On Day One of this new Congress, after years of professing great concern about the national debt, Republicans are abandoning pay-as-you-go budgeting, returning to the Bush-Cheney approach -- endless borrowing. We cannot eliminate deficits by revisiting Republican trickle-down economics -- this nonsense dug the deficit hole in the first place. Even Republican economists, like former CBO Director Doug Holtz-Eakin, concede that "there is no serious research evidence" to support the too frequent claim that "tax cuts pay for themselves."
Yet reality doesn't stop the mythmakers. Now this old concept has returned in the proposed Republican "Cut-Go" rule, which excludes any requirement that tax cuts be offset. This change demonstrates Republican indifference to our growing national debt except as an excuse for cutting current public initiatives that they wish to weaken or eliminate.
Our existing Democratic House rule ensures greater budget discipline than either Statutory PAYGO or the proposed Republican replacement. The Democratic rule requires each bill affecting direct spending or revenue to be deficit neutral. In contrast, Statutory PAYGO only requires the cumulative effect of all bills approved during an entire year to be deficit neutral. Thus, by replacing the House PAYGO rule with a weakened Republican rule, a Republican House and a complicit Senate can pass deficit-bloating bills that lower revenue throughout the year -- not worrying about paying for the additional spending until year's end, at which point, it may be impossible to do so except through statutory sequestration that enacts across the board spending cuts to priorities like Medicare and education loans without having to assume specific responsibility for what has been cut.
Another, equally troubling result of this Republican "Cut-Go" rule is the incentive it creates to convert spending programs--that would otherwise need to be offset--into tax expenditure provisions that do not and which are subject to no accountability through the Budget process. Already rampant and criticized by the bipartisan Presidential Fiscal Commission, this spending through the Tax Code is usually an inefficient and ineffective means of accomplishing a goal. Currently, spending through the Tax Code costs over $1 trillion with virtually no oversight; if the Republican rule is implemented, we can expect that figure to dramatically increase, all of it ballooning the deficit. Ironically, just last August, incoming Speaker Boehner himself lamented the proliferation of these unjustified tax breaks saying, "We need to take a long and hard look at the undergrowth of deductions, credits, and special carve-outs that our Tax Code has become."
Republicans are just like the fellow who bellies up to the bar, asking for just one more tax break for his buddies, while declaring, "put it on my tab." But its really our tab. All Americans will be indebted for their addiction to endless borrowing for endless tax breaks. Rejecting sound fiscal planning right at the start of their leadership signals their lack of seriousness.