When Democrats took over the U.S. House last January, they promised to be tightfisted. The day after the chamber convened, they passed a rule called "paygo," which required any new spending or tax cuts to be offset, either by reduced spending or tax increases.

Now, as the first session of the 110th Congress nears its close, the new rule faces its first serious test - a fix of the alternative minimum tax.

The paygo rule, short for "pay-as-you-go," requires new programs to be budget-neutral for 11 years. It applies to spending on entitlement programs such as Medicare or agricultural subsidies, but not to year-to-year discretionary spending.

The House has passed legislation, including the farm bill, a college-loan bill and a bill to implement the 9/11 Commission's recommendations, that clears the paygo test. But larger-ticket items, most notably the broad tax rewrite proposed by Ways and Means Committee Chairman Rep. Charles Rangel of New York, will prove more difficult. ...

"The Blue Dog Democrats have talked the talk on deficit reduction but have not walked the walk," contends Brian Riedl, a senior policy analyst at the Heritage Foundation, a conservative Washington research and advocacy organization. "They've made paygo irrelevant," he says.

Riedl and other critics say Democrats have stayed within the confines of the rule only by employing "gimmicks" and exploiting "loopholes." He points to the reauthorization of SCHIP, the State Children's Health Insurance Plan, which has been the subject of an intense struggle between Congress and the White House in recent weeks. To fund its plan to increase the number of children covered under the program, and not run afoul of paygo, Congress agreed to raise tobacco taxes. The problem: The tobaccotax revenue is calculated for a 10-year period, but would be used to fund five years of the program, creating what critics call a budgetary "cliff," or "artificial sunset." In 2012, the Congressional Budget Office projects, the program would receive an increase of $10.8 billion under the legislation being considered. The following year, new spending on SCHIP would drop to $7.4 billion. The next year, it would drop still further, to $6 billion.

"Disingenuous sunsets are an irresponsible way to mask the true cost of policies and circumvent the choices that should go along with those costs," wrote Maya MacGuineas, president of Committee for a Responsible Federal Budget, a bipartisan Washington group that advocates fiscal responsibility. ...

For the complete article, please visit Arkansas Online. (subscription only)