Day 2: Dems positioning for tax increases and reneging on student loan promise

It has begun...

House Approves Changes to Budget Rules

By ANDREW TAYLOR
The Associated Press
Friday, January 5, 2007; 1:51 PM

WASHINGTON -- The House, in its second day of Democratic reign, 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 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, top Republican on the Budget Committee.

But don't worry, Heath Shuler cut his credit card in half!

"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.

Oh brother!