Penny-on-the-Dollar Transaction Fee Will Eliminate the National Debt
WASHINGTON, Feb. 23 /PRNewswire-USNewswire/ -- Congressman Chaka Fattah (D-PA) today introduced legislation that calls for a penny on every dollar on transactions in the United States economy to be directed to eliminating America's national debt.
The Debt Free America Act offers a dramatic but simple new approach to paying off the debt now escalating past the $12 trillion mark. The breakthrough legislation proposes a 1 percent fee to be levied on all payment instruments including cash transactions, checks, credit cards, those processed through the Federal Reserve Bank, and those collected at the point of sale.
"Interest on the national debt is an extraordinary burden that will crowd out investments on our critical national priorities such as economic development and education," Congressman Fattah said. "The scope of this challenge requires bold and fresh thinking, but it can be done."
The U.S. economy registered $750 trillion in transactions in 2008, according to the Federal Reserve. The Debt Free America Act would place the penny-on-the-dollar fee on those transactions, except stock trades. In addition, taxpayers would receive a 1 percent tax credit for gross income up to $250,000 to offset the impact of the fee on middle class, working and modest-income households.
The Fattah bill not only puts forth a plan to wipe out the national debt, it also goes after the root causes of the debt by establishing the Bipartisan Task Force for Responsible Fiscal Action to control and limit federal spending. In addition, once the national debt is paid down, the transaction fee opens the door to broad-based tax reform, the Congressman said.
"When enacted, the transaction fee I am proposing will generate sufficient revenue to maintain a fiscally responsible budget and allow the federal government to meet its financial obligations while paying down and ultimately eliminating the oversized national debt," he said. "The Task Force will, at the same time, change the way we do business in Washington by forcing more responsible fiscal action on our lawmakers and executive branch."
Fattah, an eight term legislator from Philadelphia and a member of the House Appropriations Subcommittee on Financial Services, is an advocate for pay-as-you-go legislation, known as Paygo, which he voted for in the House.
Fattah said, "There are myriad reasons for our mammoth national debt, often traceable to actions of the previous administration.
"Start with the unfunded $2 trillion tax cut for the wealthiest Americans. Add in $1.08 trillion for off-budget funding of the wars in Iraq and Afghanistan and the jump in unfunded entitlements," Fattah said. "In addition, we can look to the nearly $2 trillion price tag to rescue the economy and bail out America's largest financial institutions."
The proposed Bipartisan Task Force for Responsible Fiscal Action offers a second sensible approach to the national economy, he said. It will develop recommendations to limit and control spending by the federal government for quick action in Congress.
"In order to avoid a financial crisis of epic proportions, Congress must take decisive action to implement a viable fiscal plan that will ensure long-term financial stability," Fattah said. "The Task Force proposes that Congress scrutinize the 'fiscal imbalance' of the federal government by identifying the factors that affect the long-term stability of the U.S. economy, including analyzing potential courses of action, as well providing specific policy recommendations," the Congressman said.
"We can attack this looming crisis with just a penny on the dollar," Congressman Fattah said. "In my hometown of Philadelphia Benjamin Franklin wisely declared that a penny saved is a penny earned. With the Debt Free America Act, a penny paid will earn massive savings for our nation and families so that our children and grandchildren won't be saddled tomorrow with yesterday's debt."
To review the Debt Free America Act, visit: www.fattah.house.gov.
SOURCE Office of Congressman Chaka Fattah