House Rules Package Would Make It Too Easy to Add More to the Debt

The House of Representatives is expected to vote sometime soon on a new rules package for the 118th Congress, which includes a number of changes to how the chamber conducts fiscal and budgetary policy. This rules package is separate from and does not generally incorporate the agreement made between Members of the House majority as part of last week’s vote for Speaker of the House.

Some of the proposed rules in the rules package would help to encourage fiscal responsibility and lower spending. However, a number of rules would weaken fiscal constraints and make it easier to add to the debt.

The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:

The national debt has grown by almost $13 trillion over the last decade. While some of that borrowing was related to the COVID crisis, much of it was the result of reckless spending and tax cuts that lawmakers from both parties chose to charge to our children rather than pay for. Our nation’s commitment to fiscal responsibility has been weakening at a time when high inflation and debt demand the opposite.

It is therefore critically important that Congress adopt rules that encourage responsible budgeting, not adding to the debt. We have recommended a number of options.

While it is very encouraging that the House rules package would strengthen limits on federal spending, it is not fiscally responsible to be anti-spending if you aren’t also anti-borrowing. 

The House rules package would permit more borrowing by allowing tax cuts to be added to the debt and by making it more difficult to raise taxes – one of the ways to help reduce the deficit.

Replacing limits on borrowing with restrictions that apply to spending alone creates a massive loophole where tax cuts don’t require offsets and spending priorities can be run through the tax code.

For the last major tax cuts in 2017, Congress opted to add to the debt rather than fully offsetting the costs with spending cuts. Following that same playbook would add more to the debt at a time when additional borrowing is exceedingly dangerous.

Instead, Congress should include any limits on new spending on top of limits on new borrowing, not in place of them. Importantly, the rules package should retain PAYGO rules that require spending and tax cuts to be offset rather than just relying on CUTGO rules that only require spending to be offset. Even statutory PAYGO is unlikely to be sufficient given that 225 members of the House and 68 senators just voted to waive over $120 billion of spending cuts scheduled to go into effect.

Aside from the rules package itself, we are encouraged that Members are preparing to focus more on excessive deficits this Congress. However, they must be careful to select achievable fiscal metrics and must work toward accomplishing such fiscal goals without threatening the full faith and credit of the United States. While fiscal reforms could accompany a debt limit bill, the debt limit must ultimately be increased or suspended – this should not be negotiable.

With inflation high, interest rates rising, and debt approaching record levels, policymakers should be passing deficit reduction bills. At the very least, they shouldn’t be making it easier to increase the deficit.


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