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Wednesday, February 28, 2007
Democrats to Reach Balanced Budget by Different Means
The broad outlines of the Democrats' FY 2008 Budget Resolution strategy are beginning to emerge. This much is now clear, per comments this week by House and Senate Budget Committee chairs Rep. John Spratt (D-SC) and Sen. Kent Conrad (D-ND):
- the BR will set total discretionary spending above the $929.8 billion cap proposed by President Bush
- it will provide for a balanced buget by FY 2012, by increasing revenues "without any tax rate increases"; instead, it will "broaden the base and keep rates low"
In addition, unlike the Bush budget, the BR won't cut the COPS program 94 percent, firefighter grants, education, or low-income heating assistance. Nor will the blueprint call for cuts in Medicare or Medicaid. At the same time, says Conrad ($), to his credit:
[Democrats] are not going to cut defense... We are going to more accurately fund the war because the president says in 2009 it ends. That's not what CBO says. We're not using funny money numbers here. We're going to use real numbers.
The key variable in the strategy is on the revenue side. Conrad promised a tax overhaul package that would go after overseas tax shelters, deal with the alternative minimum tax and shrink the gap between taxes owed and taxes paid -- policies which would almost certainly require significant new revenues, in the aggregate. Another major unknown is which of the Bush tax cuts will be assumed to expire under the plan.
Many observers eagerly await the policy details outlining the path to the promised land of a balanced budget by 2012, given the raised cap and commitments cited above. Among them, a certain quotable, notable House Ways and Means chair, Charles Rangel (D-NY), whose reaction to Conrad's comments about balancing the budget without raising tax rates was: "I wish he would tell me how."
Film at 11.
Posted by Dana Chasin
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