One Utah

A $2.7 trillion budget plan pending before the House would raise the federal debt ceiling to nearly $10 trillion, less than two months after Congress last raised the federal government’s borrowing limit.
The provision — buried on page 121 of the 151-page budget blueprint — serves as a backdrop to congressional action this week. House leaders hope to try once again to pass a budget plan for fiscal 2007, a month after a revolt by House Republican moderates and Appropriations Committee members forced leaders to pull the plan.

Once again, the Republicans will bill themselves as the party of fiscal responsibility. It is up to the Democrats to call them on this absolute and bald-faced lie. Here are the facts:

Bush has cut taxes twice - once in 2001 and once in 2003. The Republicans have continually tried to forget about the 2001 tax cut because revenues from individual taxpayers decreased for two years afterwards from $994 billion in 2001 to $858 billion in 2002 to $793 billion in 2003. That chain of events completely debunks their laffer curve mantra. While tax revenues increased from 2003 - 2005, they were still below the levels of 2001 by 6.7% in 2005. It will take a miracle for these tax cuts to pay for themselves.

At the same time, the “fiscally responsible party” has increased discretionary spending from $649 billion to $967 billion - a 48% increase. What’s the result of this massive increase in spending?

Why it’s a massive increase in total US government debt outstanding. Total outstanding debt was $5.8 trillion in 2001. Now it is over 8 trillion dollars - a 37% increase.

Let’s also remember the situation Bush inherited. He had a balanced budget. The Treasury discontinued the 30-year treasury because long-term borrowing was no longer necessary. The debt/GDP ratio had decreased for 5 years. The economy had a very strong expansion partly because businesses saw the federal government act responsibly by getting its spending under control.

Now we have a fiscal train wreck thanks to the “fiscally responsible” party and the MBA president.

This entry was posted Tuesday, May 9th, 2006 at 9:26 am and is filed under Economy, Republicans. You can leave a response, or trackback from your own site.