This sort of question requires what is called a Truth Table and looks like this where T is Taxes with 0 being Cut and 1 is Increase. So it follows that B is Budget with 0 being decrease and 1 being increase.
T B
0 0
1 0
0 1
1 1
This gives four possibilities: 0, 0 - Cut taxes, Cut the Budget; 1, 0 - Increase Taxes, Cut the Budget; 0, 1 - Cut Taxes, Increase the Budget; 1, 1 - Increase Taxes, Increase the Budget.
Now let’s look at all four possibilities (I'm writing this so I'll do it in the order I want).
4) Raise Taxes and Raise the Budget. This is the choice that will make the fewest people happy, IMO. Liberal Politicians and the people who expect to get the most hand-outs from the government, i.e. their constituents. In theory you would think this would have a chance of being deficit neutral, but seeing as how they could take all of the money made by the rich people of the U.S. and the budget would still not be balanced, it's unlikely.
3) Cut Taxes and Raise the Budget. This is the sure path to fiscal destruction and it seems to be the course we are on right now. The liberals have to tax everybody or this ship will sink. I saw on the news yesterday that the Chinese have said they will no longer buy any more of our dept. This is the first shot across the Flag Ship Obama's bow meaning, get your finances in order or you’re on your own.
2) Raise Taxes and Lower the Budget; Normally this would lower the deficit but with the current obamanation(sic) that is the Obama budget, well, I don’t see him cutting that much and see #3 above about taxing the rich. At least this possibility would demonstrate some concern for the countries fiscal well being although I know of very few people that would view a tax increase in the way VP Biden would like. I pay my taxes and donate to many charities of my own choosing (at a much higher percentage than Obama’s 4%) and I don’t need Tail Gunner Joe telling what is the right thing to do as I am sure his version would be quite different from mine.
1) That brings us to Cut Taxes and Cut the Budget; This gets my vote. Cut all “stimulus” funds that have not already been spent. Require “stimulus” funds given to cronies be returned. Immediately cancel all of the legislation adopted so far by the Obama administration and his liberal cronies in congress. If these three things are done congress could probably declare 2010 the year of no taxes, at all, and still come out ahead. Can you imagine how paying no taxes would effect current state of our economy?