Economic growth is the only way to a balanced federal budget

Avoiding massive tax hikes means increasing the debt, but the alternative is more costly in the long run.

Many provisions of the pro-growth 2017 Tax Cuts and Jobs Act expire at the end of this year. If Congress refuses to act, Americans will face the largest tax hike in history — hitting workers, families, and small businesses just as they’re finding their footing in an uncertain economy.

At the same time, Congress must confront a skyrocketing $36 trillion national debt that threatens our long-term economic stability and fiscal standing.

But deficit reduction is impossible without economic growth. That means we have to extend the tax cuts now and then confront Congress’ addiction to spending your money.

THE 2017 TAX CUTS GOT IT RIGHT.

In 2017, the U.S. economy needed a jolt. Economic growth was slow. Wages and income were stagnant. The labor force participation rate was at its lowest since the 1970s. And private investment was faltering.

President Trump and Congress created a pro-growth tax package rooted in a bottom-up philosophy emphasizing work, investment, and entrepreneurship over government handouts.

The tax cuts sparked a massive economic boom. Soon after they were signed into law:

• Unemployment fell to an all-time low 
• Income hit an all-time high 
• Inflation was a non-issue 

THIS IS THE WRONG TIME FOR A TAX INCREASE.

Today, the economy is improving from the Biden administration’s disastrous economic policies, but Americans are still being squeezed from all sides. Prices remain too high. Wages need to grow more. And interest rates are punishing families and small businesses.

The last thing Americans need is a tax increase. If Congress fails to extend the 2017 tax cuts, families will see an average tax hike of $1,500. Worse still, raising taxes would choke investment and discourage small business expansion.

The result? Empty factory floors, shuttered storefronts, and communities struggling to stay afloat.

WASHINGTON HAS A SPENDING PROBLEM.

Washington hasn’t balanced the budget since 2001. Back then, annual spending was less than $2 trillion. Last year, the federal government spent nearly $7 trillion — more than triple in just over two decades.

As spending ballooned, the debt soared — from just under $6 trillion to more than $36 trillion.

Tax cuts did not drive budget deficits. Overspending did.

• A surge in entitlement spending as our population ages
• Post-9/11 military spending increases
• Expensive new programs and benefits like the Affordable Care Act
• Interest payments on the enormous national debt are now one of the biggest items in the budget
• COVID-era spending sprees, including massive spending increases in 2020 and 2021

The dire state of the federal debt results from a culture where every problem gets a price tag. And lawmakers are rewarded for throwing more money at a problem rather than actually solving it.

THE SOLUTION: SETTING PRIORITIES

We didn’t get here overnight, and Washington won’t fix our problems with one bill.

Economic growth is a crucial first step toward a balanced budget. A growing economy leads to greater tax revenues, fewer people relying on government assistance, lower interest rates, and improved investor confidence.

Tax cuts lead to growth. Allowing tax increases right now crushes millions of families struggling to pay their bills, buy groceries, and afford today’s skyrocketing cost of living.

Congress can stop the largest tax increase in history and cut federal spending.

• The One Big Beautiful Bill includes $1.79 trillion in spending cuts to partially offset the cost of the tax cuts and other priorities in the bill.
• Separately, the House has already approved a rescissions package that would cancel $9.4 billion in previously approved spending.
• On top of that, the federal budget has increased by more than $1.5 trillion each year due to the pandemic. But the emergency has passed, and there’s no reason that level of spending should continue.

Americans for Prosperity has been fighting reckless and wasteful government spending for the last 20 years. Congress has to cut spending.

But we can’t lose sight of an immediate and urgent need to ensure that Americans aren’t hit with the largest tax increase in history.

Let your senators know that you support the One Big Beautiful Bill.