Pro-Growth Tax Cuts Will Remain In Place, Spending Restraint Process Begins
WASHINGTON, D.C. – Late last night, the House and the Senate passed the federal fiscal year 2006 budget which will calls for the fifth tax cut in as many years AND starts the process toward reigning in runaway spending.
The budget will continue the pro-growth tax cuts that have been put into place over the past four years by setting the window to make the existing tax cuts permanent and to extend provisions that are set to expire. These cuts include the capital gains and dividend tax cut provisions which were essential to reigniting the stock market after three years of declines. The budget also extends the small business expensing provisions which has helped restore business investment after two straight years of declines.
“The 2003 tax cuts have worked to spur the fastest economic growth in 20 years,” said Grover Norquist, president of Americans for Tax Reform (ATR). “This budget ensures the growth will continue by calling for a fifth year of tax cuts and to extend the tax cuts that have already been enacted.”
At the same time, the newly passed budget begins the process of restoring spending restraint in the nation’s capital. In the past four years, federal spending as a percentage of Gross Domestic Product (GDP) increased by 5.4 percent. The proposed budget will slow the growth of mandatory spending by including reconciliation language for authorizing committees for a $34.7 billion reduction over five years. At the same time, non defense, non homeland discretionary spending will decline by 0.8 percent.
“This budget is the first step towards restraining the raptorial spending interests who have been feeding at the expense of the American taxpayer for the past four years,” continued Norquist. “A message has been sent with last night’s vote – the party is over and taxpayers will come first in each successive budget from here on in.”