Julian: Today, in our OneVote coverage, we are looking at the federal budget. How the government handles money is a big issue in this campaign.
From healthcare for the poor and elderly to national defense and the military, keeping the government running costs a lot of money. The most recent budget by proposed by the Obama administration calls for $3.8 trillion in spending. But the government doesn’t collect enough money from taxes to cover those expenses. In fact, every month the federal government is spending about $100 billion more than it’s taking in. To cover that gap, the U.S. has to borrow money, often from other countries. So the U.S. has run up a big tab. The national debt is now more than $16 trillion and counting.
Our Team OneVote had a lot to say about how the government taxes and spends money.
Kailyn Allen: My biggest concern is definitely out of control spending.
I think the national debt needs to be cut dramatically. If the generation right now doesn’t pay it off, it’s going to be my generation paying it off. And it’s not fair for them to leave us with all of their problems.
Karolyn Eilertsen: My dad is also an entrepreneur and he owns a biotech company.
I’m a huge advocate of supporting small businesses and federal government money being given to small businesses so they can create jobs for the community. I know that my dad has created a lot of jobs for citizens in our community.
Julian: But where do the candidates stand? Well, they both agree that if the economy is doing better, people will earn more and then pay more in taxes, which will help bring down the debt. But they both have a different way of getting there. Romney says less taxes puts more money in people’s pockets, and then back into the economy. If elected president, he won’t add any new taxes. And he promises to cut tax rates by 20%.
Mitt Romney: Now, I’m concerned that the path that we’re on has just been unsuccessful. The president has a view very similar to the view he had when he ran four years ago – that a bigger government spending more, taxing more, regulating more – if you will, trickle-down government – would work.
Julian: Romney also wants to get rid of certain taxes on things like profits made by selling a home or stock for people who make less than $200 thousand a year. Romney is also calling for cuts in federal spending. He says he will cut funding for PBS and some arts and humanity programs, and Amtrak.
Mitt Romney: I think it’s immoral for us to keep spending our kids’ future. If I’m president, I will actually cut spending and get America on track to a balanced budget.
Julian: Romney supports a balanced-budget amendment to the Constitution that would make it illegal for lawmakers to spend more money than the government takes in.
Connor Pfeiffer: If we only are making this much money, we need to spend this much money. We don’t need to be spending more and more money. We can’t afford it.
We don’t need to raise taxes in this economy, and we don’t need to raise taxes in general. We need to cut spending. The government needs to live within its means.
Julian: And both President Obama and Mitt Romney say it’s time to reform the process for collecting taxes. And they both want to get rid of some types of tax breaks and deductions.
President Obama, too, is calling for more government spending cuts. But he also wants higher taxes on the rich to help close the budget gap.
Obama: The path I offer is harder, but it leads to a better place because it allows everybody to prosper. Anybody who is willing to work hard can get ahead. I’m asking you to choose that future.
Julian: The president says he would leave current tax rates the same for 95% of Americans while raising taxes on families earning $250,000 or more a year.
Paul Sanchez: We’re barely able to get on with our lives here at home.
My mom is getting very little pay for what she works. It’s been tough or us as well. The rich should be taxed and the poor should be able to get some tax cuts – very, very needed tax cuts.
Julian: The president also proposed The Buffett Rule, named after billionaire investor Warren Buffett, who complained it’s not fair that his secretary pays a higher tax rate than he does.
Obama: My opponent thinks it’s fair that somebody who makes $20 million a year, like him, pays a lower rate than a cop or a teacher who makes 50,000.
Julian: The president’s proposal calls for a minimum tax rate of 30% on those earning more than a million dollars a year. Mr. Obama says lowering taxes on the wealthy would force the government to cut programs that help people like the elderly and the poor.
But what about the taxes businesses pay?
Mitt Romney says the corporate tax rate should be lowered from as much as 35% to 25%. He argues that cutting taxes and regulations encourages business growth.
President Obama also supports lowering taxes on the manufacturing industry and says his administration has already offered businesses several tax cuts and incentives.
- What are some of the big ticket items in the federal budget?
- What is the difference between a deficit and debt?
- Why does the government have a deficit?
- How does the government make up for that deficit?
- Why is the national debt an important issue for young people?
- What is Mitt Romney’s plan for improving the economy?
- What promises has Mitt Romney made about the economy?
- What is Mitt Romney’s position on the Balanced Budget Amendment to the Constitution?
- What is President Obama’s plan for improving the economy?
- What is the “Buffett Rule”?
- How do Mitt Romney and President Obama differ on their views of tax rates?