New Gambit To Pass Tax Cut Extensions Without Paying For Them Represents Unsound Policy

Publication Date: July 2004

Publisher: Center on Budget and Policy Priorities (Washington, D.C.)

Author(s): Robert Greenstein; Isaac Shapiro

Research Area: Banking and finance; Government

Keywords: Economic inequality; Tax code; Economic projections; Income diversity

Type: Report

Abstract:

Spurred by a White House meeting on July 7, Republican leaders in Congress are reportedly planning to use an unusual strategy to extend certain tax cuts without paying for them. The strategy is to adopt these policies by reviving a moribund conference committee on a largely unrelated bill and attaching the tax-cut extensions to a “conference report” on that bill, thereby bypassing normal consideration in the Senate Finance Committee and on the Senate floor of whether the tax-cut extensions should be paid for. This gambit is designed to force a single up-or-down vote on a conference report that would consist primarily of tax-cut extensions the Senate has not previously considered. Those who vote against the conference report would likely be attacked as favoring “tax increases” on middle-class families, despite the fact that nearly all Senators and Congressmen who voted “no” would favor legislation to extend these tax cuts and offset the costs of doing so.