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Is There Growth in the President's FY 2014 Budget?

Not according to Larry Kudlow.

We growled about the introduction of the President's FY 2014 budget on Wednesday, April 10 to provide readers with an overall flavor. In a column posted yesterday at National Review Online, Larry Kudlow, an associate budget director in the first Reagan White House and host of a CNBC show, ripped the President's "growth-busting budget." The lede of his column said:

"No matter how you slice the Obama budget pie, the inescapable fact is that the president wants to get rid of the roughly $1 trillion budget-cutting sequester and substitute in a $1 trillion-plus tax hike. In other words, more spending, more taxing. Growth-busting. The GOP should just say no.

"And let me provide some counsel to my Republican friends in Washington, in particular in the House. Balanced budgets don’t create growth. This mantra is wrong. It’s growth that creates balanced budgets.

"Cut spending? That’s a pro-growth measure. Lower tax rates? Another pro-growth measure. The combination of limited government and true tax reform will balance the budget soon enough,  with government coming in at a smaller share of GDP while sufficient investment and work incentives get growth moving towards the 4 or 5 percent range.

"That kind of growth would make up for the lost ground of the past 15 years. And if you add in deregulation and a sound King Dollar, you’d have a growth budget that would propel America back into prosperity."

Kudlow also complained about the lack of serious corporate tax reform. In addition, Kudlow complained of the budget's attack on retirement savings accounts, writing:

"Then there’s the budget’s incredible and arbitrary limit or tax on — or even possible confiscation of — IRA-type tax-advantaged savings accounts. Who exactly gave the federal government the right to tell free people how much they can save for retirement? Obama wants a $3 million cap on these accounts. And he thinks $205,000 a year in some kind of annuity would “be substantially more than needed for reasonable retirement.” This is statism at its worst.

"Plus, people pay taxes when they redeem their IRAs. And on top of that, the U.S.A. needs more saving to promote more investment and create more jobs and growth. Better that savings and investment are tax free and we tax consumption instead."

For more about the "switcheroo on retirement savings accounts," see this Wall Street Journal editorial.


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