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Tuesday, October 03, 2006


Gene Sperling examines Republican efforts at budget reform involving pay-as-you-go rules and at the reduction of pork-barrel spending, but finds little of substance in the proposals:

Republican Budget Reform? They Can't Be Serious, by Gene Sperling, Bloomberg: Sometimes it's hard to take seriously what goes on when Congress starts talking about budget reform. Since Republicans took control of Congress in 1995, pork- barrel spending ... tripled. In that light, the anti-pork legislation passed last month is at best a papier-mache tiger.

Rather than create a bill with some teeth, the House decided that when earmarks are inserted into legislation the members have to attach their names to the spending proposals. Scary stuff, huh?

Normally, I would be delighted with even a small step toward greater budget transparency. This bill, however, doesn't even try to address the guts of the pork problem. ... Requiring nametags on earmarks may shame a few legislators from pushing for the sleaziest projects. For others, having their name next to an earmark is the type of stuff they might put in television election-campaign ads to show they were bringing home the bacon.

How the House's bill defines pork on the tax side is enough to make you laugh -- and cry.

For instance, ... in the House legislation, any tax cut benefiting more than one individual or company is not defined as an earmark. For a special-interest tax break to avoid the pork label, all that's needed is for highly-paid lobbyists to work together to ensure that at least two of their clients benefit. Perhaps we could call it the Tax Lobbyist Team Building Act?

The Senate's budget reform bill unveiled in June is more muscular than the House version, but still unbalanced.

The hallmark of budget reform is finding rules that aim to be even-handed, rather than those promoting one specific political or philosophical agenda. Consider the 1985 Gramm-Rudman-Hollings ... pay-as- you-go rules of the 1990s. Gramm-Rudman-Hollings triggered across-the-board spending cuts if deficit targets were missed. While the bill had its flaws, it was at least seen as fair because it exempted many basic programs for the poor and took half of the required cuts from defense and half from domestic spending.

The goal was to make the enforcement mechanism painful to all concerned, creating an incentive for everyone to work together to hit deficit targets. The same principle of neutrality is seen in the former pay- as-you-go rules that were in place for most of the 1990s. ... Voices ranging from former Federal Reserve Chairman Alan Greenspan, to General Accountability Office Comptroller David Walker have all recognized that pay-as-you-go should apply to both tax cuts and new entitlement spending.

The proposed Senate bill applies pay-as-you-go requirements only to entitlement programs while shielding tax cuts. So, if you have a special-interest goodie you don't want to pay for under the Senate bill, or have labeled as pork under the House bill, simply design it as tax cut that benefits two companies. You're home free. ...

No one should believe that attaching a name to earmarks or adopting one-sided budget reform is ever going to be part of the solution. That will take the type of even-handed and bipartisan effort that so far this Republican-controlled Congress has shown no interest in promoting.

    Posted by on Tuesday, October 3, 2006 at 02:06 AM in Budget Deficit, Economics, Politics, Taxes | Permalink  TrackBack (0)  Comments (28)


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