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Morning Bell: Tax and Spend Back with a Vengeance

Posted By Conn Carroll On May 16, 2008 @ 9:09 am In Ongoing Priorities | Comments Disabled

While campaigning against Republican fiscal malfeasance in 2006, then-Minority Leader Nancy Pelosi promised to institute “pay-as-you-go budget discipline” to help lower the federal debt. Speaker Pelosi quickly betrayed that promise [1] to the American people when the House failed to offset the $50.6 billion cost of protecting more than 20 million middle-class taxpayers from the Alternative Minimum Tax. Since then the House leadership has dropped all pretense of fiscal discipline, demonstrated most recently by tacking $54 billion in spending for veterans’ education benefits onto the latest Iraq/Afghanistan war supplemental.

Fortunately, there still is a key group of conservative Democrats who are committed to keeping promises and to fiscal discipline. The Blue Dog Democrats bucked their leadership’s indifference to fiscal health and demanded that the new GI benefit either be paid for with new taxes [2] or offset by other reductions in federal spending. The Blue Dogs deserve the highest praise for sticking to their principles and scoring a concession from their leadership to keep the war supplemental under pay-go rules. Unfortunately, the deal they struck with House leadership was to raise taxes, not cut spending.

The war supplemental bill will now head to the Senate, where John McCain is pushing his own GI education alternative that will not hurt military recruitment like the Democrat plan will [3]. When the supplemental comes back to the House, the Blue Dogs and other conservative members committed to limited government and fiscal discipline ought to consider some spending cuts instead of tax raises.

Specific spending cuts that could offset the new $52 billion in spending include:

  1. Farm Bill: Eliminating direct payments to farmers gets you exactly $52 billion over 10 years.
  2. Medicare: Raising the premiums on Medicare part B and D for wealthy beneficiaries.
  3. Medicaid: Not undermining administration regulations to prevent waste, fraud, and abuse of Medicaid [4].
  4. Earmarks: Instituting an earmark moratorium.
  5. NASA: Canceling NASA’s moon and Mars initiatives [5].

The Blue Dogs do not have a perfect record on standing up to the tax-and-spend House leadership, but this time around it sounds like the have some strong allies in the Senate. Senate Budget Chairman Kent Conrad (D-N.D.) told Politico [6]: “I completely agree with the Blue Dogs; I think it should be paid for. I don’t know at what point it is going to settle in around here. We are on a totally unsustainable course. Debt is going to go up by $700 billion this year. We need to pay for things. I don’t care how meritorious they are; they need to be paid for.” Conservatives, of course, care how the spending is paid for. Hopefully conservatives in the House will fight to make sure spending offsets, and not tax increases, are chosen.

Quick Hits:


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URL to article: http://blog.heritage.org/2008/05/16/morning-bell-tax-and-spend-back-with-a-vengence/

URLs in this post:

[1] quickly betrayed that promise: http://www.opinionjournal.com/editorial/feature.html?id=110010970

[2] demanded that the new GI benefit either be paid for with new taxes: http://www.cbsnews.com/stories/2008/05/13/politics/politico/thecrypt/main4094375.shtml

[3] GI education alternative that will not hurt military recruitment like the Democrat plan will: http://ap.google.com/article/ALeqM5jvWovlqUaqkZ_IuMvNikChKnb0uwD90LLFIO0

[4] administration regulations to prevent waste, fraud, and abuse of Medicaid: http://www.heritage.org/Research/HealthCare/wm1911.cfm

[5] NASA’s moon and Mars initiatives: http://www.theatlantic.com/doc/200806/asteroids

[6] Politico: http://www.politico.com/news/stories/0508/10331.html

[7] overturned a law approved by California voters overwhelmingly eight years ago: http://www.sacbee.com/111/story/943594.html

[8] Interpol: http://online.wsj.com/article/SB121089380665096969.html?mod=opinion_main_review_and_outlooks

[9] one of the federal agencies at the heart of liberal plans to bail out irresponsible home lenders and borrowers: http://

[10] Democrats in New York failed to disclose: http://www.nytimes.com/2008/05/16/nyregion/16actuary.html?ref=todayspaper

[11] would give 1.3 million illegal immigrants temporary amnesty: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/05/15/MNMG10N3V6.DTL

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