America would have been better off driving off the fiscal cliff, says Rep. Mick Mulvaney.
It would have only taken one paycheck of higher taxes to spark an outrage that would have placed the focus on the real issue, Mulvaney said: controlling federal spending.
It would have driven an outcry to change things, Mulvaney said Wednesday from his Washington office.
Late Tuesday, Mulvaney voted against a bill that will protect 98 percent of Americans from higher federal income taxes. The bill passed 257-167 in the House, averting deep federal budget cuts as well.
Had the bill been limited to just taxes, Mulvaney said he could have voted yes.
On taxes, it was a good compromise, he said. In addition to the income tax provisions, the bill made changes in the estate tax and indexed the alternative minimum tax to inflation.
But the bill increased spending by $330 billion adding $4 trillion to the national debt over the next 10 years and there was no way the Republican from Indian Land and a tea party conservative said he could support it.
Included in the spending is the extension of emergency unemployment benefits benefits that are essential for York County residents, said Pat Calkins, chairwoman of the York County Democratic Party.
This shows he is continuing his practice of obstruction, she said. Mulvaney is not representing the residents of South Carolina.
Dick Harpootlian, chairman of the South Carolina Democratic Party, said Mulvaney and tea party Republicans are more interested in the symbolism of shrinking government and cutting spending than real reform.
Their extremism is the most severe threat to our country, Harpootlian said.
Mulvaneys vote, Harpootlian said, shows he doesnt care about the average American.
U.S. Sen. Lindsey Graham was the only Republican member of South Carolinas delegation who voted for the last-minute package, saying Congress had to act to prevent catastrophic consequences.
Sen. Jim DeMint, days before he leaves office, did not vote after saying that a lame-duck session of Congress with dozens of outgoing lawmakers shouldnt vote on such an important issue.
GOP representatives vote no
In the House, Mulvaneys Republican colleagues also voted no.
House Assistant Democratic Leader Jim Clyburn of Columbia, the states only Democratic member of Congress, voted yes.
Rep. Tim Scott, R-Charleston who will be sworn in as South Carolinas junior U.S. senator Thursday after his appointment to replace DeMint by Gov. Nikki Haley said he could not vote for the fiscal cliff deal because for every dollar in spending cuts, there are 41 dollars in tax hikes. The can continues to be kicked down the road.
Overall in the House, 151 Republicans and 16 Democrats voted against the deal, while 85 Republicans and 172 Democrats voted for it. The Senate passed the measure by an 89-8 vote, with five Republicans and three Democrats opposing it.
One of the compromises in the bill was increasing the income tax rate for those making more than $400,000 for individuals or $450,000 for married couples.
The change fulfills President Barack Obamas campaign pledge to raise taxes on the wealthy. He had sought a lower income threshold. The change is expected to raise $620 billion in revenue, according to Congress Joint Committee on Taxation.
The bill also averted, at least temporarily, deep automatic cuts in federal spending which were set to begin Wednesday.
Theft in Washington
Mulvaney said trading increased spending and deficits for lower taxes is not a compromise, but a formula for economic collapse.
This is how you buy votes in Washington, Mulvaney said.
To reach a compromise, you raise taxes and increase spending, he said.
While the tax compromise was a fair deal, the additional spending was so typically Washington, Mulvaney said.
Mulvaney called the new spending, without the intent of ever paying it back, theft. It is what we have been doing for too long in Washington.
The lack of too few spending cuts concerned Republicans, but they adopted the plan out of the concern that scuttling it could throw the nations slowly improving economy into a recession.
Mulvaney said Republicans allowed ourselves to be pushed into the corner.
Mulvaney was as frustrated with his party as he was Tuesdays vote.
He said there had been strong talk Tuesday night about the debt ceiling and reducing spending.
There was tough talk from Republicans, but our actions belie tough talk, he said.
Mulvaney said he was disappointed that former vice presidential candidate Rep. Paul Ryan voted for the bill.
Mulvaney said when he was elected, there were about 20 congressmen who were committed to spending reform. He said the group has grown to about 35.
But there is an element of the party that has never been willing to recognize we (House Republicans) are in the majority because of the tea party, which he described as people who want smaller, more fiscally responsible government.
It is entirely possible that the next decision we make will be more fiscally conservative, but in the last two years I havent seen fiscally conservative decisions put into action, he said.
Debt ceiling talks still to come
The bill does not address the debt ceiling, setting up another showdown.
Obama has urged a little less drama when Congress and the White House debate increasing the governments debt, now at $16 trillion.
Mulvaney said he could vote to increase the debt ceiling, but only if it was tied to structural changes in entitlements such as Social Security, Medicare and Medicaid.
Mulvaney said the only way to control spending is to reform these entitlement programs.
Reforming entitlement programs will require means tests where benefits are tied to income, calculating the consumer price index based on the change in wages, not the price of goods, and changing the age to quality for benefits, he said.
All three will help lower the cost of the programs, he said.
Mulvaney said under this proposal the wealthy would pay more for Medicare and be phased out of Social Security benefits.
Economist: Reform not likely soon
Mark Vitner, an economist with Wells Fargo Securities, said Mulvaney is on target with the need to reform entitlement programs.
But he said actions are not likely soon because Social Security and Medicare wont go broke tomorrow. Nothing gets done in Washington until you reach a deadline, pass a deadline. Entitlement reform is like a resolution to lose weight.
While the bill that passed Tuesday will protect an estimated 98 percent of Americans from an income tax increase, it does not reduce their tax liability.
Most will pay more in federal taxes in 2013 because the temporary reduction in the Social Security payroll tax expires. The 2 percentage point reduction was worth about $1,000 to a person making $50,000 a year.
Obama and Congress reduced how much workers pay into the system in 2011 and 2012.