Budget Conference Report: Gimmick for Tax Increases and Radical Government Spending

Press Release

BUDGET CONFERENCE REPORT: GIMMICK FOR TAX INCREASES AND RADICAL GOVERNMENT SPENDING

Today, the House of Representatives voted on the Budget Conference Report that would cost $18 trillion during a five-year window between the fiscal years of 2010 to 2014. The Budget Conference Report, S. Con. Res. 13, would increase the debt held by the public to $11.6 trillion in fiscal year 2014. Congressman Steve Buyer (IN-04) opposed the Conference Report due to the record spending levels, high percentage of debt that would be held by the public, and increases in taxes for Hoosiers.

"Democrats claim the Budget Conference Report cuts the deficit and decrease taxes, but it does so only through gimmicks written into the legislation. The Budget for fiscal year 2010 actually does the opposite. The Conference Report allows for a number of tax cuts to expire, which makes way for new taxes on energy, small business and investment—hurting an already burdened economy," said Buyer.

S. Con. Res. 13 provides for a three-year, non-offset patch for the Alternative Minimum Tax (AMT). Congressman Buyer warns that this is one of the gimmicks written into the Conference Report because the budget projection relies on the AMT going back into effect after three years. Therefore, the AMT would increase taxes on approximately 30 million people in three years when, coincidentally, reductions in the deficit start to take effect.

"Although the Conference Report allows for a two year ‘doc fix,' so physicians will not receive cuts in Medicare reimbursements for two years, I call on the leadership to address comprehensive reform of the Medicare physician payment issue," added Buyer. "A two year fix for physicians' Medicare payments would serve as a reprieve for physicians as they faced a 10.6 percent cut in their Medicare payments last year and are looking to receive a 21 percent cut to payments in January 2010."

Tax increases come into effect under the Conference Report through the expiration of tax cuts that are currently in place. By just allowing the 2001 and 2003 tax provisions and the 10 year AMT patch to expire, the Conference Report increases taxes by $420 billion over five years or $1.5 trillion over 10 years Buyer noted.

"House Democrats will say that these tax increases will only tax the rich—but many of these taxpayers that would be taking the financial hit are small business owners who file as an individual. The Small Business Administration has reported that small businesses have created 60 to 80 percent of all the new jobs over the past decade and they will be hit the hardest," commented Buyer.

The Reconciliation language, included in the Conference Report, would require the House Energy and Commerce, Ways and Means, and the Education and Labor Committees to report legislation that would reduce deficits by $1 billion over five years and would allow each committee the discretion to decide what policies are incorporated so long as the amounts are met. As an example, Congressman Buyer noted that the reconciliation process would provide an avenue for the Senate and the House to avoid procedure and allow the Majority to steamroll its policy initiatives through Congress.

Legislation that could be reported to reduce the deficit includes cap-and-tax, government run health care, and government controlled student loans. Congressman Buyer added, "The Conference Report provides instruction for the Energy and Commerce and Ways and Means Committees to implement a government-run health care initiative that would compete against the private health insurance companies. The Energy and Commerce Committee is not procedurally tied to healthcare and therefore is able to include a carbon tax as a variation to the cap-and-tax program that is currently being debated in the Committee."

Additionally, the Conference Report proposes a wish list of new spending programs that will be set aside in reserve funds. There are 34 reserve funds that would supply funding for programs if offsets—tax increases—are provided. "The purpose of the reserve funds allows the majority to provide for new taxes and spending at a later date, without including the cost in the budget," said Buyer.

The Conference Report also denies the House Pay-Go requirements for certain provisions—thus, allowing government spending to go unpaid for and increasing the national debt.

The Budget Conference Report passed the House of Representatives by a vote 233 to 193. Congressman Buyer opposed the measure because of the radical spending, increase in government programs, and billions in tax increases that would be shouldered by Hoosiers.

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