America Needs Responsible and Balanced Budget

Posted April 14, 2008 at 4:53pm

Our constituents sent us to Washington to make responsible decisions that reflect the priorities and values of the American people. They want us to make choices that are forward-thinking and in the best interest of this great nation, not just for today, but for the country that we will leave our children and grandchildren.

As Democrats, we believe the federal budget and tax policy must reflect these convictions. The federal budget ought to be fiscally responsible and balanced, and it should cover our expenditures. We must make smart investments to expand economic opportunity for all Americans and enable us to compete in a global marketplace. And we must have the resources necessary to meet our obligations as a federal government.

When House Democrats took over the majority after more than a decade of Republican control, we inherited very difficult realities.

In 2001 and 2003, President Bush and the Republican Congress made irresponsible choices, leading to unprecedented growth in the national debt. Under Bush, the national debt grew more than it had under all other presidents combined. At the same time the president and the Republican majority were spending without any caution, they were giving away billions in tax breaks to the wealthiest Americans and shifting the tax burden unfairly onto the middle class. Their actions exploded the effect of the alternative minimum tax on unsuspecting families, increasing the number hit hard by the AMT from just about 2 million in 2003 to nearly 24 million in 2008. In order to make their numbers add up, the president and the Republican Congress made the 2001 and 2003 tax cuts temporary to mask their true unaffordable cost.

The Republicans’ course of action is untenable and irresponsible. Their fiscal policies have failed both American families and the American economy.

Now in the majority, Democrats are returning fairness and responsibility to the federal budget and federal tax policy.

First and foremost, we believe in the simple premise of PAYGO — paying as you go along. In order to meet our priorities, we will end unfair and unjust tax policies. We are adamant about ending tax loopholes that unfairly benefit individuals and corporations who exploit offshore tax shelters or engage in other accounting tricks.

Hardworking Americans have already seen the benefits of Democratic priorities. Just consider the economic stimulus rebates. Thanks to the leadership of the new majority, this relief was targeted to the people who have struggled the most under the Republican policies.

In the coming months, the Democratic Congress will work with the new president — whomever she or he is — to further extend tax relief to hardworking Americans and to strengthen our economy.

We will continue to push long-standing Democratic priorities: protecting the 10 percent tax bracket, enhancing the child tax credit, enacting permanent marriage penalty relief and expanding eligibility and improving the efficiency of the earned income tax credit. We also are pursuing a significant increase in the standard deduction, which will lead to a broad-based tax cut for millions of American families. And Democrats are committed to eliminating the AMT once and for all, without passing the burden to future generations.

Our priorities are built on the tenet that tax policy should encourage investment and innovation here at home. One such policy is Ways and Means Chairman Charlie Rangel’s (D-N.Y.) proposal reducing the top corporate marginal tax rate from 35 percent to 30.5 percent. A reduction of this magnitude will help American companies, and their employees, to continue to lead in an increasingly competitive global marketplace.

We are advocating for smart, fiscally responsible policies that expand economic opportunities and grow jobs here at home, including tax credits for research and development; investments in new green technologies and biotechnology; and enhancing and extending tax credits that encourage innovation, ingenuity and American entrepreneurship.

To compete in the global economy, we must make smart investments in education, including ensuring that a college education is financially attainable and supporting policies to educate more scientists and researchers.

Our federal budget obligations, including Medicare and Medicaid, must be looked at honestly. The U.S. health care system is inefficient and expensive, and it is lagging in its ability to provide quality health care for all. To fix this, we must pursue policies encouraging broad implementation of health information technology.

We know we have set out large goals, but we also know the American people deserve nothing less. They have asked us to move our country forward in a new direction, and that is at the core of our tax and budget policies.

Rep. Allyson Schwartz (D-Pa.) serves on the Budget and Ways and Means committees.