Statement by Robert Greenstein, Executive Director, Center on Budget and Policy Priorities,...

Statement by Robert Greenstein, Executive Director, Center on Budget and
Policy Priorities, on Misleading Claims that Congressional Budget Plan Calls
for 'Largest Tax Increase in History'

Some claim that the budget plan of the conferees -- which the House and Senate
are scheduled to consider this week -- would constitute "the largest tax
increase in history." This claim is inaccurate, just as the same claim was
inaccurate with regard to the budget resolution that Congress adopted last
year. This year's budget plan does not include a tax increase. It actually
calls for a $340 billion reduction in revenues, reflecting its assumption that
Congress will extend some parts of the 2001 and 2003 tax cuts without
offsetting the costs.

The charge that the conferees' plan includes a large tax increase arises not
from any policy changes that the plan proposes, but instead from policies
enacted in 2001 and 2003. Those policies put in place tax cuts that President
Bush proposed, but also provided for those tax cuts to expire at the end of
2010. The budget plan assumes that Congress will amend current law to extend
some of the expiring tax cuts (especially those affecting middle-class
families) and make other changes in tax policy, but it also assumes Congress
will partly offset the cost of such changes. The plan does not assume that
Congress will increase total revenues above what the federal government
expects to collect under current policies -- to the contrary, it assumes
Congress will reduce total revenues below what is expected under current
policies.

The President's tax cuts expire in 2010 because their supporters deliberately
designed them that way, in order to fit the tax cuts within the cost
constraints imposed by the budget resolutions that Congress adopted in 2001
and 2003. While acknowledging that their real goal was to make the tax cuts
permanent, supporters of those measures opted to "sunset" the tax cuts before
the end of the ten-year budget window, partly to avoid recognizing the cost of
permanent tax cuts. Now, a few years from the tax cuts' expiration, some of
these same supporters are acting as though the tax cuts are already permanent
and that any proposal to offset any portion of the cost of extending them is a
"tax increase."

To extend the tax cuts without paying for them -- and to attack those who
simply seek to require that Congress at least partially pay for any extension
of the tax cuts -- further heightens the irresponsible fiscal nature of the
original actions.

This statement is posted to: http://www.cbpp.org/5-20-08bud-stmt.htm.

The Center on Budget and Policy Priorities is a nonprofit, nonpartisan
research organization and policy institute that conducts research and analysis
on a range of government policies and programs. It is supported primarily by
foundation grants.

CONTACT: Michelle Bazie of the Center on Budget and Policy Priorities,
+1-202-408-1080, bazie@cbpp.org

/PRNewswire-USNewswire -- May 20/

SOURCE Center on Budget and Policy Priorities