BELT-TIGHTENING IN THE NEW DEFICIT ERA The era of budget surpluses is over. In record time, the Bush Administration, with a helping hand from Congress, has blown the surplus to bits. Although no one here in Washington is surprised, it is beyond belief that $4 trillion of projected surpluses have evaporated.
Tax Policy and the Federal Budget Deficit
Here is a news update from Taxpayers for Common Sense. TCS is the best organization that monitors excessive government spending, corruption and corporate welfare.
To get the federal budget back in the black, lawmakers need to shift significant expenditures away from wasteful and obsolete government programs and apply those vital resources to protect against terrorist threats and to deal with our economic woes. Furthermore, the nation needs additional funds for economic relief and to reinforce the safety net for workers who have lost their jobs.
As a result of the bottom falling out of the economy, the deficit this year will be $181 billion, not counting the Social Security surplus. In 2003, absent policy changes by Congress, it will grow to $193 billion. The Congressional Budget Office has also reported that sixty percent of the change in the budget surplus numbers over the next ten years is attributable to the tax cut and to increased federal spending by the current administration.
Even cutting spending this year would not by itself get us into the safety zone. To ensure that the government has the resources to meet its military goals, education and other priorities will require fiscal discipline. To balance the budget in the short-term while providing needed funding for for high-priority spending, Taxpayers for Common Sense proposes the following:
Keep the new 10 percent tax bracket as well as marriage tax relief, the child credit and other provisions. Freeze future cuts in the top four tax brackets, retain the personal exemption phase-out, and drop estate tax changes (other than increasing the threshold to $1 million). These minor changes to the Bush tax plan would save over $500 billion between 2003-2011. In addition, this proposal would maintain the tax cuts for families and low-income workers -- the taxpayers in greatest need who are most likely to spend the additional funds and thereby contribute immediately to economic revival.Last year, Congress and the Administration acted like tax dollars grew on trees. They thought we could pay for a tax cut, increase federal spending by 8 percent and then with the money left over pay down the national debt.
Now that we are struggling with a recession and fighting the war on terrorism, it is vital that the President and Congress focus on what is best for the long-term fiscal health of our nation. They need to resist the temptation to use the war to justify blowing a crater into the federal budget. It is time to repair the fiscal mistakes of last year: Let's start by making the tax cut more affordable.
For more information, contact Keith Ashdown at (202)-546-8500 ext. 110
or by email at email@example.com
TCS is at www.taxpayer.net
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