House OKs budget rule changes

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House Democrats yesterday approved powerful measures to thwart new deficit spending, but Republicans warned that the new majority is paving the way to increase federal taxes.

"We simply cannot continue to run record budget deficits and debt. We must not force our children and grandchildren to pay for what we are buying," Rep. Steny H. Hoyer, Maryland Democrat, said on his first full day as majority leader. "That is not only an intellectually bankrupt policy, it is an immoral policy."

While Republicans and conservatives said they applauded Democratic efforts to balance the budget, they said the "pay-as-you-go" provisions in the package of new rules will more likely encourage a tax increase than force cuts in federal expenditures.

"It doesn't reduce current spending levels or require a reduction in current spending levels," said Rep. Mike Pence, Indiana Republican. "It is a means to justifying tax increases on working families, small businesses and family farms. In a very real sense, the American people ought to know that this proposal translates to: 'You pay as Congress goes on spending.' "

Conservatives off Capitol Hill agreed.

Tim Phillips, president of Americans for Prosperity, said the "pay-as-you-go" rules for the budget "tilt the budgetary playing field in favor of economy-killing tax hikes instead of spending restraint."

"These new rules will almost certainly lead to tax hikes, and we know that the path to prosperity is not paved with higher taxes," he said.

Those provisions, approved on a 280-154 vote, mean that any increases in federal benefit programs such as Medicare or Medicaid will have to be offset by cuts elsewhere in federal spending or be accompanied by tax increases. They also mean that it will be much harder to extend President Bush's tax cuts, most of which expire at the end of 2010.

The package of new rules also contained other reforms to limit -- or at least expose -- the ability of lawmakers to get huge federal projects for their home districts, better known as earmarks or political pork.

Under those provisions, lawmakers will be forced to publicly disclose the earmarks they request.

The earmark provisions are similar to ones Republicans approved last year. But only about a quarter of them supported yesterday's Democratic proposal because it was linked to the "pay-as-you-go" provisions.

"To their credit, Democrats have enacted stronger pork-barrel earmark reforms than their Republican colleagues were able to pass last September," said Mr. Phillips, whose group traveled the country in a bus last year highlighting outrageous federal spending. "This is a testament to the continued power of the grass-roots taxpayers, many of whom joined us on our nationwide Ending Earmarks Express bus tour last year who told their elected officials to close the earmark favor factory."

Republicans yesterday also announced their proposal to allow small-business owners to pool resources to purchase health insurance for employees.

"Republicans are committed to working with our Democrat colleagues to find innovative ways to help provide health insurance to the 46 million Americans who have no health insurance," said Minority Leader John A. Boehner, Ohio Republican. "The Small Business Health Fairness Act, a bill that I've brought to this floor several times myself ... would allow small businesses to join together and buy health insurance in larger pools, just like big companies and unions can do today."