Monday, May 17, 2010

Democrat Budget Failures



May 17, 2010 House Republican Leader John Boehner (R-OH) Permalink

Washington Democrats remain divided and indifferent towards proposing a budget, missing a valuable opportunity to provide the fiscal discipline economists say is needed to create jobs and grow our economy. It also sends “the worst possible signal” to the American people and the international community that the federal government has no plan to address its fiscal crisis.

Democrats refuse to listen to the American people, who want us to work together to stop the out-of-control spending spree and focus on helping small businesses create jobs. A responsible budget would be a good place to start. Here’s a look at some of the consequences of Washington Democrats’ budget failure:

1. A missed opportunity to create jobs. For families and small businesses, Democrats’ budget failure means a missed opportunity to provide the fiscal discipline economists say is needed to create jobs and grow our economy.

2. Sends “the worst possible signal” that the federal government “has no plan” to address its fiscal crisis. With our national debt set to hit $13 trillion any day now, Democrats still have no credible plan to address our fiscal crisis. Bob Bixby, head of the non-partisan Concord Coalition, said recently: “Failure to adopt a budget resolution when fiscal resolution is needed most would send the worst possible signal. It would say to investors in Treasury securities, foreign and domestic, that the federal government is still in denial about its fiscal problems and has no plan to address the situation anytime soon.”

3. A historic failure of leadership. According to the non-partisan Congressional Research Service, the House has never failed to pass a budget resolution in the modern era. It was Majority Leader Steny Hoyer (D-MD) who described passing the budget as “the most basic responsibility of governing,” and Budget Chairman John Spratt (D-SC) who said, “if you can’t budget, you can’t govern.”

4. Tax hikes on the middle class and small businesses? The Heritage Foundation has noted that “not passing a budget means not carving out budgetary priorities for any extension of the 2001 and 2003 tax cuts, even for low-income families. Thus, avoiding steep tax increases during this recession will be more legislatively difficult.”

5. Punts to President Obama’s deficit commission, which most Americans view as “a cover for Congress to raise taxes.” One of Republicans’ first objections to the President’s proposed deficit commission was that it would enable Democrats to punt on fiscal responsibility, and with their failure to propose a budget, that is exactly what is happening. Most Americans, however, view the deficit commission “as cover for Congress to raise taxes.” Indeed, the commission’s recommendations may well lead to the United States adopting a European-style value added tax (VAT).

6. Washington Democrats are looking out for themselves, not the American people. Leader Hoyer has “candidly acknowledged that politics is a factor” in Democrats’ failure to propose a budget. After all, a budget blueprint would only give the American people a fuller picture of how much damage Washington Democrats’ spending spree has done to our balance sheet. One Capitol Hill newspaper has noted that Democrats “simply don’t have any good excuses not to do a budget beyond cowardice.” Families and small businesses trying to make ends meet each month don’t have the same luxury.

7. Ignores mounting evidence that America’s debt is on track to reach Greece-like levels. A new IMF report shows that our national debt is on track to exceed the size of our entire economy: “The IMF predicts that the U.S. would need to reduce its structural deficit by the equivalent of 12% of GDP… Greece, in the midst of a financial crisis, needs to reduce its structural deficit by just 9% of GDP, according to the IMF's analysis.” Greece’s debt is projected to reach 125 percent of GDP this year, the highest in the European Union.

8. Increases strain on national security resources. Gen. James Cartwright, the Vice Chairman of the Joint Chiefs of Staff, emphasized the links between economic uncertainty and national security in a speech last week: “There is no precedent for sustaining the deficits that we are in right now and are projected in our future. And the ability to recover from them has no real precedent. We’ve got a significant problem in front of us and waging a war in that construct is something that we’re going to have to understand and think our way through.”

9. Paves the way for even more spending during the annual appropriations process. The Heritage Foundation has noted that not passing a budget “prevents Congress from capping discretionary spending for fiscal year (FY) 2011. The House and Senate may ‘deem’ spending targets for their appropriations committees, but the respective spending targets may not even match each other (which would create large problems when the spending bills reach the conference committee).”

10. Demonstrates the need for Republicans’ better solutions to cut spending now and make Washington do more with less. As the American people continue to ask 'where are the jobs?,’ what will it take for Democrats to work with Republicans on common-sense solutions that will actually help get people back to work and put our fiscal house in order?

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