(Alexandria, VA) – By proposing to bust the reasonable budget caps he agreed to just four years ago, President Obama would dash any hopes for a sustainable fiscal outcome -- that's the view of the nonpartisan National Taxpayers Union (NTU). NTU also warned Members of Congress to reject what amounts to a fiscal suicide pact -- accepting an increase in domestic outlays in exchange for a hike in Pentagon spending.
Notably, the budget would exceed the 2011 spending caps by $74 billion in the upcoming fiscal year. The caps have helped to gradually reduce budget deficits in recent years and eviscerating them in this fashion would be incredibly fiscally irresponsible.
Equally troubling, Obama's plan would raise taxes by $2.1 trillion, according to the House Budget Committee. Despite this massive proposed increase in taxes, his budget would never achieve balance.
Even with a boost in new revenue, this budget would allow our deficit to hover at its post-World War II high, thus putting our nation’s finances on a continued unsustainable path. By locking in a continued trend of financial irresponsibility, the President’s plan would see interest payments on the national debt more than double – from 1.3 percent of GDP to 2.8 percent in 2025.
Meanwhile, the President would essentially ignore the largest drivers of our debt – entitlement programs. His budget would even undo some of the cuts that he signed into law a few years ago, while continuing to offer many of the same discredited policies that have marked his Administration. Among these are stiff new taxes on energy production, which will not only raise prices and reduce job opportunities, but will also backfire in the long run. Ultimately the reduced economic activity from these new levies would lead to lower revenues for governments at all levels.
“The budget would be a major step backwards for taxpayers: reversing recent progress toward financial discipline, and by saddling businesses and individuals with bigger tax bills,” said NTU President Pete Sepp. “President Obama's proposal is a non-starter for deficit reduction or economic growth, and a dead end for working constructively with Congress. Its final destination should be the scrap heap."
National Taxpayers Union, “The Voice of America’s Taxayers,” is a nonpartisan, nonprofit organization working for lower taxes, smaller government, and economic freedom at all levels. More information on NTU’s work is available at www.ntu.org.