Baldwin Issues Comments on OMB Director Bolton Budget Committee Hearing

HEADLINE: REP. BALDWIN ISSUES COMMENTS ON OMB DIRECTOR BOLTON BUDGET COMMITTEE HEARING

BYLINE: States News Service

DATELINE: WASHINGTON

BODY:

The office of Rep. Tammy Baldwin, D-Wis., issued the following statement:

Thank you Mr. Chairman and Ranking Member Spratt.

Mr. Bolton and Mr. Mankiw, one of the best ways to appraise this budget is whether it coveys to the American people that the President understands the problems they are facing and attempts to confront those problems head on. Mr. Bolton, I would like to take the opportunity to look at how this budget will affect my constituents.

It seems to me that the President's priorities are more tax cuts, and those tax cuts benefit the most affluent Americans over middle and lower-income Americans, and over the immediate issue of jobs, health care, and education, which are, parenthetically, the chief issues on the minds of my constituents.

This budget makes most of the provisions of Bush's 2001 tax cuts, 2002 stimulus tax package, and the 2003 tax cuts permanent. The projected costs of the provisions will be $131.6 billion over five years, but the costs will rise to 936.3 billion over 10 years - or when one includes the interest on the debt, $2.2 trillion.

This budget favors a new tax-favored Lifetime Savings Account and a new tax-favored Retirement Savings Account. In both cases, these programs are affordable in the short-term, but when they fully mature they are projected to cost up to $50 billion a year.

These tax initiatives will drive us deeper and deeper into debt and will disproportionately enrich the very wealthy. In doing so, the tax initiatives will squeeze out any hope of doing meaningful things to address our constituents' top challenges: jobs, healthcare and education. In fact, by making the tax cuts permanent, the top 1 percent of households will receive on average a $58,220 tax break, yet the average middle-income family will receive a tax break of $655.

The new savings plans would similarly benefit the wealthy. The Lifetime Savings Accounts for example, when fully up and running, would provide the top 5 percent of the population with 50 percent of the account's tax benefits. The top 10 percent would secure two-thirds of the benefits! I have information here that suggests that the bottom 60 percent would receive just 4 percent of the tax benefits. And believe it or not, the Retirement Savings Accounts are supposed to be even more skewed!

These savings proposals would have these effects for several reasons. By increasing the maximum that can be deposited annually in these tax-favored accounts, these proposals create limits that far exceed what all but the most affluent citizens can afford to set aside each year. But, let's bring this budget home. The "average" family of four in my district will get very little for these trillion dollar tax extensions, the new Lifetime Savings Accounts or the Retirement Savings Accounts except for additional interest payments on the rapidly expanding debt. As families in my district struggle with recent job losses and significant health insurance costs, they are being told these issues are not priorities for this Administration.

I know you've presented us with a five-year budget, but do you dispute the out-year estimates on the 2009-2014 tax cut extensions or the fully implemented savings programs? Do you dispute that it is the tax cuts and not spending increases that have caused the majority of the swing from surplus to deficit?

Contact: Jerilyn Goodman, 608/258-9800, jerilyn.goodman@mail.house.gov