Ryan: Higher Taxes and Spending, Raiding Social Security Are No Way to Balance Budget
The House of Representatives today passed the final version of the Democrats' fiscal year 2008 budget plan by a vote of 214-209. The budget plan, or "conference report," sets the parameters within which Congress will move forward with its annual spending legislation. First District Congressman Paul Ryan, who serves as the Ranking Member of the House Budget Committee, voted against this budget blueprint because it sets the stage for at least the second largest tax hike in American history, promises immense new spending, and fails to stop the government's raid on Social Security - while doing nothing to address the entitlement crisis our nation faces as the baby boomers retire.
"This budget plan sets off a vicious cycle of higher taxes and higher spending that will lead to even more tax hikes. In short, it puts government spenders first and puts taxpayers at the back of the line," Ryan said. "It also continues the federal government's raid on Social Security surpluses, even though we succeeded last week in getting a bipartisan majority in the House to vote for ending the raid. Actions - and numbers - speak louder than words, and these budget numbers just don't add up to fiscal discipline. They chart a course for major tax hikes and overspending, without any attempt to fix entitlement programs to prevent the looming crisis. Washington does not have a revenue problem; it has a spending problem, which this tax-and-spend budget fails to address."
In contrast to the budget plan that Ryan proposed earlier this spring, which would have balanced the budget by controlling spending, without raising taxes and without dipping into the Social Security surplus, the budget conference report the House passed today does the following:
Includes a tax hike of at least $217 billion by fiscal year 2012 - the second largest tax increase in U.S. history. This includes increases in marginal rates, capital gains rates, dividends taxes, and others.
Contains a tax hike "trigger" to automatically raise taxes even higher if surpluses do not materialize - in other words, if Congress spends too much. The majority claims their budget plan will maintain certain popular tax relief provisions, but the trigger automatically turns off this tax relief - reimposing the marriage penalty, cutting the child tax credit in half, among others - if Democrats spend too much and future surpluses fail to materialize. This would raise the budget plan's tax increase right back to the initial House-passed amount of nearly $400 billion - the largest tax hike in American history.
Fails to protect Social Security. Despite massive tax increases, the Democrats' budget plan fails to provide a surplus large enough to halt the government's raid on Social Security - contradicting House Members' commitment last week to do so when they voted for Ryan's motion to instruct budget conferees.
Increases non-defense appropriations spending by $22 billion in the next fiscal year (FY08) alone. To put this in context, this is on top of the $6 billion the Majority in Congress added to the omnibus and the more than $20 billion of extraneous spending they are pushing for in the war supplemental.
Abandons the emergency set-aside fund that Ryan had helped secure in last year's budget resolution, and drops any limitation on what Congress can call an "emergency," exempting the spending from any limits. Without an emergency set-aside fund and a clear definition of what counts as "emergency spending," there's nothing to prevent non-emergency, pork-barrel items from being included in "emergency" bills.
Contains 23 reserve funds that include promises of more than $190 billion in additional spending - without providing any means to pay for it. If these promises are kept, it will almost surely lead to even more tax increases.
Ignores non-partisan experts' repeated warnings about the unsustainable rate of entitlement spending and puts off any significant entitlement reform for at least five years.
In addition, this budget plan fails to comply with the pay-as-you-go (PAYGO) rule that Democrats adopted, with much fanfare, at the beginning of this Congress.