- The Washington Times - Wednesday, March 21, 2007

If there’s one thing every American on a budget knows, it’s that you can’t have it all.Ordinary Americans know that if you increase spending in one area of your budget, you have to decrease spending in another area, or risk going into debt. And they know that if you’re already in debt, you have to trim your expenditures to pay back the money you owe. Unfortunately, the budget proposal that the Democrats introduced last week fails to understand this important principle.

The Democrats’ budget sends one message loud and clear: You can have it all. You can increase spending to the tune of $150 billion, pay down the deficit and create a budget surplus all at the same time. What the Democrats’ budget isn’t as clear on is how to actually pay for all this. The proposal conveniently disguises the fact that Democrats are prepared to allow massive tax increases to pay for their increased spending.

Like President Bush, the Democrats claim their proposal will balance the budget by 2012. But unlike the president, the Democrats claim they can balance the budget — and, indeed, produce a surplus — while spending approximately $150 billion more than the president over the next five years. They argue that they can make up the difference by closing — or at least narrowing — the “tax gap,” the difference between what the government expects to collect in taxes and what it actually collects. But as the New York Times reported, even Senate Budget Committee Chairman Kent Conrad “conceded that reducing the so-called tax gap would not provide enough money on its own.”

Without any way of paying for their spending increases, Democrats are left with their old standby: raising taxes — which is what the Democrats’ budget proposal in fact does. By failing to extend the 2001 and 2003 Bush tax relief, the Democrats’ budget will result in a $900 billion tax increase over the next five years, the largest tax increase in U.S. history. Beginning in 2010, millions of American families would face punishing tax increases. Families with the lowest incomes would face the heaviest increases.

In addition to burdening families, the failure to extend the tax relief will also have a crippling effect on our economy. The tax relief we passed in 2003 helped move our economy out of recession and propelled us into more than three years of robust economic growth. Since August 2003, our economy has created more than 7.5 million new jobs, and unemployment has fallen. Our current unemployment rate of 4.5 percent is lower than the average of the past three decades. Meanwhile, the deficit has dropped from an estimated $500 billion three years ago to less than $240 billion this year, and it’s on track to keep falling.

Democrats like to argue that cutting taxes has deprived the federal government of needed revenue; but, in fact, the deficit reduction of the past three years is largely a result of revenue increases produced by the tax relief. Cutting taxes spurs economic growth, and economic growth creates more revenue for the federal government. Failing to extend the tax relief we’ve passed will not only place an unacceptable burden on millions of American families, but would also jeopardize our economic growth and our goals of balancing the budget by 2012.

The Democrats’ budget proposal also overlooks another threat to successfully balancing the budget: the growth of entitlement programs. If Congress does not take action to reduce the growth of these programs, in a few short years Social Security, Medicare and Medicaid will be facing bankruptcy as they expand to meet the needs of the aging Baby Boomer generation. Significant reform is necessary to ensure a long-term balancing of the budget and to preserve these programs for future generations. Despite this pressing need for reform, the Democrats’ proposal passes the buck to future Congresses, leaving all three of these programs moving swiftly toward bankruptcy.

During the last election cycle, Democrats talked a lot about their commitment to fiscal responsibility and a balanced budget, but the facts of their budget proposal demonstrate that they’re still committed to the same old tax-and-spend policies. The Democrats’ proposal uses deceptive budget gimmicks to disguise the fact that they can’t pay for their spending increases without levying the largest tax increase in our history.

Republicans will work to amend this budget to protect American families and promote fiscally responsible policies to secure our nation’s economic future.

Jon Kyl, Arizona Republican, is chairman of the Senate Republican Conference.

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