New House rules not so slight 'sleight of hand'. Increases deficit.

The new GOP majority in the U. S. House of Representatives is busy these days - enacting a whole new set of rules that look and sound like the old Pay-As-You-Go rules, but will have the exact opposite effect. They will raise the deficit that the incoming GOP deficit hawks say they are so against. This is the same kind of smoke and mirrors that we’ve watched the GOP slam the U.S. economy - and by extension, the taxpayers - with for more than 30 years. Uh, way back to the Reagan years and the sad story of not-so-trickle-down economics.

The original 1990 Pay-As-You-Go rules, enacted as part of a greater budget bill, was intended to keep brakes on deficits. But once George W. Bush got to Washington D. C. all bets were off. They wanted to heap goodies on their friends at the top of the economic heap - while obscuring the deficit increases it would cause (what we are seeing now). So they let the PAYGO expire at the end of 2002, and then passed the Bush Tax Cuts (cleverly called the Jobs and Growth Tax Relief Reconciliation Act of 2003) and the Medicare Prescription Drug, Improvement and Modernization Act.

All unfunded. All deficit busting. Enter the quickly shrinking federal surplus and ballooning deficits. You should remember that George W. Bush was, after all, a savvy businessman - having wrecked several businesses and been bailed out by his father’s friends - and couldn’t have seen this coming.

Anyway, this created sweaty-palmed fear amongst many, and the PAYGO rules were re-instated in 2007. You’d think the day had been saved, but the cracks in the budgeting process wouldn’t be hastily slapped over with chewing gum like that. The PAYGO rules were waived to enact the Economic Stimulus Act of 2008 (nope that wasn’t Obama yet - lay this one on GWB) which reduced revenues and increased spending. Uh, that’s what PAYGO was designed to prevent.

Then the economy cratered. So, in order to pass the American Recovery and Reinvestment Act (2009) to keep us from going into a Great Depression, there had to be another emergency waiver of PAYGO.

So today, we have H. R. 5 that essentially is designed to reduce spending rather than deficits. Yes, I know … deficits were bad. But that was then.The new language reads as follows:

…it shall not be in order to consider a bill … if the provisions of such measure have the net effect of increasing mandatory spending.”

Similar language. Similar name. The same GOP smoke-and-mirrors. This is handy, since tax cuts don’t have to be balanced out with equal spending cuts or revenue increases elsewhere in the budget - and as we all know, tax cuts for our powerful and wealthy friends is what gets us re-elected. Tax cuts can now be ‘deficit financed’. Ain’t that clever?

According to OMB Watch, it gets even worse.

“Adding to the complexity and the problems created by the House Cut-Go rule is the fact that PAYGO also exists as a law. No matter what the new House rule allows, deficits induced by Congress must either be declared as the result of an emergency – a frequent occurrence – or they will result in automatic, across-the-board spending cuts to designated mandatory spending programs, including Medicare. Tax cuts that are not required to be offset by the House are automatically offset by mandatory spending cuts by law, allowing Congress to avoid the politically painful act of voting on fiscally responsible offsets.”

Swell. If you and I ran our own finances like this, we’d be in jail - much like Tom DeLay.

Rule changes also essentially allow for Rep. Paul Ryan, R-WI, Chair of the House Budget Committee, to single handedly assign spending levels for the coming fiscal year by simply ‘publishing them’. That’s way easier than going through the usual Budget Committee process, isn’t it? Budget by fiat. Hardly the warm and fuzzy bi-partisan effort we’d hoped for.

Ryan can also simply ignore the deficit increasing implications of attempts to repeal the Affordable Care Act (the hated ‘Obamacare’) - which according to OMB will add nearly $230 billion to the deficit over the next ten years if it were to be repealed. Fortunately, repeal is unlikely. I hope. Even better, he can also ignore the downstream deficit impacts of extending the Bush tax cuts again.

According to OMB Watch, this crazy CUT-GO rule will also gut infrastructure spending in addition to making it easier to make cuts to appropriations bills.

It would be laughable if it weren’t so serious.

The Senate still has to adhere to the PAYGO rules, fortunately. However, with the House in complete disarray rules-wise, you can expect the next two years to be total gridlock.

That’s just what we don’t need now.

-maven