While the rest of America is tightening family budgets and making sacrifices due to the recession, Washington, D.C. is on a spending spree. Over the course of one month, Congress has approved an unprecedented $1 trillion stimulus package and is close to passing a new $410 billion bill to fund the federal government for the rest of the year at an eighty percent increase over fiscal year 2008. Then, just two days after promising to bring fiscal responsibility back to Washington during his State of the Nation address, President Barack Obama released his nearly $4 trillion budget blueprint for fiscal year 2010.
President Obama’s budget will raise our national deficit to $1.75 trillion this year, a level not seen since 1942 when the U.S. joined World War II. While the President promises his budget will cut the current deficit in half by 2013, even his own predictions note that is only temporary and the deficit will increase once again in 2014. Additionally, the budget will nearly double the national debt over the next ten years, from $12.8 trillion in 2009 to $23.1 trillion in 2019.
Despite promising to lower taxes for ninety-five percent of Americans, President Obama’s budget includes $1.4 trillion in tax hikes. These tax hikes will affect everyone from small business owners and 401(k) holders to senior citizens and middle-class families. Not only will the budget reinstate the death tax, it also calls for $210 billion in higher taxes on American companies trying to compete in the global market. Worst of all, President Obama’s budget assumes the implementation of a $646 billion “cap and trade” energy tax that will raise prices for every American energy consumer.
President Obama’s budget would raise $318 billion in new income taxes over the next ten years. Particularly surprising is the proposal to limit the tax deduction for charitable contributions for families making more than $250,000. Eliminating the charitable deduction will have the biggest impact on community service organizations, most of which rely heavily on private donations. From the Red Cross to local soup kitchens, the services charities provide are needed now more than ever.
Instead of stimulating the small businesses that have created nearly eighty percent of new jobs in America in recent years, the budget raises marginal income tax rates from thirty-three percent to thirty-six percent, and from thirty-five percent to almost forty percent. Small businesses employ roughly half of all private-sector workers and are the engine of job creation in the U.S. Raising taxes on hundreds of thousands of small businesses at a time when our national unemployment rate is nearing eight percent is dangerous economic policy.
President Obama’s budget will only serve to further stifle job growth and create more difficulties for our families, communities and businesses. Middle class families and small businesses are the backbone of our economy and Congress must focus on empowering them to drive our recovery. Unfortunately, the tax hikes in President Obama’s budget will slow economic growth in America and reduce investment, productivity and competitiveness in our markets.
The federal budget is much more than a list of numbers on a page – it is a reflection of our ability as elected representatives to come together and make the same tough choices that American families must make every month. Families across the nation are cutting their own budgets down to the necessities. It is past time for Congress to do the same.
Congressman Geoff Davis