Monday, December 17, 2007

"Paygo" is gone

Where did "Paygo" go?

I don't know, ask the Democrats.

What is Paygo?

Paygo is a commitment made to voters by the Democrats when they took over after the 2006 elections to offset any new spending or tax cuts with either tax increases or cuts in spending.

Not even one year into their own rule of pay as you go, the Democrats have to break their own commitment they made to the country.

In order to fix the massive AMT problem, they have to waive the Paygo rule-

Michael Barone- Real Clear Politics

The paradox is that the same Democrats who want to increase top-bracket income and capital-gains tax rates are desperately eager to spare relatively high earners from the AMT -- so desperate that Senate Democrats agreed to waive the "paygo" rule they reinstated when they took control.

Paygo requires that a tax cut be offset by a tax increase or a spending cut of corresponding dollar amounts. But when the Senate early this month passed its $50 billion AMT "patch" exempting 230 million taxpayers from the AMT for one year, it waived the paygo rule.

House Democrats are simmering, but they will probably have to go along. There's a process argument for waiving paygo, which is that future AMT revenues are fictitious because no Congress will allow the tax to go into effect. But it's nonetheless embarrassing for Democrats to renounce a rule they adopted as a guarantee of their fiscal responsibility.

The reason Democrats risked this embarrassment is that the AMT tends to fall on voters in places with high state and local government spending and taxes -- Democratic places like Massachusetts, Connecticut, New York, New Jersey, Maryland and California.


So either the break the Democrats break a promise or they raise taxes on $230 million Americans.

Either way, they will be seen as having miserably failed.

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