- The Washington Times - Tuesday, June 16, 2009


Your editorial criticizing President Obama’s proposal to require paying for new entitlement increases and tax cuts raises several questions that demand a response (“Tax as you go,” Opinion, Thursday).

First, it isn’t the case that Mr. Obama would exempt “$2.5 trillion worth of new spending priorities” from his pay-as-you-go requirement. The president’s proposal does have several large exemptions, but every one of them applies to the cost of extending policies Congress enacted years ago that are scheduled to expire. Essentially, the proposal exempts policies Mr. Obama inherited. Most notably, it would not require Congress to offset the cost of extending the tax cuts enacted in 2001 and 2003 - tax cuts that The Washington Times presumably favors and does not want to fund by increasing other taxes.

Second, the president’s proposal would not exempt health care reform. It would require Congress to fully offset all of the costs of the health reform legislation it is considering.

Third, while you correctly noted that the pay-as-you-go rule would not apply to the economic recovery law Congress enacted in February - or other legislation Congress already has enacted - the provisions of that law are temporary, and the president’s proposal would require Congress to pay for any of the mandatory spending increases or tax cuts it wishes to extend.

To be sure, the nation would be better off if Congress would abide by a pay-as-you-go rule that did not contain the exemptions in the president’s proposal. However, unlike the previous president, who declined to pay for his big initiatives (e.g., his tax cuts and prescription drug benefit), this president will force himself to pay for his own priorities, starting with health reform. To claim that Mr. Obama would not subject his own priorities to a pay-as-you-go standard is off the mark.


Executive director

Center on Budget and Policy Priorities


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