At a March 11th Senate Budget Committee hearing on the benefits of a balanced budget, lawmakers discussed government waste, corporate welfare, special interests, and tax reform. Testimony was heard from Former Governor of Michigan and President of the Business Round Table, John Engler, President of the Committee for a Responsible Federal Budget, Maya MacGuineas, and Eastman Professor of Political Economy, Dr. Mark Blyth.

During opening statements, Chairman Enzi (R-WY) emphasized the importance of increasing government spending efficiency, and Ranking Member Sanders (D-VT) drew attention to corporate tax loopholes, arguing that tax breaks for the wealthy significantly contribute to the national debt. The panelists expressed differing views on these issues, with Hon. Engler arguing that corporate taxes hinder U.S. businesses’ competitiveness in the global market, while Ms. MacGuineas focused on the need for entitlement and tax reform, urging Congress to avoid political handouts and gimmicks during the appropriations process. Dr. Blyth characterized the national debt as “under-revenue-ing” rather than having an over-spending problem, asserting that tax breaks for wealthy groups such as corporations have burdened the U.S. economy.

In response to questions from Chairman Enzi (R-WY) about narrowing federal budget priorities, Engler voiced strong opposition to increased taxes, and MacGuineas noted the importance of better oversight of mandatory spending accounts that make up such a large portion of the budget. Ranking Member Sanders (D-VT) questioned the panelists on corporate tax loopholes, arguing that Congress should eliminate tax breaks rather than cutting funding to social safety-net programs like Social Security and Medicare. MacGuineas agreed that corporate tax breaks need to be curtailed, while Engler argued that corporate taxes themselves should be eliminated altogether because they hinder American competitiveness.

Despite disagreement over how the budget should be balanced, most senators and the panelists agreed that a balance can only happen if lawmakers work together. Senator Whitehouse (D-RI) emphasized this point, arguing that reducing the deficit will require cooperation. Engler noted that when he was Governor, a main contributor to Michigan’s ability to balance their budget was lawmakers’ ability to compromise on spending issues. Senator Purdue (R-GA) further maintained that Congress’s fiscal irresponsibility cannot continue, calling for entitlement reform.

TCS has long argued that adhering to fiscal discipline would eliminate the need for sequestration and across-the-board budget cuts, and we have documented many tax subsidies that equate to corporate welfare and should be repealed.