FISCAL IRRESPONSIBILITY

March 27, 2007

The Senate Democrats, writing their first budget resolution since winning control in Congress last fall, have produced a budget blueprint that is fiscally irresponsible, says Brian M. Riedl of the Heritage Foundation:

Under the resolution:

  • Taxes would be raised by $900 billion over five years and a projected $3.3 trillion over ten years, or $2,641 per household annually over the next decade.
  • Some 22 reserve funds would be included that could be used to raise taxes by hundreds of billions more.
  • Discretionary spending would be increased by nearly 9 percent in fiscal year 2008 and not a single program would be terminated.

The resolution completely ignores the impending tsunami of Social Security, Medicare, and Medicaid costs, says Riedl.  It also creates rules that bias the budget toward tax increases; and employs the same gimmicks that Congress criticized the President for using in his budget proposal.

This classic tax-and-spend budget would likely assure the expiration of the tax cuts that have helped to create jobs and promote economic growth, says Riedl.  The result would likely be higher tax rates on families and businesses, slower economic growth and a nation woefully unprepared to fund the coming retirement benefits of 77 million baby boomers.

Source: Brian M. Riedl, "The Senate Budget: A $2,641 Per Household Tax Increase and No Entitlement Reforms," Heritage WebMemo No. 1405, Heritage Foundation, March 22, 2007.

 

Browse more articles on Tax and Spending Issues