Senator Coburn Offers Amendment to Offset Some of the Tax Deal
Update: The Senate passed the tax cut legislation on a 81-19 vote. It now moves to the House, which may act Wednesday or Thursday.
With the Senate voting today on the nearly $900 billion in increased government borrowing to finance the tax deal, we at CRFB have been dismayed by the fact that there has been no attempt to offset the impact the package will have on the national debt. We were very pleased that a bipartisan group of senators promised on the Senate floor Tuesday to push for deficit reduction in the coming year. It is also encouraging that Senator Tom Coburn (R-OK), one of the "aye" voters on the Fiscal Commission, proposed an amendment to partially offset some of the costs of the tax deal. Unfortunately, this amendment was just recently voted down.
His amendment, S.Amdt. 4765, would have, by Senator Coburn's estimate, saved $46 billion in the coming fiscal year and $156 billion over the next five (CBO has not done an estimate). The amendment consists of many spending cut recommendations from President Obama's 2011 budget request and spending cuts from the Fiscal Commission.
While this hardly offsets the nearly $900 billion five year cost of the tax deal, it is a start. Overall, CRFB believes that if lawmakers are going to enact additional stimulative measures, they should focus on policies that will have more bang for the buck in aiding the economic recovery (see CBO's table of fiscal multipliers). Lawmakers should also be putting forth a plan to pay for this package, as well as a complete deficit reduction plan, over the longer-term.