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Rules package would renew ‘Gephardt Rule’ with a major twist

Gephardt, left, presents Pelosi with her winnings after losing a baseball bet in 2002. (CQ Roll Call file photo)
Gephardt, left, presents Pelosi with her winnings after losing a baseball bet in 2002. (CQ Roll Call file photo)

A proposed House rules package wouldn’t just reinstate the old rule that let the chamber avoid separate votes on the statutory debt ceiling 20 times in three decades starting in 1980. 

The new rules offered by House Democratic leaders, set for floor debate Thursday, would turbocharge the old “Gephardt rule” into something completely new. It would allow the chamber to spin off a resolution “suspending” the debt ceiling to the Senate, without a House vote, once the House adopts its own version of a budget resolution.

That’s a stark departure from the previous Gephardt rule, named for former House Majority Leader Richard A. Gephardt, D-Mo., which required the House and Senate to jointly agree on the same budget resolution in order for the House to avoid what is typically a difficult vote on the debt ceiling. Getting the Democratic House and GOP Senate to adopt a joint budget resolution would be extremely difficult, to say the least, in the current political environment.

In one slightly limiting catch, the “suspension” period, during which the debt ceiling doesn’t apply, would only run through the end of the fiscal year of the resolution in question. So for example, if the House adopts a fiscal 2020 budget resolution, the suspension period would end, and the debt limit be reinstated, on Sept. 30, 2020 — right before the next elections. Previously, the House could attach whatever numerical increase in the debt ceiling was incorporated into the budget resolution.

Congress will have to address the debt limit later this year after a temporary suspension of borrowing authority expires March 1. Analysts estimate that the Treasury can delay default until sometime in the summer through use of so-called extraordinary measures, such as suspending the investment of funds in the major retirement and health benefit accounts for federal employees.

The Senate would still have to garner the typical 60 votes to advance a debt ceiling resolution in that chamber. But given the House for the last eight years has been more prickly about the debt limit, if Democratic leaders can round up a simple majority vote for a budget resolution it would go a long way towards ensuring stability of financial markets when the deadline nears.

Tax increases

Another significant hurdle to Democrats’ policy objectives would be removed when it comes to taxes.

The rules package would remove the three-fifths requirement to raise income tax rates in the House, restoring the requirement to a simple majority. Not one House Democrat voted for the GOP-written tax overhaul bill (PL 115-97) when it passed in December 2017. Since then, many Democrats have said they want to raise taxes on the rich and corporations, either to pay for other programs or reduce deficits.

A likely target would be revisiting the reduction of corporate income tax rates from 35 percent to 21 percent; Democrats have said they’d raise the rate to perhaps 25 percent, the level proposed by House Republicans in 2014, possibly as part of an infrastructure spending package. Democrats also want to increase the top individual income tax rate, currently applied to single filers earning more than $500,000 or married couples filing jointly with more than $600,000 in income.

Other budget-related changes in the proposed rules include:

Ending House Budget Committee term limits. A Democratic House aide said that provision was drawn from the recommendations of a special congressional committee that unsuccessfully sought to send Congress a plan to make changes in the budget process last year. The change would allow panel members to build up expertise on a complicated topic before being booted off the committee, as members currently are after serving for four out of six successive Congresses.

Repealing “dynamic scoring” requirement. The package would get rid of a GOP-initiated rule requiring the Congressional Budget Office and Joint Committee on Taxation to produce a macroeconomic analysis of major legislation, showing its impact on the economy as well as any feedback effects — such as increased revenue collections — from economic growth. Those analyses are also referred to as dynamic scoring. Democrats charge that Republicans used dynamic scoring analyses to oversell the growth effects of tax cuts.

Appropriations amendments. The measure would remove a rule enforced by a point of order that prohibits amendments to appropriations bills if these would increase the level of budget authority or permitted spending in a bill. Under the rule, increased spending would not have to be offset, but it would still have to comply with limits on committee spending in the budget resolution.

Pay-as-you-go rules. Democrats would restore the pay-as-you-go rule that was in effect before Republicans won control of the House in 2010. The rule would require any increase in mandatory spending or tax cut that increases the deficit or reduces a surplus to be offset by other spending cuts or revenue increases. The timeline for the rule would be the calendar year rather than fiscal year. Republicans had changed the rule to what they called “cut-go,” in which mandatory spending increases had to be offset by other mandatory spending cuts but tax cuts did not fall under the rule. In a brief rebellion, some Democrats on Wednesday threatened to vote against the rules package over their opposition to pay-as-you-go, but the rank-and-file had rallied around the measure by day’s end, largely because the Rules Committee can waive the requirement.

Advance appropriations. The rules would bar advance appropriations in fiscal 2019, apart from exceptions designated by the House Budget Committee chairman. The advance appropriations rule could throw a wrench in any plans to provide President Donald Trump advance funding for a U.S.-Mexico border barrier, an idea recently floated by Senate Appropriations Chairman Richard C. Shelby, R-Ala. That’s because, under the rules package, it would require an exemption to be agreed to by the Budget chairman — a Democrat in the House — or subject any spending legislation to a point of order the House members would have to vote to waive for consideration.

Infrastructure. The rules package would repeal many but not all of the continuing provisions in the GOP-written fiscal 2018 budget resolution. One provision that is preserved is a “reserve fund” for infrastructure, which is essentially a policy statement in favor of more infrastructure spending, though without any offsets identified.

Holman rule. The package would end a rule targeting federal worker pay that Republicans had reinstated in the previous Congress, known as the “Holman rule.” First created in 1876 by Rep. William S. Holman of Indiana, the rule allowed floor amendments on appropriations bills to target individual salaries or workforce levels. The rule let lawmakers slash the salaries of individual federal employees, and efforts at its revival had sparked controversy in recent years. It was reinstated in the 115th Congress after a decadeslong hiatus, but it wasn’t utilized much during the appropriations process.

Kellie Mejdrich, Lindsey McPherson and Doug Sword contributed to this report.

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