In an attempt to stem the spending spree that has taken place this year, the Congressional Budget Office (CBO) has put forward a set of recommendations to balance the federal budget.  

Unfortunately some of the people that will take the biggest hit are working families and small business owners.

Just a few of the CBO's recommendations:

• Increase the individual income tax rates.
• Eliminate tax subsidies for child care.
• Eliminate or limit eligibility for the child tax credit.
• Require self-employed and employees to pay the same amounts in payroll taxes.

At a time when we should be providing more opportunities for working families, removing the tax credit for child care and raising individual income tax rates is not the answer.

For the first time in our history women now outnumber men in the workforce.   You see it everywhere you look in today's workplace.  It is clear that today's workforce isn't what it used to be – especially when it comes to working families.  In 1950 less than 12 percent of mothers with children under age 6 were in the labor force.  Today, more than 60 percent of them work outside the home.

For decades millions of women have successfully balanced work and family – many because they have to, some because they desire the challenges and rewards of a career outside the home.  In 1955 only 27 percent of mothers in the workforce had kids under the age of 18, today that number is over 70 percent. 

Given the important impact women are having in the workforce, our policies need to encourage, not discourage, women to enter and remain in the workplace.  Removing tax credits for child care is not the answer.  Our policies should focus on giving working families more flexibility and opportunities, not higher taxes, more mandates or new regulations.  

We need more flexible work arrangements.  Working parents are struggling to balance competing demands from care-giving responsibilities and their careers.  Let's offer private sector employees the option to take time off in lieu of overtime pay, a unique perk that government employees have enjoyed for 30 years.    

Working parents, especially women, are often forced to make difficult choices about their careers. Oftentimes this choice comes down to taking a full-time position with benefits and a 9 to 5 straightjacket schedule or taking a more flexible part-time position. For this reason, many primary caregivers go without the benefits provided by full-time positions.

If a parent needs a flexible schedule and comp time is not yet an option, the employee should be able to trade taxable wages for workplace benefits like health or retirement benefits. Our tax code currently makes this difficult.

And, if we get rid of the child care tax credit that is going to make it even more difficult for families to afford child care which will further discourage women from working outside the home.

At the National Center for Policy Analysis we believe strongly in getting our fiscal house in order and balancing the federal budget.  But it should be done by cutting wasteful government spending and not increasing taxes on those who make our economy work.  Our policies need to make it easier for working families and small business owners – the proposals outlined by the CBO do little to achieve that goal.

One Response to “Congressional Budget Office Tries to balance Federal Budget?”

1. Don Simkovich Says:
   September 15th, 2009 at 3:57 pm

   Great perspective. I want to do a bit more digging on the president’s economic council or economic advisors and find out what they’re proposing for changes in the tax code. I had seen a report on NASDAQ.com that their work is largely behind closed doors.

Leave a Reply