March 05, 2014
Julia Lawless, Antonia Ferrier (202) 224-4515
Hatch: President's FY2015 Budget "Returns to Already-Rejected Ideas"
Speaking on the Senate Floor, Utah Senator Says “At this critical time in our nation’s history, the American people are demanding leadership. Sadly, they aren’t getting it with President Obama’s latest budget.”
WASHINGTON – In a speech on the Senate Floor today, U.S. Senator Orrin Hatch (R-Utah), Ranking Member of the Senate Finance Committee, slammed President Obama’s Fiscal Year (FY) 2015 Budget proposal as another rehash of failed ideas from the Obama Administration that would result in higher taxes, more spending, and more debt.
“When you look for the substance of this budget, you will see that the administration appears to be short on new ideas. President Obama’s new budget consists largely of proposals from his past budgets, which is surprising given that none of them have received a single affirmative vote in Congress,” Hatch said in his remarks. “This budget is…a political document. Its purpose is to galvanize support from the President’s left-leaning base in an election year. Nothing more. Nothing less.”
Hatch also outlined several ideas the President should have included in his budget, such as tax reform, spending cuts, changes to ObamaCare, and other ideas to help grow the economy and create jobs.
The full text of Hatch’s remarks is below:
Mr. President, I rise to offer some remarks on President Obama’s fiscal year 2015 budget proposal, some of which was released yesterday.
As we all know, the release of the President’s budget is an annual event here in Washington. It sets in motion a chain of processes and events that drive much of what we do here in Congress.
Unfortunately, with President Obama’s budgets in particular, this annual chain of events has, for the most part, become an empty, almost meaningless exercise.
The first problem with this year’s budget is that we received it just yesterday, a full month past the statutory deadline. And, what budget information we did receive yesterday is incomplete.
For example, when you look at the appendix of the budget, there is often reference to a section called “Analytical Perspectives,” but those perspectives are nowhere to be found.
I assume that the rest of the budget information is forthcoming. Still, we can only wonder why it is being released a few pieces at a time.
Of course, the problems with this budget go well beyond the delays and the sporadic release of information. Put simply, no one in their right mind would say that the substance of the budget was worth the wait.
Despite the fact that they took an extra month to put this budget together, the most striking thing about it is how little there is in the way of new ideas and proposals. Indeed, when you look for the substance of this budget, you will see that the administration appears to be short on new ideas. President Obama’s new budget consists largely of proposals from his past budgets, which is surprising given that none of them have received a single affirmative vote in Congress.
These proposals center on three familiar themes, all of which we’ve seen in past budgets and in virtually every policy proposal from this President.
First, we see the administration’s continued insistence that we can tax and spend our way into prosperity and that growing the federal government is the same as growing our economy.
Second, there is the effort to further redistribute income and the notion that this will, on its own, somehow lead to economic growth and job creation.
And, finally, we see another attempt to define “tax reform” as a process of closing whatever the administration deems to be a “loophole” in the tax code and using the resulting revenue, not to reduce the deficit or lower tax rates, but to fuel more federal spending.
Using overly optimistic economic assumptions, the administration claims that this budget will reduce our high debt-to-GDP ratio. However, to get there – and to help fulfill its tax-and-spend objectives – the budget envisions well over $1 trillion of additional taxes in the face of a persistently sluggish economy.
That bears repeating: President Obama’s latest budget contains more than a trillion dollars in proposed tax hikes.
No one should mistake the President’s intentions. Indeed, this budget is an outline of his domestic policy priorities for the future.
And, once again, chief among those priorities is another massive tax increase, which, if the President had his way, would come on top of all the tax increases we’ve seen already under this administration.
This, Mr. President, is hardly what our struggling economy needs.
Let’s talk about our economy for a moment.
If this budget is any indication, President Obama certainly isn’t interested in that conversation.
Currently, we have an economy in which labor-force participation has fallen from around 66 percent prior to the financial crisis to 63 percent, with no recovery in sight. This is the lowest labor force participation rate we’ve seen since the Carter Administration and it is holding back economic growth.
The nonpartisan Congressional Budget Office has noted that a decline in the growth of the labor force is a principal reason that potential growth in the economy will decline in the coming decade. No one seriously disputes that this is a problem, except, of course, when such declines can be attributed to Obamacare.
We all remember last month, when the CBO found that, as a result of the generous subsidies and the not-so-generous taxes in Obamacare, millions of workers would either reduce their hours or leave the workforce entirely.
Virtually every objective observer saw this as a bad thing.
Yet, in response to these numbers, the administration and its supporters took to the airwaves to applaud the fact that Obamacare would “free” people from their jobs and allow them to, in the words of the White House Press Secretary, “pursue their dreams,” courtesy of their fellow taxpayers.
While economists in the administration and liberal pundits might applaud the reduced labor supply arising from Obamacare, it is, to say the least, difficult for me to find merit in the resulting reduction in economic growth.
Of course, there’s nothing in the President’s budget that would address this issue. If anything, the policies contained in this new round of proposals would make all of this worse.
Returning to the latest call for well over a trillion dollars of new revenue, the administration claims – as it has for years now – that these tax hikes are needed to restore fiscal responsibility and reduce the deficit as part of a quote-unquote balanced approach.
However, we need to look at the facts.
If you look at the deficit reduction that has taken place over the last five years, you’ll see just how unbalanced this approach is.
In Fiscal Year 2009 we achieved a high-deficit watermark of $1.4 trillion dollars. That number fell to a still high $680 billion in Fiscal Year 2013. Of the $736 billion of deficit reduction over that five-year span, $670 billion came from increased revenue and only $66 billion came from reduced outlays.
So, in terms of budget realizations, rather than promises for the future, less than nine percent of the deficit reduction between 2009 and 2013 came from reductions in spending. The vast majority came from increased revenue.
Yet, the mantra from the administration continues – more revenues and higher taxes along with even more spending.
One can only wonder where job creation falls into the mix, if it does at all.
Since President Obama came into office, we’ve heard a lot of talk about his laser-like focus on job creation. However, the record of this administration suggests that his focus is more on growing government than on growing our economy.
We’ve seen the failed stimulus, Obamacare, and initiatives like Dodd-Frank, all of which have expanded the size and scope of the federal government without laying a foundation for economic growth. And, sadly, Mr. President, the budget offered this week does not present a vision for such growth in the future.
This budget is, instead, a political document. Its purpose is to galvanize support from the President’s left-leaning base in an election year.
Nothing more. Nothing less.
This is disappointing, to say the least, particularly when you look at the challenges our nation is currently facing.
One such challenge is our nation’s broken tax code. And, while this budget comes close to acknowledging that the tax code is a problem, it misses an opportunity to actually do something about it.
Tax reform, if it’s done correctly, would promote growth and competitiveness in jobs and the economy and provide greater economic efficiency, simplicity, and fairness.
However, like I said earlier, in the administration’s view, tax reform is guided primarily by a desire to obtain more tax revenue to fund yet more expansion of the federal government, along with an insistence on unilaterally picking winners and losers.
The quote-unquote tax reform outlined in the President’s budget utilizes a corporate-only approach. In other words, it would amend the business tax system and leave the individual tax code largely as it is.
That approach is different from of the ideas outlined by the two chairmen of the tax writing committees, both of whom have proposed detailed comprehensive tax reform plans.
While I haven’t endorsed either Chairman Camp’s or Chairman Wyden’s plan, they both recognize that the non-corporate business sector, which makes up over half of all U.S. businesses, is also in need of tax reform. This sets them apart from President Obama and the proposals in his latest budget.
And, of course, let’s not forget hard-working individual Americans, far too many of whom need assistance in filling out their tax returns. These people would be left behind under the President’s proposal.
The President’s budget looks to raise tax revenue largely to increase spending on what it calls “investments” in infrastructure.
That sounds wonderful.
However, what is taken to be “infrastructure” in the minds of the federal bureaucrats who the President would empower to spend hard-earned taxpayer money is sure to be guided more by politics than by economic efficiency.
And, the so-called infrastructure bank or infrastructure finance authority, or whatever is the label of the day, that the President has continually called for would surely become the next Fannie and Freddie, putting innocent taxpayers on the hook for any losses resulting from large federal contractors rolling the dice on building projects.
Like I said, Mr. President, our nation and our economy face a number of challenges. Ongoing sluggishness threatens to become a permanent fixture on our long-term economic path.
Indeed, as I referred to earlier, the nonpartisan Congressional Budget Office has already ratcheted down its estimate of the economy’s long-run growth path, partly because of negative effects from the ever-evolving health care law that Democrats unilaterally enacted and that the President seems intent on unilaterally implementing.
Mr. President, I don’t think that any member of this body would argue that the status quo in our economy is acceptable.
We have a lot of work to do when it comes to creating jobs, economic growth, prosperity, and opportunity in this country. Unfortunately, the President’s recent budget does not, in my view, add to the discussion. Rather, it returns to already-rejected ideas and appears to be aimed at politics more than at the need for growth in private-sector jobs.
At this critical time in our nation’s history, the American people are demanding leadership. Sadly, they aren’t getting it with President Obama’s latest budget. I yield the floor.