House GOP passes new rules on tax and spending legislation

After four years out of power, Republicans seized control of the House with gusto on Wednesday, adopting a passel of new rules designed to make it easier to keep their campaign promises to cut taxes, repeal President Obama's health-care law and slash government spending.

The rules rewrite, which sailed through the House on a strict party-line vote, will also make it easier to increase the national debt by exempting trillions of dollars in GOP priorities from pay-as-you-go rules put in place by Democrats. For example, House Republicans could extend Bush administration tax cuts for the wealthy past their 2012 expiration or create a significant new tax break for businesses without regard for the holes those policies would blow in the nation's finances.

Democrats fumed that the new rules reveal Republicans as being more interested in cutting taxes for monied special interests than in restoring the government's fiscal health. But the GOP swept to power in the November midterm elections on a pledge to balance the books by reducing the size of government, not raising taxes, and they said the rules adopted Wednesday merely make those priorities clear.
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"It's often been said that we don't have a revenue problem, we have a spending problem," Rep. David Dreier (R-Calif.), the new chairman of the Rules Committee, said during debate on the House floor. "These new rules will make it easier to reduce spending rather than increase it."

The rules have no impact in the Senate, which remains under Democratic control. But their adoption marks the first move in what is expected to be an extended battle between Republicans and the White House over fiscal policy.

The next stage of that battle will come later this month, when the new rules grant incoming House Budget Committee Chairman Paul D. Ryan (R-Wis.) unprecedented power to force reductions in spending for the current fiscal year - reductions likely to be opposed by the White House. Ryan vowed Wednesday to press ahead with a GOP campaign pledge to pare spending unrelated to defense and homeland security back to 2008 levels, a move that Democrats say could decimate dozens of programs, including state education aid, the space program, the FBI and services at hundreds of national parks.

Ryan acknowledged that the move would save significantly less than the $100 billion Republicans promised during the election. At the time, he said, Republicans were measuring their plans against Obama's budget request for fiscal year 2011. But Democrats failed to enact that request or adopt any other budget blueprint. Instead, the government is operating under a temporary resolution that continues funding at lower, fiscal year 2010 levels through March 4.

Adjusting their goals

As Republicans prepare a new spending plan for the rest of the fiscal year, independent budget analysts said they would have to trim about $85 billion to return to 2008 levels. But with nearly half the fiscal year already gone, Ryan said Republicans are further adjusting their goals and would probably cut about $60 billion from current programs.

"We've already achieved some of that [promised] savings by virtue of not" permitting Democrats to fund Obama's budget request, Ryan said. And he vowed that House Republicans will far exceed their $100 billion goal when they put together their own budget blueprint for the fiscal year that begins in October. That plan will seek not just to shrink government to its size in 2008, before Obama took power and authorized new spending on the economy, Ryan said: It will seek to put the budget on a path to balance.

"We will be cutting $100 billion plus over this calendar year," Ryan said. "If you think we're stopping shy of $100 billion in cuts, you got another thing coming. We're going to go way beyond $100 billion."

Republican leaders predicted that their members would have the stomach to cut popular programs, though fissures were already evident. Rep. Steven C. LaTourette (R-Ohio) moved unsuccessfully to block a new rule that would for the first time make highway spending vulnerable to annual budget cuts. The U.S. Chamber of Commerce, which backed dozens of Republican candidates this fall, also opposes the change.

Debt-ceiling fight ahead

The new House rules also prepare the ground for the third stage in the coming budget battle: a springtime brawl over raising the legal limit on government borrowing. With the national debt closing in on the current ceiling of $14.3 trillion, the Treasury Department expects to need an increase in borrowing authority by mid-year.

In the past, Democrats avoided a separate vote on the debt limit by including it in their budget blueprint. But the new GOP rules require the House to vote separately on the issue, and Republican leaders hope to extract major concessions from the White House in exchange for additional borrowing authority, which both sides agree is essential to avoid upsetting world financial markets.

In addition to specific budget cuts, Republicans are considering a push for legal caps on government spending. Rep. Jeff Flake (R-Ariz.) said they should also begin trimming popular entitlement programs, starting with the Medicare prescription drug benefit that Republicans created - but did not pay for - in 2003.

"As part of the discussion to raise debt limit, you're going to have a discussion about entitlement spending, and I hope Medicare Part D is part of that," Flake said. "Because that's something we bear particular responsibility for as Republicans."

The White House cautioned Republicans not to overreach.

"It is important to approach the upcoming vote . . . on the debt limit in a way that is responsible, and in a way that doesn't threaten the full faith and credit of our government," White House spokesman Robert Gibbs told reporters.