President's Budget to be Released Monday

To: Reporters, editors, editorial writers and producers
Fr: Speaker Nancy Pelosi, Majority Leader Steny Hoyer, Majority Whip James Clyburn, and Budget Committee Chairman John Spratt
Re: President's FY08 Federal Budget Request
Date: February 2, 2007

"Our budget will run a deficit that will be small and short-term"
- President Bush, 2002 State of the Union Address
 
The $5.6 trillion projected surplus inherited by the Bush Administration has been replaced by a deficit of nearly $3 trillion, a reversal of almost $8.6 trillion.

Wanted: A Balanced, Bipartisan Budget
The Bush Administration's federal budget request for Fiscal Year 2008, which will be submitted to Congress on Monday, represents the President's first opportunity to act on his State of the Union promise to balance the budget while investing in our nation.
 
We would like to see the President answer America's plea, made loud and clear in the last election, to take America in a new direction. If the President is willing to put partisanship aside, we have no doubt that Congressional Democrats will be able to work with him to produce a budget that accurately reflects the priorities of the American people and restores fiscal discipline.
 
But achieving that goal will require Presidential leadership and a genuine effort to work in a bipartisan way. 
 
No More Fuzzy Math
It is our hope that the President will submit a budget that is credible, accounts for all expected costs, and invests in our nation's priorities.  The President also needs to demonstrate that he is willing to apply fiscal discipline to his own priorities.
 
In its first six budget submissions, the Bush Administration employed various gimmicks to hide the true nature of the dangerous, record deficits its policies created.
 
For example, in the Fiscal Year 2007 Budget, the Administration did not include a realistic cost estimate for the wars in Iraq and Afghanistan after 2007.  Certainly the Administration could have provided an estimate for two wars that were ongoing.
 
The full cost of the President's tax cuts over the next ten years was also excluded.  And, the cost related to fixing the Alternative Minimum Tax, which will reach nearly $100 billion by 2012 if the President's tax cuts are extended, was omitted.
 
In addition, the President consistently promised to balance the budget through large unspecified savings in discretionary spending - promises he never delivered on when it came time to follow through with specific cuts to achieve those savings. Additionally, the Social Security surplus has been used to mask the true size of the deficit.
 
Fuzzy math is not going to solve the considerable budget challenges we face.
 
A Return to Pay-as-You-Go
Democrats will also look for the President to once again endorse the pay-as-you-go (PAYGO) budget rules that he embraced in his first three budgets.  President Bush supported PAYGO until it made it harder to enact further tax cuts financed by debt.
 
In one of our first acts as a Majority, we reinstated these important budget rules with overwhelming bipartisan support.  These rules helped create budget surpluses in the 1990s.  With the country facing record debt, the time to re-embrace PAYGO has clearly come.
 
Reining in Earmarks
Once elected to the Majority, Democrats pledged to cut in half the number of Congressional earmarks.  The President followed suit.  It is important to note that the President did not act during the first six years of his Administration while the number of earmarks exploded under a Republican Congress - growing from 6,333 worth $18.5 billion in Fiscal Year 2001, to 9,963 worth $29 billion in Fiscal Year 2006, according to Citizens Against Government Waste.  The President declined to use his authority, under current law, to submit a proposed rescission eliminating funding for any earmark project.
 
Congressional Democrats already acted to curb these abuses by eliminating earmarks from the joint funding resolution for FY07 - signaling our commitment to consider earmark requests only under the transparent, responsible process outlined in the rules package that the House passed as our first order of business.
 
Resisting the "Rosy Scenario"
The President must resist the temptation to rely on the infamous "rosy scenario" to balance the budget.  It would be dangerous to assume that the recent increase in revenue will continue indefinitely.  Moreover, the increase is largely attributable to record corporate profits and a greater concentration of wealth among upper-income Americans.  This may be good for the Treasury, but it is not a good thing for average Americans who continue to struggle with the high costs of energy, health care and a college education.
 
Investing in Priorities
Press reports indicate that the President will propose in his budget significant cuts to important programs such as Medicare and Medicaid.  The need to cut these programs largely stems from the cost of the President's tax cuts, which disproportionately benefit the wealthiest Americans.
 
Democrats believe that America has asked us to reexamine our priorities and take America in a new direction.  We want to invest in our children and the health of our citizens to strengthen our future.  We want to invest in technology and alternative energy to strengthen our economy and protect our environment.  We want to invest in our national defense to keep our country secure.
 
We also believe that we must balance the budget but that we cannot balance it on the backs of working American families.
 
A New Direction
Our country has voiced its desire for a new direction - and the new Democratic Majority is dedicated to giving the American people exactly that.  The submission of an honest, credible and responsible budget would be a good start.

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