By Walter Alarkon - 08/30/10 02:00 AM EDT
Most of the budget savings from House GOP Leader John BoehnerJohn BoehnerNew Trump campaign boss took shots at Ryan on radio show Election reveals Paul Ryan to be worst speaker in U.S. history Getting rid of ObamaCare means getting rid of Hillary MORE’s proposed spending cuts would be canceled out by the extension of upper-income tax cuts also backed by Republicans.
BoehnerJohn BoehnerNew Trump campaign boss took shots at Ryan on radio show Election reveals Paul Ryan to be worst speaker in U.S. history Getting rid of ObamaCare means getting rid of Hillary MORE, who hopes to succeed Rep. Nancy Pelosi (D-Calif.) as Speaker next year, laid out his economic vision in a speech Tuesday, calling for a host of spending reductions and tax-cut extensions that go further than what Democrats and the White House want.
Boehner also targeted spending identified by Republicans on the Budget Committee as items that could be eliminated immediately.
The GOP spending cut package includes $266 billion in remaining stimulus funds that could be repealed and another $111 billion for reducing government employment, freezing federal worker pay, canceling unspent bailout funds and reforming mortgage guarantors Freddie Mac and Fannie Mae. The amount of savings was estimated by Budget Committee Republicans in May, when they first proposed their plan.
Boehner's spending reductions would total more than $700 billion in savings beyond cuts that Democrats have proposed. But that’s also the approximate cost of extending the tax cuts for upper-income earners, meaning extending those tax cuts would wipe out those savings.
Thus, unless Republicans did more to cut the deficit, enacting the proposals pushed by Boehner this week wouldn’t produce much more savings than Democratic policies.
When asked about
the deficit impact of Boehner's economic plan compared to Democrats',
Boehner spokesman Michael Steel said the question was based on a
"flawed premise." Steel stressed the Republicans are seeking to
prevent tax increases backed by Democrats.
"Only in Washington Democrats' logic do you need to raise taxes to prevent a tax hike," he said. "It's the American peoples' money, not the government's money."
President Obama and Democratic leaders in Congress have pushed to extend the expiring Bush-era tax cuts only for individuals making less than $200,000 and couples making less than $250,000. Higher earners would see the tax cuts enacted a decade ago expire at the end of this year.
The Democrats’ proposal would add about $3 trillion to the country’s debt over the next decade, according to independent estimates by the non-partisan Tax Policy Center.
The proposal backed by Boehner and top Republicans would extend the expiring tax cuts for all taxpayers, including those making more than $200,000. That would cost about $3.7 trillion over the next decade — $3 trillion for the middle-class and low-income earners, and another $700 billion for wealthier taxpayers.
“Doing what the Democrats want to do with taxes, will save somewhere between $700 billion and $900 billion, which is more fiscally conservative,” said Roberton Williams, a Tax Policy Center senior fellow.
Democrats have panned Boehner's proposals for adding to the deficit,
cutting discretionary spending that includes veterans' benefits and
ending stimulus funding that has provided tax cuts for the middle class
and contracts for small businesses.
"George Bush’s policies drove the economy into a ditch, House Republicans want to drive it off a cliff," said Doug Thornell, a spokesman for Rep. Chris Van Hollen (D-Md.). "This country cannot afford John Boehner’s reckless and radical ideas.”
Republicans have blasted Democrats for overseeing a deficit that will reach about $1.4 trillion for the second straight year. But GOP leaders have tried to juggle their deficit concerns with worries about tax increases, which they see as poison to an economic recovery.
Boehner argued Tuesday that the deficit problem — annual
budget shortfalls will average roughly $1 trillion over the next decade —
won’t be solved if tax rates go up and the economy sputters.
“Raising taxes on families and small businesses during a recession is a recipe for disaster — both for our economy and for the deficit. Period. End of story,” Boehner said. “That’s why President Obama should work with Republicans to stop all of these job-killing tax hikes.”