Obama's Budget Supports Failed Bush Policies

Donald Lambro
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Posted: Apr 13, 2009 12:01 AM
Obama's Budget Supports Failed Bush Policies

WASHINGTON -- When President Obama delivered his record-breaking $3.6 trillion budget to Congress, it was front-page news and led all the television broadcasts -- with little or no critical analysis.

But when the Republicans brought forth their alternative budget, it was relegated to the back pages and received only a cursory mention on the nightly news shows, usually accompanied by a Democratic talking head who dismissed the GOP plan as coldhearted and penny-pinching that turned its back on people in need during these hard economic times.

Actually, the House Republican plan does a number of things to grow the economy that the Democratic plan does not: like tax incentives for business investment, economic growth and job creation; borrowing a lot less than the Democrats would and creating less debt; and not raising taxes, which would be job killer during a recession.

In short, House Republicans took up the President Obama's challenge to offer their own budget, and it turns out to be pretty good. It deserves a lot more attention than it got from the news media, said Brian Riedl, chief budget analyst at the Heritage Foundation. Among its provisions:

-- It borrows $3.6 trillion less than Obama's budget. That works out to $23,000 less debt per household.

-- It keeps total federal spending slightly above 20 percent of the gross domestic produce (GDP), roughly the same rate of spending we had before the recession.

-- It contains no tax increases and would shorten and simplify the federal tax code.

-- It places a moratorium on wasteful earmarks and tackles needed Social Security, Medicare and Medicaid reforms.

Obama's budget and the barely trimmed-down version the House and Senate Democrats taped together would slap more than $9 trillion in new debt on our children and grandchildren. "This is more debt than has been accumulated by all previous presidents in American history from George Washington to George W. Bush -- combined," Riedl said.

The Republicans would freeze non-defense, non-veterans discretionary spending for five years at present levels, and stop the stimulus spending that is planned in 2010 and beyond when the economy is expected to be in recovery.

Unlike Obama's budget and the Democrats' proposals, the GOP plan would raise no one's taxes.

Instead, it would make the 2001 and 2003 tax cuts permanent, along with the Alternative Minimum Tax reduction. But it would provide beleaguered taxpayers a further tax break by giving anyone a choice between a 10 percent marginal tax rate for those making less than $100,000 and a 25 percent rate for those making more than $100,000.

Moreover, they would offer needed pro-growth incentives that include cutting the 35 percent corporate tax rate to 25 percent, and suspending the capital-gains taxes through the end of 2010 to spur capital investment.

"Even with all those benefits, the House GOP budget proposal would bring in revenues averaging just below 18 percent of GDP, which is near the historical average," Riedl said.

The Obama budget and the versions hatched by Democrats on Capitol Hill would push federal spending as a share of GDP from 23.6 percent in 2011 to 24.5 percent in 2019 -- "significantly above the past 40-year average of 20.7 percent," said Americans for Tax Reform.

The Democrats respond to all of this by saying it is just a repeat of the policies offered by President Bush.

In fact, as Riedl pointed out, the Obama and Democratic budgets would "actually accelerate" Bush's fiscal policies, producing "more runaway spending, more bailouts and even bigger deficits. The president is not repudiating Bushism -- he's doubling down on it."

Is he ever. Increasing government spending by $1 trillion over the next 10 years; raising taxes on millions of Americans and businesses by $1.4 trillion over the next decade; and doubling the publicly held federal debt to more than $15 trillion.

In a few days, millions of taxpayers will be sending hundreds of billions of dollars to the U.S. Treasury to pay for the costs of Obama's voraciously growing government -- in many cases, money Americans desperately need to make ends meet.

This is not a time -- now or next year -- to be taking more money out of a recessionary, cash-strapped economy whose unemployment rate is fast-approaching 10 percent.

This is a time when the policy of the government should be to let the businesses and its workers keep more of what they earn. Obama's minuscule $7 a week for most workers provides little if any real relief.

Taking less money out of an anemic economy is a message that still resonates with taxpayers who are beginning to doubt that the Democrats dubious, snake-oil, tax-and-spend remedies will strengthen the economy.

It didn't make sense when FDR did it in the 1930s, and it doesn't make any sense now.