Hensarling Statement On President's State Of The Union Speech

Statement

Initially, I was pleased to hear that President Obama was proposing to freeze non-security discretionary spending for 3 years. However, after reading the fine print, it seems this proposal is more about changing news headlines rather than spending lines. And if it is about headlines, the headline ought to be "President To The Nation: Stop Me Before I Spend Again."

Since coming into office a little more than one year ago, President Obama and his Congressional Democratic majorities have passed a $1.1 trillion "stimulus" bill that has not worked and has left Americans mired in an economy with 10% unemployment, a $410 billion pork-laden omnibus bill that increased non-defense spending by 10%, a $447 billion omnibus bill that increased non-defense spending by 12%, and a $3.6 trillion budget costing $30,826 per household. In fact, President Obama and his Congressional Democratic majorities have increased non-defense spending by 84% over 2 years.

After this flood of spending, it appears on the surface that perhaps President Obama has finally decided to heed the call of the American people and attempt to bring some semblance of fiscal responsibility back to Washington. However, his purported freeze is not really a freeze because it exempts 83% of the federal budget from the freezer, does not turn on the freezer until next year and then turns off the freezer shortly thereafter.

Even with the freeze in place, it will not have much of an effect. If you apply the $250 billion in savings over ten years -- based on the President's ten year spending plan submitted last year -- government spending will still grow by 38.98% over those 10 years, as opposed to the 39.01% spending increase he proposed last year. If this is the President's idea of saving the nation from fiscal calamity, we are in deeper trouble than I thought.

If President Obama is serious about fiscal responsibility, he can find savings immediately by terminating TARP, by ending bailout mania, and by returning unused stimulus funds to the Treasury for deficit reduction.

In the same speech that President Obama tells the nation he's committed to fiscal responsibility, he unveils several proposals estimated to cost the American taxpayer billions. This makes it very hard to take President Obama's newfound commitment to fiscal responsibility seriously.

On the Deficit Commission:

It's certainly time as nation that we restore our nation's fiscal health, but, the idea of a deficit commission assumes that the deficit itself is the problem. This is simply not the case, because when it comes to our nation's fiscal health, spending is the disease and the deficit is simply a symptom of that disease.

Unless you're planning to increase taxes, the only way to get the deficit under control is to address the spending problem that creates it. Because this is not a spending commission, I fear it is simply a tool designed to give the President and Congressional Democrats an excuse to raise taxes.

The deficit commission simply has no credibility. It largely looks like a proposal designed give political cover to the President and Congressional Democrats who are trying to heal self-inflicted wounds arising from their fiscal record. Even if you don't believe that, the commission has several fatal flaws. First, you simply cannot call a commission that is stacked in favor of Democrats and the President -- through his ability to not only nominate Democrats, but also some of the Republican members -- bipartisan. Secondly, even if it were truly bipartisan, without a supermajority required to report out recommendations, a Democratic-led commission could recommend tax increases and only involve the Republican members insomuch that they use them as cover by attempting to portray the commission as bipartisan. Lastly, if we're going to be fiscally responsible, let's have its results sooner rather than later -- especially not after an election.

Economic Growth:

I'm pleased that the President might be recognizing the role small businesses play in our economy and job creation. I agree with the President that we need to provide small businesses with tax relief in order to create jobs and get our economy moving again.

While tax relief for small business is a start to getting our economy back on track, it's simply not enough. If the President really wants to help the private sector get back in the business of job creation and economic growth, he could take off the table the uncertainty that is currently plaguing our economy caused by job-killing policy proposals such as a nearly $2 trillion government take-over of health care, a national energy tax plan that will raise taxes by over $800 billion, and a government take-over of our nation's mortgage and financial institutions.

To get our economy back on track, House Republicans have proposed several alternatives to the big-government, big spending policies pursued by President Obama and Congressional Democrats.

Economic Stimulus:

As an alternative to the Democrats' $1.1 trillion stimulus plan, Republicans proposed a plan that would create twice as many jobs at half the cost. Specifically, our plan would have reduced individual tax rates, allowed small business to take a tax deduction equal to 20% of their income, made unemployment benefits tax free so that those individuals between jobs can focus on providing for their families and provided a home-buyers credit of $7,500 for those buyers who can make a minimum down-payment of 5%.

As an alternative to the Democrats' $3.6 trillion budget, Republicans proposed an alternative budget that would have spent $4.8 trillion less than the Democratic budget over 10 years, brought debt under control, borrowing $3.6 trillion less than the Democratic budget over 10 years, did not raise taxes and would have created 2.1 million more jobs than the Democratic budget.

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