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George Osborne presented the U.K. government's emergency budget yesterday, with spending cuts and consumption-tax hikes intended to shrink public borrowing to 1.1% of GDP by 2016, down from 10.1% of GDP this year. Nearly 80% of that retrenchment comes as spending cuts rather than tax increases. The Chancellor of the Exchequer's cuts are, on balance, good news for the British economy. Even more welcome, though, is that Mr. Osborne's budget is the latest to depart from the short-lived Keynesian consensus that government can spend its way back to prosperity.
House Majority Leader Steny Hoyer said Tuesday his party will not approve a traditional budget that sets spending guidelines for the new fiscal year.
Instead, Hoyer, D-Md., used a speech before the think tank Third Way to announce plans for the House to unveil what he called a “budget enforcement resolution” in its place.
Hoyer says this blueprint will curb discretionary spending (money the government spends on programs except Social Security, Medicare and Medicaid) beyond cuts called for in President Obama’s budget and look for ways to trim wasteful spending.
Hoyer also argued the reason to punt on a regular budget was because Mr. Obama’s fiscal commission that aims to slash the debt hasn’t completed it’s work yet.
“It isn’t possible to debate an pass a realistic, long-term budget until we’ve considered the bipartisan commission’s deficit-reduction plan,” Hoyer said. “I believe that Congress must take up and vote on that plan.”
GOP Leader Boehner responds:
“In his speech today, Majority Leader Hoyer admits that House Democrats will not do a budget this year, for the first time in modern history. He also admits that he supports raising taxes on the middle class to pay for more government spending.
“That is the ideology of Washington Democrats: just keep spending taxpayers’ money – with no plan, no discipline, and no accountability. Every American knows that our country is going through tough times. Unemployment is near ten percent nationwide. In my home state of Ohio, it’s even higher. Every American family also knows what Washington Democrats can’t seem to grasp: in tough times it’s more important – not less – to have a budget, to set priorities, and to live within your means.
“As the Obama Administration’s Office of Management and Budget Director flees the rising tide of red ink, it’s time to be honest with the American people. To tell them how much their federal government is spending, how much it owes, and how big a bite it will take out of their paychecks this year and in years to come. Struggling small business owners can’t save, invest, and hire if Washington Democrats won’t even tell them how much they’ll owe in taxes next year.
“Economists have told us a fiscally-responsible budget will help create jobs, and the American people know they’re right. House Republicans have offered better solutions to cut spending now, and impose real spending caps in the future. We know that higher taxes, higher deficits, and more debt are not the answer. That’s why the Majority Leader is dead wrong about the future of this country, and what we need to do – right now – to make sure the American dream is alive and well for our kids and grandkids.”
Hoyer also argued the reason to punt on a regular budget was because Mr. Obama’s fiscal commission that aims to slash the debt hasn’t completed it’s work yet.
“It isn’t possible to debate an pass a realistic, long-term budget until we’ve considered the bipartisan commission’s deficit-reduction plan,” Hoyer said. “I believe that Congress must take up and vote on that plan.”
Originally posted by black cat
The way I see it the solution is simple and the Germans have it right. Think about your household budget. When you are in debt and have maxed out your lines of credit you can't spend your way out of that debt, you have to cut back on your spending and actually pay some of the debts off to have any breathing room. If your spending outweighs your income you end up with a negative net worth. Piling on more debt to get out of the debt you are already in doesn't make any sense at all.
Originally posted by kinda kurious
Anywho, I thought all you neocons would be happy to see Obama fail as prescribed by the Pied Piper of puffery, Rush Limbaugh.
Weren't you all hoping he'd fail?