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Congressman Tom McClintock

Representing the 4th District of California

Progressive Caucus Budget

March 25, 2015
Speeches

Congressman McClintock serves on the House Budget Committee.  He participated in floor debate on the various budgets introduced in the House.   Here, he discusses the Congressional Progressive Cauccus Budget.   The Congressional Caucus Budget was defeated on the House Floor on March 25, 2015.
 

Congressional Progressive Caucus Budget
House Chamber, Washington
March 25, 2015

Mr. Speaker,

Even though I disagree heartily with the budgets advanced by the Progressive Caucus, they do an invaluable service to the budget debate by bringing into sharp relief the two very different visions of governance advanced by the two parties.  The Progressive budget is a sincere and bold document.  Unfortunately it is also wrong.  

It would hike taxes by $7 trillion over the next ten years relative to the Republican budget, hike spending by $9.3 trillion more and run up $2.8 trillion more in debt than the Republican budget over ten years.

Let’s begin with a reality check here. Divide a trillion dollars into the number of families in this country.  A trillion dollars is roughly $8,000 from an average family’s earnings.  

Some of that they see as direct taxes.  Some of that they see as increased prices or depressed wages as businesses pass along their costs to consumers and employees.  But ultimately it is paid by working Americans – because that’s where the bulk of our economy rests.

So $3.8 trillion in increased taxes means roughly $30,000 taken from the earnings of an average family over the next ten years.  $2.8 trillion in increased debt means another $22,000 of debt added to that family’s obligations that they will have to pay in future taxes.

We’re told “only rich people will pay the tax.”  The problem is there aren’t enough rich people in the country to make more than a dent in these numbers.  It turns out many of the so-called “rich people” aren’t rich and they aren’t even people.  They’re struggling small businesses filing under sub-chapter S.

And remember this dirty little secret: businesses don’t pay business taxes.  The only three possible ways a business tax can be paid is by consumers through higher prices, by employees through lower wages, and by investors through lower earnings – that’s your 401(k) or pension plan we’re talking about.

We’re told, “Don’t worry, we’re using that money to create wealth and jobs.”

Government does not create wealth because government cannot inject a dollar into the economy until it has first taken that same dollar out of the economy.

True, we see the job that government “creates” when it puts the dollar back in the economy – what we don’t see as clearly is the job that is lost when government first takes that dollar out of the economy.  We see those lost jobs in the lowest labor participation rate in nearly 40 years and in declining median incomes for working Americans.

Here’s what government CAN do – and what the progressive Democratic budget proposes.  It can transfer jobs from the private sector to the public sector by taxing one and expanding the other.  It can transfer jobs from one sector of the private market to the other by taxing one and subsidizing the other.  

That is precisely the difference between Apple Computer and Solyndra.  It is the difference between Fed Ex and the Post Office.  And it is the difference between the Reagan recovery and the Obama recovery.

Indeed, it has been estimated that if the Obama recovery had mirrored the Reagan recovery, millions more Americans would be working today and family incomes would be thousands of dollars higher than they are today.

But of course, Reagan diagnosed the problem very differently than this administration.  You remember his famous words: “in this great economic crisis, government is not the solution to our problems – government IS the problem.”

He dramatically reduced the tax burden from 70 percent to 28 percent.  He reduced spending by two percent of GDP.   He rolled back many of the regulatory burdens imposed on our economy.

And the result was one of the most dramatic and prolonged economic expansions in our nation’s history.

It wasn’t just Reagan.  After the 1994 Congressional election, Bill Clinton realized his policies weren’t working.  He reached across the aisle to the Republican Congress and together they accomplished some amazing things.  They reduced federal spending by four percent of GDP.  They approved what amounted to the biggest capital gains tax cut in American history.  They dramatically reduced entitlement spending by – in Clinton’s words – “ending welfare as we know it.”  The result was the only four budget surpluses in the last half century and another period of prolonged economic expansion.

And the percentage of children living in poverty dropped dramatically.

The Budget reported by the House Budget Committee employs those principles that worked when Reagan and Clinton used them, AND when John F. Kennedy, Harry Truman and Warren Harding used them.

The Republican House budget gradually REDUCES spending as a percentage of GDP.  It calls for a lower, flatter tax rate.  It puts our nation back on a course to a balanced budget.  It saves Medicare from bankrupting and collapsing on an entire generation of Americans.

It takes us off the path of debt and doubt and despair that this administration has dogmatically followed and restores us to policies that have repeatedly brought prosperity to our nation.  
Government cannot create jobs – but it CAN create conditions where jobs multiply and prosper – or where they stagnate and disappear.  THAT it can do very well, and we have very consistent experience with the policies that create these conditions.  

Increase the burdens on the economy and the economy contracts.  Lighten the burdens on the economy and it grows and prospers.

No nation has ever taxed and spent its way to prosperity, but many nations have taxed and spent their way to economic ruin and bankruptcy.

We know what works and we know what doesn’t work.  The House Budget Committee’s budget follows principles that have time and again consistently and rapidly produced economic expansion and prosperity.  The Obama budget, the House Democrats’ budget and the Progressive budget before us now double down on policies that have bankrupt nations throughout recorded history. 

That is the choice before us today. 

Let’s choose wisely – our future depends on it.

 

Congressional Progressive Caucus Budget
Closing Remarks
House Chamber, Washington
March 25, 2015

Mr. Speaker:

The reason these times are so impassioned is because we have arrived at a moment when two very different visions of society are competing for our nation’s future, and they are very much reflected in the budgets put forward by the two parties in this House.

America’s prosperity and greatness spring from uniquely American principles of individual freedom, personal responsibility, and constitutionally limited government.  America’s founders created a voluntary society where people are free to make their own choices, enjoy the fruit of their own labors, take responsibility for their own decisions and lead their own lives with a minimum of government interference and intrusion.

When someone needs help, we freely give that help, but we ask in return that they make the effort to support themselves to the extent they can.  

Our government views no one person or group as more or less worthy than any other.  We are Americans.  We will be judged on our own merits and we’ll make our own choices – including what kind of car we’ll drive; how we’ll raise our children; what kind of light bulbs we prefer; what we’ll have for dinner.

Today, a very different vision competes for our future: that of a compulsory society, where our individual rights are subordinated to the mandates of government bureaucrats, where innocent taxpayers are forced to bail out the bad decisions of others and where consumers are compelled to purchase the products or underwrite the losses of politically favored companies.

Under this vision, the purpose of government is not to protect individual freedom but to improve society, however those in power decide it should be improved: to take from those it declares are undeserving to give to those it declares are deserving.    To put it more succinctly, to take from each according to his abilities and to give to each according to his needs.  

That’s what this is all about.  

Not more than a hundred steps from where we debate right now, Thomas Jefferson reviewed the bountiful resources of the nation and asked, “With all these blessings, what more is necessary to make us a happy and a prosperous people?  Still one thing more, fellow-citizens – a wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned.  This is the sum of good government.”

This is the blueprint put forward by the House Budget Committee.  Let us be clear: the various Democratic plans, including the one before us now, fundamentally reject these principles and replace them with values alien and antithetical to those which built our nation.

That is the question that our generation must decide in all of its forms, including the question put to us today by this substitute amendment.

 

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