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Profiles of Courage on the Fiscal Cliff
Jesse Richman, 12/17/2012

In Requiem to an Improvident Generation I concluded three years ago "Vote for a Democrat who supports substantial and specific spending cuts or a Republican who takes a stand for real and sizable tax increases if you can find one. They are rare in this improvident land."

By this standard Republican representative Scott Rigell deserves note for his courage.  Rigell has been unusual in the clarity with which he has called for a budget deal which addresses both revenue and spending.  He deserves plaudits for facing the fiscal facts without resort to the dreamy fallacies that cutting taxes while cutting spending (Republicans) or increasing spending while increasing taxes on the rich (Democrats) will somehow lead to a balanced budget.  He is behaving like a true fiscal conservative. Copied below is a letter Rigell sent to all House Republicans on December 12.


December 12, 2012

Dear Republican Colleague,

In Conference last week I expressed my support of our leadership’s current proposal to avert the “fiscal cliff.” I referenced the following three facts which give critical insight into the effective yield (federal revenues/GDP) of our current tax code:

  • Only twice in the past decade has it yielded 18% or more of GDP.
  • Its 12-year average yield is 16.9% of GDP.
  • The last year in which federal expenditures were 16.9% or less of GDP was 1959, six years before the introduction of Medicare and Medicaid.

After a careful review of CBO data, a strong case can be made that our current tax code’s long-term, “permanent” yield will not exceed 17% of GDP. That yield is locked-in by the Americans for Tax Reform pledge, which requires any change in the tax code to be revenue neutral. Yet floor votes make clear that our Conference is unwilling to pass a budget which cuts spending to 17% of GDP. Accordingly, I closed my remarks at Conference by sharing what I believe is a serious defect in our fiscal platform:

Even if the RSC Budget (which I support and voted for) becomes law and the economy grows at a robust rate, continued deficit spending and escalating debt are inevitable. Increasing revenues through tax reform (as well as through growth) is a mathematical – and fiscally conservative – imperative.

To properly work through this debate I respectfully submit that in addition to being guided by sound data, we need to examine what it means to be a fiscal conservative. Surely, in addition to fighting for smaller government, it means paying for the size and scope of government for which we have voted. That is why supporting an agreement that results in higher revenue and lower expenses in the “fiscal cliff” negotiations is not political weakness. Rather, it is sound conservative fiscal policy.

Reckless, unsustainable federal spending is what threatens the foundation of our Republic, and the case I make for additional revenue should not be interpreted as a lack of understanding on that critical point. As a father and grandfather, the depth of my disappointment with the Administration – and our House Democratic colleagues – for misrepresenting and mocking our budget while failing to provide a tangible alternative cannot be overstated. My support does not extend to, and I would encourage our Conference to reject, any proposal which fails to make higher revenues contingent upon cuts in spending.

To give further context to the facts I have laid out in this letter, I have included two attachments. The first is a number line that graphically shows key budget data about our current and historical levels of revenue and expenses. I share this with my constituents when I speak about our country’s fiscal trajectory. The second attachment is a public letter I wrote to my district when I withdrew my support of the Americans for Tax Reform pledge last winter.

As a businessman in a season of public service, I go where the numbers lead me. The conclusions I have come to are data-driven, reflect considerable research, and are therefore strongly held. Yet I close this letter mindful of the timeless counsel of King Solomon: “In an abundance of counselors there is wisdom.” So in closing please know that I have a sincere desire to hear and understand your views, and those of our colleagues, on this critical and inherently complex topic.

With a shared resolve to restore America’s fiscal foundation, I remain

Yours in freedom,

Scott Rigell

Rigell's courage in calling for additional revenue in conjunction with spending cuts is rare.  Unlike a great many members of the 112th Congress, he is moving away from the improvident policies of recent decades and toward real fiscal responsibility.  If more Republicans and Democrats would follow Rigell's lead, the fiscal cliff negotiations might produce a reasoned long term deal that balances the budget.  Unfortunately I fear that improvidence remains the primary mode for both parties.

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  • [An] extensive argument for balanced trade, and a program to achieve balanced trade is presented in Trading Away Our Future, by Raymond Richman, Howard Richman and Jesse Richman. “A minimum standard for ensuring that trade does benefit all is that trade should be relatively in balance.” [Balanced Trade entry]

    Journal of Economic Literature:

  • [Trading Away Our Future] Examines the costs and benefits of U.S. trade and tax policies. Discusses why trade deficits matter; root of the trade deficit; the “ostrich” and “eagles” attitudes; how to balance trade; taxation of capital gains; the real estate tax; the corporate income tax; solving the low savings problem; how to protect one’s assets; and a program for a strong America....

    Atlantic Economic Journal:

  • In Trading Away Our Future   Richman ... advocates the immediate adoption of a set of public policy proposal designed to reduce the trade deficit and increase domestic savings.... the set of public policy proposals is a wake-up call... [February 17, 2009 review by T.H. Cate]