CRFB Responds to Senator Obama's Convention Speech

Last night at the Democratic Convention, Senator Barack Obama proposed $547 billion in annual spending increases and tax cuts, according to a new analysis by the Committee for a Responsible Federal Budget.

The policies discussed by Senator Obama included:

• Cutting taxes for 95% of all working families (renewal of the 2001 and 2003 tax cuts for families making under $250,000 a year; a $500 per person "Making Work Pay" tax credit; and a number of other policies for low-income workers, savers, homeowners, and middle-class taxpayers) for $394 billion in 2013.
• Cutting taxes for domestic corporations and eliminating the capital gains tax for start up businesses for $13 billion in 2013.
• Investing in the development of green technology for $15 billion in 2013.
• Increasing federal spending on all levels education and expanding existing college tax credits for $40 billion in 2013.
• Engaging in major healthcare reform resulting in a large expansion of health insurance coverage for $65 billion in 2013.
• Expanding the size of the military for $20 billion in 2013.

"The Senator's tax cuts and new spending initiatives would cost over half a trillion dollars a year," explained Maya MacGuineas, President of the Committee for a Responsible Federal Budget, "it's hard to see how we'll ever get out of this deficit hole at this rate."

Barack Obama said that he would pay for all of his new policies by closing tax loopholes and havens and cutting spending on ineffective and inefficient government programs. Added to savings from ending the Iraq war, these policies could reduce the budget gap by between $200 and $250 billion, according to the analysis.

"As the country faces daunting fiscal challenges from large deficits to trillion-dollar long-term imbalances, it is critical that the presidential candidates present the country with credible plans to improve the situation, rather than a long list of policies that would continue our dependency of borrowing from our children," said MacGuineas.

The Committee for a Responsible Federal Budget has released a complete analysis of all the proposals put forward by Senator Obama and Senator McCain, entitled Promises, Promises: A Fiscal Voter Guide to the 2008 Election at http://www.usbudgetwatch.org.

Learn More About: Maya MacGuineas
Related Programs: Committee for a Responsible Federal Budget
Topics: Elections & Political Parties, Fiscal Policy