The Budget

Floor Speech

THE BUDGET -- (Senate - March 05, 2008)

Mr. CRAPO. Mr. President, I wish to use my time by following up on the comments our leader has made with regard to the budget. It is budget time in Washington right now. Although many people are focused very heavily on the President's budget submission, the reality is that the budget is a uniquely legislative responsibility. The President makes a recommendation, but it is this Congress, the Senate and the House of Representatives, that establishes the budget for our Nation.

The budget that was announced yesterday and reviewed, which we will be evaluating in the Budget Committee today, in my opinion, is not responsible. In fact, it is an embarrassment.

We often talk about the fact that we want to avoid tax-and-spend politics in Washington. But this budget plunges headlong back into the very tax-and-spend policies of the past that have put us in the dire fiscal position we are in today.

The budget is a failure on the spending policy, it is a failure on the tax policy, and it is a failure on the additions to our national debt that are monumental, which it contemplates. It is a failure because it does not do a single thing about the most significant fiscal problems facing us, namely the entitlement problems and the entitlement portion of our budget.

Let me go through all those briefly. To do so, I am going to explain--this may be a little bit basic to those in the middle of budgeting, but I am not sure the folks who pay attention to those understand exactly how the budgeting process works.

This year we will have the first budget that exceeds $3 trillion in Federal spending. In rough approximation, that budget is approximately two-thirds entitlements and spending on the interest on the national debt. The other remaining third is made up of what we call discretionary spending.

Again, approximately half of that is our national defense budget, and the remaining half is the rest of our nondefense discretionary spending; basically the rest of everything in Government more than our entitlement programs, interest on the national debt, and defense spending.

The problem, the most significant problem we face in our budget today, is the fact that the two-thirds portion I talk about, the entitlements and the interest on the national debt, are out of control. I often say they are on auto pilot, this spending in that two-thirds of our budget. That is growing at a rate that has often doubled, sometimes more than doubled, even tripled or quadrupled the rate of the growth of our economy.

It grows without a vote in Congress. Previous Congresses have passed legislation, and previous Presidents have signed the legislation into law that has established our entitlement programs.

Entitlement programs grow regardless of what we do in Congress. We could never vote again here in Congress and this spending would continue at rates that have nothing to do with the health or strength of the economy and which, as I have said, far ourpaces our economy. What does the budget before us propose to do about this? Nothing. Yet again we have no opportunity proposed in the budget that we will be battling over to try to address this incredible fiscal problem our Nation faces.

What does the budget do instead? It increases spending dramatically in the discretionary part of the budget as well as allowing the entitlement section of the budget to rage uncontrolled. We are looking in this budget at a $350 billion deficit, and that doesn't count war spending except for a small portion. It doesn't take into account the fact that we just passed a stimulus package that put another $150 billion of debt on the backs of our children and grandchildren without paying for it under the pay-go rules we are required to live by in Congress--in other words, $150 billion of new spending with no offsets against any other spending immediately put on the backs of our children and grandchildren in the form of national debt which they will pay back at a much higher rate as interest compounds on it over the years.

What does this budget do in order to try to deal with this increased rush for spending? It raises taxes. It raises taxes over $700 billion in the next 5 years. How does that happen? By the way, this tax increase America will face under the assumptions of this budget will occur with no vote in Congress. How does that happen? To explain that, I need to explain how the budget works.

As most people in America are becoming aware, there is a filibuster in the Senate that requires, on major policies where there is disagreement, essentially that in order to move forward, 60 votes are needed to get past the filibuster, to get cloture. Because of that 60-vote requirement on filibusters, it is difficult to either increase taxes or cut taxes because there is usually opposition to either move, and it requires 60 votes to move forward. But there is one bill each year on which we don't have to have 60 votes. It is called the reconciliation bill. It is a part of our budget process. Because of the way the law is set up, we can have a 50-percent-plus-one vote on that reconciliation bill each year. That is how the tax cuts of 2001 and 2003 were put into place.

Those tax cuts, as a reminder, were reductions in the income tax marginal rates for every American, with the largest percentage of those reductions in the lower and middle-income categories, reductions of the capital gains tax, reductions of the dividends tax, and a number of other very important tax policies that in 2001 and 2003 reduced taxes because we were able to use the reconciliation bill to do so. The problem is that the reconciliation process requires a sunset.

People around the country must wonder why we are facing a sunset of these tax cuts. It is because in order to avoid the filibuster and get the tax cuts put into place, the reconciliation process was used, which itself carries a sunset. So over the next 3 or 4 years, the tax cuts of 2001 and 2003 will expire. Once they expire, taxes will go back up in nominal amounts on every American.

All we have to do is to extend those tax cuts to keep tax rates at their current levels, to be responsible about tax policy. But what does this budget do? In order to facilitate the explosion of new spending this budget contemplates, it assumes there will be no vote in Congress to extend those tax rates cuts. What does that mean?

Let's look at the first chart. Over the next 5 years, that means taxes are going to go up by $1.3 trillion. The lower income tax rates people are paying today are going to go back up. The child tax credit, the marriage penalty elimination, the estate tax reductions, and the small business tax relief all go back up. One year of AMT fix is contemplated, but the alternative minimum tax which is now slamming the middle class will not be accommodated in any year of this budget except for the first year. There are other extensions of other types of R&D tax credits and other things that are important for our economy that will go up. When you have totaled it all up, this budget contemplates and provides for $1.3 trillion of new taxes.

Over a 10-year period, the number is even more phenomenal: $3.9 trillion of new taxes. That is how we are facilitating the increased spending contemplated in this budget.

As I indicated, we are now facing a situation where Washington has returned to the tax-and-spend policies of the past. If we do nothing, which is what this budget contemplates, entitlement spending will continue to rage, driving up our debt. Discretionary spending will be accelerated, driving up the debt. Taxes will explode. When those tax rates go up, remember, it is going to happen with no vote in Congress. We are simply going to sit back and let America have the hugest tax increase it has ever had by taking no action to protect the American taxpayer.

I was elected to the House of Representatives back in 1992 or 1993. Ever since that time, we have tried to reduce taxes to accommodate a better tax policy and tax structure in this policy. Every time we have proposed a tax cut, that tax cut was attacked as a tax cut for the wealthy. That simply is not true. As our leader said, whether you look at the alternative minimum tax, the marriage tax penalty, the small businesses, the child tax credit, or the reductions of income tax rates across the board for every taxpayer in America, these taxes squarely hit the middle class and every income category across the board. We often talk about that typical family of four and the several thousand dollars of taxes they are going to be asked to pitch in for this. But it really is not just that typical family of four; it is a single mother, a single man, a family with children, a family without children, a married couple. Everybody who pays taxes is going to see their taxes go up dramatically.

This budget is not responsible. It is not responsible on spending policy. It is not responsible on taxing policy. It is not responsible because it provides for no action to deal with the entitlement reform so pressing in our Nation.

I yield the floor.

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