Dems Act Quickly On Budget Rules

New House Rules Require Spending Increases To Be Offset And 'Earmarks' To Be Disclosed

(CBS/AP)  The House, in its second day under Democratic control, changed budget rules that have allowed deficits to swell with lawmakers' pet projects and President Bush's tax cuts.

The rule changes voted Friday could bedevil efforts later to appease middle-class voters.

One rule requires that tax cuts have corresponding cuts in government spending or tax increases elsewhere to pay for them. Likewise, any increase in entitlement programs like Medicare would have to have corresponding tax increases, or equal cuts in other government programs, under the pay-as-you-go rule reinstated Friday. It was adopted 280-154.

If strictly enforced, the PAYGO rule would make it difficult for Democrats to pass increases in federal benefit programs such as Medicare or the Medicaid health care program for the poor or disabled. In the near term, it would mean Democrats' bill to cut student loan rates will be less generous than they'd like. The rule would also threaten efforts to extend Mr. Bush's tax cuts, most of which expire at the end of 2010.

"This is putting the American taxpayer on a collision course with higher taxes," said Paul Ryan of Wisconsin, the top Republican on the Budget Committee.

"Today, we are cutting our national credit card," countered Heath Shuler, D-N.C., during floor debate Friday. To underscore the point, Shuler cut a credit card in half at a news conference populated by moderate-to-conservative "Blue Dog" Democrats who are most responsible for implementing the rule.

At the same time, House lawmakers passed a Democratic proposal to require lawmakers to disclose publicly the pet projects — referred to as earmarks in legislative terms — they want for their districts or states, such as Alaska's "bridge to nowhere" in the last Congress. Republicans had made a similar move last year, and GOP critics of pet projects applauded Democrats' efforts to require greater disclosure.

CBS News correspondent Gloria Borger reports that the House also voted to end perks that members get from lobbyists, such as gifts of any kind, the use of corporate jets and free meals. The Senate takes up its own ethics package on Monday.

But though reform is in, like it or not, Borger says some habits won't die easily.

"The people that write those rules are very creative," says Tommy Jacomo, executive director of The Palm, where he's been serving up power lunches to Washington's big shots for 35 years. "I'm sure they'll find ways to get around them. In the beginning I'm sure it's going to affect business a little bit, but eventually things will just come full circle."

Borger also notes that lobbyists can still give money to political campaigns.

The Democrats also followed through on their pledge to get rid of tactics they complained were unfair when Republican leaders used them, even though they are now in charge and could have benefited from them, CBS News correspondent Bob Fuss reports.

Rules now bar votes from being held open just to change the outcome; the most egregious example of that was the vote on the Medicare prescription drug plan, when a 15-minute vote stretched to almost three hours as Republican leaders twisted arms, threatened and cajoled until they got the votes to pass it.

That rule change was adopted 430-0.

Still, only about a fourth of the Republicans voted for the earmark disclosures because it was linked to the PAYGO rule that will make it harder to extend the tax cuts set to expire in four years.

The emphasis on earmark reform came in the wake of the Randy "Duke" Cunningham scandal, in which the former California GOP congressman pleaded guilty to corruption charges for channeling earmarks to defense contractors in exchange for $2.4 million in bribes. Lesser scandals have hit other lawmakers.

The PAYGO and earmark proposals come one day after Democrats officially took control of Congress for the first time in 12 years, with a jubilant Nancy Pelosi becoming the first woman ever to rise to Speaker of the House.

Pelosi, D-Calif., will exert vast influence over the congressional agenda and stands second in the line of succession to the presidency. In her first step as speaker, she orchestrated bipartisan 430-1 passage of a measure banning lawmakers from accepting gifts and free trips from lobbyists and discounted trips on private planes. Rep. Dan Burton, R-Ind., cast the sole "nay" vote.

Democratic budget hawks, especially the moderate-to-conservative "Blue Dogs," say restoring the PAYGO rule is crucial to curbing the budget deficit. Various forms of the rule were in place from 1990-2002, however, and Congress often found ways around it.

The version adopted Friday can easily be waived. Still, the incoming chairman of the Budget Committee, John Spratt Jr., D-S.C., touted it as better than the status quo.

"You've got to offset those tax cuts," Spratt said. "And if you want to enhance an entitlement, you've got to pay for it."

Democrats left in place — for now — a GOP rule limiting committee chairmen to three two-year terms.

Former GOP Rules Committee Chairman David Dreier of California said he supported the reforms but complained that the new rules could easily be sidestepped — and that more extensive reforms once demanded by Democrats had been left out.

[bellal-2009]

It's amazing how Democrats just asssume wage earners are idiots.

[bellal-2009]

Well, frankly6, that's not true. I will say hello to lestb tomorrow but as far as jane, haven't ever met her nor seen her on this post in a while.

[newsjeff-2009]

To the person who complained about my complaining about Republican politcal leaders like John Sullivan,James Inhofe, and the formerly GOP controlled senate and congress voting against raising mininum wage to $7.25 per hour and stopping any minimum wage increase bills from even getting to Bush or Cheney I have an idea. The bottom line is when the GOP party controlled the house and senate they did not allow the minimum wage to be raised, something that at least democrats like Reid,Pelosi and Hillary Clinton and numerous other democrats have talked about, maybe we should do a survey of the over 20 states in the U.S. that have higher minimum wage rates in the $6 or $7(Sante Fe, New Mexico's rate is $9.50)and ask people in these states if they would rather have the higher minimum wage rate or the $5.15 per hour that has been unchanged since 1997. I would also like to hear how the GOP senators like James Inhofe and other political leaders plan to handle global warming, since many GOP leaders claimed a few years ago that global warming was only a theory and no evidence existed for the global warming scare, if it is just a scare, I am seeing some really scary weather the past few years.

[frankly6]

bellaL

You have to have some power in order to be in a possition to negotiate salary. The average person who has to take a minimum wage job is in no possition to negotiate. This is idea is beyond rediculous.

Say hello to lestb35 and janeM will ya?

[j-whitman]

We should have started PAYGO for Bush & his administration 6 years ago - America & the World would be safer.

[j-whitman]

Geez,, The more I read my last post the better I like the idea... Proud Patriotic Americans would only apply for the job or Mexicans.. These people couldn't earn thier bonus.. You wouldn't hire them back after the 1st day --- Better than cutting programs or military training & maintenence.

[j-whitman]

PAYGO - Would be a good way to pay the administrations salaries -- 1 days work for $20,, give them a $5 bonus if it is done honestly.

[bellal-2009]

Lets tax the sheet out of the CEOs who outsource jobs at the expense of American workers.

We can call it the Patriot Tax!

Posted by the74blaster at 06:14 PM : Jan 06, 2007

Yea, let's.
The minimum wage bill, although not a big deal, in theory is against middle class. Let people negotiate their own salaries with employers. It would be good experience for American workers.

[the74blaster]

The minimum wage bill that was shot down is only another example of how out of touch the GOP congress was with real America. I have read the comments and the 210 million-severance packages that Home Depot gave to the CEO is a joke! I agree in an elevated tax for the CEO in question but it should be 210 million since rewarding failure does not set a good example for children and he probably already has decent retirement savings.

The real problem is the greed that leads business owners to outsource jobs rather than hire their fellow Americans. This is the ultimate form of being unpatriotic! Fellow posters please forgive me for stealing a page out of Karl Roves playbook but it fits my post quite well.

Why is it acceptable to invest in manufacturing operations in a COMMUNIST country and put fellow Americans out of work? I have a suggestion. Lets tax the sheet out of the CEOs who outsource jobs at the expense of American workers.

We can call it the Patriot Tax!

[bellal-2009]

Raising the minimum wage only costs the middle class in inflation and taxes to pay for welfare for people who would have been hired at $5 but won't be hired at $7 like disabled people for instance.