AVON — U.S. Rep. Todd Rokita had been asked before a recent community forum whether he had good news on the fiscal cliff. His answer - no.
"But it is solvable," the Republican congressman added.
Rokita, who represents Indiana's Fourth Congressional District, was in town this week to discuss what's being called the fiscal cliff - a combination of budget cuts and tax increases related to the 2011 Budget Control Act that raised the nation's debt ceiling.
Those are scheduled to go into effect Jan. 2. If they do, the Tax Foundation estimates Indiana will see a federal tax increase of 5.27 percent, or about $3,653 per household. As well, they predict state employment will drop 1.2 percent.
But what the media is calling a fiscal cliff is more a pothole in Rokita's mind. The real fiscal cliff, he says, is the more than $16 trillion in debt owed by the feds.
"If we're going to change the direction of the things I'm talking about, it's not going to happen from Washington," Rokita said. "It's going to happen by us being on the phone with our families first. We have to get out of our comfort zones and do that quote-unquote hand-to-hand combat - in a very nice and persuasive way - to get this country to live within its means again."
Among Rokita's key points is that nearly 42 cents of every dollar spent by the federal government is borrowed - the largest creditor being China. And of all that spending, only 34 percent is discretionary. Welfare programs like Social Security and Medicare are mandatory, meaning their budgets can't be touched without first reforming the laws that created them.
"No one has the appetite for that," Rokita said. "Until we can get to this autopilot spending, we're not going to be able to affect the deficit. We can't honestly talk about this unless we're willing to reform Medicare, Medicaid, Social Security, and the other welfare programs."
Why do these programs need amending? Because according to the Urban Institute, in 2010 what a couple (making a combined $71,400 annually on average over a lifetime) paid into Medicare was 40 percent of the payout. In 2030, that's projected to be 35 percent. Rokita says that split is currently better for Social Security, but it's going in Medicare's direction.
The congressman also showed a graph, courtesy of the Office of Management and Budget and the Congressional Budget Office, showing U.S. debt held by the public as a share of the economy. On its current path, the curve is nearly vertical, going to the year 2080.
"That's what happens when 10,000 people a day retire into these programs that are unreformed," Rokita said.
Suggestions from the audience included raising the eligibility age before being able to take advantage of these programs. That's an idea Rokita supports, but he said many in the Republican party are afraid to suggest it for fear of alienating senior citizens - one of their last reliable voting blocs.
Another idea he supports is making eligibility in these programs means-tested. That would entail a tax increase for many higher-earners, but the notion is getting popular.
"A lot of us are saying it should be a true safety net for those who need it, not a social program for everybody," Rokita said. "I don't know why this party isn't saying more of that."
wade.coggeshall@flyergroup.com
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