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House Republicans expected to adopt "cut as you go" rules

John Dimsdale Dec 25, 2010
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House Republicans expected to adopt "cut as you go" rules

John Dimsdale Dec 25, 2010
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TEXT OF STORY

JEREMY HOBSON: When Republicans take control of the House of Representatives next year, they’ll change the budget rules. Democrats had a “pay as you go” requirement that all new spending and all tax cuts had to be paid for. House Republicans plan to adopt what they call “cut as you go” rules.

Our Washington Bureau Chief John Dimsdale explains.


John Dimsdale: Under “cut as you go,” new spending still has to be paid for, but not tax cuts. Stanley Collender at Qorvis Communications says Republicans are spelling out their priorities.

Stanley Collender: We want to cut spending to reduce the deficit, not increase taxes. And we want to be able to cut taxes as much as we want without worrying about the deficit.

Some Republicans argue tax cuts bring more economic activity, which generates more taxable income and more government revenue.

Bruce Bartlett: Clearly this is nonsense.

Bruce Bartlett is a former economist at the Treasury Department.

Bartlett: We’ve seen very substantial increases in the deficit under Republican administrations.

The other goal of the “cut as you go” rules, says Bartlett, is to trim the size of government.

Bartlett: The theory that Republicans have been operating under since the late 1970s is something called Starve the Beast.

The thinking goes the fewer taxes paid, the less the government has to spend. But Bartlett says the tax cuts just result in more government borrowing.

In Washington, I’m John Dimsdale for Marketplace.

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