Tax Quote of the Week
"In general, the art of government consists of taking as much money as possible from one class of citizens to give to the other."
-- Voltaire
Ballooning Deficit Cloud Over Election
The fall elections are heating up as candidates for President, the Senate and House prepare to launch campaigns. It will be a busy October for political figures throughout the nation.
On September 9, 2008, the Congressional Budget Office (CBO) released the 2008 deficit estimate of $407 billion. This is more than double the 2007 deficit of $161 billion.
Budget leaders of both parties promptly responded. At a Senate Budget Committee hearing, Chair Kent Conrad (D-ND) stated, "It is Republican policies on spending and taxes that have exploded deficits and debt. By the time they are done, on their watch, under their control, they will nearly have doubled the national debt; they will have far more than doubled foreign holdings of U.S. debt and the economic consequences are just becoming clear."
The ranking member of the Senate Budget Committee is Sen. Judd Gregg (R-NH). He responded by stating, "These budget numbers are obviously bad. The deficit will have more than doubled from last year. Remember, this is doubling by the Democratic Congress, and Congress hold controls the purse strings. Debts are up by $1 trillion. We are looking at a situation where only one regular appropriation bill has passed in the past two years -- it was the Defense Appropriation Bill -- and two if you count the omnibus bill. So essentially the business of operating the government from day-to-day has been abdicated by the Democratic leadership."
Editor's Note: In an election year it is understandable that both parties will point to the other side with respect to the federal budget deficit. Your editor and this organization take no position on these statements and share this background as a public service. At present, the CBO reports that the federal public debt is now 38% of the gross domestic product, or the entire U.S. economy. This debt is a very large number, but it is reasonably close to the average debt level as a percent of the economy for the past five decades. However, both the next Congress and the next President will need to face the fact that the budget deficit is growing and a long-term solution for funding Social Security and Medicare has not yet been achieved.
Energy Extenders Bill Proposed
Sen. Max Baucus (D-MT) has announced that he and ranking member of the Senate Finance Committee Charles Grassley (R-IA) have agreed to jointly introduce the Energy Independence and Investment Act of 2008.
Because he has tried several times to pass an energy bill, Sen. Baucus humorously noted that "I am starting to feel like Don Quixote. Except I am not jousting at windmills, I'm jousting for windmills."
While Senate Democrats and Republicans have not been able to agree previously on an energy bill, the compromise could potentially pass and be enacted because of what Sen. Baucus calls the motivating force of "$4 gas."
The key benefits under the bill include extension of wind and solar energy credits, a credit of $7,500 for plug-in electric cars, a credit for capture of carbon dioxide, energy-efficiency credits for buildings and new credits for ethanol and other alternative fuels. There are also offsets that would increase taxes on the five largest oil and gas companies.
