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Republicans' New Deficit-Cutting Rules Include a Long List of Exemptions

January 4, 2011 - by Donny Shaw

The new House operating rules being proposed by the incoming Republican majority would generally require all bills that add to the federal deficit to be offset with new spending cuts. But they have written in a pretty substantial loophole for themselves. Under the rule, the “budgetary effects” of a whole slate of Republican legislative priorities would be exempt from the new offsetting rule, including their bill to repeal the deficit-reducing Affordable Care Act.

Here, straight form the rule itself, is the actual legislative language of all the budgeting exemptions the Republicans are giving themselves.

(h) EXEMPTIONS.—Until the adoption of the concurrent resolution on the budget for fiscal year 2012, during the One Hundred Twelfth Congress, an estimate under clause 4 of rule XXIX may—

(1) exempt the budgetary effects of legislation extending the Economic Growth and Tax Relief Reconciliation Act of 2001;

(2) exempt the budgetary effects of legislation extending the Jobs and Growth Tax Relief Reconciliation Act of 2003;

(3) exempt the budgetary effects of legislation repealing the Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act of 2010; or for deficit-neutral legislation that solely reforms the Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act of 2010 and the payment rates and related parameters in accordance with subsections (d) and (f) of section 1848 of the Social Security Act (as scheduled on December 31, 2009, to be in effect);

(4) exempt the budgetary effects of preventing a larger number of taxpayers from becoming subject to the Alternative Minimum Tax as compared with tax year 2008;

(5) Exempt the budgetary effects of extending the estate, gift, and generation-skipping transfer tax provisions of title III of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010;

(6) exempt the budgetary effects of legislation providing a 20 percent deduction in gross income to small businesses; and

(7) exempt the budgetary effects of legislation implementing trade agreements.

…In sum, the exemptions are for extending the 2001 and 2003 Bush tax cuts, repealing Affordable Care Act (a.k.a. “Obamacare”), patching the alternative minimum tax, extending the Bush-level estate tax rate, cutting taxes for small businesses, and establishing foreign trade deals.

Under the rule, these exemptions would apply until a legitimate budget resolution has been agreed to. That means the Republicans will probably have several months to hold votes on these issues without having to consider spending-cut offsets or acknowledge that they are being financed by adding to the deficit.

UPDATE: This isn’t the only budgeting gimmick in the Republicans’ rules package. Check out The Hill on how the rules package allows members to rescind appropriations and then reallocate the recessions as new spending.

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