Congressional Budget for the United States Government for Fiscal Year 2008

Floor Speech

CONGRESSIONAL BUDGET FOR THE UNITED STATES GOVERNMENT FOR FISCAL YEAR 2008 -- (Senate - March 20, 2007)

BREAK IN TRANSCRIPT

Mr. McCONNELL. Madam President, I always look forward to budget week every year because this debate illustrates the differences between the two parties like no other debate we have in the course of the year. Our budget debate is led by one of our most, if not our most skillful debater and budget expert, Senator Gregg, and I know he will want to respond once again to the observations of our good friend from North Dakota, the chairman of the committee.

Republicans got their first look at the Democratic budget last week. We have been pouring over the details for the last few days, and at this point I can safely say this: If anyone is searching for a political document that reflects the triumph of rhetoric over reality, look no further.

For years, Republicans have politely stood by and listened as Democrats lectured us about the rich--the richest 1 percent is the favorite phrase--while casting themselves as the party of the working class. We have heard from brave Democratic candidates and newly elected Members who tell us we favor the country club set and the CEOs. Many would like to paint us into a modern day Thomas Nast cartoon, chomping cigars and taking care of businessmen at the working man's expense. It is a caricature that has always been wrong and that has persisted so long it has certainly been a nuisance.

Americans usually know better. They look at their paychecks and they ask themselves that simple question: Am I better off now than I was 4 years ago? The answer, for most Americans, is clear: Republican economic policies have lifted tens of millions of working families into the middle class over the last two decades and sparked a general wave of prosperity that few of us could ever have imagined. Americans know it, and so do our colleagues on the other side of the aisle, which is why the budget they are proposing is so disturbing.

Rhetorically, our colleagues on the other side of the aisle have been careful to embrace an appealing script: Keep taxes low, reform entitlements, and control spending. But the rhetoric always meets reality right here in the budget, and this time the collision between the two is straight out of the movie ``300,'' playing right now.

Let's start with the rhetoric. A few months ago, in November, the senior Senator from Delaware was asked whether Democrats planned to raise taxes. Here is what he said: ``Well, the answer is that they will not do that--they won't raise taxes on working and middle class [Americans].''

That was the senior Senator from Delaware on November 5. His Democratic colleagues have stuck to the same script. In early November, voters in Missouri asked the now junior Senator from that State whether Republicans were right to say that she and other Democrats would raise taxes if they took back the majority. ``There's nothing to that allegation,'' she said. ``We're going to cut taxes for the middle class.''

Then there was the now junior Senator from Virginia, who recently laid out a case against Republican economic policies in a Jacksonian-tinged response to the President's State of the Union Address. Talking to the Roanoke Times on November 6, he too denied the Democrats would raise taxes on the middle class. He said he would not ``raise taxes for wage-earning people.'' He would put more burdens on corporations instead, he said.

Well, someone on the Budget Committee isn't conferring with the new Members because the budget the Democrats handed down last week not only contradicts the stated intentions of these new Senators, its passage would represent, as Senator Gregg has pointed out, the greatest tax hike in U.S. history by far, four times greater, in fact, than any previous tax hike. Four times greater.

The last time we saw a tax hike even remotely this big was in the Democratic-controlled Congress back in 1993, and we know what happened the following year. Voter anger over those hikes put Republicans in charge of both Chambers for the first time since 1954. President Clinton himself would lay those electoral losses squarely at the feet of the 1993 tax hike. Speaking later to a group of donors, President Clinton said, ``I'll tell you the whole story about that tax hike. Probably there are people in this room who are still mad at me at that budget because you think I raised your taxes too much. It might surprise you to know that I think I raised them too much too.''

That was President Clinton speaking about his tax hike in 1993.

If President Clinton thought that tax hike was too much, he would choke on this one. The tax hike the new majority party sent down last week is four times bigger than one that he said was too big for Americans--and, ultimately, him--to stomach.

How can the Democrats possibly think the American people will stomach this one?

Do they think Americans are ready to see all the economic gains of the last 5 years washed away by a budget that reinstates every tax we have lowered or repealed over that period?

If this budget passes, those cuts are gone. Extinct. Dead.

And their reimposition would cost working men and women and retirees dearly--nearly $1 trillion over the next 5 years, by our count.

Everyone will take a hit. Despite the Democratic refrain that the tax cuts we enacted in 2001, 2003, and 2005 favor the richest 1 percent, the truth is, the wealthiest Americans continue to pay the lion's share of taxes.

Under the Democrat budget, they would see their share increase even more--disincentivizing the kind of corporate and individual investment that has driven the economic boom of the last several years.

But the wealthiest taxpayers can absorb a hit. They are not the ones this budget hurts the most. That is what is most astonishing about this budget: Working families will take it on the chin.

How? Let me count the ways.

Under the Democrat's budget, 45 million working families with two children will see their taxes increase by nearly $3,000 annually.

The child tax credit is cut in half--to $500, piling one more worry onto the shoulders of parents, not to mention parents-to-be. We should be encouraging and supporting young, growing families in this country, not penalizing them.

Newlyweds are robbed of a measure of their happiness, with the budget cutting the standard deduction for married couples by $1,700.

Far from shifting the burden onto the wealthy, the Democrat's budget would drive up the taxes of an average family of four by more than 130 percent--more than doubling their taxes.

Single parent households would take a hit too. By letting the 2001 and 2003 tax cuts expire in 2010, single-parent families would see their taxes rise by nearly 70 percent.

Senior citizens get hit big.

Again: Despite Democratic grumbling that only the richest 1 percent of Americans benefit from the tax cuts we passed in 2001 and 2003, seniors were a major beneficiary of the capital gains and dividend tax relief. More than half of all seniors today claim income from dividends, and one-third claim income from capital gains.

That's right, this proposed hike will hit more than half of all seniors.

The expansion of the market over the last 2 decades hasn't just benefited the few. It has helped millions of hard-working Americans retire earlier than they could have dreamed of a generation earlier. Democrats see the wealth
that more than 15 million American seniors accumulated over that period, and they want a piece of it.

In a sort of perverse politics of inclusion, business owners and executives, middle-class families of four, struggling single-parent households, and millions of seniors--everyone gets slammed by this budget.

Call it fair but cruel.

This budget represents a tax hike four times greater than the previous record, and Republicans cannot support it. We said at the beginning of the session we would not support tax hikes. We certainly will not support what amounts to the biggest one in American history.

Worse still, the Democrats don't even plan to put their $916 billion in new revenue to good use. They don't take back working Americans' tax relief to pay down the debt or lower the deficit--they want it so they can continue to raise spending to unprecedented levels.

Let's take a look at some of the numbers.

This budget increases annual spending on federal programs over the President's 2008-2012 requests by nearly $150 billion.

It spends more than $1 trillion of the Social Security surplus, increases gross debt by more than $2 trillion between 2008-2011, increases the deficit by $440 billion, and it completely ignores the urgent need to address entitlement reform--this, despite the fact that the new Democratic chairman of the budget committee stated flat out on national television just 2 weeks ago, and I quote, that ``We need to reform the entitlement programs.''

Add it all up and you've got the classic stereotype of the Party of Tax and Spend. Only, this time, it is on a level the likes of which we have never seen before. It is hyperbole, really.

Republicans made a pledge to fight tax increases and to rein in spending, and we intend to stick by it. With this budget, the Democrats have guaranteed quite a fight.

I yield the floor.

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