Tuesday, March 19, 2013

The Hill: Erik Wasson- ‘House Democratic Budget Includes $1.2T in Taxes, $200B New Stimulus’

Source:U.S. Congress- U.S. Representative Chris Van Hollen (Democrat, Maryland) Ranking Member of the House Budget Committee (113th Congress)

“House Democrats on Monday unveiled a 2014 budget proposal that includes $1.2 trillion in new taxes and $200 billion in stimulus spending.

That’s about twice the level of stimulus spending that what was in the Senate Democratic budget, which included $975 million in new taxes.

House Republicans have a budget that would lower tax rates and cut spending by $5.7 trillion compared to the Congressional Budget Office baseline.

The House Democratic budget, authored by Budget Committee Ranking Member Chris Van Hollen (D-Md.), would raise $1.2 trillion in revenue over ten years by ending tax breaks for both corporations and individuals.

“We focus immediately on accelerating the economic recovery, on growing jobs rather than shrinking jobs,” Van Hollen told reporters.” 

From The Hill 

This is a better plan then the House Republican budget plan because it moves us past the George W. Bush borrow and spend policies where you can cut taxes indefinitely and increase defense spending indefinitely without paying for any of it.

What House Democrats are trying to do led by Chris Van Hollen (Ranking Member of the Budget Committee) is say we have both a revenue and a spending problem. We are spending too much money in some areas. We aren’t collecting enough money to pay for the things that the Federal Government needs to do and we need to invest more in areas that we should be spending on, that leads to better economic and job growth, like in infrastructure, science, and other research.

So the goals are clear and very laid out and if Representative Paul Ryan wasn’t Chairman of the Budget Committee and Representative Van Hollen was, this plan would probably pass in the House.

The problems with the Van Hollen budget plan are both pragmatic and structural. This is the plan that will be offered by the House Democrats that will be the minority substitute to the Ryan Plan. Which is Congressional speak for House Democrats are currently the minority party in the House, therefor don’t have the members and votes to pass their own bills. They can only offer amendment and substitutes to what House Republicans will be doing. And therefor this plan will never become law, at least not in this Congress.

And then there’s the structural problem with the Van Hollen Plan: they want to raise taxes during a weak economy to pay for more Federal spending. I agree with them on infrastructure, I just don’t think you invest more in in infrastructure in a weak economy that’s barely growing a 1%, by making the cost of doing business in America more expensive. But instead have everyone chip into the new roads and other infrastructure projects that we need, as well as the improvements.

As I’ve written before, Congressional budget plans are generally not worth more than pop culture catch phrases and political slogans and tend not to be anything more than visions and wish lists: “This is what we would do if we just had the power and votes to get it done.” But at least this gives American voters a real choice in who they want to see in control of the House of Representatives two years from now: Republicans or Democrats. 

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