A Tax, Borrow, and Spend Approach Won’t Fix the Economy
http://www.aframnews.com/html/interspire/articles/187/1/A-Tax-Borrow-and-Spend-Approach-Wont-Fix-the-Economy/Page1.html
Sen. Kay Bailey Hutchison
Kay Bailey Hutchison is the senior U.S. Senator from Texas and is the senior Republican on the Senate Committee on Commerce, Science & Transportation. By Sen. Kay Bailey Hutchison
Published on 03/9/2009
When Congress was presented with a massive spending bill as the first major piece of legislation under the new Administration, many lawmakers, myself included, balked at the trillion dollar price tag. As massive as the stimulus legislation was, it was merely the preamble to a series of proposed big government tax and spend initiatives. On the docket is the largest budget in the history of our nation, a proposal that will raise taxes and swell the national debt, and an Omnibus Appropriations bill that will, for the first time in our nation’s history, spend more than $1 trillion for annual appropriations.
When Congress was presented with a massive spending bill as the first major piece of legislation under the new Administration, many lawmakers, myself included, balked at the trillion dollar price tag. As massive as the stimulus legislation was, it was merely the preamble to a series of proposed big government tax and spend initiatives. On the docket is the largest budget in the history of our nation, a proposal that will raise taxes and swell the national debt, and an Omnibus Appropriations bill that will, for the first time in our nation’s history, spend more than $1 trillion for annual appropriations. With families and businesses struggling to make ends meet, the last thing Congress should attempt to do is tax, borrow, and spend our way out of one of the most challenging economic circumstances in a generation.
At the end of February, the Administration presented its $3.6 trillion budget blueprint for 2010. Rather than prioritize spending, the plan proposes a $1.75 trillion deficit, the highest since 1945, when America was in the throes of WWII. While the budget plan bears some meritorious spending, funding for worthy projects is overshadowed by twin liabilities: tax hikes and deepening debt.
First, in lieu of spending restraint, the budget will levy a $1.4 trillion tax increase to partially fund an ambitious agenda that is teeming with initiatives that, given our economic state, are low priority. And those who will be hit hardest are small businesses. Under this massive tax hike, economists predict that hiring will slow and the unemployment rate will continue to escalate. Savings and investment will be discouraged. And our nation’s entrepreneurial spirit will be stifled.
Second, the budget will raise our rapidly accumulating national debt to perilous new heights. Today, the United States has a debt of $10.8 trillion. The Administration projects that amount will rise to $14 trillion next year; to $17.1 trillion in less than five years; and to $23.1 trillion dollars in a decade. We are dangerously approaching a situation in which we have so much debt that foreign investors will not buy it without a significant interest rate hike to protect them against increased risk. Furthermore, the debt we incur today will take years to bring down to a manageable size. Is this what the “New Era of Spending Responsibility” (as the budget blueprint is titled) looks like?
In early March, the Senate considered the Omnibus Appropriations bill, a piece of legislation to fund the government from now to October 1, 2009. It spends over 8 percent more than what Congress approved for FY 2008, over twice the rate of inflation. Democratic leaders in Congress pushed for the swift completion of this bill, refusing to allow passage of any amendments.
Most egregiously, the Omnibus bill includes 122 programs that not only are receiving astonishing increases over prior year appropriations levels, but were also funded in the Stimulus bill, passed in February. A more prudent approach would have been to pass the annual Omnibus bill before crafting the $1 trillion Stimulus measure so we could guard against this duplicative spending. To that end, I introduced an amendment to this Omnibus bill that would have sent it back to the Appropriations Committee to bring the total spending level back down to the FY 2008 level with adjustments for inflation. The amendment would have required duplicative spending in the Stimulus and the Omnibus to be struck.
The Stimulus bill was merely the beginning. We will soon have to consider the $1 trillion budget, including a $634 billion “down payment” on the Administration’s universal health care plan. On the horizon lies the Administration’s housing plan, which will reportedly cost upwards of $250 billion. And in the coming months, the White House will likely ask for another $1 to $2 trillion to shore up the financial sector.
I, along with so many Americans, am in sticker shock over the trillions of dollars at play in these efforts. Congress should pause and consider the consequence of every dollar we tax, borrow, or spend. Will these policies spur growth? Will they create jobs? Will they protect American families and small businesses? If not, the President must step back and reconsider these initiatives before it is too late.
At the end of February, the Administration presented its $3.6 trillion budget blueprint for 2010. Rather than prioritize spending, the plan proposes a $1.75 trillion deficit, the highest since 1945, when America was in the throes of WWII. While the budget plan bears some meritorious spending, funding for worthy projects is overshadowed by twin liabilities: tax hikes and deepening debt.
First, in lieu of spending restraint, the budget will levy a $1.4 trillion tax increase to partially fund an ambitious agenda that is teeming with initiatives that, given our economic state, are low priority. And those who will be hit hardest are small businesses. Under this massive tax hike, economists predict that hiring will slow and the unemployment rate will continue to escalate. Savings and investment will be discouraged. And our nation’s entrepreneurial spirit will be stifled.
Second, the budget will raise our rapidly accumulating national debt to perilous new heights. Today, the United States has a debt of $10.8 trillion. The Administration projects that amount will rise to $14 trillion next year; to $17.1 trillion in less than five years; and to $23.1 trillion dollars in a decade. We are dangerously approaching a situation in which we have so much debt that foreign investors will not buy it without a significant interest rate hike to protect them against increased risk. Furthermore, the debt we incur today will take years to bring down to a manageable size. Is this what the “New Era of Spending Responsibility” (as the budget blueprint is titled) looks like?
In early March, the Senate considered the Omnibus Appropriations bill, a piece of legislation to fund the government from now to October 1, 2009. It spends over 8 percent more than what Congress approved for FY 2008, over twice the rate of inflation. Democratic leaders in Congress pushed for the swift completion of this bill, refusing to allow passage of any amendments.
Most egregiously, the Omnibus bill includes 122 programs that not only are receiving astonishing increases over prior year appropriations levels, but were also funded in the Stimulus bill, passed in February. A more prudent approach would have been to pass the annual Omnibus bill before crafting the $1 trillion Stimulus measure so we could guard against this duplicative spending. To that end, I introduced an amendment to this Omnibus bill that would have sent it back to the Appropriations Committee to bring the total spending level back down to the FY 2008 level with adjustments for inflation. The amendment would have required duplicative spending in the Stimulus and the Omnibus to be struck.
The Stimulus bill was merely the beginning. We will soon have to consider the $1 trillion budget, including a $634 billion “down payment” on the Administration’s universal health care plan. On the horizon lies the Administration’s housing plan, which will reportedly cost upwards of $250 billion. And in the coming months, the White House will likely ask for another $1 to $2 trillion to shore up the financial sector.
I, along with so many Americans, am in sticker shock over the trillions of dollars at play in these efforts. Congress should pause and consider the consequence of every dollar we tax, borrow, or spend. Will these policies spur growth? Will they create jobs? Will they protect American families and small businesses? If not, the President must step back and reconsider these initiatives before it is too late.