The Administration's Budget for 2011

Congress needs to go back to the drawing board on the FY2011 budget.

If enacted this budget plan will balloon the deficit, dramatically increase taxes in a tough economy, and undermine job creation. Plagued with record-breaking spending and larger deficits than ever seen, this plan is a surefire way to slow economic growth, slow employment, and make U.S. companies less competitive around the globe.

Job creators, investors, and higher income Americans, including many small business owners, will be the hardest hit by punishing tax increases. According to initial reports, there are nearly a half a trillion dollars in business tax hikes over the next 10 years, including taxes on energy, financial transactions, unemployment insurance, firms using independent contractors, and foreign earnings. Imposing these taxes in a weak economy will delay our economic recovery, hurt business expansion, and slow job creation.

While the FY2011 Greenbook is full of tax increases, it offers little in the way of tax cuts to help businesses grow.

Additionally, the discipline envisioned on the spending side of the equation is weak.

The spending freeze, initially announced with fanfare, covers only a small sliver of the federal budget pie. Federal spending will grow to a record $3.8 trillion in FY2011, more than 25 percent of the nation's GDP, a post-World War II record. The bipartisan deficit reduction commission the president plans to organize would have no binding influence over this or any Congress.

Using its own numbers, the administration's proposed budget deficits will cause debt as a share of the economy to rise by 13.6 percentage points to over 77 percent.

Deficits of this magnitude are unsustainable. Such heavy borrowing by government crowds out the capital available for the private sector, threatens to reignite inflation and higher interest rates, and cedes too much leverage to foreign debt holders.

I know that there is no perfect plan to erase the deficit and balance the budget. However, serious deficit reduction can only begin with robust economic growth, expansion of the tax base, and serious entitlement reform.