ROGERS — Getting the economy on track will require deep cuts to the federal budget and a fairer tax system, Sen. Mark Pryor, D-Ark., said Tuesday.
National defense, Social Security and Medicare and Medicaid will account for more than 60 percent of federal spending in 2012, according to pie charts he displayed. Spending in those areas will have to be reduced along with cuts to other programs if Congress hopes to get the budget under control, he said.
“Everybody’s going to get cut,” Pryor said. “We’ve been living beyond our means.”
The two-term senator spoke at a Rogers Rotary Club luncheon in the John Q. Hammons Center.
Pryor said various tax breaks have created a system in which 45 percent of Americans don’t pay taxes.
“It’s hard to have a fair tax system where only about half the people are paying,” he said.
Corporate tax breaks create situations in which companies such as Walmart pay a higher rate than others, he said.
Eliminating some breaks could add more than $1 trillion to the treasury, he said.
The government also can jump-start the economy by helping create jobs, he said. Job creation can occur through financial aid to small businesses and investment in technology, he said.
“Economic growth always follows innovation,” he said.
Sen. John Boozman, R-Ark., said in an email Congress can help create jobs in part by reining in the national debt and creating a less-confusing tax system. The federal debt is $14.6 trillion.
The national unemployment rate in July was 9.3 percent. The rate in Arkansas was 8.5 percent, said Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas.
President Barack Obama is expected in a post-Labor Day speech to introduce a jobs-creation package that could include increased spending on road construction, according to news accounts.
Pryor said Benton County has received $275 million in federal funding in recent years for projects such as interstate and airport construction. Federal money for such projects could be more scarce in future years under a tight economy, he said.
Michael Lindsey, vice president of government affairs for the Rogers-Lowell Area Chamber of Commerce, said local leaders are aware less money will be available for federal projects. However, extending the 18.4-cent federal gasoline tax beyond Sept. 30 could provide money for highway projects, said Lindsay, who attended the luncheon speech.
In an interview later, Pryor said he supports extending the federal gasoline tax, and might consider supporting a one-cent increase.