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Monday, December 10, 2007
"A Bad Patch" -- Next Steps on the AMT Bill
House PAYGO Rules Requiring a Waiver Will be Watched
This weekend, the Washington Post editorialized on what it deems "A Bad Patch," the bill moving through Congress to "patch" the Alternative Minimum Tax (AMT). Congress has taken pains to make sure all of its measures this year that raise mandatory spending or cut taxes are revenue-neutral, to comply with the fiscal discipline requirements of the "PAYGO" rules Congress passed this year.
But the Senate dropped the PAYGO ball completely last week, voting 88-5 to pass an un-paid-for patch -- of which 85 percent of the benefit goes to those earning $100,000 or more, incidentally:
Republicans -- who might as well rename themselves the Grand Old Party of Fiscal Irresponsibility -- refuse to pay the $50 billion tab for the one-year fix. They refuse to do away with the "carried interest" loophole that lets venture capitalists and hedge fund operators pay lower capital gains rates on ordinary income, and they refuse to countenance any other method.
The editorial fixes attention on the House Democrats' next move, with the "patch" ball now in their court. At a meeting with the Post editorial board on Friday, House Majority Leader Steny H. Hoyer (D-MD) "was refreshingly frank about the trade-off involved... Asked why Democrats shouldn't be criticized for this choice, Mr. Hoyer said, 'I think you are right to rake us over the coals for passing an unpaid-for AMT.'"
The Senate's PAYGO rules require a point of order to be raised in objection to any legislation that violates PAYGO. No such point of order was raised during the lengthy Senate debate last week. The House rules are different; a waiver vote must occur before any legislation that breaches the PAYGO rules can be voted upon by the House.
We at OMB Watch, and, we suspect, the House Blue Dogs -- who wrote a letter to Senate leaders last Tuesday saying "Waiving PAYGO rules in the face of tough decisions and political pressure is fiscally reckless, an abdication of our duties, and frankly, a broken promise" -- will be watching carefully this week.
Posted by Dana Chasin
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