An 11th hour amendment to S. Con. Res. 11, the Senate Budget Resolution, could open the door to tax hikes to pay for increased spending, far above the Budget Control Act (BCA) caps.
Senator Kaine’s (D-VA) Amendment #1047 passed 50-48 at 3:02 am this morning – just before final passage of the underlying budget resolution. The amendment garnered support from all Democrats in the chamber and a handful of Republicans including: Alexander (R-TN), Ayotte (R-NH), Collins (R-ME), Corker (R-TN), Graham (R-SC), and McCain (R-AZ).
The text of the amendment reveals that it would “provide for sequestration replacement” by creating a “Deficit-Neutral Reserve Fund Relating to Revise or Repeal Sequestration.” It would provide such “relief” with offsets “in mandatory or discretionary spending programs and tax expenditures.” In other words, it would open the door to raise taxes in order to bust the budget caps that have helped restrain spending and reduce the deficit.
It’s not clear that the amendment will be carried over into the final product that emerges from the upcoming Budget Conference, but it is clear that there is a bipartisan appetite for more spending and tax increases are on the table Because the amendment is a Deficit Neutral Reserve Fund, as opposed to a Spending Neutral Reserve Fund, tax hikes could be used to fund increased spending, rather than finding offsets elsewhere in the budget.
Using tax hikes to undo the BCA would imperil our already anemic economy, kill jobs and send investment overseas. No matter how you run the numbers, there’s no way we can tax ourselves out of the fiscal morass we find ourselves in and imposing more costs on the most productive areas of our economy would only compound the problem.
It should be shocking to taxpayers that rather than rooting out waste and making the tough choices necessary to stay within the modest spending caps imposed by the BCA, legislators are willing to risk our economic recovery with cash grabs that can’t begin to make a dent in our growing debt crisis.