House Republicans and Democrats agree on one thing: Congress can and must balance the federal budget over the next five years. Where our approaches diverge sharply is how we go about reaching this shared goal.
Last week, as the House of Representatives debated the Fiscal Year 2008 budget resolution, it became clear that this was much more than a simple discussion about budgetary priorities over the next few years. In fact, it was a much larger debate about our governing philosophies, about what kind of society we envision, and about the kind of country we want to leave for future generations.
The budget the Democrat leadership proposed, which the House approved by a narrow majority vote, is true to their philosophy. They believe that more government is better government, and that the best way to solve the myriad problems we face in this country is to spend more and more and to tax our people more and more to pay for that spending.
The Democrats’ budget reflects this philosophy by calling for the largest tax increase in American history, coupled with immense new spending and postponement of critical entitlement reform for at least another five years.
This is an enormous missed opportunity for Democrats who want to claim the mantle of fiscal responsibility. Instead of beginning to address the crisis of soaring entitlement costs — including the $4.6 trillion liability in Social Security that grows by $600 billion every year or the $32 trillion liability in Medicare — their budget relies on a return to tax and spend policies that are no solution for long-term deficits.
Washington does not have a revenue problem — it has an overspending problem. Prior to the broad-based tax relief Congress delivered in 2003, federal revenues had decreased for three straight years. Since the tax relief, revenue has risen for three straight years, and in 2007 revenue is up again by almost ten percent. These surging revenues have been the key factor in the substantial deficit reduction that has occurred over the past few years. Clearly, the federal government is bringing in enough tax dollars. Our challenge is to get a handle on spending, particularly skyrocketing entitlement spending.
In contrast to the vision embodied by the Democrats’ budget, conservatives believe that more taxation equals less freedom. We believe that the best America is one where citizens are free from the shackles of big government. We believe that the nucleus of our society and the engine of economic growth in this country is the individual, not the government. The American dream is the story of the person who, regardless of race, religion, gender, or income level, reaches their God-given potential by making the most of the franchise of liberty. We realize that the more we tax this individual, the less freedom he will have, and the less freedom his family will have.
The Republican substitute budget reflects these principles. Like the Democrats, we achieve balance in 2012, but we do so by pursuing policies that keep our economy growing strong, reforming our nation’s largest and least sustainable entitlement programs, and increasing accountability for federal spending.
Our alternative budget preserves the tax relief adopted in 2001 and 2003, including marginal income tax rates, the 10% bracket, the child tax credit, capital and dividend tax rates, and marriage penalty and death tax relief. Allowing these taxes to return to previous levels would not only deliver a widespread tax hike to U.S. taxpayers, but also undercut American businesses’ ability to compete globally.
Instead, our budget essentially freezes annually appropriated non-security spending for the next fiscal year at the 2007 level, excluding emergencies. Within this amount, we recommend increases for certain priorities, such as veterans’ health care.
The Republican budget plan also calls for reforms to slow the runaway growth of entitlement spending and make improvements that start to address the financial crunch these programs face. Delaying meaningful reforms, as the Democrat budget does, only allows the problems to worsen.
Finally, our budget incorporates key enforcement provisions that encourage restraint and make Congress more accountable for the tax dollars it spends. These include a set-aside fund that specifically budgets for domestic emergencies, stronger earmark transparency, a legislative line-item veto, and discretionary spending caps.
Engaging in this debate is critical, because if we choose the wrong direction today — if we fail to set priorities and make reforms — those who believe that our society is founded on freedom, on equality of opportunity, and on the individual will have lost. Then we may become the first generation to sever that precious American legacy of leaving a better standard of living for future generations. It is up to us to defend this legacy and argue for smaller, more effective government.