Annual Budget Debate

Floor Speech

ANNUAL BUDGET DEBATE -- (House of Representatives - March 27, 2007)

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Ms. FOXX. I thank you, Congressman Hensarling. And I want to thank you for setting the stage for this discussion tonight. As you said, it is the beginning of many times when we need to be bringing this issue up. I also want to thank you for your leadership of the Republican Study Committee, our party group of conservatives that raises issues every day here on the floor and in committee meetings on the things that the American people believe in and that we fight for every day.

Let me reiterate some of what you said and then add some points about North Carolina and raise some other issues that you have not yet gotten to.

As you said, under the assumptions in this proposed budget, we will see the largest tax increase in our Nation's history. And I think we need to keep saying that over and over and over again. The Democrat budget increases taxes by $392.5 billion over 5 years, shattering their last record tax increase of $240 billion in 1993. In fact, they would raise taxes, increase taxes by $231 billion in 2012 alone. But the hits just keep coming; and as you pointed out, it is the same playbook that they used in 2003 all over again.

It is more than just a reckless policy that endangers the strength of our economy; it is a cause for serious concern for the livelihood of the constituents of the Fifth District in North Carolina and, in fact, people all over North Carolina. We would see in North Carolina more than 3 million taxpayers whose bills would go up. And it wouldn't be just a little bump, either. The average tax increase for the 3.1 million North Carolinians would be $2,671. That is a lot of money.

This stark reality underscores the truth of my Democrat colleagues' approach to the Federal budget.

They know that the more money they can get out of Americans' pockets, the more money they can spend to expand the Federal Government. That is not what we need. This approach is completely backwards. We should be looking first to put money back into taxpayers' pockets, not taking it out.

Furthermore, this current budget proposal is a squandered opportunity to reform spiraling Social Security, Medicare, and Medicaid costs and to give Americans the permanent tax relief they deserve. Instead, it allows widespread tax increase that hit middle-income families, low-income earners, families with children, small businesses, and others.

Some people would see more than a 100 percent increase in their taxes. For example, an elderly couple with $40,000 in income would see a tax increase of 156 percent in 2011, from $583 to $1,489. And a family of four with $60,000 in income would have a tax bill that would rise from $3,030 to $4,893 in 2011, an increase of more than $1,850, or 61 percent.

And these increases are no accident. The Democrats were warned. During budget markup I know that my colleagues introduced many amendments which were all rejected, and these would have prevented the tax increases. But they would not listen.

But the budget proposal again isn't a real surprise. It is business as usual for the Democrats and proves that their promises to be fiscally responsible are just empty rhetoric. If this budget is approved, it will signal a return to the Democrats' beloved tax and spend model for government.

If you take a look also at the more than $20 billion in pork that was added to last week's troop emergency funding bill, it becomes crystal clear where the Democrats stand on spending. And, worse, they prove they don't mind using our troops as bargaining chips.

Democrats have willfully abandoned their pledge of fiscal responsibility. We have talked about it before. They are being very hypocritical in terms of what they promised and what they have done. They pledged to follow pay-as-you-go spending rules and spending restraint to curb the deficit. And then we get this budget which would give us again the largest tax increase in the history of this country and ignore the larger consequences for our economy.

These tax increase are going to threaten to reverse the substantial deficit reduction that has occurred in the past several years. We have increased tax revenue from 16.5 percent of GDP in 2003 to 18.5 percent this year, exceeding the average percentage of the past 4 decades. This is a result of those tax cuts that we passed. Tax revenue grew by 14.6 percent in 2005, 11.5 percent in 2006, and already 9.3 percent in the first 5 months of fiscal 2007. This revenue growth was the principle factor in reducing the budget deficit from $412.7 billion in 2004 to an estimated $214 billion this year, according to the Congressional Budget Office.

Let me give just a couple more examples of again how people are directly going to be affected by this tax increase and to show the hypocrisy of the Democrats who say all the time that they are trying to help low-income and middle-income people. It will raise the 10 percent tax rate bracket to 15 percent. This will give a tax increase to 5 million individuals and families who don't pay taxes now but would become subject to the individual income tax in 2011 if the Democrats are successful in raising the 10 percent tax bracket to 15 percent. It eliminates the marriage penalty relief that we have had; 23 million taxpayers would see their taxes increase on average by $466. It cuts the child tax credit in half; 31 million taxpayers would see their taxes increase on average by $859 in 2011.

Every working American would be affected by the Democrats' tax hike. We have to bring this message to the American public and show them why the Republicans are fighting so hard against this budget that is going to be brought up by the Democrats.

And, again, Congressman Hensarling, I applaud your efforts through the RSC and through the Budget Committee for helping us put together this Special Order and giving these facts about the largest single tax increase in American history being proposed by the Democrats.

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