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 23, 2007)

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Mr. MCCONNELL. Mr. President, the great untold story of the post-9/11 period is the recovery of America's will to move on, despite new threats, and build an even stronger economy, an even stronger America than before. We gave the American people the tools they needed to help themselves and then we got out of the way.

We eliminated the marriage penalty and doubled the child tax credit. We created a tuition tax deduction. We increased the deduction on charitable gifts and put the death tax on the road to extinction. We slashed the tax on capital gains and dividends.

The American people took care of the rest. They took all these things and unleashed a flood of economic activity that is still lifting the tide for tens of millions of working families and retirees. We look out at the American economy today with amazement. Despite Ð9/11, despite a recession, despite Katrina, despite a war, we see: 4.5 percent unemployment--lower than the average of the last four decades. An economy that is grown at 3.4 percent over the last four quarters. More than 7.2 million new jobs since August '03

That is more jobs over the last 4 years than the European Union and Japan--combined.

China may have the world's fastest growing economy. But its entire GDP is less than the amount that ours has grown in the last 5 1/2 years.

New jobs create new revenue, and it's been pouring into the U.S. Treasury at a staggering clip. Since we cut taxes on capital gains, tax revenues exceeded government estimates by more than two-thirds.

President Bush looked out over this economic landscape too, and he gave us a budget that builds on it, that advocates discipline and anticipates continued strong revenues by keeping tax cuts in place.

That is the formula for continuing to shrink the deficit and leading us to a surplus. And we had reason to think the Democrats would embrace it, even on taxes, when my good friend the senior Senator from Nevada said back in November that raising taxes would be, ``Unacceptable.''

Well, we should have known better. Budget week is like an annual debutante ball for the Democrats. They step out so everybody can take a good look at them, but their budgets never look good in the lights.

The budget they proposed this week was a disaster. It restored the marriage tax, cut the child credit in half, lowered deductions on everything from charitable gifts to college tuition, and raised taxes on capital gains and dividends. It wasn't just a tax increase. It was the mother of all tax increases. Nearly four times bigger than the previous record.

It reversed every tax cut we passed, and its passage would have resulted in a tax increase on every single taxpayer in America.

A family of four with two kids and an annual income of $56,300 would pay an extra $2,000

Nearly 50 million married couples would pay an extra $2,700 each year in taxes.

More than 10 million single mothers would see their tax bill go up by more than $1,000.

Seventeen million seniors would see their taxes go up by more than $2,000.

Spending wasn't any better.

Here too, we thought the Democrats might be coming around. The day before the President's budget was released, my good friend, the Senior Senator from North Dakota, said:

We need to be tough on spending. The week after that, he went even farther, saying we should sharply inhibit the growth of spending.

But then the curtain fell, and we saw the reality. The Democrats proposed to increase nonessential spending over the President's budget by nearly $150 billion.

And as if that wasn't enough, in addition to the tax hikes we could see, they set up 20 new accounts that they planned to fill up with money they had raised from a raft of new taxes they didn't even specify. Most of these funds are for worthy purposes. But let's be honest with the American people and pay for these programs by trimming waste, fraud, and abuse instead of open-ended tax hikes down the road.

Republicans opened this Congress with a pledge to work with Democrats. We gave them a soaring economy and an offer to take advantage of divided government to do big things, as divided governments have in the past. One of the big things we proposed was entitlement reform. Every Member of this Chamber knows Social Security is unsustainable in its current form. Yet the budget writers ignored the problem altogether. They proposed to raise $916 billion in new taxes--and to spend it. Budget week is when the rhetoric meets reality: and one of the sad realities this budget revealed was that Democrats weren't serious about reform this week.

Oh they will deny it. Just like they have tried to deny that the tax hikes in this budget are tax hikes.

After I and my colleagues pointed out the new taxes in this budget, the senior Senator from North Dakota rose to say that we were letting our imaginations get the better of us. He said the Democratic budget contained ``no proposed tax increase.''

But then, one day after rising on the floor to insist that there were no new taxes in this budget, he and his Democratic colleagues admitted as much. They voted for an amendment that would reduce some of the more unsavory tax increases in their budget.

Well, you don't need to be Einstein to know that you can't lower a tax increase that doesn't exist.

The upshot of that amendment is that the budget we are now being asked to vote on no longer represents a tax hike four times larger than the previous record.

We are being asked to vote on a tax hike nearly three times bigger than the previous record--and, in the process, to get in the way of an economic expansion, increase nonessential spending by tens of billions of dollars, and do absolutely nothing about a pending entitlement crisis.

Republicans wouldn't do any one of those things, let alone all four. And we urge our colleagues on other side to reconsider the damage they plan to inflict on Americans who have worked hard to rebuild and reenergize this country over the last 5 years.

Their current budget would squeeze three-quarters of a trillion dollars out of the American taxpayer without shaving so much as a dime from a single government program. This is the very definition of tax and spend. It represents a tremendous missed opportunity. And it is a terrible disappointment.

When Republicans proposed to accomplish big things, this isn't what we had in mind.

This budget is a big mistake. Republicans can't support it.

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Mr. McCONNELL. Let me add my word of thanks to Chairman Conrad and Senator Gregg. They have done a spectacular job on this budget, and I wish to thank my Senators on this side of the aisle for cooperating in such a way that we are going to finish this bill at midafternoon on Friday, one of the earliest completion times we have had.

Finally, with regard to next week, it is the view of the Republican side of the aisle that we need to finish that bill next week. The troops need the money. There is a veto threat out against the bill potentially if it is not fixed on the floor of the Senate. So we need to wrap up that bill up next week, and we will be working cooperatively on this side of the aisle to achieve that goal.

I yield the floor.

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