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November 4, 2012

Senator describes biggest challenges to U.S.

BRISTOL — U.S. Sen. Dan Coats, R-Ind., thinks he knows what it will take to get America back on track. Getting there, however, is going to be no easy task.

Coats was the featured speaker at a Greater Elkhart Chamber of Commerce luncheon held Friday afternoon at the Elcona Country Club in Bristol.

During his speech, Coats described what he sees as the two biggest challenges currently facing the United States today: national security and fiscal responsibility.

“Clearly, the biggest challenges for members of Congress, the Senate, and for the next president — whether it’s reelection of this current president or a new president — the two preeminent challenges are one, keeping Americans safe from terrorism and weapons of mass destruction,” Coats said. “But the second one is to address the fiscal situation that our country is in, and the impact that it has not just on the economy, but the impact it has on families, individuals, college students graduating without a job to go to, middle-aged workers being laid off with not necessarily the prospect of being called back ... the devastating personal effects of an economy that is sputtering. So the challenge facing us is pretty immediate.”

In discussing the fiscal situation, Coats first pointed to the so-called “fiscal cliff” the U.S. government will face at the end of 2012, when the terms of the Budget Control Act of 2011 are scheduled to go into effect.

Among the laws set to change at midnight Dec. 31 are the end of last year’s temporary payroll tax cuts, the end of certain tax breaks for businesses, shifts in the alternative minimum tax, the end of the tax cuts from 2001-2003, and the beginning of taxes related to President Obama’s health care law.

“All the economists — liberal, conservative, republican, democrat, nonpartisan — basically say if this is not addressed before the end of the year, the increase in tax rates, which will result in, for a family of four in Indiana, about a $4,100 increase in their taxes on the average,” Coats said, “because tax rates at every level — the lowest to the highest — are all going to increase significantly.”

Coats also referenced the dreaded “sequestration,” or massive across-the-board budget cuts, set to begin this January if Congress and the Obama administration can’t come up with a deal to reduce expected federal budget deficits by $1.2 trillion through 2021.

“So that has to be dealt with in the time between now and the end of the year,” Coats said, “and this lame duck Congress, and whoever will be our current president, will have to deal with that.”

From his perspective, Coats said he sees two ways these dire fiscal issues can be dealt with: either biting the bullet and making the hard decisions needed now to get them solved, or simply kicking the issues down the road and letting the next president and the newly reconstituted Congress deal with it.

“In one sense, trying to cram all this into just a few critical weeks before the end of the year, and do it right, is an enormous challenge that many think cannot be done,” Coats said. “In another sense, kicking it down the road another three, six or nine months continues this dark cloud of uncertainty over the future of the economy, what the tax rates are going to be, what the health care responsibility is going to be.”

Coats said he has talked to people in nearly every niche of the business world, from small shop owners to mid-level and fortune 500 companies based in Indiana, and virtually every response has been the same: I can’t make a long-term decision on behalf of my company when I don’t know what my tax rates are going to be, what regulations are going to come down, what my health care obligations are going to be.

“Kicking this down the road another six months or nine months has a real downside to it,” Coats said, “so you can see the dilemma that we face.”

So what is an ailing country to do?

According to Coats, there are currently four major things that Washington needs to face up to if any of these issues are going to be addressed.

Step One: Cut Spending

“We spend too much money,” Coats said. “Government is bloated, and we’ve got too much bureaucracy. We have to take what Indiana has done, steps necessary to make government more efficient and more effective, more taxpayer friendly. Getting our budget balanced is absolutely imperative.”

Step Two: Comprehensive Tax Reform

“Our tax code is full of literally over 1,000 exemptions and credits and subsidies that benefit a few and not the many,” Coats said. “This is an item that is being debated at the national level for the race for the presidency. Closing those and making the tax code simpler, fairer, more economic growth oriented ... this would stimulate our economy.”

Step Three: Regulatory Reform

“Basically, getting control of a lot of out of control regulatory agencies that are not elected leaders with no accountability to the taxpayer or to the people,” Coats said. “A lot of these are nonsensical, so that has to be part of it.”

Step Four: Entitlements Reform

“We cannot accomplish what we need to do without addressing structural reform for our entitlements,” Coats said. “Those programs are going bust, and it’s not me saying it, it’s the trustees who have a legal obligation to tell you what the status of it is. If they’re not structurally reformed in a sensible way, they’re going to come down. Health care is very much a part of that. If we can’t get a hold of this and it keeps running out of control, we will never be able to deal with our fiscal situation.”

Road map to success or no, Coats said that if any of these plans are to prove fruitful, the country needs strong, courageous representatives willing to stand up and make the hard decisions — not just career politicians only willing to do what it takes to get reelected.

“I think we’re recognizing as a nation that what we need to do is stand up and support those that are willing to stand up and do the right thing, knowing what needs to be done for our country,” Coats said, “and knowing that they’re doing it for the purpose of putting us in a better position for the future.”

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