The Corner

House Should Overhaul Disastrous Senate Deal

The House of Representatives should make massive changes to the so-called fiscal cliff deal that passed the Senate 89–8 at 1:39 a.m. today. That amended measure then can proceed to a conference committee for further improvement before advancing to final passage in both houses and President Obama’s signature, if he favors the legislation. These additional steps are required for three key reasons:

First, laws should be passed through regular order, rather than Soviet-style backroom discussions and near-unanimous approval by rubber-stamp legislatures. The lawmaking gyrations of the last few weeks have been unseemly and an international embarrassment unworthy of Earth’s sole superpower.

Second, the House is not the Senate’s handmaiden. The House of Representatives is under no obligation to swallow whole whatever the Senate tries to cram down its throat. And vice-versa.

Third, the measure approved this morning stinks.

President Obama repeatedly has called for a “balanced approach” to deficit relief and debt reduction. H.R. 8, the bill in question, is less balanced than the Leaning Tower of Pisa. Amazingly, as the Congressional Budget Office calculates, for every $1 that this proposal cuts spending, it hikes taxes by $41! In total, $15 billion in spending cuts are dwarfed by $620 billion in tax increases. Meanwhile, America’s $16.42 trillion national debt roars relentlessly on, since this measure does not even attempt to fill this Grand Canyon of red ink.

At a bare minimum, House Republicans should insist on serious spending cuts to accompany any such tax increases. Rather than nipping and tucking at the growth rates of the overall budget, Republicans should terminate specific programs and agencies. Those are the only cuts that ever mean anything. Spending “cuts” in Washington typically decrease the rates of increase in the growth of expenditures. Expanding Uncle Sam’s role in some aspect of American life by, say, “just” 3 percent rather than 5 percent is seen as a “draconian cut” that threatens the Republic itself. Thus, spending goes up, up, and away — and never down.

It is far better simply to kill antiquated, duplicative, and foolish programs and agencies, so they never waste the American people’s money nor trample our liberties ever again. I recently suggested a handful of such program terminations here. My list could and should be extended enormously.

The GOP House also should propose a middle-class tax cut, which does not increase taxes on anyone. This would prevent House Republicans from repeating the dreadful error of all but five Senate Republicans (most notably Florida’s stalwart senator Marco Rubio) who voted to increase tax rates, thus advancing the notion that Republicans cannot be trusted on spending and taxes.

The GOP could pay for this middle tax cut by welcoming home some $1.6 trillion in corporate profits stranded in overseas bank accounts today (plus another $1.9 trillion expected to be sidelined through 2022). Inviting U.S. companies to redeploy this capital in America, after paying a long-term 7 percent tax on it, would give this economy a badly needed shot of financial Five-Hour Energy Drink. (I recently detailed how to accomplish this here.)

Finally, this chaos is underway thanks to one man: Senate Democrat Leader Harry Reid of Nevada. Thanks to Reid’s obstructionism, which Obama has done nothing to discourage, the Senate has not passed a budget since April 29, 2009. Reid has refused to vote on, amend, or otherwise consider the budgets that House Republicans have passed and forwarded to the Senate for its review. Reid has done this in violation of the 1974 Congressional Budget and Impoundment Control Act (Public Law 93-344, as amended), which requires that budgets be passed calmly by April 15 each year. Instead, these harried decisions get made literally while that glowing crystal ball drops in Times Square at midnight on New Year’s Eve.

Deroy Murdock is a Manhattan-based Fox News contributor and a contributing editor of National Review Online, and a senior fellow with the London Center for Policy Research.

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