David Dreier’s Plan to Pay for the Iraq War: Just Call it a Mistake

Hat tip to Brad DeLong for pointing us to Hilzoy who listens to David Dreier so we don’t have to. Hilzoy catches Congressman Dreier offering yet another excuse to trash pay-as-you-go.



The Washington Post article notes this is over how to fix the AMT mess:

The House yesterday narrowly approved a $73.8 billion measure to protect millions of families from the alternative minimum tax and offer new tax breaks to middle-income homeowners and low-income parents, offset by tax increases that would land primarily on wealthy Wall Street financiers. The 216 to 193 vote came after a fiery debate that divided Democrats and energized Republicans, who assailed proposed tax increases that Rep. Sam Johnson (R-Tex.) called "an assault on free enterprise." Democrats countered that they were only closing tax loopholes on super-rich private-equity and hedge fund managers in order to live by a pledge of fiscal responsibility.

The New York Times article caught Dreier giving a preview of Bush’s Saturday radio address:

But anti-tax Republicans said the AMT was a mistake and thus offsets were unneeded. "What absolute lunacy," said Rep. David Dreier, R-Calif., "paying for a tax that was never intended."

As Hilroy notes:

For this, they are being excoriated by Republicans. David Dreier thinks that PAYGO rules shouldn't apply to "mistakes" … What a fascinating principle: you don't have to pay for costs you incur by mistake. I wonder if our creditors will go for that? And why not extend it to other things as well? The Iraq war, for instance, was never expected to last this long: why should we bother to come up with the billions and billions of dollars we are still paying for it? If it comes to that, why not just throw fiscal responsibility out the window?

One should note that President Bush ditched pay-as-you-go over six years ago. In his radio address this morning, he had two themes. First, he said he would veto any bill that actually paid for the AMT fix with an offsetting tax increase. His second message was to chastise Congress for not passing more Iraq War spending. As Hilroy notes – this war was a mistake so by Bush’s and Dreier’s “logic”, we don’t have to pay for that either. And who is to blame for all of this? President Bush was blaming the Democrats. After all, the Gramm-Rudman-Hollings Balanced Budget Act is just irresponsible in the minds of our current GOP leaders.