Democratic “balanced approach”: $1.5 trillion in tax hikes
posted at 8:01 am on March 14, 2013 by Ed Morrissey
This came out late last night — at least here in Rome — and so I missed a couple of e-mails on this rather momentous occasion when Senate Democrats finally produce a budget. It’s the first time in four years, and now it’s easy to see why they didn’t want to put their plans on paper. The FY2014 plan being moved in committee by new Budget Committee chair Patty Murray will hike taxed by $1.5 trillion — and spend even more than we do now.
A Republican staffer on Capitol Hill sent me this chart, along with an explanation:
The Senate Democrats’ budget claims to increase taxes $975B over the next ten years. They are actually hiding an additional $500 billion in tax proposals buried in their 113 page budget document (“Restoring the Promise of American Opportunity”).
First, at the top of page 8 they propose $100 billion dollars for a “jobs and infrastructure” package that “is fully paid for by eliminating loopholes and cutting wasteful spending in the tax code . . . “. This provision is hidden in the resolution itself as a so-called reserve fund (section 308).
Second, in the middle of page 21 they propose that “The budget replaces sequestration using the following equal mix of responsible spending cuts and new revenue . . . .” This includes “$480 billion in new revenue raised by closing loopholes and ending wasteful deductions . . . .” This is implemented through a reserve fund in the resolution (section 403).
Finally, on page 66 the budget document says “The Senate Budget calls for deficit reduction of $975 billion to be achieve eliminate loopholes and cutting unfair and inefficient spending in the tax code . . . .” This is the amount the Chairman refers to and the resolution directs the Finance Committee to provide this amount. However, this $975 billion includes $164 billion to extend refundable tax credits that were originally adopted in the stimulus bill. These tax credits are actually checks sent to people that do not owe income tax and, therefore, according to CBO, are increases in spending. Subtracting the $164 billion from $975 billion leaves a $923 billion tax hike (which is then added to the additional $580).
That’s two-and-a-half times larger than the tax hike Democrats won over the New Year break. Is that matched by cuts in spending, for a balanced approach to deficit reform? Not even close. According to another Republican staffer, spending increases every year over the projected ten-year window, far outpacing anticipated inflation:
Compared to the Senate Budget Committee Republican baseline (which is CBO baseline, without extension of Sandy Emergency category funding and with CBO’s alternative OCO path (to eliminate possibility of phony war and disaster relief savings), Murray’s budget spends a total of $207 billion more than the SBC baseline outlays over 10 years. The SBC baseline is a more accurate one because it’s less vulnerable to gimmicks, assumes roughly $46.2 trillion in spending over ten years. (this baseline is essentially Paul Ryan’s baseline as well, fyi.) Murray’s own budget says it spends $46.4 trillion over the ten year window. …
Murray’s budget spends $2.2 trillion more in 2023 (the last year of the budget window) than the 2013 levels – a 62% increase (significantly outpacing inflation).
Needless to say, this is a dead letter among Republicans:
The “budget would raise taxes on Americans by $1.5 trillion to pay for increased spending … on top of the $1.7 trillion in tax increases already signed into law during the Obama administration,” said a statement from Sen. John Thune, the chairman of the Senate Republican Conference.
“The policies of big spending and big government have led to a dismal average economic growth rate of just 0.8 percent over the past four years. It’s time to grow the economy, not the government,” he added. …
Sen. Jeff Sessions, the senior Republican on Murray’s budget committee, pitched a slower-growing, economy-boosting budget plan that would help people manage their own lives.
“We need to grow the economy, not the government,” he said in a statement. “We must act to create more jobs and better pay. And we can do it without adding to the debt,” he said, before ticking off a series of optimist-sounding measures.
“Pro-growth tax reform, more domestic energy production, make the welfare office a place to restart lives … enforce immigration law to ensure fairness for American workers, eliminate every burdensome federal regulation that isn’t needed and that destroys jobs [and] balance the federal budget,” Sessions said in a press statement.
What about President Balanced Approach? Oh, he likes the Murray budget:
“The Senate Democratic budget is a concrete plan that will grow our economy and shrink our deficits in a balanced way, consistent with the [p]resident’s belief that our economy grows best from the middle-out, not the top-down, while reducing the debt as a share of the economy,” said the statement.
For more fun, try to count how many times Jay Carney said the word “balance” in his press briefing yesterday, and then reconcile that with what we see in the Senate Democrat plan. Maybe by “balance,” Democrats mean “making up for lost time on tax hikes.”