House Passes Obama-Backed Budget Rules
By Ben Pershing
The House approved a bill Wednesday requiring that much new legislation be deficit-neutral, endorsing budget rules proposed by President Obama as he struggles to halt a rising tide of red ink.
The "pay-as-you-go," or PAYGO, measure passed the House 265 to 166. It mandates that most tax cuts and spending increases be offset with corresponding spending cuts or tax increases.
The bill faces an uncertain fate in the Senate, where Budget Chairman Kent Conrad (D-N.D.) has not endorsed bringing it up for consideration. During the last Congress, House Democrats vowed to follow PAYGO rules and then routinely set them aside on major bills, blaming the Senate's unwillingness to go along.
Obama and congressional Democrats say the rules will help rein in the mounting deficit and prevent irresponsible fiscal policy in the future, arguing that such restrictions helped lead to budget surpluses in the 1990s.
Obama applauded the House vote, saying lawmakers "demonstrated strong support for fiscal discipline. ... It is time to stop the practice of passing today's costs onto future generations. PAYGO was a driving principle behind the move from deficit to surplus in the 1990s, and must be so again today."
But Republicans complained that Wednesday's bill was weaker than advertised and would most likely lead to undesirable tax hikes. The conservative Republican Study Committee called the legislation "so riddled with loopholes and exemptions that it only continues the mockery of fiscal restraint this Congress has come to represent."
When the GOP held the House majority, it generally resisted the argument that tax cuts needed to be "offset," arguing that tax cuts spurred economic growth and so should not be made more difficult to pass. Republicans pointed out Wednesday that Obama's proposal exempted key items from adherence to PAYGO rules, including a "patch" for the alternative minimum tax, extensions of some expiring tax cuts and a bill to prevent Medicare reimbursement rates for doctors from declining. And the restrictions would only apply to taxes and mandatory spending, like entitlement programs, not discretionary spending like the stimulus bill.
"The fact is this bill would not have stopped the tsunami of spending Democrats have unleashed during the past six months," said House Minority Leader John Boehner (R-Ohio).
A Republican-authored substitute, which would have imposed caps on both discretionary and mandatory spending and would not have provided for automatic tax increases, was defeated by an almost-party-line vote.
But Democrats said Wednesday's vote was an important -- and realistic -- first step back towards budget sanity. House Majority Leader Steny Hoyer (D-Md.), the measure's lead sponsor, said on its introduction last week that "the principle of paying for what we buy was abandoned by President Bush, who used borrowed money to fund tax cuts for the most privileged."
The importance of deficit neutrality has figured prominently in the ongoing debate over health-care reform, and Hoyer said, "PAYGO is only part of the solution to our fiscal mess -- the work ahead will include controlling the costs of health care and the growth of our entitlement programs."
July 22, 2009; 5:14 PM ET
Categories: House , Purse Strings
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