Congressional budget still part of “same family”

By Suzia van Swol-University of New Mexico, Talk Radio News Service
Office of Management and Budget (OMB) Director Peter Orszag said today that the budget proposals under consideration in the House and Senate Budget Committees "are from the same family as the President’s budget." "The resolutions may not be identical twins to what the President submitted, but they are certainly brothers that look an awful lot alike,” said Orszag, speaking to reporters on a conference call.

In response to Republican criticism of the proposal, Orszag responded that it is “easy to lob criticisms, but part of governing, or part of the policy process, needs to involve putting forward alternatives.” He said that he hasn’t seen an alternative budget proposal on the Senate side and his understanding is that there won’t be one. “It seems off to be criticizing, without putting forward an alternative,” stated Orszag.

The tax gap in the budget proposal amounts to a figure around 300 billion a year, and Orszag says that there are some proposals in the budget to start to reduce this number. However, Orszag stated that “there is widespread concern, frankly, that perhaps even the 300 billion dollar estimate is too low because of the complexity of some of the transactions that are involved.”

Orszag said that he takes issue with the objecture that there is “spiraling debt.” He stated that “we are inheriting a budget situation that is a mess and that we are working our way out of, and under both budget resolutions, the deficit is reduced in reduced in half—by more than half—by 2013.”

Orszag went on to explain that the only constraints on the task force are that there can be no tax increases during 2009 or 2010 and that the proposal should not raise taxes on American families making less than $250,000.

Orszag said that in regards to the committee using reconciliation this year,“reconciliation is not where we would like to start but we are not willing to take it off the table. There clearly are some differences between the Senate and the House on this topic and that will be worked out, assuming that both resolutions are adopted by the respective bodies; that would be something that would be worked out in conference.”

Tax gap reform will stop tax increases

"Some taxpayers shortchange the American people by nearly $300 billion, which is roughly $950 for every man, woman, and child in America," said Senator Tom Carper (D-Del.) at a roundtable discussion to find ways to cut the tax gap. With the financial crisis continuing to drive stocks down and the impending bailout bail threatening America's national debt levels, he said, it has become more important than ever to ensure taxes are being paid and to collect additional revenue without having to raise taxes in the next administration. The tax gap has not been examined since 2001, when more than $290 billion was not collected.

The discussion panel included the Inspector General, members of the U.S. Government Accountability Office, the National Taxpayer Advocate from the Internal Revenue Service, and members of the U.S. Treasury Department. Each panelist discussed seven ideal proposals to close the tax gap. These included the encouragement of more frequent, voluntary estimated tax payments by small businesses, the withholding of payments to noncompliant federal contractors, requiring information reporting by financial institutions about non-interest bearing accounts, reversing matching against state and local tax data, allowing voluntary withholding agreements among independent contractors and service recipients, eliminating the exception to 1099 information reporting for closely held corporations, and improvement of the IRS's data collection infrastructure. Carper has not specifically advocated any one of these proposals and believes that "no single approach, alone, will work." Carper encouraged the participants of the discussion to "think outside the box for new solutions."