Revolutionary War and War of 1812 Battlefield Protection Act--Continued
Floor Speech
REVOLUTIONARY WAR AND WAR OF 1812 BATTLEFIELD PROTECTION ACT--Continued -- (Senate - March 17, 2009)
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FISCAL YEAR 2010 BUDGET
Mr. THUNE. Mr. President, the Senate will in a couple of weeks take up the fiscal year 2010 budget. It is a defining document. In many cases, the budget establishes a blueprint for the agenda, what is going to happen in the Congress.
We normally get a budget proposal from the President, and the Congress takes it up and acts on it. We have gotten that blueprint from the new administration. The Congress will, as I said, in a couple of weeks take up our version of that budget, put it into legislative form, and take action on it.
I think what most Republicans in the Senate are going to take issue with in this budget is the fact that it does spend too much, tax too much, and borrow too much. We believe the budget as proposed is going to be very harmful to the economy at a time when we ought to be looking at creating jobs. In fact, this budget could do the exact opposite. It could cost the economy a significant number of jobs because it is going to impose all kinds of new burdens on that economy.
The first point I would like to make with respect to the issue of spending too much--as I said, it spends too much, taxes too much, borrows too much, but if we look at the amount of spending in the bill on the surface, discretionary spending would increase by $725 billion over 10 years. Mandatory spending would increase $1.2 trillion during the same period.
Total spending in this year's budget for fiscal year 2010 is $3.9 trillion or 28 percent of our gross domestic product. That means we would be spending more as a percentage of our gross domestic product than at any time since World War II.
That is a stunning and staggering fact when you think about it. At a time when a lot of Americans are being asked to tighten their belts in a difficult economy, this budget grows the size of Government by 9 percent for nondefense programs in fiscal year 2010, for a total of 20 percent growth in these programs since the year 2008.
There has been a lot of talk about revising the history of the past 8 years. But this budget spends more than the Bush budget every single year, and that is even after adjusting for inflation.
For those on the other side who have been critical of the overspending on the Republican side--and I don't deny the Republicans spent more than we should have when we were in control of this place, but this budget is staggering in terms of the amount of spending it includes--$3.9 trillion for fiscal year 2010, and, as I said, 28 percent of GDP, which would represent the highest level of share of GDP at any time in this Nation since World War II.
With respect to the issue of taxes--and as I said, it spends too much which, obviously, any person who looks at this would agree with, but it also taxes too much. If you look at the taxes in the proposal, there is on the surface a whole lot of new revenue that is raised just by allowing previous tax policy to expire. We are going to see tax rates increase on people at the higher income levels.
The argument by the Democrats in the Senate has always been--and by the President, for that matter--that 95 percent of the people in the country are going to get tax cuts, and these new taxes on the economy are not going to impact that many people.
We are going to take issue with that because if you look at the total amount of new taxation--and when I say ``new,'' I am talking about net new taxes because that is independent of the tax relief. What they call the make work pay tax credit that is included in this bill does reduce the tax burden on some Americans by a certain amount. But the overall tax burden on the American economy is going to grow by $1.4 trillion.
Again, to put things in perspective, $1.4 trillion is equivalent to the annual GDP of Spain. We are going to raise taxes by $1.4 trillion in an economy that is in the middle of a recession.
Much has been made about the fact small businesses are going to be saddled with new taxes under this budget. There have been statistics thrown around. Make no mistake about it; if you are a small business with more than 20 employees and you are organized as a subchapter S corporation or an LLC and, therefore, the income you derive from that business flows through to your individual income statement, you are going to pay a higher level of taxes if you have a certain amount of income coming in.
So any company that makes $200,000 or $250,000 a year adjusted gross income because it flows through to the individual tax form, that individual could be facing much higher taxes. In fact, what has been determined through the analysis that has been done is that 60 to 80 percent of small businesses in this country will see their tax burdens go up because of the taxes included in this budget--$1.4 trillion in new taxes, which, as I said, is the equivalent of the annual GDP of Spain in the middle of a recession.
The other point I would make to those who say this is not going to impact average middle-income Americans is, if you look at the energy tax in this bill, I don't know how you can get around the fact that is going to hit everybody across the board.
The administration has said the revenue raised on the cap and trade--we call it the energy tax component. It is going to be a tax on utilities because the utilities are going to pass this on. It is not going to be borne by the utilities. It will be passed on to consumers. The administration has indicated $646 billion or $650 billion in revenue will come in from this new cap-and-trade proposal or this new energy tax proposal. I would argue that based upon additional analysis that has been done, it will be significantly more revenue coming in from that, which means it is going to cost the economy significantly more as well.
I refer my colleagues to an MIT study that was done in 2007 where they looked at a proposal, the Boxer-Sanders proposal--S. 309, I believe it was--and made an assessment as to what that would cost the economy. Bear in mind the President, while he was a Senator, cosponsored that proposal, and his proposal for a cap-and-trade regime is modeled very much after that legislation.
What MIT found when they modeled this was that it would cost the average household in this country $3,128 in the year 2015 if this sort of cap-and-trade proposal were implemented and put into law.
As I said before, that assumes a much higher level of taxation, a much higher level of revenue coming in from this cap-and-trade proposal than does the President's budget.
I would argue that the President's budget dramatically underestimates the impact of the cap-and-trade proposal in terms of cost to the economy and the additional taxes that will be passed on, and that this represents a much more accurate review.
The Congressional Budget Office also has in their analysis concluded that by the year 2020, this could cost somewhere between $50 billion and $300 billion a year. The MIT study suggests it would cost more than $300 billion a year. I think as more and more analysis is done and more and more data is captured about this cap-and-trade proposal, we are going to find it is extremely more expensive than what has been anticipated and what has been assumed in the President's budget.
The energy tax piece of this is going to be passed on to everybody. If you are a middle-income taxpayer, a lower income taxpayer, or a small business, energy costs are going to go up. The argument has also been made the make work pay tax credit would offset that. That is true up to a point, but that is up to $400 for a single filer and $800 for a couple filing jointly and phased out so that people in the middle-income categories are still going to be faced with this significant energy tax that is paraded by the new cap-and-trade policy that is assumed in the President's budget. Not only does it directly raise taxes--the $1.4 trillion that I mentioned earlier which equals the annual GDP of Spain--the tax increase is going to be passed on to a lot of small businesses in this country. But there is this cap-and-trade tax, which is the secret job killer in this budget in terms of the enormous burden and cost it will impose on our economy, on small businesses, and on working families in this country.
As I said before, this budget spends too much, it taxes too much, and the other point I will make is that it borrows too much. If we look at the amount of borrowing that is entailed as a result of this budget and what it does to our national debt over time, again, the numbers are quite staggering.
This budget doubles--doubles, Mr. President--the public debt in 5 years and triples it in 10 years. The amount of borrowing that we are passing on to future generations is going to double in 5 years and triple in 10. Just to put this in perspective, this creates more debt. The President's budget creates more debt than was accumulated under every President in this country from George Washington through George Bush. In other words, from the inception of our country, from our very first President, George Washington, to George Bush, his Presidency included--a lot of people have criticized the previous administration for adding to the Federal debt. In fact, during the Bush administration, it was about $2.9 trillion that was added to the Federal debt. This is going to dwarf that by multitudes. It doubles the publicly held debt in 5 years and triples it in 10 years and accumulates more debt than was accumulated from the time of George Washington through the Presidency of George Bush.
That is a stunning amount of borrowing. We are getting to where even if the President's budget proposals and economic assumptions are accurate--and I would take issue with those--where the total amount of borrowing, the total amount of public debt is going to be about two-thirds of our GDP, those are numbers we have not seen at any time in this country since World War II.
There are incredible amounts of spending, incredible amounts of taxation, incredible amounts of borrowing, and lots of policy changes that we think are very bad for the country and very bad for our economy at a time when we need to be putting policies in place that will create jobs, stimulate the economy, and help expand it in a way that will make this country more prosperous and stronger for the future.
In the debate that will ensue in the next several weeks--and it will get underway in a couple of weeks--we are going to be making lots of arguments, as both sides will--those who are in favor of the President's budget proposal and those of us who are opposed to it--about the substance of it. I hope when we focus on the substance of it, the American people will tune in because they ultimately are the ones who pay the costs.
For the taxpayers of this country who bear the burden and responsibility of financing the many new initiatives that are paraded in this, it does create a lot of new initiatives. It does away with guaranteed student loan lending, a program that has been very successful across this country and moves everything back into direct lending of the Federal Government. It, as I said, creates an entirely new energy program, a cap-and-trade program, which
is a tax. Let's call it what it is. It is going to impose an incredible cost on our economy, not to be borne by corporate America; it will be passed on to the American consumers. If the MIT study that was done a year ago is right, there will be $3,128 per household in this country to comply with the additional costs that will be imposed as a result of this new cap-and-trade proposal included in the President's budget.
It assumes some $600 billion for health care reform. We have not seen specifics and details about that, but we are concerned as well about the direction in which that may be headed.
There are lots of reasons to be opposed to this budget. There are lots of things we could and should be doing to get this economy growing again, but clearly, raising taxes, spending more money here in Washington, DC, borrowing more from our children and grandchildren is not the way to go about this.
I wish I could say I was presenting the worst-case scenario. The numbers we are seeing here are probably optimistic. I think the President's economic assumptions with respect to inflation, unemployment, GDP growth, and all those sorts of things are overly optimistic. I think they have dramatically understated, as I said, the cost of the cap-and-trade proposal. They have understated savings that will be achieved by reductions in our military spending as a result of drawdowns in Iraq. I don't think that is going to be nearly what they assume it is going to be. I think the actual deficits and debt that are going to come as a result of this budget proposal that the President is putting in front of us is going to be way beyond anything we are even contemplating now.
I have to say, what we are contemplating now is way beyond anything we have seen throughout our Nation's history. It is not fair to future generations for us to be saddling them with this enormous amount of debt. As I have pointed out before on the floor, we have had a tradition in this country of one generation sacrificing for another; one generation going without things so that future generations can have a better life. We have turned that ethic completely on its head with this budget by the amount of borrowing and spending that we are doing and in the amount of taxing. We are taking from future generations and asking them to sacrifice so we can have a better life today because we have not been willing or able to live within our means.
It is high time that Congress started taking the steps necessary to get this budget under control, to not buy into the spending spree. Since we have been here--and it has been a little over 50 days in this new Congress and the new administration--the level of spending is now at $1.2 trillion--$24 billion a day or $1 billion an hour that we have spent already--and that is before we even get to this fiscal year 2010 budget, which includes historic levels of spending, historic levels of taxation, the largest tax increase in American history, and historic levels of borrowing that asks future generations to make sacrifices which are not fair to ask of them.
It is our responsibility to live within our means. We can do that. We can put policies in place that will be additive in terms of creating jobs and growing our economy and making our country stronger. Going down this path is not going to do that. I hope as we debate this in the next couple of weeks that it will become clear to the American people who is standing up for the American taxpayer and what the costs are--the actual costs--that we are asking not only them to bear but asking their children and grandchildren to bear.
Mr. President, I yield the floor, and I suggest the absence of a quorum.
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