CQ TODAY ONLINE NEWS – TAXES
Oct. 25, 2011 – 8:43 p.m.
Aides Say Offset to Revenue-Reducing Bill Not Indicative of Republican Shift
By Richard E. Cohen, CQ Staff
After the House votes Thursday on a bill that would repeal a requirement that government agencies withhold federal taxes from payments to contractors, the Republican leadership will bring up a second bill designed to offset the first measure’s lost revenue.
This will mark the second time recently that the House Republican majority has departed from its position that the cost of bills that reduce revenue need not be offset by spending cuts or increased revenue from other sources.
But GOP aides said no change of policy or philosophy should be read into the recent legislative strategy.
“We want the president to have no excuse to oppose or ignore that the House is passing a portion of his jobs package,” said Michael Steel, spokesman for Republican Speaker
“These are specific bills, and you should not assume any new, modified, expanded, redacted” pay-for rule that will result from this week’s action, said Sage Eastman, deputy staff director for the Ways and Means Committee. “They are what they are.”
The contracting bill (
The second bill (
The Ways and Means Committee approved the contracting bill by voice vote, also Oct. 13.
Republican leaders have fashioned a rule for floor debate that would insert the health care bill into the withholding measure after expected House passage of both, and then send the combined measure to the Senate.
In separate statements, the Budget Committee and the White House Office of Management and Budget (OMB) endorsed each bill, but did not buy into the use of the second measure as a revenue raiser to offset the cost of repealing the withholding requirement.
“The administration would be willing to work with the Congress to identify acceptable offsets for the budgetary costs associated with the repeal,” OMB said Tuesday in a statement of administration policy.
Some Democrats oppose altering the income formula, even though President Obama called for changing the formula as part of the deficit reduction plan he proposed in September.
‘Cut As You Go’
Aides Say Offset to Revenue-Reducing Bill Not Indicative of Republican Shift
Republicans have long held that the costs of tax cuts do not have to be offset, a position they effectively enshrined when they took control of the House in January and scrapped the previous Democratic majority’s rule that imposed “pay as you go” requirements for both spending increases and tax cuts. The GOP put in place a “cut as you go” policy to assure that additional spending would not add to the deficit, but it was silent on the deficit implications of tax cuts.
“The ‘pay as you go’ rule has been repeatedly ignored to justify billions of dollars in new spending and tax and fee increases,” Boehner said in a September 2010 speech.
Repeal of the withholding requirement — the implementation of which has been delayed for three years by legislative and regulatory actions — has become part of the jobs debate in Congress. Senate Republicans offered it last week as an alternative (
Assuming the House passes the withholding measure, Senate Democrats may offer their own “pay for” to replace the Medicaid changes. “Pay as you go” procedures still apply to revenue measures in the Senate.
In March, the House passed a bill, which the Senate later cleared (PL 112-9), that did away with an unpopular tax reporting requirement included in the health care overhaul (PL 111-148, PL 111-152). That measure included an offset to cover the estimated $22 billion cost of eliminating the tax requirement, known as the 1099 provision. The offset required some people, if their income level rises during the year, to pay back a portion of the subsidies they received to help defray the cost of obtaining insurance through the exchanges.