Having signed into law a spending package totaling $1.2 trillion, President Biden recently released his proposed budget for fiscal year 2025. Rather than offering the bold leadership required to avert an impending fiscal crisis, Biden’s proposed budget promises more taxes, more debt and more fiscal irresponsibility. Fortunately for taxpayers, there’s another blueprint available that makes a serious effort to address Washington’s chronic overspending and reverse course before the next generation is buried under an unmanageable debt burden.
It’s hard to overstate the fiscal problems our country faces, with the national debt now rapidly approaching $35 trillion. Numbers that enormous tend to lose their meaning, but the national debt is nearly eight times as much as total federal revenue last year. In other words, we could spend the next seven years spending tax revenue on nothing but paying off debt and still have debt left over.
Of course, that’s nowhere near what we’re doing. As things stand, the country is set to add $20 trillion more to the national debt over the next decade as debt continues to grow at a rate that far outpaces GDP growth. And as the sheer volume of debt rises unsustainably, so too does the cost of servicing it as well. As of October 2023, paying interest on the debt is now our country’s fourth-largest spending program after other enormous budget items including Social Security, Medicare and defense spending, and it will continue to eat up a greater share of spending as the debt grows.
President Biden’s 2025 budget proposal offers little relief. Already, the federal debt appears to have risen by $6.25 trillion since he took office. Rather than real solutions, Biden’s budget offers campaign promises: to raise taxes and spend even more. These promises are repackaged for average Americans under the guise of “deficit reduction,” as his proposed tax hikes are slightly more massive than his proposed increases in spending. Overall, the Biden budget would add $16 trillion to the national debt by 2034.
While the sheer scope of Biden’s plan to increase taxes on Americans by $4.4 trillion is daunting enough, several of the proposals would leave families and small businesses on the hook for niche policy goals. Biden’s budget would increase taxes on American energy, boost the death tax and let the 2017 individual tax cuts expire. On the business side, Biden proposes hiking taxes on mom and pop shops through the Net Investment Income Tax (NIIT) and instituting a new tax on unrealized income.
Meanwhile, the budget does nothing to rein in spending or address Social Security, which is expected to become insolvent in 2033. Future generations are sure to face a fiscal nightmare with Biden’s new spending, inaction where it matters the most and skyrocketing debt load.
Fortunately for taxpayers, House Republicans at the Republican Study Committee (RSC) offer a welcome alternative to this reckless spending proposal with a budget that actually balances. Within seven years, the RSC budget would produce a government surplus rather than deficit, which has not been accomplished since 2001. Total deficits in the RSC budget before balancing would amount to $2 trillion, much less than both Biden’s proposed $16 trillion.
The RSC budget is able to do this not by tax hikes, but by making structural changes that would reduce spending over the long-term. The budget would eliminate earmarks, which account for billions of dollars of taxpayer money that goes to politicians’ pet projects. It would also reform emergency spending, which is routinely used to avoid spending caps. The RSC also proposes to reduce federal spending through deregulation, bringing savings of time and money to Americans.
The RSC budget also spurs economic growth by keeping more money in the hands of private citizens and businesses rather than tying it up in wasteful or inefficient government programs. Reducing the tax burden of business investments in equipment, maintaining competitive corporate tax rates and preserving other important business tax provisions passed in 2017 would spur productivity growth. Meanwhile, Americans would get to keep more of their money and use it better than Uncle Sam can.
Thankfully, Congress holds the power of the purse, not the President. When spending talks begin for 2025, it would be wise to start with the optimistic fiscal outlook envisioned by the RSC rather than President Biden’s traditional tax and spend plan. Otherwise, debt servicing is likely to keep jumping up in the list of top spending programs, and our moniker will go from “the richest country in the world” to “the most indebted country in the world.”
Andrew Wilford is a Senior Policy Analyst and Debbie Jennings is a Policy Manager at the National Taxpayers Union Foundation, a nonprofit dedicated to tax policy research and education at all levels of government.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller.