Do the New House Rules Doom the Deficit?

Republicans like to say, We don't have a deficit problem, we have a spending problem. So we shouldn't be surprised that according to the new rules passed in the Republican House, it'll be no problem for the GOP to cut taxes without paying for them. But that's a problem!

Congress's PAYGO ("pay as you go") rules generally require the government to pay for changes to mandatory spending -- such as entitlements, welfare, farm subsidies, and veterans spending -- with tax increases or spending cuts. But in Boehner's House, PAYGO is replaced with CUTGO ("cut as you go rule"), which says the government has to pay for spending increases, but not tax cuts.

That means that if I want to create a new spending program to give sick low-income families money, I have to cut some other program. But, if I want to create a new tax break to give low-income families the same amount of money, I don't have to do anything even if it costs ten times more.

House Republicans apply the same tax-cuts-don't-add-to-the-deficit philosophy in their new reconciliation rules. Reconciliation, which was used to pass the health care overhaul, makes it easier for majorities to pass controversial bills. In the last Congress, reconciliation could only pass bills that reduce the deficit within ten years. In the new House rules, reconciliation cannot be used to pass a bill that increases spending by a dollar, but (guess where this is going?) it can be used to pass a bill that increases the deficit through dramatic tax increases.

After stacking the deck in favor of tax cuts, the new House rules give Budget Committee Chair Paul Ryan unprecedented authority to set spending levels for the coming year. Ryan has promised more than $100 billion in spending cuts over the next twelve months -- which Democrats and the White House will almost certainly oppose.

Finally, House Republicans have been adamant about repealing health care reform, which was scored by the CBO as reducing the deficit by $143 billion. How can the House pass a bill that increases the deficit? By creating an "explicit exemption" in their rules for health care repeal.

This is cookie-cutter Republicanism, but it isn't serious deficit reduction policy. It increases the risk of gridlock between the House and the Democratic-controlled Senate, and it gives Republicans reason to continue pushing de facto spending legislation through tax expenditures.

On the one hand, you could argue that these rules aren't worth getting worked up over. Democrats passed rules to facilitate their new spending, you could say, and Republicans passed rules to facilitate their tax cuts. But with trillion-dollar deficits piling on top of each other, we need both parties to acknowledge that the only long-term solution to the deficit is higher taxes and lower spending. Straitjacketing our tax policy is an ominous opening move from the new House.

Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

Why Principals Matter

Nadia Lopez didn't think anybody cared about her middle school. Then Humans of New York told her story to the Internet—and everything changed.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register with Disqus.

Please note that The Atlantic's account system is separate from our commenting system. To log in or register with The Atlantic, use the Sign In button at the top of every page.

blog comments powered by Disqus

Video

A History of Contraception

In the 16th century, men used linen condoms laced shut with ribbons.

Video

'A Music That Has No End'

In Spain, a flamenco guitarist hustles to make a modest living.

Video

What Fifty Shades Left Out

A straightforward guide to BDSM

More in Business

Just In