Johnny Isakson: Use debt-ceiling debate to reach accord on deficit reduction

Congress should use this year’s debate over raising the debt ceiling to reach a deficit-reduction proposal that will require candid discussion of across-the-board sacrifices – including the elimination of many tax exemptions, U.S. Sen. Johnny Isakson told a group of business leaders on Monday.

U.S. Sen. Johnny Isakson/AJC file

U.S. Sen. Johnny Isakson/AJC file

The morning address to the Cobb County Chamber of Commerce was the first of two groups Isakson was to deliver his message. During a second appointment with the Atlanta Press Club, Isakson endorsed the idea of allowing states to declare bankruptcy.

Isakson, who won a second term in November, told his morning audience that the federal deficit threatens national security. If nothing is done, he said, “there’ll be no commerce to chamber.”

Said Isakson:

”We don’t have much time. In fact, I think we’ve got nine months to begin the process. By the end of September, the 2012 elections will be driving what everybody does in Washington D.C. And getting something done is going to be very, very difficult.”

He recommended using the December proposal of the 18-member, bipartisan deficit reduction commission as a starting point. That panel issued a prescription of serious spending cuts, a broad overhaul of Social Security, and the elimination of much-cherished tax exemptions.

Isakson, who has championed home mortgage interest deductions in the past, said everything must be on the table. (U.S. Sen. Saxby Chambliss said much the same thing last week. )

Isakson said he was working on a bipartisan approach with U.S. Sen. Jeanne Shaheen, D-N.H. He’ll be sitting with her during Tuesday’s State of the Union speech by President Barack Obama.

Passing any measure will require a change in the way we talk about issues, Isakson said. This was the meat of his speech:
Said Isakson:

”We’ve got to change the process by which we spend, tax and entitle…..it’s going to take shared sacrifice. You’re going to have to sacrifice. Public officials like me are going to have to sacrifice. Beneficiaries of entitlements are going to have to sacrifice.

“The media is going to have to sacrifice. Everyone always perks up when I say that. We’ve gotten into an environment where we take isolated sentences in a speech, pull them out, and it becomes the whole speech. And it’s a slip-up it becomes the whole image of the public official.

“You take one tax benefit and people dwell on it on an hourlong cable show at night. Next thing you know, it’s the entire subject. We isolate individual parts of the problem and never get to the macro solution. What’s micro in our conversation becomes macro in our country. And that’s just not right.

“But it’s easy to do. It’s easy for me to do when I’m running against my opponent, trying to find one little bad thing. But I don’t like to do that….

“Same thing with our solutions. We need to give them enough time to be heard, to be debated, and to be shared, for everyone to understand if shared sacrifice will work.”

Isakson said the federal government needs to build up a cash reserve system, rather than tapping the deficit in emergencies. He also noted that the deficit-reduction commission recommended a shift to biennial budgeting, which Isakson said he has backed for six years.

On the crucial issue of taxes:

”The deficit commission made a terrific recommendation on tax reform. This is where the shared sacrifice comes in. ..It says first you do away with all deductions – except the child deduction and the family deduction on your tax return. You might add a couple back, but you’ve got to pay for them if you do.

“But then you lower the corporate rate from 35 percent to 28 percent. And the individual from 35 percent to a top rate of 23 percent….If you do that, you gain a trillion dollars which you automatically put against the debt. And you declare that any increase from revenues that come from the reduction of taxes have to go against the deficit and the debt….

“Some parts I like, some parts I don’t like. But I’m not willing to pick out the things I don’t like until we all get in the boat together and share the sacrifice.”

Cobb County sheriff’s deputies were a substantial presence at the chamber event. Two escorted Isakson back to his car — a sign of how the Gabrielle Giffords shooting has shaken things up.

The Associated Press has filed these early paragraphs about Isakson’s Atlanta Press Club appearance:

Sen. Johnny Isakson says bankruptcy could be a good solution for struggling states straining under pension debt.

The idea has become part of a growing discussion about how states will grapple with their budget woes, some due in large part to pension payments.

…Isakson said bankruptcy is not a term to fear but can be a fix. He says following the example of private sector companies like Delta Air Lines, which filed for bankruptcy in 2005 and emerged two years later.

- By Jim Galloway, Political Insider

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34 comments Add your comment

Cutty

January 24th, 2011
11:59 am

Johnny boy and the rest of the republican party have failed to explain how cutting taxes a tally increases the revenue of the federal government. Yes, individuals and corporations get to keep more of their money, but it has been proven that the federal treasury doesn’t increase because of it.

If u want to keep more of your own money, then just say that. But you can’t claim that government coffers will increase that way. The last decade proved this myth was wrong.

Road Scholar

January 24th, 2011
12:07 pm

“Public officials like me are going to have to sacrifice. ”

Does that mean you are ready to accept the deletion of your salary and healthcare for serving in the Senate?

“..It says first you do away with all deductions – except the child deduction and the family deduction on your tax return. ”

Why should a family get a child deduction? They have children based on their own lifestyle and goals. Remember the conservative charge…that the poor and unmarried have additional children to get more money?

What about “married” deducions for gay couples? Remember separation of church and state.

Honestly, the tax laws need to be simplified and uncluttered…but for all. But I don’t get the point by reducing rates, income grows; is that solely due to the loss of deductions? Or is it a hidden tax increase?

Oh with the simplified tax rules, does that add tax accountants to the unemployment lines?

RetiredSoldier

January 24th, 2011
12:11 pm

Cutty-

Johnny boy? Guess you didn’t listen to Obama in Tuson. Is that the way democrats should be refered to? You are dismissive his ideas, what is your solution? Maybe it’s to stick your head in the sand and spend like crazy. Opps, nevermind, that’s what we have been doing for the past two years.

Econ major

January 24th, 2011
12:20 pm

Cutty ,the only myth here is the one you stated.Is it a 100%? NO Nothing in econ. is, but historically its dead on.

Just Nasty & Mean

January 24th, 2011
12:23 pm

Johnny…we hardly knew ya…. You had all the constitutional conservative and independent support a US Senator from Georgia could ask for. But then…during the Lame Duck, 30 days after being reelected, …..you sided with the dems and voted for START, putting the USA at a significant disadvantage to the Russians. .

Sorry Johnny. “Fool me once shame on you…..fool me twice–Well—-IT AIN’T GONNA HAPPEN AGAIN”

jconservative

January 24th, 2011
12:34 pm

Good luck to the senator and his efforts to reduce spending and improve the tax system. But please lets not talk or debate in code. Lets call a spade a spade.

Re taxes: eliminate deductions and lower the rate. Lets tell the truth. The truth is that taxes will go up. OK, I have no problem with taxes going up. I do have a problem with trying to pull the wool over the voters eyes. If you want to raise taxes, just say “Raise Taxes”.

Cut spending? I have been a pusher for cuts in spending since Reagan was sworn in and spending mushroomed through the roof. I am thrilled others are now aboard.

Social Security gets handled by raising the eligibility age and means testing the proceeds. Medicare gets handled by raising the eligibility age and repealing the Bush 43 Drug plan. Defense gets cut 15% across the board from its 2009 level.

What’s in your plan?

Cutty

January 24th, 2011
12:59 pm

Don’t get your pants all in a wad. It was a figure of speech. I never attacked the man. All I hear from the right is tax cuts helps the economy, but it didn’t when Bush was President. I’ve never heard a coherent explanation of why tax cuts are good. As a member of congress how is decreasing revenue a good think?

I’m not an economist and don’t claim to be, but as a breadwinner I don’t see how working less hours will increase my family’s savings account. You all can be condescending and turn this any way you want but I think my question is legitimate.

bart

January 24th, 2011
12:59 pm

EVERYTHING must be on the table…Social Security, Medicare, Medicaid, tax reform, and defense spending. If the Repubs are serious about deficit reduction, then, yes, even defense spending has to be looked at. If we got out of the 2 unwinnable wars we are fighting, then the deficit could be significantly reduced. But that’s not going to happen. The “trickle down” theory that some Repubs are still touting was proven to be a lie under both Reagan and Bush #2. If we the people put enough pressure on our senators and representatives, then they will get serious about REAL deficit reduction, but not before.

Last Man Standing

January 24th, 2011
1:13 pm

* No more foreign aid.

* Congressmen and Senators accept an immediate 25% cut in salary.

* No seperate retirement or medical plan for Congressmen and Senators.

* Immediately begin drilling for oil here to eleiminate dependence on foreign oil.

* Implement the “Fair Tax”.

RetiredSoldier

January 24th, 2011
1:15 pm

Cutty-

Not in a wad, but your lack of respect is typical of many liberals. Decreasing revenue is a good thing because a smaller government does less harm. Tax cuts usually provide more revenue, see Reagan and Kennedy, but spending cuts equal to the tax cut should be enacted at the same time. Why? If the tax cut does not result in increased revenue, then the spending cuts equal out. If the tax cuts do result in increased revenue then apply the excess to our debt.

Equating a tax cut to working less hours is not appropiate. When business and individuals have nore money to spend via a tax cut, then it is spent in the economy, more business activity equals more revenue to the government.

RetiredSoldier

January 24th, 2011
1:18 pm

Bart-

You need to talk to Obama about the wars.

Last Man-

Agree one hundred per cent. Please include the senior members of the administration to the 25% reduction,

Chuck

January 24th, 2011
1:34 pm

That idea is a start but let’s not fool ourselves into thinking that tax as a single subject is the solution to our ailments. The American people expect you to address ALL of our ailments… JOBS being number-1. I can’t pay taxes if I have no JOB!

Cutty

January 24th, 2011
1:38 pm

So calling someone named Johnny, Johnny boy is disrespectful and common of liberals, but accusing the President of being a foreign-born Kenyan is fine and even viewed as patriotic of conservatives?? Dude get over yourself. Veteran or not you’re wrong on this one.

Cutty

January 24th, 2011
1:40 pm

…. and based on ur assumptions, the stock market is doing great right now so where are the jobs and spending activity??

Hazel

January 24th, 2011
1:46 pm

End all farm aid.
End senior exemptions.
End tax-free churches.
End mortgage deductions.
Stop states getting more money out of the federal govt’t than they put in.
Assess property at full value

“except the child deduction and the family deduction” – whats so special about them? Can’t afford a kid, don’t have one.

eli

January 24th, 2011
1:55 pm

By all means, use the debt ceiling as a wake up call to remind America that taxes are too low!

I was around for the 50s, the economy boomed and taxes were at an all time high. I am not suggesting that high taxes caused the booming economy (although, arguably, high tax rates may encourage people to work harder and produce more income to make up for what is paid to the government)…just that tax rates and economic growth probably are not as correlated as right-wingers want to pretend they are.

khc

January 24th, 2011
2:06 pm

to go to lower corporate tax, phase out all corporate tax breaks, same with mortgage deduction (immediately would cause housing sector even more loss); cannot means test ss…not right for someone to pay in then eliminate their benefits….

Last Man Standing

January 24th, 2011
2:27 pm

It is ironic that a comment I made many weeks ago contained the word “boy”. The comment was not posted and I was advised that it was “sensitive” and might “offend someone”. Apparently, referring to a U.S. Senator as “Johhny boy” is OK. Oh, wait a minute! He is a Republican and they aren’t on the “approved list” of the AJC.

[...] This post was mentioned on Twitter by Kelly McCutchen, luther cox. luther cox said: Johnny Isakson: Use debt-ceiling debate to reach accord on deficit reduction | Political Insider http://bit.ly/gBvKO0 [...]

RetiredSoldier

January 24th, 2011
3:05 pm

Dude, I meant Cutty-

The stock market is a early indicator of where the economy is believed to be headed by investors. If you trust that then you are certainly libel to be sorry at some point. I suspect if you ask a stock guru why the market is so far ahead of the rest of the fundamentals they would say, beats me but I’m on the train!.

I “got over” myself a long time ago. I just believe in holding people to the same standard they try to hold others to. Don’t know your age, but try the military if you are young enough, it just might change your perspective.

Cutty

January 24th, 2011
3:24 pm

Sheesh, you reverse racism folks don’t have a clue about racism.

This nation IS a bunch of whiners always trying to find a wrong. And no I didn’t go to the military I went to college and avoided the draft like Saxby, Dick, et al. Most liberals like Kerry served their time tho.

Intown

January 24th, 2011
4:10 pm

1) I’m not sure I see the connection between tax cuts and revenue generation. If you charge less in taxes, you are probably going to bring in less revenue. Duh.

2) Won’t declaring bankruptcy to escape pension benefits hurt workers (who earned lower wages over many years in exchange for a defined pension). How are these folks going to live in their later years? When Johnny and Saxby agree to live like that, I’ll support it.

RetiredSoldier

January 24th, 2011
4:17 pm

Cutty-

Now I’m a racist? Unreal. So did most conservatives like Bush senior and Bush junior. Oh, and like me. You missed out on the best time of your life.

RetiredSoldier

January 24th, 2011
4:20 pm

Intown-
1. Read my 1:15 post.

2. The states should have thought about that before they ran up unsustainable debt.

blue dog

January 24th, 2011
4:24 pm

Okay…we all sacrifice…and when Georgia files bankruptcy…I sacrifice even more because I lose my pension that I worked for 30 years at a low paying job that promised that even if I cannot afford a 401K with this low salary…I will be ok because I will be getting the pension…and now Johnny…because you GOP’ers don’t want to raise any taxes to cover your contractual obligation to me…you act like any other deadbeat and simply not pay your debts. No…you can never consider the obvious…raise revenue sufficient to meet your obligations…what a government.

RetiredSoldier

January 24th, 2011
4:31 pm

blue dog-

Get a grip. First, Georgia is no where close to going under. The states that I have heard about is CA, IL, NY, PA and maybe NJ. Not Georgia.

Second, a U.S. senator has absolutely nothing to do with state taxes.

Third, have you ever thought that a government might reduce spending to meet a shortfall rather than raise taxes? Oh no, I’ll be struck down for being a heretic for this last sentance.

LMAO

January 24th, 2011
4:36 pm

Let states file bankruptcy is hog wash. I have to pay my debts or I’ll lose everything I’ve worked for. Now that the state is under Republican leadership and they don’t know what to do it’s okay clean off the ledger so more debt can be accrued? Bull pucks!!!

blue dog

January 24th, 2011
4:53 pm

in town

Thank you for recognizing the devastating consequences of allowing states to declare bankruptcy to us pensioners. Johnny makes that comment as if he is talking about what he is having for lunch…just an offhand comment….not one word about it ruining our lives…nothing about doing what’s both morally and legally right. If pensions were too generous in some states…begin lowering the benefit for new hires…like they did in Georgia beginning in Jan 2009.
My concern is if other states file BR, then states like Ga will simply underfund their pension funds to artificially create the same crisis necessary to also, declare BR…all in the name of “smaller government”…the GOP mantra…the hidden meaning of which is…no government.

khc

January 24th, 2011
5:16 pm

under perdue they purposely underfunded pensions….his two top aides were bankers…who know how to screw folks

blue dog

January 24th, 2011
5:37 pm

Khc

Exactly my point…
Zell screwed state employees in the early 90’s, permanently eliminating all career path raises…now this…

Cutty

January 24th, 2011
5:41 pm

What other reason would u be up on arms over my comment other than assuming it was racist? And college was the best years of my life. To each his own. I’ll give you Bush Sr. but we know Junior didn’t see any parts of a war.

Upside Down

January 24th, 2011
7:59 pm

“…..it’s going to take shared sacrifice. You’re going to have to sacrifice.”

Nice concept in theory but it won’t happen. No one’s willing to have his ox gored.

“Sen. Johnny Isakson says bankruptcy could be a good solution for struggling states straining under pension debt.”

Horrible idea. Any state that went bankrupt would, among other consequences, see its bond ratings go into the toilet, and state taxes would go through the roof. Better idea: make the states live within a budget and spend no more than they collect.

ga female

January 24th, 2011
10:47 pm

Johnnie is a morally bankrupt person, right before Christmas, his wife Susan went up to their Nanny of 13 years and told her they need to cut costs and cut her hours two zero for the next two weeks. I overheard her telling my Nanny. I let my nanny tell her that since she was being layed off for two weeks due to a work slow down by her employer, Senator Isakson that she was eligible to go file and collect unemployment for those two weeks. Perhaps, she might want to call Mrs. Isakson and let her know that as soon as she filed for unemployment to support her family with it was going to be a public record. Amazingly, Susan Isakson quickly called back the nanny that her husband thought it over and since she had been their Nanny for 13 years, they would go ahead and pay her and even pay her extra since it was the holidays. This scumbag was going to not pay the Nanny for two weeks after he had voted himself the Millionare tax breaks. He had gotten himself at least 2% off his Social Security withholding. That alone was over $4,000, certainly more than double the Nanny’s pay.

Anyone who doesn’t think anything Johnny Isakson is promoting isn’t self serving is a fool.

bob

January 26th, 2011
3:38 am

don’t see how the statement .. don’t fear bank rup….if you are a public employee retiree..he points to a company bank rup. model…where they company can break its contract with employees….not pay the retirement benefits….how does that make us not fear…then the feds take the money from cutting retiree benefits and keeps on spending….think about senators and reps have a lifetime income from the first day they are elected