Democrats' Final Accomplishments: Spending Preserved at Status Quo, Taxes Set to Increase

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October 15, 2010

economy, taxes

Continuing (Resolution) Unsustainable Spending:

With the adjournment of the House of Representatives, Democrats put aside the priorities of the country in order to return to their districts to complete the campaign season. The legislative priorities the Democrats hammered through at midnight on September 30, 2010, were void of any effort to prevent a $3.9 trillion tax increase on the nation’s families and job creators. Instead, the Democrats chose to increase taxes and expand government by preserving its unsustainable spending levels.

Massive Expansion of Government: Above the projected levels of government spending by the Congressional Budget Office, the House Democrats have approved $3.183 trillion in new spending since 2009. This includes big-ticket spending items such as the following:

$634 billion spending included in the failed ‘stimulus’ experiment ($1.2 trillion total cost);
$864 billion for House passed cap and trade bill;
$849 billion in non-emergency appropriations above inflation;
$382 billion in net spending for ObamaCare (net includes the large reduction in Medicare); and
$83 billion for additional unemployment benefits.

“If You Can’t Budget, You Can’t Govern”: Those were the remarks made by Current Budget Committee Chairman John Spratt (D-SC) in 2006 after Republicans decided not to vote on their own budget resolution. This year, House Democrats not only failed to vote on a budget resolution, they failed to even propose a budget for the first time since the 1974 Congressional Budget Act was signed into law.

In addition, fiscal year 2011 began on October 1, 2010, but the Democrats have not signed into law any of the 12 appropriations bills for FY 2011, a Constitutional responsibility of Congress.

Leveraging America’s Future: The unsustainable Democrat budgets will ultimately result in a declining standard of living for future generations. For example, a child born this year will inherit $29,178 in public debt. By the time that child graduates from college, based on Congressional Budget Office (CBO) projections, they will be liable for $103,826 of government debt.

CBO estimates that under Democrat budgets, public debt will go from $5.803 trillion (beginning in the 111^th Congress—2009) to $20.294 trillion—more than triple— by 2020; and
Additionally, Democrats are responsible for adding over one-third of the total national debt in just the last four years. Since taking control of Congress in January 2007, Democrats have added more than $4.9 trillion to the current national debt of $13.642.

Democrat Deficits Unsustainable: Recently, President Obama’s former Budget Director, Peter Orszag, was quoted as saying, “A sustainable level [of deficits] is more like three percent or lower.” In 2009, the deficit amounted to 9.9 percent of GDP, and again this year, they are on pace to reach 9 percent of the economy. In fact, according to CBO estimates, Democrat budgets will run unsustainable deficits indefinitely.

The smallest projected Democrat deficit over the next 10 years is $724 billion (4.1 percent of GDP); and
Democrat budgets contain 5 years of deficits over $1 trillion.

Failed to Address Entitlement Crisis: Currently, Social Security and Medicare have a combined $43 trillion unfunded liability, a per household burden of $379,475. By doing nothing, these unfunded liabilities will increase by $14 trillion in less than five years, increasing the burden by $120,939 (total of $500,414) per household. Doing nothing to help save these programs effectively allows them to go into bankruptcy. Unfortunately, the Democrats have not only failed to address the problem, they’ve made it worse by adding an additional $2.6 trillion to the problem with ObamaCare.

Democrats Set to Raise Taxes by $3.9 Trillion:

The Democrats adjourned the Congress allowing the largest tax increase in America’s history to impact all taxpayers to the tune of $3.9 trillion on January 1. While they tried to manipulate the narrative by saying they will increase taxes only for the wealthy, in reality, the Democrats’ misguided policies will result in higher taxes for all taxpayers.

$685 Billion Down, $3.9 Trillion to Go: President Obama’s very first budget called for $1.4 trillion in tax increases, and his budget this year called for another $1.8 trillion in tax increases. If the House approved cap and trade legislation were enacted, it would increase taxes by an additional $873 billion. So far, the Democrats have succeeded in enacting tax increases by more than $685 billion since 2009.

$570 billion for ObamaCare;
$65.5 billion for SCHIP;
$7 billion in the failed stimulus;
$22.7 billion in UI, NOL relief, and Homebuyer Credit Bill;
$6 billion in HIRE Act;
$9.7 billion in the State Bailout Bill;
$2.6 billion in Small Business Bill; and
$.5 billion in supplemental appropriations bill.

Low- and Middle- Class Tax Increases: The Democrats wanted you to believe that nearly $4 trillion in tax increases was subject only to the wealthy. In what may come as a surprise to many, their policies will effectively increase taxes on everyone.

The lowest income tax bracket will increase from 10 percent to 15 percent, resulting in 88 million taxpayers facing a minimum tax increase of $503 on January 1, 2011;
75 percent of small businesses will face a tax increase;
The average middle-income family in America will see their taxes increase by an average of $1,535;
The death tax will be reinstated from 0 to 55 percent; and
Average marriage penalty will go from $0 to $595.

Dismal Economic Policies:

The policies of the Democrat-led Congress have been depressing—quite literally. The White House’s Office of Management and Budget (OMB) now predicts that the nation will have another year (2011) of unemployment that remains well above nine percent, and CBO has suggested that increasing taxes will lead to lower economic growth and higher unemployment.

$1.2 Trillion ‘Stimulus’ Experiment = 2.6 Million Jobs Lost: The Democrats ‘stimulus’ experiment will cost every single taxpayer $7,692—a bill taxpayer’s will pay for years to come. When signed into law in February 2009, Democrats promised 3.7 million new jobs; instead, the nation’s economy has lost a net total of 2.6 million, including 2.4 million private sector jobs.

1.5 million jobs lost in the construction and manufacturing industry;
7 million jobs short of Democrats’ stimulus promise; and
49 out of 50 states have lost jobs since Democrats’ stimulus was passed.

Sputtering Economic Growth: The 1.7 percent GDP growth rate in the 3^rd quarter is far below Democrat projections, and it appears the economy may worsen, as some economists and major banks are now project the economy to likely be “very bad” over the next 6 to 9 months. In addition, household wealth continues to decline, recently falling by $1.5 trillion in the 2nd quarter of 2010. U.S. households have lost more than $12 trillion since the beginning of the recession.

$12,941 – average drop in household value during the second quarter of 2010; and
U.S. household net worth would have to increase 23 percent to reach pre-recession levels.

Home Sales Continue to Decline: After the Democrats characteristically tried to prop up home sales with more government spending, home sales are once again at record lows. Sales of existing houses were the second-lowest on record in August, and new home sales also remain at near-record lows.

New house sales are still 74 percent below their peak in January 2006.

Lackluster Job Creation: For a record of 14 consecutive months, unemployment has remained above 9.5 percent—the longest span since the great depression.

The economy needs to produce 250,000 jobs per month over the next 5 years in order to return to pre-recession unemployment; thus far, Democrats have achieved an average of -138,000 jobs per month since the stimulus was signed into law in February 2009.

Source: Ways and Means Committee Republicans, House Budget Committee Republicans, BLS.gov, Tax Foundation

For additional information, contact:

The House Republican Conference Policy Office