May 5, 2003

by John Springer

PDF of fact sheet
HTM of full report
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A new report from the Center on Budget and Policy Priorities, Missing the Point, describes various gimmicks the Administration and some Congressional leaders have been promoting as a way to squeeze the Administration’s $726 billion tax-cut proposal into a package that will officially meet the $550 billion limit set by Congress (or into the $350 billion target that applies initially in the Senate).  These gimmicks would not reduce the package’s long-term cost, the report explains.  The gimmicks include:

Both of these first two types of gimmicks — artificial expiration dates and phase-ins — were used to reduce the ten-year cost of the 2001 tax cut so it would fit within the budget targets that applied that year.  The artificial sunsets gimmick already has been recycled by the Thomas plan, and the phase-in gimmick may well be recycled in the weeks ahead as well.

For example, a Senate Finance Committee Republican staff member has told Congress Daily that consideration is being given to taking revenue-raising measures that the Senate passed in April to offset the costs of faith-based legislation (known as the “CARE” bill) and using these offsets again in the reconciliation bill.  If such offsets are enacted as part of the reconciliation bill, they will have to be removed from the faith-based legislation.  But that would mean that unless other offsets were found for the CARE bill, that legislation — which the Administration also is insisting upon — would further increase the deficit.

These various gimmicks and maneuvers represent ways that the Administration and the Congressional leadership could appear to be complying with the limits the Congressional budget resolution set while pushing legislation that effectively breaches those limits by large amounts.  Such maneuvers technically would meet the letter of the budget that Congress adopted.  But they would violate its spirit, make the nation’s fiscal policy more reckless, and render our economic policies less rational.