Reality bites

March 26, 2007

House and Senate Democrats are about the business of restoring to the federal budget process rules that require tough choices to eliminate red ink - a long-overdue reform.

Lawmakers aren't making any tough choices yet, though, and have instead employed some bookkeeping tricks that for a while, at least, may leave taxpayers believing there won't have to be any sacrifices.

But with huge debts and more liabilities looming, sacrifices are indeed necessary no matter how hard the Democrats try to make it look otherwise until after the 2008 elections - a bit of chicanery that undercuts their commendable drive for discipline.

The new rules - really old rules that fell into disuse under Republican control - require that new automatic spending programs and new tax cuts be offset by reductions in spending or tax increases so the bottom line is unaffected - pay as you go. Spending caps would apply to the portion of the budget controlled through the appropriations process.

These measures, put in place during the administration of President George H. W. Bush and reinforced by President Bill Clinton, are credited in part for the federal budget surplus that emerged during the late 1990s.

But the rules are included in budget blueprints that are out of sync with reality.

For example, House and Senate versions of the Democratic budget reach a small surplus by 2012 by making the unlikely assumption that President Bush's tax cuts will expire on schedule in 2010. Yet the budgets also suggest extending some of the tax cuts if offset money can be found.

In a more glaring inconsistency, the Senate voted 97-1 to tap into the projected surplus, which comes from the expired Bush cuts, to continue tax cuts that apply to the middle class. Even a phony surplus can't survive unspent.

And those pork-barrel sweeteners added to the Iraq "emergency" spending bill won't be counted against the bottom line at all.

Groups lobbying for a return to fiscal restraint are cheered nonetheless. Republicans put hundreds of billions on the tab thanks to tax cuts and war spending, making even a bow toward tight-fistedness welcome.

The first test of the Democrats' mettle may come later this year when the new rules cramp their plans to expand health care for low-income children, increase farm subsidies and conservation grants and spare 83,000 mostly middle-income taxpayers from the ever-expanding alternative minimum tax. These are laudable but expensive goals, and the rules say they have to be offset by cuts or taxes elsewhere. Democrats will be under great pressure to start making exceptions - particularly before the election.

But they must resist. They promised tough decisions; it's time to start making them.

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