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Washington, DC – Congress has approved the outline of President Obama’s $3.6 trillion budget. Although no Republicans voted for the budget, there was bipartisan opposition to Obama’s budget as twenty fiscally responsible Democrats voted against the $3.6 budget busting plan.
The Congressional Budget Office (CBO) estimates that President Obama’s budget will leave the United States with a $1.8 trillion deficit, meaning the United States will have to borrow nearly half of the money it spends. The CBO further estimates that the Obama budget will add $9.3 trillion to our $11 trillion national debt
If President Obama’s budget passes, it will represent 12 percent of GDP, shockingly higher than the historical norm of three percent. According to the CBO, the cumulative federal debt to GDP ratio will jump form 41 percent in 2008, to a staggering 82 percent by 2019. By comparison, in 2008 France had a debt to GDP ratio of 68 percent.
The President also calls for at least 1.5 trillion in new taxes, and a cap-and-trade energy tax that is estimated to raise energy costs by $3,000 per American family. The President’s budget will provide for a massive expansion of government in health care and education, but the budget has not identified how he will pay for these new programs. The new government programs are at odds with the President's stated goal of halving the yearly deficit to less than $600 billion in five years. New programs are proposed, but nothing in the budget indicates the President will begin to fix our collapsing entitlement system.
The burden of this debt will be borne by young Americans and future generations, saddling them with higher taxes and a debased dollar.
House Republicans offered an alternative budget based on a freeze in federal spending and tax cuts to let families keep more of their own money in the economic slowdown. Included in the alternative budget is a bold proposal by Congressman Paul Ryan (R-WI) to flatten and simplify the tax code. Ryan’s plan would immediate simplify Americans' lives by easing tax compliance and creating a tax code that respects them.
FreedomWorks President Matt Kibbe commented:
“President Obama’s budget is a fiscal train wreck. There are only three ways for the government to spend money it does not have: print, borrow, or tax. Today we are spending, and tomorrow it will have to be paid back with higher taxes and inflation. Taxes will harm the economy, and inflation will rob Americans of their buying power. This is the recipe for a return of 1970’s stagflation. The bottom line is that Americans just cannot afford President Obama’s budget.”