DON’T BORROW, SPEND, AND TAX AWAY OUR FUTURE
The President’s Plan
- Blames Bush: President Obama correctly points out that he inherited a projected $1.2 trillion deficit in 2009 from President Bush and a Democratic Congress. However, his budget adds an additional $659 billion to that deficit, pushing it above $1.8 trillion. Although Obama has pledged to reduce the budget deficit to approximately $600 billion by 2012, that would still be $150 billion above pre-recession levels. Quadrupling the deficit and then cutting it in half is not “change.”
- Increases Spending, Again: After an $800 billion stimulus bill, the Obama budget increases spending by $1 trillion over 10 years, includes an additional $250 billion placeholder for another bailout, and calls for a Pay-As-You-Go (PAYGO) law while astonishingly violating that rule by $3.4 trillion.
- Expands Government: The 25% spending increase in the Obama budget represents the largest non-war government expansion since the New Deal.
- Leaves Deficits: The Obama budget leaves permanent deficits averaging $600 billion even after the economy recovers and doubles the publicly held national debt to over $15 trillion ($12.5 trillion in 2009 dollars).
- Cuts Defense: The Obama budget fails to fully fund the core defense needs of the United States. About $30 billion more is needed in the base defense budget.
- Puts Government in Charge: The $634 billion for health care reform in the Obama budget is only a “down payment” on an eventual government-run system. Experts believe the actual cost could reach $1.6 trillion over 10 years. This is in addition to the trillions already spent on health care this year in the stimulus and SCHIP bills.
Taxes, Taxes, Taxes
- Energy Taxes: The Obama budget proposes a $646 billion cap-and-trade tax that White House officials admit could actually generate $1.9 trillion in tax revenue over eight years. This tax would cost each American household between $650 and $2,000 annually in new energy costs, even though President Obama promised that “electricity rates would necessarily skyrocket” under this cap-and-trade program (January 2008).
- Oil and Gas Taxes: The Obama budget would collect $31 billion in new oil and gas tax revenue. These industries are already taxed above the industrial average, and increasing the burden would be detrimental to increasing or even maintaining domestic supply.
- Excise Taxes: The Obama budget would reinstate unnecessary Superfund excise taxes that expired in 1995.
- Death Taxes: The estate tax is set to expire in 2010, but the Obama budget and liberals in Congress are proposing keeping it between 35 and 45%.
- Tobacco Taxes: The largest tobacco tax in history is three times as likely to affect low-income Americans, who are more likely to smoke, as it is to affect high-income Americans.
There Are Alternatives
- A Path to American Prosperity: There are now two 10-year budget plans being offered in Washington. The Obama budget raises taxes by $1.4 trillion; the conservative Alternative avoids all tax increases and even simplifies the tax code. One budget does nothing to address the unsustainable costs of Social Security and Medicaid; the other begins to reform these programs. One budget permanently raises federal spending to over 22% of GDP; the other lowers it to pre-recession levels.
- Lower Taxes: Senator Jim DeMint’s “American Option” would have reduced business taxes from 35 percent to 25 percent to spur rapid growth in wages, jobs and business incomes. It also would have permanently repealed the Alternative Minimum Tax and reduced the individual tax rate to three levels—10, 15, and 25 percent—giving Americans more of their own money to fuel the economy and increasing disposable income for an average family of four by up to $4,500 by 2013.