Blue Dogs Respond to New CBO Report
Today, members of the fiscally conservative Democratic Blue Dog Coalition responded to a report released by the nonpartisan Congressional Budget Office (CBO), entitled “Long-Term Effects of Indexing the Alternative Minimum Tax and Extending the Tax Reductions of 2001 and 2003.” The report, requested by Senate Budget Committee Chairman Kent Conrad, provides analysis of the long-term economic effects of forgoing pay-as-you-go budget rules and continuing to pass temporary relief of the Alternative Minimum Tax (AMT) without providing offsets.
The report confirms what Blue Dogs have said repeatedly: failure to provide fiscally responsible, permanent relief of the AMT poses a real threat to the future fiscal health and economic stability of the country. The fiscal 2008 deficit is poised to be one of the largest in history, and it will only worsen if Congress continues to pass bills that violate pay-as-you-go rules.
“At a time when our country faces a badly deteriorating fiscal situation and an uncertain economic future, it is critical that members of Congress are aware of the long term implications of the policy decisions they make today,” said Congressman Mike Ross (D-AR), Blue Dog Co-Chair for Communications. “Going forward, we hope to work together with members in both the House and Senate, and on both sides of the aisle, to produce fiscally responsible legislation that not only adheres to PAYGO rules, but also takes steps to improve our long term fiscal and economic outlook.”
"I want to thank Chairman Conrad for requesting this important report," said Congressman John Tanner (D-TN), a member of the House Ways and Means Committee and a founding member of the Blue Dog Coalition. "The message is clear: failure to make the tough fiscal choices we are elected to make will directly result in the erosion of this country's revenue base to interest, limiting our ability to invest in the infrastructure and human capital that are critical for economic development."
Last year, a CBO analysis requested by the Blue Dogs found that failure to offset the cost of a one-year AMT patch for 2007 would produce $29 billion in additional debt service costs over the next decade. The report released today builds on this analysis and demonstrates in stark terms the disastrous economic and fiscal consequences that would be produced by failing to offset the cost of AMT relief.
“We should be thinking long-term. We should be thinking about how this will impact our children and grandchildren,” added Congressman Ross. “We have to find a permanent, fiscally responsible solution to this problem now, and while that solution may not be the politically expedient thing to do, it’s the right thing to do for the future economic well-being of our country.”