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MOAA...
Military Officers Association of America
New Budget Rules
Could Mean Gridlock
Republicans in control of the House and Democrats in control of the
Senate have approved dramatically different budget rules for the 112th
Congress that would appear to make it difficult for them to reach
agreements on almost any major budget changes without major compromises
by one or the other or both.
The most important change in the House was to replace the
“pay-as-you-go” (PAYGO) spending rule with the “cut-as-you-go” (cut-go)
policy. Under the PAYGO rule still used by the Senate, any increases in
so-called “entitlement” spending must be offset either by cuts in other
entitlement spending programs or increases in revenue.
Entitlement spending (also known as mandatory spending) involves any
program that is subject to automatic adjustment mechanisms (e.g.,
COLAs) and doesn’t require annual appropriations. It includes such
programs as Social Security, Medicare, military and federal civilian
retirement and survivor programs, TRICARE For Life, VA disability
payments, and more.
PAYGO rules also require offsetting the cost of any proposed tax cuts
with equivalent spending cuts.
The new House “Cut-Go” rule requires that any new increase in mandatory
spending can be offset only by other mandatory spending cuts, and not
by tax increases. It also exempts tax cuts from any offset
requirements.
Practically speaking, what will this mean?
The focus in the House is clearly to force significant spending
reductions and make it easier to enact tax cuts.
But the different rules between the House and Senate raise the prospect
that un-offset tax cuts approved by the House would violate Senate
rules, and revenue increases proposed by the Senate to cover the cost
of Medicare or other fixes would violate House rules.
To add to the complexity, the PAYGO offset rules are set in law, even
though the House has chosen to use different rules for its
deliberations.
In the past, the most frequently used way to get around the statutory
PAYGO rule was to declare the spending increase an “emergency” need, as
emergencies aren’t subject to PAYGO offset requirements. The new House
rules likely will cut down on emergency spending increases, but will
House members now seek “emergency tax cuts”?
If all this technical budget rule stuff is too geeky for most
Americans, the bottom line is a pretty familiar one: expect more
gridlock.
Read it at MOAA
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