Featured Member Activity
May 04 2013
By: Sen. Rob Portman
Our least favorite federal holiday – tax day – has just come and gone. It’s never fun to pay taxes, but it is particularly frustrating when our tax dollars are going to inefficient or unworkable programs and to pay interest on a record debt that just keeps growing.
Unfortunately, the budget recently proposed by the president does nothing to address that frustration.
The source of our soaring deficit is no secret. Unlike families across Ohio who plan ahead to spend their dollars wisely, Washington always spends more than it takes in.
This year, the average household will pay $22,370 in direct and indirect federal taxes, while the federal government will spend $29,349 per household. The difference between those two numbers – $6,979 – is this year’s per household addition to a record-high national debt that already tops $140,000 per household.
Washington’s soaring taxing, spending and borrowing have contributed to the weakest economic recovery since the 1940s.
For every net new job created in the last four years, eight people have left the workforce. If we had simply matched the recovery from the last equally-deep recession, 11 million more people would be working. Instead, the economy continues to struggle under the weight of Washington’s policies.
I’d hoped President Obama’s budget proposal – despite being 65 days late – would attack the deficits and weak economy head-on. But it’s not up to the task: It contains even higher taxes, more spending and large deficits. And it never balances – not in a decade, not ever.
The budget begins by proposing $1.1 trillion in new taxes over the decade, bringing the total Obama administration tax increases to $3 trillion when including the fiscal cliff and health care tax hikes.
In fact, taxes over the next decade would average the largest share of the economy in American history, not a recipe for economic growth.
Some have expressed a willingness to pay higher taxes combined with spending cuts to reduce the deficit. The president’s budget doesn’t even contemplate such a compromise.
Instead, it increases spending by $800 billion. Under his plan, 75 cents of every dollar raised in tax increases would go into new federal spending. Just 25 cents would go toward reducing the deficit.
Break it all down and, even with these record tax increases, the president’s budget increases the debt by $8.1 trillion over the next decade, only slightly less than the $8.4 trillion in new debt if Washington continues on its current course.
And even that small deficit reduction is delayed until after President Obama leaves office. His budget increases the deficit by $388 billion over the next five years. The sacrifices wouldn’t begin until the next president is in office.
Hiking spending and deficits now and then punting the tough decisions down the road is not leadership; it’s the type of approach that created this mess.
Washington cannot keep having its dessert first and then delaying the vegetables to some distant date that never comes.
Also under this budget, America’s important entitlement programs suffer. The Social Security Disability Fund is projected to go bankrupt in just three years, and the entire Social Security program is scheduled to go bankrupt in 20 years – soon enough to affect many people retiring today.
Every year of the president’s budget, Social Security benefits will exceed Social Security taxes, with an overall shortfall of a trillion dollars over the decade. But despite all that new spending and taxation, the president has not presented a plan to bring the program into solvency.
At the same time, Medicare is projected to spend $3 in benefits for every $1 it takes in, yet the president’s budget would allow its trust fund to go bankrupt in just over a decade.
Failing to reform these vital but unsustainable entitlements will condemn seniors to large benefit cuts, and everyone else to large tax increases and expanded budget deficits.
The president’s plan has some things worth considering: the proposal to use a more accurate inflation calculator will make budget adjustments more precise while also reducing the deficit. The budget also moves toward pro-growth reform of the archaic corporate tax code.
But these are pebbles of good decisions in a landslide of bad ideas.
Overall, the president’s budget is not up to task. Nor was his last budget, rejected 99-0 in the Senate and 414-0 in the House.
In a time when Republicans and Democrats agree on little, that the president’s budgets aren’t the right way to go brings everyone together.
Obviously, the president hasn’t heard the calls from Americans across the political spectrum to end the runaway spending in Washington.
But I’ve been listening, and with Ohio families paying $22,000 per year to Washington, it’s time we honored their investment with a plan that reins in spending, creates jobs and finally balances the budget.