Capitol Comment: U.S. budget should create solutions, not challenges

As the U.S. economy slows, and perhaps even retracts, many American families are taking a hard look at their budgets and making choices about how they'll spend their income.

Likewise, Congress is now deciding the nation's spending priorities in the budget for the next fiscal year. The federal budget directly affects all Americans, either offering solutions to the challenges we face or creating new burdens for future generations.

On March 14, the Senate passed the Fiscal Year 2009 Budget Resolution which provides resources to keep our nation safe and improves America's ability to compete in a global market. Unfortunately, the budget also contains an historic tax hike that will burden American families and constrain our economic future.

One of the most important responsibilities of the Congress is to protect the American people. The budget allows us to do that by funding the U.S. Department of Defense, including all operations in the Global War on Terror. As our brave service members fight violent extremism around the world, it is imperative that we give them the resources they need to complete their mission.

It is also our duty to ensure that America remains a world leader in research, innovation and technology. The budget supports this goal by increasing funding for research investment and improving teacher education in math, science, engineering and other technical disciplines.

Despite these worthwhile endeavors, the budget also has major flaws.

It eliminates the tax cuts from 2001 and 2003 that generated record growth, and it imposes a $1.2 trillion tax increase on American families � the largest tax hike in U.S. history. This will directly impact 43 million families across our nation, including many in Texas.

An average one-wage-earner family of four with an income of $50,000 will pay $2,300 more per year in federal taxes. For $2,300, a family could buy several months of groceries, pay utility bills for an entire year, provide health care expenses for nearly a year, or gas up two cars for nearly a year. Instead, these families will be forced to send more of their hard-earned money to the federal government.

The budget is also a direct attack on small business owners who are the backbone of the American economy. Because of this legislation, 27 million small businesses will be forced to pay $4,100 more in taxes each year.

Ironically, the budget comes on the heels of an economic stimulus package that Congress passed a few weeks ago to provide tax rebates to spur our struggling economy. Now, the majority party in Congress is burdening many of the very same people with more taxes. Given our current economic climate, it is incomprehensible to me that Congress would negate the benefits of the economic stimulus package by imposing higher taxes on those who will soon be receiving their rebates.

This budget also fails to cut back on entitlement and discretionary spending that has ballooned out of control. Over the next five years, overall spending will increase by nearly $700 billion. Rather than focus on fiscal discipline, a majority in the Senate decided to pass a budget that will raise taxes, jeopardize millions of American jobs, and put our country's economic future at risk.

The next few years will present extraordinary opportunities and challenges for our nation, and we must ensure that our budget is correctly prioritized to keep America competitive and assure national security. While those are the priorities, we must cut back the increase in programs that are no longer necessary and scrub every agency to stop wasteful spending.

As our financial institutions battle a liquidity crisis that threatens our whole economy, we do not need a budget that reverts back to the same old tax and spend policies that have proven disastrous in the past. I will continue to work for a solution that keeps tax rates low, while also investing in the priorities that are essential for our future.

Kay Bailey Hutchison is the senior U.S. Senator from Texas.