Mario H. Lopez: What do I want for Christmas? A Government that Works

Not to drag down everyone’s holiday season, but could there be a more dispiriting scene than the current debate in Washington over getting the economy moving again?

It does not matter what the nature of the dispute is; it could be tax policy, spending priorities or the proper role of government. Regardless, our leaders in the nation’s capital are trapped in an endless cycle of blame-shifting and political gamesmanship.

And as the calendar prepares to flip to 2012 and the election cycle grows even more heated, it’s hard to be optimistic that our leaders are ready to confront the challenges facing our nation.

What's lacking? Two things: leadership and vision.

Take the recent dust-up over extending the temporary payroll tax cut for next year. Both Democrats and Republicans offered proposals for extending the tax break. President Obama and the Democrats have sought to extend the cut while taxing higher income earners more heavily; Republicans have offered to extend the tax break, but only if it is paid for by spending cuts elsewhere.

What is disappointing about the payroll tax dispute is that it’s an argument over a policy many experts agree will do little to spark economic growth. Why? Because a temporary payroll cut does not give job creating small businesses an incentive to hire new workers and expand for the long-term.

Of course even a temporary payroll tax cut is better than nothing, and it does put a little more money in people’s pockets, rather than in the hands of the government, at a time of real hardship.

But if you’re looking to breathe life into an economy in critical condition, a temporary payroll tax cut won’t get the job done.

That is why it is especially disappointing that President Obama has chosen to turn the payroll tax cut into a campaign issue: not only is likely to continue his record of implementing policies that have failed to stimulate the economy, but it gives Americans false hope that businesses will create desperately needed jobs.

The debate over the payroll tax cut is also a forbidding omen for the next big tax debate that will take place next year over tax increases that are slated to be implemented in 2013. Likewise, the sunset provisions in the expiring tax cuts are a lingering problem, as those provisions make it difficult for businesses to plan for the future. I’d prefer to see the expiring tax rates made permanent so that business owners can plan with greater certainty.

The positions the President and Congress have staked out in this current debate are a preview of how next year’s debate will shape up. That means more jockeying for political advantage, more pointing of fingers and more poor results for the American people.

Unfortunately, the debates over tax policy are overshadowing the real problem, which is runaway government spending. Our national debt recently topped $15 trillion—the highest in our nation’s history—while the last fiscal year’s budget deficit clocked in at $1.3 trillion. In August, the credit rating firm Standard & Poor’s lowered the rating on U.S. debt, the first time that’s ever happened, to signal low confidence in our nation’s fiscal management.

There is no end in sight to our spending binge. But rather than tackle this problem, which would go a long way toward restoring confidence and getting the economy moving, Congress and President Obama have decided to squabble over issues like the temporary payroll tax cut.

Is there anything we can be optimistic about? Sure. We have recently seen a slight decrease in the unemployment rate, and there are some indications that the sluggish economy may be showing signs of additional growth. The signs of recovery are still tenuous, given the continued financial unrest in Europe and elsewhere, but at least it is something.

The good news is that the U.S. economy, even in the darkest and most difficult times, continues to prove itself the most productive and resilient the world has ever seen. But the fact is, that resilience is in spite of our leadership in White House and the Congress—not because of anything they’re doing.

It does not have to be this way. Washington needs to stop tinkering around the edges and get serious about focusing on economic growth, and that means getting serious about reining in government debt and spending. That would be a gift that would bring us all a little holiday cheer.

Mario H. Lopez is the President of the Hispanic Leadership Fund, an advocacy organization dedicated to promoting limited government, individual liberty, and free enterprise.

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