You’d like to think fiscal responsibility was a non-partisan issue in Washington.
More and more, it’s becoming clear that the Democratic Party, to the surprise of many, has become the party of fiscal responsibility, of fiscally conservative principles.
The recent vote on paying for the reduction in the Alternative Minimum Tax is a case in point, one Republicans and some Democrats will be hard-pressed to live down in the next election.
Both parties agreed the Alternative Minimum Tax needed to be changed before it grew to include many middle income Americans for whom it was never intended. But changing who the tax would affect would cost $50 billion. That’s $50 billion that would have come into the treasury. In fact, President George W. Bush counted that money as revenue in the administration’s last federal deficit prediction.
In short, House Democrats, following rules they imposed on themselves after taking over this year, voted twice to pay for this loss of $50 billion by closing a loophole on very high income investment-fund managers who were getting a better tax deal and write-offs than average folks.
The House “pay as you go” rule requires that new spending or new tax cuts be offset by other spending cuts or by closing tax loopholes or by generating other revenue. The idea is one every family can understand. You don’t spend more than you have, and you don’t take on debt you can’t pay.
The blame lies first with Republicans in the Senate who stopped the majority Democrats from passing AMT reform with a plan to pay for it. The Republicans worked procedural technicalities and President Bush threatened a veto if the Democrats insisted on paying for the loss to the treasury.
Ultimately, the minority Republicans won, utilizing a shrewd political move. They could say Democrats voted against reforming AMT if Democrats did not capitulate to approve the reforms even though there is no money to pay for them.
Many Democrats in the House eventually relented, figuring they’d better vote to prevent average Americans from getting hit by the AMT, even if the government can’t pay for it and the vote effectively raises the federal deficit.
Some House members, including Rep. Tim Walz, D-1st District, and Rep. Collin Peterson, D-7th District, didn’t take the bait and voted for keeping the Paygo rules. Meanwhile, Rep. John Kline, R-2nd District, voted against Paygo, as did Republican Sen. Norm Coleman.
The American Enterprise Institute, a conservative think tank, and the Concord Coalition, a budget watchdog group, resoundingly thrashed lawmakers unwilling to pay for things they approve. We are just as frustrated but expect to be even more exasperated when the campaigns heat up.
As part of the cover, opponents of Paygo will say Walz and Peterson voted for tax increases. We hope voters, who normally have short memories, will have a clearer mind on just what happened last week.
