New (House) Rule: Slash, Cut, Pillage And Destroy

The CBPP has a disturbing report out today on the new rules expected to be adopted by the Tea Party House of Representatives. It's going to be a long two years.

The new rules announced December 22 would replace pay-as-you-go with a much weaker, one-sided “cut-as-you-go” rule, under which increases in mandatory spending would still have to be paid for but tax cuts would not.

In addition, increases in mandatory spending could be offset only by reductions in other mandatory spending, not by any measure to raise revenues such as by closing unproductive special-interest tax loopholes. For example, the House would be barred from paying for continuation of a provision enacted in 2009 (and extended in the just-enacted tax compromise) that enables many minimum-wage families to receive a full, rather than a partial, Child Tax Credit by closing wasteful tax breaks for multinational corporations that shelter profits overseas. Use of such an offset would violate the new House rules because the provision expanding the Child Tax Credit for working-poor families counts as spending and hence could not be paid for by closing a tax loophole. Yet the same new rules would enable the House to expand tax loopholes for multinational corporations and wealthy investors without paying for those tax breaks at all, because any tax cut, no matter how costly or ill-advised, could now be deficit financed.

The new rules would stand the reconciliation process on its head , by allowing the House to use reconciliation to push through bills that greatly increase deficits as long as the deficit increases result from tax cuts, while barring the use of reconciliation in the House for legislation that reduces the deficit if that legislation contains a net increase in spending (no matter how small) that is more than offset by revenue-raising provisions.

Under the Democratic-led House, reconciliation could only be used if it was deficit-neutral. The health care bill, for example, had effective dates pushed way out in order to spread out the cost in a way that would be offset by revenues coming in against it. Otherwise they couldn't have gotten it through. Under this new House of Representatives, it won't matter whether the deficit increases as the result of tax cuts provided they slash spending elsewhere.

Basically, they're rolling back everything to the Bush years when it comes to the budget and spending. I predict an ugly 2 years ahead, with battles over everything but defense spending.


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