Onbehalf of the 362,000 members of the National Taxpayers Union (NTU), I urge youto support the “Honest Solutions” budget resolution drafted by RepresentativeJim Jordan (R-OH), Chairman of the Republican Study Committee. This fiscaloutline builds upon and strengthens the important reforms contained in the“Path to Prosperity” budget resolution introduced by Representative Paul Ryan(R-WI), Chairman of the House Budget Committee. These plans recognize that thetrue problem our nation’s finances face is overspending, not a lack oftaxation. By reforming and reducing spending, the Republican Study Committeeand Chairman Ryan are doing what President Obama failed to do in his recentbudget proposal: create a sustainable fiscal future while significantlyreducing the risk of a crippling debt crisis.
Bothresolutions would restructure and shore up Medicare by transitioning from thecurrent blank-check scheme that has ruined its financial condition to a“premium support” model under which expenditures would grow more affordably.With Medicaid, they would convert the program into steadily-growing blockgrants to better help states pursue innovative care options. When combined withreduced non-defense discretionary spending and fundamental tax reform, theseplans would put us back on course to a balanced budget and would gradually easeour staggering debt-to-GDP ratio. In further recognition of demographic andfiscal reality, the RSC’s proposal would phase in an increase of theeligibility age for Social Security and Medicare. Unfortunately, bothblueprints leave defense spending largely untouched. NTU continues to believe thatcarefully trimming defense expenditures is a prudent and necessary move; bothpackages could be improved by tackling inefficiency and wasteful weaponsprograms in the Defense Department.
If,as some have suggested in more clever words, we simply do nothing, taxes as apercentage of the economy will have to nearly double from traditional levels in order to fund our presententitlement-fueled spending trajectory. Taxes as a percentage of the economywould have to rise from their post-war average of about 18.2 percent to astaggering 34.4 percent by 2080. If we pursue President Obama’s budget outline,we would still have to raise tax revenue to roughly 23 percent of GDP in thenear future to reach balance. Considering that the federal government has neveronce raised more than 21 percent of GDP in revenue (even during World War II),this path is ruinous and unsustainable.
Republicanand Democratic Congresses alike, as well as Presidents Bush and Obama, got usinto this overspending mess in less than a decade and we believe it is onlyreasonable to expect to begin cleaning it up within a similar timeframe. Thatis why NTU supports the RSC plan – which achieves balance at the end of thedecade and reduces spending to the historical revenue average of 18 percent ofGDP in roughly half that time – as the best outline for the future. However, ifthe RSC’s legislation does not pass, we strongly urge enactment of the Path toProsperity legislation as the only other outline to honestly and credibly seeksolutions without massive tax hikes.
ChairmanRyan and the Republican Study Committee have proven that not only is itpossible to solve our budget challenges without tax increases, it is also achievablewhile still allowing for steady and manageable growth in our commitments toseniors and the poor. We applaud their efforts and look forward to working withyou to secure our fiscal future.
Vice President of Government Affairs