Alex's Outlook

Thursday, February 12, 2004

Is it possible?

In an article remarkably devoid of its typical anti-Bush invective, al-Reuters reports that Alan Greenspan has thrown his considerable weight behind making the tax cuts permanent and cutting spending, instead of raising taxes.

WASHINGTON (Reuters) - Federal Reserve Chairman Alan Greenspan on Thursday lent support to a White House bid to make $1.7 trillion in tax cuts permanent, telling Congress spending control was the best way to cut the budget gap.

"I am in favor ... of continuing the tax cuts that are in dispute at this particular stage," the influential central bank chief told the Senate Banking Committee, wading into a contentious election-year debate.

"I would argue strenuously that it should be taken out on the expenditure side."

Greenspan's initiative seems fortuitously timed with a House Republican initiative to slash government spending for FY 2005. House conservatives have prepared a very ambitious set of budgetary reforms that will rein in the senior appropriators (Ralph Regula and Don Young), constrain the future growth of government and cut current outlays.

The package, containing close to a dozen reform initiatives, would also rein in House appropriators who are viewed suspiciously by many conservatives as a third party, independent from Republicans and Democrats.

[...]

Ryan said the GOP leadership has been receptive toward the proposals and has promised to give them floor consideration, even though the reforms would make it tougher for leaders to shepherd controversial legislation through the House.

Most important, the initiative would give the budget resolution the force of law. This would significantly constrain the ability of GOP leaders to circumvent the budget, which is viewed by lawmakers more as a roadmap than an ironclad constraint on spending.

[...]

For example, the $534 billion Medicare bill that Congress passed last year would have died in the House for having exceeded budgetary limits had GOP leaders not waived those limits with a floor rule.

In addition, the package calls for the growth of discretionary and entitlement
spending to be capped at the rate of inflation.

Conservatives also want to abolish the practice of designating spending as “emergencies,” a tactic that allows congressional leaders to circumvent fiscal constraints because such items do not count against the discretionary spending ceiling.

Another proposal would give the president the power to target and eliminate wasteful spending in appropriations bills. Presidential proposals to eliminate such spending would be given expedited consideration from Congress.

“I happen to agree with a lot in there,” said Castle of the conservative budget reform package. “I feel very strongly that you need some of these processes in place.”

Mike Castle is the leader of the moderate House Republicans. If he goes along, the unified moderate and conservative wings should make this a slam dunk. Passing a budget only requires a majority vote, so the Republicans can probably squeak it by even in the face of ironclad liberal opposition.

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