(WASHINGTON) – Freshman Congressman Tim Huelskamp of Kansas, a member of the Budget Committee, released the following statement after the Congressional Budget Office (CBO) issued its annual Budget and Economic Outlook. Not only did CBO project a $1.1 trillion deficit for FY12 – the fourth year of trillion-dollar deficits – but also anticipated slow economic growth. Attributing the slowdown in part to higher tax rates (as a result of the expiration of the Bush-Obama tax cuts), CBO predicts real GDP will grow by 2 percent this year and by 1.1 percent next year. Congressman Huelskamp has introduced the “American Freedom and Opportunity Act” to extend the Bush-Obama tax cuts. Also in its analysis, CBO also predicts that unemployment will stay above 8 percent this year and next, averaging 9.1 percent in 2013.
“Today’s CBO numbers present a poor outlook for America, and the fault belongs to no one but Washington. Four years of trillion-dollar deficits and a $15-trillion-and-growing debt burden are having their toll not just on Washington’s fiscal well-being, but also on the entire economy.”
“In his 2009 State of the Union Address, President Obama pledged to cut the deficit in half by the end of his first term. Not only will the President fall short of that goal, but he will be double where he promised the American people where we would be. It’s not a surprise that President Obama cannot meet his pledge. After all, it is his spending sprees, his stimulus, and his health care law that are bankrupting Washington and sending our economy into shambles. Pointing fingers will not work anymore. It’s his economy and his bureaucracy.”
“This economic recovery is anemic at best. We may have emerged from the formal definition of a recession, but just barely. Unfortunately, the conditions are not exactly ripe for growth, which is reflected in CBO’s downward revision of its economic growth estimates. Yet, the Obama Administration policies of overspending, overtaxing and overregulating has created this anti-business climate of uncertainty.”
“While the President’s stimulus was supposed to jump start the economy and keep unemployment from going above 8 percent, America has known nothing except unemployment rates higher than 8 percent since it became law. Now, CBO expects unemployment to stay above that rate both this year and next. Despite the mountains of evidence showing that stimulus spending does not work, President Obama had the audacity to come before the House in September and ask for Stimulus Part Two. He made similar requests in his State of the Union just last week.”
With the expiration of the Bush-Obama tax cuts looming at the end of 2012, the “American Freedom and Opportunity Act” will extend permanently the Bush-Obama tax cuts, repeal the Alternative Minimum Tax (AMT), and eliminate the death tax. In addition, this legislation will prohibit all of the ObamaCare tax increases from taking effect at the beginning of next year. Finally, it will prevent another increase of the tobacco tax.
President Obama extended the 2001 and 2003 bipartisan tax cuts in December 2010, at which time he deemed the extension “a substantial victory for middle class families.” Eighty-five percent of those cuts went to families earning less than $250,000.
Specifically, Congressman Huelskamp’s legislation will permanently implement:
– Income tax brackets of 10, 25, 28, 33, and 35 percent (as opposed to 15, 28, 31, 36, and 39.6 percent, as scheduled)
– Capital gains tax rate of 15 percent (and a 10 percent rate for those in the 10 and 15 percent rates)
– A child tax credit of $1,000
– The American Opportunity Tax Credit: A deduction for post-secondary educational expenses