The debt ceiling boxing match seems to be nearing a decision, but the real work on the economy has yet to begin, former New York Rep. Vito Fossella tells Newsmax.TV in an exclusive interview.
One of the most vital issues in the days ahead will be to decide the exact makeup of the 12-member, bipartisan congressional committee that will pinpoint more than $1 trillion worth of future spending cuts, Fossella said.
“The key becomes who is selected to be on this committee,” said Fossella. “If you have folks who see that the answer to our nation’s problems is more spending and more taxes, then that is what you are going to get.”
Other issues that have to be worked out between now and the November 2012 election include making sure that the burden from the debt deal does not fall on the shoulders of the middle class and persuading the credit rating agencies not to downgrade the United States’ AAA rating as a result of the months of Capitol Hill wrangling, he said.
“The middle class is taxed enough,” said Fossella, who served in the New York state House for six terms before a brief stint in Washington. “The last thing they need is another tax burden or tax blanket placed upon them.
“If it is, then the 2012 elections are really just around the corner,” he warned pointedly. “The beauty of this country is that power still resonates and belongs to the people.”
Story continues below the video.
Fossella described the deal that the two parties worked out on Sunday as “better than some of the alternatives,” which, he said, “would have put our nation’s economy and, most importantly, the ability to create more jobs in the private sector on a path of even more fiscal ruin.”
The whole debate has served the purpose of spotlighting the size of the national debt and showed that government spending is “way out of whack with what’s coming in,” he said.
But the important thing now that a solution is within reach is to focus on job creation. “The overarching issues, and frankly the more important issues that should resonate with the country, are how do we grow our economy at such a rate and how do we provide incentives and how do we give the tools necessary to the private sector to put more people to work.
“Jobs and the employment issues and a more pro-growth tax policy hopefully will come out of it,” he said, warning that politicians should not think they have solved the nation’s debt problem.
“They haven’t. They are still kicking the can down the road, still not addressing two or three or four years out, how we can best put our nation’s economy back on the right and prosperous track.”
Politicians too often look at things like a snapshot, he said. “In reality, they are long-running movies that, in a way, never end. So the next scene in this movie is going to become next November’s election. Anybody in office right now or those willing to seek office should bring their message to the people that the last thing the middle class needs is a tax hike.”
But he said Republican cries for a balanced-budget amendment to the Constitution would fade if the economy starts to grow. “If you put in place a tax policy or an economic policy that focuses on prosperity, on entrepreneurship, providing people with the right sense of opportunity to excel in the greatest country in the world, these discussions over a balanced-budget amendment become secondary.
“If you get people to work, if you expand the tax base, if you let small businesses become big businesses, all these debates that cause a lot of angst and anxiety will go by the wayside.”
Fossella lamented that is “sad” that the country’s credit rating is being considered for downgrade. “Basically, folks are saying we could be a bunch of deadbeats.”
Politicians must do everything they can to prevent the credit rating from being downgraded, he said. “The folks in Washington should do everything they can to make sure the United States Treasury, the United States government, really means what it says when it says it’s going to have a AAA rating.
“It’s a dangerous course we have set out on, and to take it lightly would be a big mistake.”
If there is a downgrade, interest rates will soar, which, in themselves would be an indirect tax on the American people, he said.
“The money’s got to come from somewhere, so you either reduce spending elsewhere or you get the money from the American people. Either way would be problematic,” Fossella said.