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House GOP fears ‘vicious cycle’ of taxes
Question of the Day
House Republicans say the dozen appropriation bills crafted by Democrats this year will result in more than $100 billion in new spending that will set off a “vicious cycle” of higher taxes and will cripple the economy.
“This is beyond the definition of big spending,” said House Republican Chief Deputy Whip Eric Cantor of Virginia.
Democrats dispute the accusation, saying no taxes will be raised to pay for spending programs and that their plan includes middle-class tax cuts.
“For [Republicans] to try to say they are the party of fiscal responsibility is ‘Alice in Wonderland,’ and Lewis Carroll is writing their stuff,” said House Majority Leader Steny H. Hoyer, Maryland Democrat.
At the heart of the tax debate is a Democratic proposal to allow the 2010 expiration of a series of tax cuts instituted by President Bush in 2001 and 2003. Democrats say the action would result in a budget surplus of at least $150 billion by 2012, which will help pay for spending increases.
Republicans say that sunsetting the cuts would in effect amount to at least $217 billion in new taxes in 2012, the second-largest tax increase in history.
“The [Bush] administration does not believe that the first step on the path to a balanced budget should be a substantial increase in federal spending, yet that is precisely what is called for in the budget resolution adopted by the House and Senate,” said Rob Portman, outgoing director of the White House Office of Management and Budget.
With Democrats adopting pay-as-you-go budget rules, which require new expenditures to be accompanied by equivalent spending reductions or tax increases, Republicans say Democrats will be forced at some point to impose new taxes, thus further undermining their public support.
“Democrats continue to tout their pay-go as proof of their commitment to fiscal discipline,” said Rep. Paul D. Ryan of Wisconsin, the ranking Republican on the House Budget Committee. “But, assuming they actually stick to this rule, all it actually requires is that they offset their ever-higher spending with savings elsewhere — or as they’ve shown with every action they’ve taken to date — chase that spending with ever-higher taxes.”
Democrats say nothing in the 2008 budget, which begins Oct. 1, will change the tax cuts on the books through 2010. They add that their spending requests hardly are excessive.
Mr. Hoyer said the Democrat-crafted House budget offers less than a 1 percent increase in overall spending.
“This administration continues to believe that Congress’ role is to rubber-stamp whatever it asks for,” Mr. Hoyer said. “The American public doesn’t believe that, and [congressional Democrats] certainly don’t believe that.”
Democrats say the budget supports an extension of the child tax credit and marriage penalty relief, provides for estate tax reform and deductions for state and local sales taxes, and protects millions of Americans against the alternative minimum tax — as long as appropriation bills uphold pay-go rules.
Only four of the 12 appropriations bills in the House offer spending caps less than what Mr. Bush has proposed in his budget for fiscal 2008. The Bush administration has promised to veto most appropriations bills that exceed the president’s budget request.
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