Dems Act Quickly On Budget Rules

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.