Budget and Deficit

Two words: Tax cuts. Surpluses should not be used for new government spending, or for paying down the national debt. They should be used to help return the overall tax burden to a reasonable level.

The tax proposals approved by the House Ways and Means Committee give 75 percent of the individual tax cuts to taxpayers with less than $75,000 in adjusted gross income (AGI). Because they only pay 38% of all income taxes, this makes the tax package progressive. Contrary to those critics who believe this is a tax cut for the rich, the bill achieves a delicate balance between growth and political considerations. Though most of the tax cuts are directed at the middle class, growth generated by the bill would essentially offset the revenue loss over the next ten years.

Candidates Bob Dole and Jack Kemp have proposed a dramatic tax cut plan that is designed to stimulate increased economic growth, remedy the decline in the value of the dependent deduction, and reduce the punitive treatment of capital gains. An analysis demonstrates that the plan is likely to achieve its goals, and only requires a spending cut of less than 2% to pay for itself.

This is a 6-page analysis of the House Republican "Contract With America" proposal to reform business depreciation rules.

An 11-page expose of the federal budget process, where spending is compared to an inflated current services budget, rather than to last year's spending. This is how a 4.5% spending increase over the previous year can be characterized as a "draconian cut."

The federal backing of GSE obligations may be implicit, but it is very real. Taxpayers have literally billions of dollars at stake if a GSE fails to meet its obligations.