Blueprint of Republican’s Counter Budget

 

Last week Obama called out Congressional Republicans to come up with something better if they did not like his budget.  Two days later the Republicans released a 19 page blueprint outlining the main points of their budget. The liberal bloggers have attacked it for lack of details such as revenue numbers ignoring the fact that it is just an outline. So keep in mind this is only a blueprint with more specifics to be released as early as this week.  Here is a link if you would like to read it for yourself or you can read this short summary. They broke it down into 3 points. Here are some of the items talked about in the document.

1. Curb Spending

It was pretty generic, but the major point made was to cut down wasteful spending by eliminating or reforming ineffective government programs and cutting out earmarks, much like the President promised to do before coming into office.  They also mentioned using savings to pay down debt.

Since universal healthcare is a big point of concern for most and will be a large drain on the economy, they addressed this issue as well.  They talked about the dangers of the government taking over this industry and offered these points.

• Republicans offer in response tax incentives for working families and small business owners to obtain access to coverage
• Allowing individuals to shop across state lines to purchase affordable policies that best meet their needs
• support reasonable limits on non-economic damages, along with penalties for trial lawyers who file  frivolous lawsuits
• Simplifying the current benefit structure in traditional Medicare to include a catastrophic cap on out-of-pocket expenses
• Provide a more flexible financing structure to give states more power to reform the system.

2. Create Jobs and lower taxes

In this section they discuss their tax plan and also energy independence.  Their simplified tax code would include the following.

• Marginal tax rate of 10% for income up to $100,000 and 25% for any income over this level.
• Permanently fix the AMT
• Lower the capital gains tax and loosen restrictions on other saving vehicles
• A new tax deduction that allows businesses with less than 500 employees to take a tax deduction equal to 20 percent of their income

Here are their energy independence points.

• The Secretary of Interior should be required to offer new leases in the OCS, and ensure royalty revenues from OCS development are shared with coastal states
• To further the investment in renewable energy, a portion of the federal share of royalty revenues would be put into a Renewable Energy Trust Fund to pay for renewable, alternative, and advanced energy programs
• Open the Arctic Coastal Plain to energy exploration and development
• Remove government barriers to new nuclear reactors as long as they meet strict security and safety criteria
• Promote the leasing of federal lands which contain alternative energy such as oil shale

3. Control the Debt

The Democrats budget will incur about $9.73 Trillion in debt over the next decade so this of course is a major issue.  Here are some of the points in the Republican Blueprint.

• Refuse to assume additional spending for bailouts
• First perform a thorough stress test to determine whether a financial institution is healthy, troubled, or insolvent. For troubled firms, some portion of the firm’s toxic assets would be insured, but such insurance would be self-financed by the industry itself in the form of premiums. For insolvent firms, either the FDIC or a Resolution Trust Corporation-type entity would restructure these firms in receivership by selling off their assets and liabilities, reappointing private management.
• Phase out the GSEs’ government charter (Fannie and Freddie) and privatizes them over a reasonable time, following a model similar to that of the successful Sallie Mae privatization a decade ago.
• Support a requirement that the Fed establish some numerical definition for price stability and maintain that policy.
• Amend the Humphrey-Hawkins Full Employment Act, which currently diverts the Fed’s attention from long-term price stability to short-term economic growth.

So there it is in a nutshell.  I am sure not everyone will think it is perfect, even when completed with details, but it is a step in the right direction.  Of course, I am fairly certain it will be completely dismissed by a Democratic controlled Congress, but at least they won’t be able to say there is no alternative.

Tagged as: budget, Obama, republicans