheduled to take effect on January 1, 2013. For over a year Senator Murkowski has traveled throughout the state speaking to Alaskans about the country’s fiscal problems and the need for a comprehensive solution. She held three formal town halls on the topic in October of 2011.
If Congress takes no action to avert the cliff, an estimated $600 billion (nearly four percent of the nation’s GDP) will be extracted from the economy beginning on the first day of next year: nearly $500 billion in tax increases and $100 billion from the so called sequestration, a series of mandatory federal spending cuts. Alaskans can expect to pay $647 million in additional federal tax or roughly $1,749 per return. Alaska’s heavy dependence on federal revenue, contributing roughly 13 percent of the state’s economy, and the large federal workforce make Alaska particularly vulnerable to any federal spending cuts. As Senator Murkowski made clear during a recent conversation with the Alaska press, there isn’t a more critical confronting the nation and the state of Alaska.
With $16 trillion in national debt and four years of trillion dollar deficits, it isn’t a surprise to anyone that there is a spending problem in this country.
Senator Murkowski believes everything must be on the table during these financial negotiations. While she isn’t opposed to having an honest conversation about higher-income Americans paying a bit more, she wants to ensure that wealth isn’t defined in a way that unfairly penalizes people in high cost of living places like Alaska. In Alaska, a family income of $250,000 cuts a pretty wide swath, and many in that bracket are small businesses employing other Alaskans, so she believes Congress should be talking about a higher threshold. In addition to looking at new revenues, she believes it is important to reexamine all existing expenditures in the tax code to ensure that every deduction, credit and exemption supports our broader policy objectives. However, simply changing the tax code doesn’t solve our spending problems. The Senator believes we need real mandatory spending reforms if we ever hope to rein in federal spending. Without a comprehensive approach, the country simply cannot pay down its debts, avoid sequestration, and address expiring tax provisions. The Senator believes we are at a crossroads and this is an opportunity to seriously confront America’s spending problem by enacting meaningful reform. The final package is going to have to include a combination of revenues, comprehensive reform and real cuts in both mandatory and discretionary spending. Failure means negative economic growth, lost jobs, lower wages, a weakened Alaskan economy, and uncertainty for everyone. People always ask, what are some concrete examples of cuts Senator Murkowski could support? Examples are below.
While addressing the debt and deficit is a top priority, Senator Murkowski believes the indiscriminate nature of the sequestration process could disproportionally penalize Alaska and disrupt an already fragile economy. The Senator is hopeful that fiscal cliff negotiations will result in more meaningful spending reform than the indiscriminate cuts mandated by sequestration.
The Senator also wants to ensure current beneficiaries and those close to retirement receive the benefits they rely on, but she believes in ensuring the solvency of mandatory programs for future retirees. Senator Murkowski also believes the budget should not be balanced on the backs of federal workers.
Ultimately a comprehensive solution is necessary and the Senator believes it must address federal spending and tax reform, and it must have iron-clad enforceable mechanisms. Senator Murkowski believes delaying on the difficult decisions regarding the fiscal cliff will only make the impacts worse. She finds it incumbent upon herself and her Senate colleagues to take on the difficult task and create meaningful plan to avoid the fiscal cliff.
Note to Reader – Fiscal cliff negotiations are ongoing and the provisions of a potential deal are evolving on nearly a daily basis. We appreciate your engagement on this issue, as well as your patience with this page’s evolving information.
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