The House Ways & Means Committee held hearings yesterday on President Obama’s new $3.8 trillion budget proposal. Treasury Secretary Timothy Geithner along with White House Office of Management and Budget Director Peter Orszag attempted to defend the indefensible: a budget proposal that accelerates massive new spending and borrowing that adds a minimum of $1.6 trillion to the debt.
Rep. Paul Ryan (R-Wisc.), top Republican on the House Budget Committee and a member of Ways & Means, asked Geithner at the hearing to explain why the administration neglected to propose a “credible budget.”
REP. PAUL RYAN: Page 146 of your budget, your S-1 budget totals, and when you take a look at this, I just find this amazing… you’re a smart guy, you’ve got smart economists over there, all of them say that for the medium and long run the budget deficit’s got to get below 3 percent of GDP, yet this budget proposal you’re bringing us doesn’t get close to it…
SEC. TIM GEITHNER: You’re exactly right. We…
RYAN: I’ve got three minutes so let me finish here. So you’ve got this warning under here, it’s like the warning on a cigarette pack, you’ve got this little magic box underneath your budget totals that says we’re going to have a commission do it. We’re going to have this partisan commission, a 2-to-1 ratio of Democrats over Republicans that will give us a report after the election…
GEITHNER: That’s not fair — it’s not a 2-to-1 ratio. Let me say it slightly differently. What we’re saying is we’re going to solve our part of the mess we inherited. We inherited a structural deficit and to bring that down…
RYAN: Then why don’t you do that in your budget? If you’re going to solve this problem — you guys run the government. If you’re going to solve our fiscal situation, why don’t you do that? Why don’t you give us a budget that gets the deficits to a sustainable level? … Why aren’t you giving us a budget — not punting to a commission — that using your own definition and standards is actually sustainable?
GEITHNER: We are proposing a budget that takes the huge mess we inherited…
RYAN: You can blame Bush only so long.
At a leadership press availability Ryan promised Republican alternatives would be offered to the President’s budget proposal.
“It’s just to me astounding the lack of leadership and the insatiable appetite for more spending and more borrowing,” Ryan said. “And so we will be offering alternatives.”
“This is a budget that has $2 trillion, by their own definition, of extra tax increases on workers and small businesses,” Ryan said. “Fourteen trillion in more debt and borrowing. … We know right now irrefutable, statistically, that we are going to give the next generation a lower standard of living. We know that our children and our grandchildren are going to inherit a mountain of debt and taxes where they won’t have the kind of life that we had. That is not what we do in America. We fix our problems in our generation so the next generation is better off. And that, in this budget, is being severed. It’s unconscionable, it’s irresponsible, and to use the administration’s own terminology, it’s not credible.”
I caught up to Rep. Dave Camp (R-Mi.), top Republican on the Ways & Means Committee, and asked him about one aspect of the new tax increases included in the President’s budget proposal. How will $260 billion in new taxes on small business help create jobs?
“Well, it won’t,” Camp said. “I asked the Secretary of the Treasury that question and he didn’t have an answer. What they do in this budget is a massive tax increase and a lot of that will fall on small business. … Most jobs are created in small businesses and, frankly, all big businesses start out as small businesses, so we really need to make sure that that part of our economy gets moving again. To tax them, to take that much money out of their pockets, makes it impossible for them to invest in hiring a new person, buying a new piece of equipment, which all helps in that ripple effect throughout our economy in creating prosperity and economic growth.”
I also spoke with Rep. Devin Nunes (R-Calif.) at the hearing about the crippling new taxes on the oil and gas industry that will prohibit domestic exploration, drive up costs at the pump and cause a rise in dependence on foreign oil.
“The Obama administration says one thing and they do the opposite,” Nunes told HUMAN EVENTS. “They say we want to stop importing oil but their policies are going to force more importation of oil. They say we don’t want to buy from Hugo Chavez and the Middle East, and they pass policies and promote policies that are going to force us to import more oil from the Middle East and Hugo Chavez.”
Given the constant contradictions from the White House, what’s your overall assessment of the budget proposal?
“It’s full of gimmicks,” Nunes said. “It’s a joke. It’s not believable. The only thing that’s believable is that we’re going to spend $3.8 trillion if we’re lucky. If they don’t spend $4 trillion. And they want to borrow a trillion and a half if not $2 trillion. We are going to borrow at least a trillion dollars this year with no end in sight.”