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Democrats give up on the budget
Written by on July 12, 2010, 04:25 PM
House Democratic leadership has given up on passing a budget. Instead of the standard budget that projects revenue and spending out five years, the House considered only a weak measure to restrict spending by the Appropriations Committee.
This marks the first time since passage of the 1974 Budget Act that the House has failed to consider a budget resolution. This isn't to say that Congress has always passed a budget. Sometimes the House and Senate have been unable to reach an agreement on a joint budget. This is the first time, however, that the House didn't even try.
The sad irony is that we need a real budget now more than ever before. The June unemployment report showed that an additional 125,000 Americans lost their jobs last month.
Many economists thought that we would be well on our way to recovery by now. The Obama administration even dubbed this as "Recovery Summer" and White House advisors are fanning out across the country to promote the government stimulus bill.
One of the most frequently cited reasons for the sluggish job market is uncertainty. Businesses, worried about a second recession and increased taxes, are holding back on hiring. Individuals, worried about losing their jobs, are holding back on consumer spending.
Congress itself breeds this uncertainty by failing to consider a long-term budget and by calling for increased taxes on job creators. President Obama, while on the campaign trail, frequently promised that he would not raise taxes for those making less than $250,000 "by one dime."
But tax policy starts on Capitol Hill, not the White House. President Obama's allies in the House and the Senate are saying they are not bound by this promise. House Majority Leader Steny Hoyer (D-Md.) hinted at increasing marginal rates for middle income taxpayers and introducing a new value-added tax in a recent policy address. Sen. Dianne Feinstein (D-Ca.) speculated that increased taxes should begin at $200,000 annual income saying, "With the debt and deficit we have, you can't make promises to people."
For most people that amount of annual income still sounds like a lot of money. The reality is, however, that many small businesses pay taxes at the individual rate. They run their business and pay employees with this income and when the government takes more, they have less for payroll or new equipment.
The 2001 and 2003 tax cuts expire in just six months, the estate tax returns to Clinton-era levels at the same time, and so far we have no plan from Congressional leadership.
I don't believe our growing deficits are a result of taxes being too low. Our growing national debt is a result of unprecedented levels of government spending.
In 1990, the government spent an inflation adjusted $22,027 per household. Over ten years, this level remained steady and economic growth meant that we had four years of budget surpluses. As a member of the House Budget Committee during those years, I helped write these balanced budgets. We resisted the urge to increase spending and paid down the debt four years in a row.
Today, we are spending $30,543 per household and expect to be spending over $35,000 by the end of the decade. Tax revenue cannot keep up with all this increased spending.
I believe that we can return our government to a sensible level of spending that holds down our deficit and allows private sector businesses to flourish. The alternative is to give the government even more control over how our economy runs.
In the face of 125,000 Americans losing their job this month, all President Obama had to offer was a new government broadband Internet program projected to create 5,000 jobs. We need 13 million new jobs to return to full employment. A small number of expensive government jobs will never get us there. Only providing a stable climate for private sector businesses can truly revive our economy.
This is no time to give up on the budget. This is the time to provide a long-term plan that brings our spending back in line with historical averages and establishes tax policy that gives businesses the certainty to hire and invest.
CLICK HERE to view original post.
This marks the first time since passage of the 1974 Budget Act that the House has failed to consider a budget resolution. This isn't to say that Congress has always passed a budget. Sometimes the House and Senate have been unable to reach an agreement on a joint budget. This is the first time, however, that the House didn't even try.
The sad irony is that we need a real budget now more than ever before. The June unemployment report showed that an additional 125,000 Americans lost their jobs last month.
Many economists thought that we would be well on our way to recovery by now. The Obama administration even dubbed this as "Recovery Summer" and White House advisors are fanning out across the country to promote the government stimulus bill.
One of the most frequently cited reasons for the sluggish job market is uncertainty. Businesses, worried about a second recession and increased taxes, are holding back on hiring. Individuals, worried about losing their jobs, are holding back on consumer spending.
Congress itself breeds this uncertainty by failing to consider a long-term budget and by calling for increased taxes on job creators. President Obama, while on the campaign trail, frequently promised that he would not raise taxes for those making less than $250,000 "by one dime."
But tax policy starts on Capitol Hill, not the White House. President Obama's allies in the House and the Senate are saying they are not bound by this promise. House Majority Leader Steny Hoyer (D-Md.) hinted at increasing marginal rates for middle income taxpayers and introducing a new value-added tax in a recent policy address. Sen. Dianne Feinstein (D-Ca.) speculated that increased taxes should begin at $200,000 annual income saying, "With the debt and deficit we have, you can't make promises to people."
For most people that amount of annual income still sounds like a lot of money. The reality is, however, that many small businesses pay taxes at the individual rate. They run their business and pay employees with this income and when the government takes more, they have less for payroll or new equipment.
The 2001 and 2003 tax cuts expire in just six months, the estate tax returns to Clinton-era levels at the same time, and so far we have no plan from Congressional leadership.
I don't believe our growing deficits are a result of taxes being too low. Our growing national debt is a result of unprecedented levels of government spending.
In 1990, the government spent an inflation adjusted $22,027 per household. Over ten years, this level remained steady and economic growth meant that we had four years of budget surpluses. As a member of the House Budget Committee during those years, I helped write these balanced budgets. We resisted the urge to increase spending and paid down the debt four years in a row.
Today, we are spending $30,543 per household and expect to be spending over $35,000 by the end of the decade. Tax revenue cannot keep up with all this increased spending.
I believe that we can return our government to a sensible level of spending that holds down our deficit and allows private sector businesses to flourish. The alternative is to give the government even more control over how our economy runs.
In the face of 125,000 Americans losing their job this month, all President Obama had to offer was a new government broadband Internet program projected to create 5,000 jobs. We need 13 million new jobs to return to full employment. A small number of expensive government jobs will never get us there. Only providing a stable climate for private sector businesses can truly revive our economy.
This is no time to give up on the budget. This is the time to provide a long-term plan that brings our spending back in line with historical averages and establishes tax policy that gives businesses the certainty to hire and invest.
CLICK HERE to view original post.
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