For newly empowered congressional Republicans, priority one must be an extension of the Bush tax cuts. There should be enough votes not only from a new Republican majority, but also from some of the decimated and dispirited (and even newly elected) Democrats. If President Obama is smart, he won't veto the bill.
If the tax cuts are allowed to expire, everyone who gets a paycheck and has taxes withheld is going to see less money in the "net" column starting January 1.
Bloomberg.com has published some calculations. It reports that, according to the Tax Institute at H&R Block, "for a married couple earning $80,000 a year, increased taxes would drain $221.48 in withholding from a semi-monthly paycheck. Married individuals earning $240,000 a year" (just under the $250,000 standard President Obama defines as "rich") "would lose $557.78 to withholding in a single semi-monthly paycheck." Double these figures for a month and multiply by 12 and you quickly see the additional drain on the economy at a time of anemic 2 percent growth.
Another example from Bloomberg: teachers, teacher aides and custodial workers who make from $20,000 to $40,000 per year would lose an estimated $50 per paycheck, which is significant at a time when every dollar counts.
President Obama has been telling us how much is enough for us to make. Instead, we should be telling him how much of our money we will allow government to take and spend. That is the theme emerging from the midterm election.
There are a number of other credible sources Republicans could use to stop and reverse runaway spending. The Heritage Foundation's Brian Riedl has identified $343 billion in specific spending cuts the next Congress might enact in the fiscal 2012 budget. Riedl acknowledges that cutting spending won't be easy. That's because every dollar spent by the government attracts self-interested supporters. But he maintains the identified cuts should be achievable. Read his spending cut targets at heritage.org.
The public is in the mood for repairing America's crumbling financial house. Democrats will have a more difficult time demagoguing spending cuts when they have been primarily (though not entirely) responsible for the ocean of red ink.
That Puritan ethic remains in the DNA of many Americans. It is now up to Republicans to get it out and remind us of what fiscal and personal responsibility can do to restore financial solvency. It may take a while and there will be some discomfort and even pain involved. But in the end, we will all be better off than we are now and much better off than we will be if we fail to reduce our unsustainable debt.