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Garrett: How to deal with our fiscal mess
Sunday, March 7, 2010
BY SCOTT GARRETT
The Record
Scott Garrett represents New Jersey’s Fifth Congressional District.
NEW JERSEY is in a fiscal crisis,” said Governor Christie in his address to the New Jersey Legislature regarding the budget for fiscal year 2010. Christie is staring down the barrel at the brutal consequences of excessive taxing and spending, and he is not cowering under its shadow. And make no mistake, the shadow is intimidating.
New Jersey has the highest state and local taxes in the country in addition to having toll roads and a 7 percent sales tax. Total unfunded pension and medical benefit liabilities are $90 billion because of underpaid pension contributions and astronomical retirement payouts and benefits.
All of this, and New Jersey has a $2 billion 2010 budget gap and a projected $11 billion dollar budget gap for 2011.
The most sobering numbers come from the manner in which New Jersey residents have responded to Trenton’s reckless behavior. A recent study found that more than 300,000 households have departed from New Jersey between 2004 and 2008, taking $70 billion in wealth and more than $1 billion in charitable donations with them.
People are now forced to flee our great state because of grotesque tax hikes levied to support a bloated and unmanageable debt. Although Trenton thinks it has the ability to print money, it has forgotten that taxpayers of New Jersey do not have bottomless pockets.
While Christie is not the first governor to inherit fiscal problems, he is the first in recent memory to deal with them in a direct, honest and collaborative manner. Instead of wishing away the problems of excessive spending and taxation, he is asking lawmakers to stop “protecting their piece of turf” and “join the sacrifice, come to the center of the room and be part of the solution.”
I applaud his efforts and I fully support the governor in his crusade.
As New Jersey prepares to take the difficult steps to find real solutions, those of us serving in Washington, D.C., need to begin confronting the federal government’s similar fiscal problems. Like New Jersey, the federal government’s spending problems are also very real.
According to Moody’s Investors Services, unless there are significant changes in the coming decade, the United States could lose its AAA credit rating. The consequences of this downgrade range from terrible to catastrophic.
Despite a dedicated 12.4 percent payroll tax used to fund it, the federal pension system (Social Security) has promised approximately $17 trillion more in benefits than it can pay for.
Despite projections that the government health care programs (Medicare and Medicaid) are underfunded by $121,000 per person, the Democrats in Congress announced as their biggest domestic priority the creation of a new health care measure.
Despite warnings, such as the one issued by Moody’s, that current levels of borrowing by the federal government are unsustainable, President Obama proposed a budget that would double the national debt in five years.
And despite the president’s calls for bipartisanship, most of the major legislation passed this past year has featured bipartisan opposition and only partisan support.
As unpleasant as they may be, these are the facts and no one disputes them. What were once problems of the future have become problems of the present; the day when Congress and the president will have to come to grips with excessive government spending is quickly approaching.
I hope that when that day comes, we can look to Christie’s bold approach to fixing New Jersey as an example of dealing with the problems in a responsible, collaborative way.
Scott Garrett represents New Jersey’s Fifth Congressional District.
