07.06.11

“Phantom Budget”: Sessions Remarks On Unseen Democrat Resolution

“The Budget Committee Chairman says he now, once again, has a budget that he is sharing secretly with his Democrat colleagues. Yet we hear no indication that a full text of the resolution will be made public or, crucially, that it will be slated for a public mark-up in the Committee as required by law… Making matters worse, we have reason to believe from statements and news leaks that the budget will have even more taxes and even fewer cuts than advertised. Tax increases may well exceed $2 trillion. And it may cut, or save, as little as $1.5 trillion—just one-fourth of the spending reductions achieved by House Republicans… A colossal tax hike combined with anemic spending cuts only speeds our current trajectory towards a bigger government, a bigger debt, and a weaker private sector.”

WASHINGTON—U.S. Sen. Jeff Sessions (R-AL), Ranking Member of the Senate Budget Committee, issued the following statement today as Budget Committee Chairman Kent Conrad briefed his Democrat colleagues on the details of a still-unseen Senate Democrat budget:

“After failing to produce a budget for 798 days, the Budget Committee Chairman says he now, once again, has a budget that he is sharing secretly with his Democrat colleagues. Yet we hear no indication that a full text of the resolution will be made public or, crucially, that it will be slated for a public mark-up in the Committee as required by law. Indeed, we hear no indication that the Democrat budget will even be brought to the floor for amendment and debate. This suggests that the plan is considered by a number of Democrats themselves to not be fiscally credible or politically defensible.

What we are told is that the unseen Democrat budget will tie every dollar of spending cuts to a dollar in tax hikes—despite overwhelming economic evidence cautioning against such an approach. We should cut wasteful spending, not raise taxes to pay for it. Americans thrive when a minimum burden is placed on them by their government. A colossal tax hike combined with anemic spending cuts only speeds our current trajectory towards a bigger government, a bigger debt, and a weaker private sector.

Making matters worse, we have reason to believe from statements and news leaks that the budget will have even more taxes and even fewer cuts than advertised. Tax increases may well exceed $2 trillion. And it may cut, or save, as little as $1.5 trillion—just one-fourth of the spending reductions achieved by House Republicans. In order to make our government leaner and our economy stronger we need to cut spending by $6 trillion or more over the next ten years. That is the only way we can restore the proper balance—shifting power from a wasteful, oversized government back to the American people.

We face a real crisis, yet all we hear from the Senate Democrat leadership is vague talk describing a phantom budget. Until honest numbers are produced, we have only words that make smoke and mirrors look substantial.”

BACKGROUND:

To view a white paper on fiscal consolidation efforts and the economic benefits of spending cuts rather than tax hikes, please click here.

Questions To Ask About Senate Democrats’ Phantom Budget

• Are Democrats willing to cut spending now?

o Is there a significant reduction in non-defense discretionary spending in 2012? The House is moving appropriations bills that will reduce such spending by some $70 billion relative to the prior year. The Senate should consider reductions on a similar scale.

• Are Democrats willing to cut spending enough?

o Does the budget adequately address the problem of overspending? Spending cuts of only $1-2 trillion over 10 years would do little to slow the steady increase of the government’s share of the economy projected under the president’s budget.

• Do Democrats leave spending reform to the future?

o Does the budget ensure reforms will be enacted this year, or leave them to future Congresses? Budget plans can assume reforms, or can use the budget process to ensure reforms are enacted through reconciliation. A budget that does not include substantial reconciliation instructions to authorizing committees is insufficient.

• Are Democrats raising taxes on the middle class?

o Does the budget truly continue the Bush tax cuts for the middle class? The 2001 and 2003 tax cuts included many provisions, such as the ending the marriage penalty and providing a child tax credit, that benefit working families. Democrat “tax reform” should not eviscerate these prior achievements or increase the tax burden on the middle class.

• Are Democrats understating their proposed tax increases?

o Are tax increases on families and small businesses with income over $250,000 simply assumed? The president and the Fiscal Commission measured their tax increases from a base that included the expiration of current tax rates for small businesses. This gimmick substantially understates the amount of deficit reduction that comes from changes in current tax policy.

• Are Democrats overstating their proposed spending reductions?

o Does the budget count interest savings as spending reduction even if they result from tax increases? Reducing the deficit reduces interest costs, but those savings should be allocated to revenues and spending in the share that each provide to the deficit reduction plan. To do otherwise is a gimmick that makes it look like spending is reduced more than it is.

• Are Democrats cheating doctors who care for Medicare patients?

o Does the budget address the Medicare “doc fix”? Under current law, Medicare physician payment rates are scheduled to decrease next year. A common gimmick to understate deficits is to assume that the cuts will not tax place, but that offsets will be found in the future—but history suggests that this approach only leads to more deficit spending.