(Alexandria, VA) -- Today's data from the White House is a welcome confirmation that recent tax cuts have boosted the economy, but rising revenues won't erase budget deficits unless Washington acts now to hold the line on future spending, according to the 350,000-member National Taxpayers Union (NTU).
"The latest report from the White House's own Office of Management and Budget highlights what taxpayers and most economists already know: reducing the federal tax burden creates new incentives to work, invest, and create jobs," said NTU President John Berthoud. "That's why nearly every time Washington has cut tax rates, the Treasury has received substantial increases in federal revenue. Despite the good news that the Administration's target of cutting the deficit in half may be met sooner, the vital mission of actually balancing the budget must be achieved by significant spending restraint."
Berthoud noted that the loudest applause likely to be heard from taxpayers over today's news is in response to the President's call to end the politicization of Medicare and Social Security, and enact substantive reforms before the next generation of America retires.
Medicare's and Social Security's fiscal maladies are not as far off as some policymakers would like the public to believe. In the next nine years, Medicare Part A will run a combined deficit of $112 billion, more than a fourfold increase from last year's projection. This reality has so far spurred little debate on Capitol Hill, a situation NTU's members hope to reverse. Just a few of the many NTU-backed initiatives for change include moderately restraining the growth of future benefits, preventing a cost explosion in the Medicare Part D prescription drug program, and allowing Americans to save more for their own retirement.
"This report can be treated in one of two ways," Berthoud concluded. "Policymakers can continue the push for more economic freedom and tame the growth of entitlements, or they can spend this revenue windfall on pork-barrel projects and unsustainable programs. As the entitlement crisis looms ominously on our nation's fiscal horizon, taxpayers can only hope the sun will not set on these important tax cuts."
NTU is a non-profit, non-partisan organization working for lower taxes and smaller government. Note: More information on tax cuts, along with recommendations for budget process reform and spending reductions, may be accessed online at www.ntu.org.