Congressional Republicans offer alternative budget

One month after President Obama sent Congress his proposed budget for 2010 and in the same week that both the U.S. House and Senate were debating separate budget resolutions on the floor, House Republicans introduced their own proposed budget. The move appears intended to blunt sharp criticism from President Obama and Congressional Democrats that Republicans were attacking the President’s budget and budget resolutions drafted by House and Senate Democrats without offering an alternative budget of their own.

As reported in the New York Times, the House Republican plan would  “freeze most domestic spending for five years, increase Pentagon spending, permanently extend the Bush-era tax breaks and eliminate any taxes on successful investments in 2010 as a way to spur the economy. Republicans said they would spend $4.8 trillion less than Democrats over 10 years.” However, the plan would not reduce federal deficits much more than Democratic proposals.

Additionally, the Republicans’ budget proposes major changes in Medicare, suspending the American Recovery and Reinvestment Act and allowing American taxpayers to choose to file their income taxes under the current income tax system with deductions or filing under a new system whereby families would pay 10 percent on their adjusted gross income of up to $100,000 and 25 percent on income above that.

A new report by Citizens for Tax Justice compares the income tax proposals in the House Republicans’ budget to the income tax proposals in the House Budget Committee’s resolution written by the Democratic majority and finds that:

  • “Over a third of taxpayers, mostly low- and middle-income families, would pay more in taxes under the House GOP plan than they would under the House Democratic plan in 2010.
  • The richest one percent of taxpayers would pay $75,000 less, on average, in income taxes under the House GOP plan than they would under the Democratic plan in 2010.
  • The income tax proposals in the House GOP plan, which is presented as a fiscally responsible alternative to the Democratic plan, would cost over $225 billion more than the Democratic plan’s income tax policies in 2010 alone.”

By the end of last week, both the House and Senate had passed the Democrats’ budget resolutions and rejected the Republican alternative. But the Republicans’ alternative budget is worth studying because it gives insight into how they are likely to approach appropriations bills and tax bills that may come up later this year.  A final vote on a compromise budget conference report is expected in mid-April after the spring recess.

– Steve Francisco

About Steve Francisco

Steve Francisco is the former federal policy analyst for the Minnesota Budget Project.
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