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Budget adds too much to debt

Our country is attempting to recover from one of the worst economic periods in history and the Democrats have a budget proposal that will do little to help. The budget proposal does help the Democrats though, by using a procedure called “reconcilliation” to pass their latest version of government-run health care. One of the Democratic ringleaders behind this proposal is South Carolina’s own, John Spratt. He is Nancy Pelosi’s House Budget Chairman. We must do everything we can to ensure that Congressman Spratt is not sent back to Washington next November.

The following editorial ran in the Greenville News and we thought that it explained the budget situation very accurately.

A budget proposal that increases spending, increases taxes and contains a token freeze on a small portion of federal spending puts the nation on a dangerous course as it struggles to emerge from the worst economic downturn since the Great Depression.

Certainly the Great Recession has put tremendous pressure on the federal government. Revenues are down and expenses are up as the nation struggles to turn its financial fortunes around. However, President Barack Obama’s budget proposals that call for a $1.6 trillion deficit this year, $1.3 trillion in fiscal 2011 and monumental deficits each of the next 10 years will make matters worse, not better.

South Carolina Sen. Lindsey Graham said it best in a statement issued after Obama presented his budget blueprint: “The Obama budget spends way too much. If this budget were passed as written, we would put future generations even deeper in debt. … As a nation we can and must do better when it comes to protecting the taxpayer’s wallet.”

Sen. Jim DeMint, who urged fiscal restraint and an end to earmarks, said the budget plan signals “business as usual in Washington.”

The good news is Congress will get to have its say on this budget; and a president’s budget proposal is not the final word. But Congress has seldom shown a willingness to make difficult decisions either. And some are necessary in this and future budgets if the nation is ever going to get its fiscal house in order.

Obama’s budget proposal calls for reversing the Bush tax cuts on families and small businesses earning more than $250,000 per year. The proposal ignores the impact on economic growth such a measure would have. Eliminating those cuts would reduce consumer spending — a key driver of the nation’s economy — and would hurt small businesses that are considered to be the backbone of American business.

Even with those tax cuts eliminated, the budget calls for deficits that will be dangerously high. Economists say federal deficits should never exceed 3 percent of gross domestic product. The closest Obama’s projected deficits for the next decade get to that threshold is 3.6 percent, according to a New York Times report. The deficits average 4.5 percent of GDP over the course of the next decade. That would swell a national debt that’s already more than $12 trillion and growing at an alarming pace.

Some of the tax cuts that have been proposed in this budget — a tax credit for employers who hire new workers is one — have been proven ineffective before. Employers are not going to hire workers because a tax credit has been offered. They will hire workers when their business is growing and that only can happen if people and businesses have a steady stream of income to spend.

What’s needed are tough decisions about cutting outdated and ineffective programs. Obama deserves credit for trotting out some proposed cuts that were rejected last year by Congress. But there’s little reason to expect Congress will have the courage to make any substantive cuts.

Adding to the fiscal pressure, Obama and Congress continue to promote a new jobs bill that will add to deficits without any impact on job creation, if the last stimulus is any indicator.

This budget proposal continues Washington’s runaway spending and puts off the tough decisions until after Obama leaves office. In recent days, the president has acknowledged that he understands the dire predicament our runaway spending and accelerating deficits have placed this nation in. But his budget proposal does not show that he’s willing to take any of the tough action that’s needed to address it.

February 10, 2010

Greenville News