New GOP House Rules Pave The Way For More Tax Cuts, Deficits

December 28, 2010 5:36 a.m.

In 2007, just weeks after Republicans lost control of the House and Senate and six years after the first passel of Bush tax cuts were signed into law, Democrats made a key change to the budget rules to prevent that episode from repeating itself.

Republicans had used the budget reconciliation process — immune from a filibuster — to pass the cuts and explode the deficit: two things the reconciliation process was never meant to allow. To get away with it, Republicans were forced to include a 10-year sunset in package — planting the seeds for the tax cut fight we just saw on Capitol Hill. After Dems wrested control of Congress, they banned the reconciliation loopholes used by the GOP altogether.

But as they return to power in the House of Representatives, Republicans are taking steps to unravel those changes.The Center on Budget and Policy Priorities examined the GOP’s proposed new rules for the House, and here’s what they found.

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.

To translate: Bush tax cuts are fine, but, say, paying for infrastructure projects by taxing carbon would be forbidden, even if the net result would be a reduction in the deficit.

This is just one key feature of the GOP’s playbook: CUT/GO. Under CUT/GO, all new spending has to be paid for, but tax cuts do not. Additionally any new spending must be paid for with parallel spending cuts elsewhere in the budget — not with tax hikes. So unemployment benefits couldn’t be paid for by closing a corporate tax loophole. But a corporate tax loophole could be widened without requiring any offsets.

The practical implications for now are nil. The Democrats still control the Senate, and, even if they didn’t, the Senate’s rules are more arcane and harder to change. But Democrats are currently weighing a few modest changes to other Senate rules, and you could imagine Republicans in a future Congress taking steps to make tax cuts even easier to pass.

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