Hearing of House Committee on the Budget: The President's Budget for Fiscal Year 2006

HEARING OF HOUSE COMMITTEE ON THE BUDGET: THE PRESIDENT'S BUDGET FOR FISCAL YEAR 2006

February 8, 2005

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Mr. Bradley. Thank you very much, Mr. Chairman. It is certainly a pleasure to be on this committee and I am looking forward to a very interesting month to 6 weeks ahead of us.

Mr. Bolten, a pleasure to meet you, I meant for your position on agricultural subsidies, and I hope that the $5.7 billion that we are talking about over the next 10 years is just a start.

Secondly, I think it is very interesting, the whole discussion about the top tax bracket and the percentage that is paying those taxes. Obviously, if we have gone in the top 5 percent from 52 to 54 percent, that means that somebody at the other end of the spectrum is paying a lesser percent; and it must mean in my point of view that the tax package has not only become more progressive, but that it has helped middle-income Americans because every tax bracket has dropped. There has been marriage penalty relief. The child credit has been upped. The 10 percent tax bracket has dropped. I believe 3 or 4 million people off the tax rolls, and the small business expensing provisions have helped small businesses grow.

So my request would be if your staff would be able to prepare a couple of charts that would show some of that information, that would be very helpful. It is a very important story, I think, not only if we look at Chairman Nussle's charts 11 and 12, that has contributed to increasing revenues and increasing jobs, but it also--how it has changed the dynamics of who pays.

My question is if you could touch on some of the budget restraint mechanisms, line-item veto, the rescissions authority, the importance of those in making sure that a budget that we passed actually has the backbone for the President to be able to enforce that.

Mr. Bolten. First of all, Congressman, we can provide you a chart. I am looking at one that we don't have on the screen now but I think that you will find useful as you look at it. But what it does show is that the result of the President's tax cuts is that people in all of the upper-income brackets are paying a larger share of the total income tax take than they would be without the President's tax cuts.

The one category that is going down substantially is the bottom 50 percent. I didn't have the figure when I answered a previous question, but the bottom 50 percent of taxpayers in this country, those in the bottom half of income, would, without the President's tax cuts, would be paying 4.1 percent of the total income tax taken in this country. After the President's tax cuts, they pay 3.6 percent of the total income tax take in this country.

Thank you for raising the budget process reforms that I alluded to in my opening statement. They are very important. You will find them amply discussed in the main budget volume that you have in front of you.

There are several important proposals there that include statutory caps on discretionary spending, pay-go for mandatory spending. That means if someone wants to propose an increase in mandatory spending, that there be an offsetting decrease in mandatory spending. It includes some proposals to ensure that we are not expanding the unfunded liabilities we have out in the future, because it is easy to make proposals that are outside the 10-year budget windows that resolutions have traditionally operated in, so to make sure that those additional expenses are also captured.

We are also coming forward with a proposal on the line-item veto that we have carried in the past. There seems to be increasing interest in the Congress in some measure, in some sort of measure, whether it is our specific one or not, of giving authority to line out a lot of the individual spending items that find their way into big appropriations bills.

Finally, we are proposing a sunset commission and a results commission as a way for the Executive and the Congress jointly to take a look at our spending programs overall in context, and where we can find savings to capture those savings, where we find programs that aren't delivering the best results, to capture those savings as well. It is a big package of proposals, and I think you will see it well reflected here.

We are glad to provide additional materials as you might need.

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