Saturday, March 31, 2007

Federal Budget - Walberg Votes No

On Thursday, the U.S. House voted on the budget plan for the government of the United States of America for the fiscal year 2008. The $2.9 trillion budget passed, 216-210.

Tim Walberg voted No. The entire Republican caucus voted against the budget (except three not-voting members), as did 12 Democrats. In Michigan, all six Democratic members voted to support the bill.

If you're curious to know how the government plans to spend your money, I'd urge you to read the bill, H. Con. Res. 99 (text also here). I'll warn you, though, a $2.9 trillion bill is lengthy.

Oddly enough, however, we didn't hear complaints from Congressman Walberg about pork spending, or at least, that wasn't what he was upset about. Instead, this is what he had to say:
The budget proposal introduced by my colleagues on the opposite side of the aisle imposes the largest tax increase in American history, nearly $400 billion dollars over the next five years.
(Emphasis added.)

Largest tax increase in American history? Wow! Those dastardly Democrats! Robbing the American taxpayer for their wasteful spending on stupid things like the Department of Education!

Well, unfortunately, it ain't that simple.

In fact, Democrats did not raise taxes in this budget. They didn't lower them, either. As far as I can tell (from news reports and my limited knowledge on such issues), tax rates were left untouched.

So how can Walberg and other Republicans make this claim?

See, it's not so much what the Democrats did as much as it's what they didn't do. They chose not to extend the tax cuts President Bush pushed for in his first term, which are set to expire in 2010.

Just think about that for a moment. By Walberg's logic, not extending temporary tax cuts three years before they expire is, in fact, a $400 billion tax increase.


The San Francisco Chronicle brings us a Democratic response to these absurd assertions:

The budget plan, not dissimilar from the budget already passed by the Senate, makes no mention of the tax cuts that were a centerpiece of President Bush's first term. So, Democrats asked, how does that qualify as a tax increase?

"We didn't write 'em,'' Budget Committee Chairman John Spratt, D-S.C., said of the tax cuts, which Democrats have long said favored the richest Americans. "We didn't design 'em. The Republicans did. They are the ones who are responsible for them expiring.''

"The Republicans live in a world of make-believe. But instead of imaginary friends, they have imaginary demons -- imaginary tax increases,'' said Rep. Lloyd Doggett, D-Texas.

And besides, the Democrats said, if the Republicans were so gung-ho on making the Bush tax cuts permanent, why didn't they do so when they had majorities in both houses of Congress?

(Emphasis added.)

Now, remember, the Democratic majority hasn't actually done anything regarding the tax cuts, extending or repealing. But can you think of any reasons why they might not be eager to make them permanent after 2010?
Tax cuts were much deeper, and affected far more money, for families in the highest income categories. Households in the top 1 percent of earnings, which had an average income of $1.25 million, saw their effective individual tax rates drop to 19.6 percent in 2004 from 24.2 percent in 2000. The rate cut was twice as deep as for middle-income families, and it translated to an average tax cut of almost $58,000.


Mr. Bush and his Republican allies in Congress want to permanently extend that tax cut and almost all of the others that Congress passed in his first term. The cost of doing that would be more than $1 trillion over the next decade, a cost that would hit the Treasury at the same time that the spending on old-age benefits for retiring baby boomers begins to soar.
(Emphasis added.)

That sure is sound economic planning. But what happens if the tax cuts aren't extended?
The Democrats, whose budget projections call for a budget surplus of $153 billion by fiscal 2012 after years of enormous deficits they blame on the Bush tax cuts and runaway spending under the Republicans, said they are interested in unspecified middle-class tax relief in the next few years.
So, we can either have a sudden, $1 trillion cost for the Treasury, or we can have a $153 billion surplus, reminiscent of Bill Clinton's economic success. That's certainly a tough choice.

By the way, the House Republicans did have their own budget plan:
The Republicans offered an alternative budget plan, which was defeated 268-160, that provided smaller increases in many domestic programs and cut Medicare and Medicaid. It would have extended the Bush tax cuts but assumed the wars in Iraq and Afghanistan would end by 2009.
To me, that sounds sort of like a timetable for withdrawal... you know, the kind Tim Walberg called "benchmarks for failure." But I guess it's all okay, since most of Iraq is as safe as Detroit.

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Does anyone know of anything in that bill, maybe something one of the dem Congressmen touted, which Walberg voted against? This was a really good topic which Fitzy posted and there are no comments.

I have not heard anything specific contained in that bill other than the lack of tax cut extensions.
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