Last Thursday, the House of Representatives narrowly passed its budget proposal for fiscal year 2008. I strongly opposed the measure mindful of the consequences massive spending increases and higher tax burdens will have on Kentucky families.

The resolution, drafted by the new Democrat leadership, includes $23 billion in non-defense discretionary spending, three times more than the President’s request earlier this year.  The budget also sets the course for the largest tax increase in American history – nearly $400 billion over the next five years - resulting from the Democrat leadership’s refusal to extend the 2001 and 2003 tax cuts.

The 2008 budget also fails to address the fiscal crisis facing many of our most important entitlement programs. Without reform, Medicare, Medicaid, and Social Security spending can only be sustained by raising taxes each year until they are nearly 60 percent higher than they are today. Otherwise, every other federal program except these three would be eliminated by 2045.

I strongly believe that our fiscal priorities in Congress should be to keep taxes low, encourage job creation, and make it easier for Americans to invest in their future. I was proud to join my Republican colleagues in supporting an alternative proposal that would balance the budget in five years without raising taxes on working families by providing significant entitlement reform and aggressive spending discipline. The House ultimately voted along strict party lines, choosing instead not to extend pro-growth policies or employ the spending restraint necessary to balance the federal budget.

The tax cuts of 2001 and 2003 are proof positive that marginal across the board tax cuts stimulate economic growth like nothing else; creating new jobs, business opportunities, and increased federal revenues. Millions of new jobs have been created since tax policies went into effect in 2003. The national unemployment rate has dropped to historic sustained lows. At the same time, these new jobs have created new tax revenue, generating record returns to the U.S. Treasury, paying down the national deficit at a faster rate than many government analysts ever predicted.

Our economy is continuing to enjoy one of the longest stretches of positive gain in recent memory. Out-of-control spending coupled with massive tax increases will bring our vibrant economy to a screeching halt. Instead, we must harness present economic growth by making the tough decisions necessary to reign in spending. We can balance the federal budget without raiding the family budget.

            Supporters of the House passed budget argue that tax increases will only burden upper income Americans. The reality is tens of millions of Americans - small business owners, married couples, single parents and senior citizens – will be adversely affected if the Bush tax cuts are allowed to expire. Several specific hikes would disproportionately target lower and middle-income taxpayers via the elimination of marriage penalty relief, cuts to the child tax credit, and raising the 10% tax bracket to 15% making millions of individuals and families who previously owed no taxes subject to the individual income tax by 2011. All told, 1.4 million Kentuckians will experience an average tax increase of $2,563 should the House-passed budget become law.

The Estate Tax is scheduled to phase out over the next few years only to return in 2011 at the rate of 55 percent. Small, family-owned businesses are especially vulnerable to this tax, because most small business owners are forced to count the value of their business as part of their estate. Democrat leaders do not intend to address this critical concern that will affect millions of hardworking business owners and farmers.

A responsible balanced budget plan should protect the tax cuts that have stimulated our nation’s economic prosperity over the past four years. Congress must balance the budget without raising taxes. This is the only way to hold the government’s spending in check over the long term. Balancing higher spending with higher taxes ignores the unsustainable growth of government spending, risking deeper deficits. A responsible budget must also take tangible steps to ensure that we can meet commitments to current and future beneficiaries of our largest entitlement programs - programs that, without reform, will be insolvent within a generation. 

The budget that passed the House last week illustrates the fundamental difference between our two political parties. As a conservative, I will always affirm my belief that American families, not government bureaucrats, know best how to save, spend and invest the money that they earn. While the 2008 budget does contain several good provisions to fund important programs and initiatives, it takes an irresponsible course to achieve balance. I took a pledge when I first came to Congress to pursue fiscal discipline and to oppose tax increases of any form. I honored that commitment by voting against passage.