Having resolved the recent federal debt ceiling “crisis,” Congress is now eyeing the federal budget for fiscal year 2024. That’s right, President Biden is proposing to increase future federal taxes and spending by $4.7 trillion and $1.8 trillion respectively. Ten years. He is trying to sell the policy by claiming that his plan will reduce the deficit by $2.9 trillion over the next decade. We believe that flipping the president’s numbers would lead to much better results for the country.
Please let me explain.
In the 40 years before the pandemic, federal spending accounted for an average of 21.1% of the economy as measured by Gross Domestic Product (GDP). The pandemic has necessitated a temporary increase in federal spending, but sadly despite the fading memory of the pandemic, federal spending as a share of GDP is still significantly higher than before the crisis. Until now. (Related: Alfredo Ortiz: America Needs a Debt Ceiling Deal That Really Solves Inflation)
According to the Congressional Budget Office, federal spending averages 24.1% Percentage of GDP over the next 10 years.President Biden wasn’t satisfied with the expected significant growth, pushing the 10-year average to 24.8%.
Don’t be fooled. Given that the cumulative GDP is projected to sum, $332 trillion Even a 0.7 percent increase in federal spending over the next 10 years would make sense, to say the least.
Federal spending shouldn’t grow faster than the economy or the people’s payroll, and President Biden’s plan will do just that.
The Biden administration’s policy approach is reminiscent of President Ronald Reagan’s statement: government view On the economy: “If the economy moves, tax it. If it keeps moving, adjust. If it stops moving, subsidize it.”
We propose another approach. It will make the country’s financial base more sound, reduce the government’s burden on household budgets, and lead to an absolute improvement in living standards. Liberal budgetary policies raise the cost of living, Decreased quality of lifeand Americans are ready for change.
We propose a prosperity-promoting strategy that flips the numbers for President Biden.Excluding that tax increase If we pay $4.7 trillion, cut federal spending $4.7 trillion increase.Excluding that Increased federal spending at $1.8 trillion cut federal taxes $1.8 trillion increase.
President Biden’s budget plan, at least on paper, would cut the federal deficit by $2.9 trillion over the next decade. Our proposal would also cut the deficit by $2.9 trillion. No change.
But while President Biden’s budget will expand the size of government and the federal tax burden, our budget will shrink the government and reduce the tax burden for U.S. taxpayers.
Most importantly, President Biden’s proposal will hurt America’s long-term economic growth, while ours will boost it. That’s the key.
That’s why it was signed by 435 economists, including two Nobel laureates. open letter Earlier this year, he called on Congress to reject President Biden’s irresponsible budget plan. Citing the Biden administration’s “anti-growth” tax and spending policies, economists conclude: We have huge spending problems. ”
Needless to say, allies of the Biden administration and the Capitol, perhaps without hesitation, said that the $4.7 trillion federal spending cuts (together with the $1.8 trillion tax cuts) would “water down” federal programs and cut all sorts of will impose a policy of harm. (Related: Starr Parker: Do Nothing Democrats Want To Get Paid Instead Of Working)
In fact, our proposed cuts would cut federal spending and taxes modestly by 5.9% and 3%, respectively, compared to current law.
Why do we reject the big government socialist ideals of the Biden administration? We do this because we want the US economy to grow, not the federal government.
President Biden is proposing to increase federal taxes and spending. We humbly propose another vision.
James Carter is Director of the Center for American Prosperity at the America First Policy Institute. He previously served as Assistant Secretary of Labor under President George W. Bush and as Deputy Assistant Secretary for Economic Policy at the US Treasury Department. James S. Gilmore III served as the 68th Governor of Virginia and currently serves as CEO of the American Opportunity Foundation.
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