The Congressional Budget Office this week confirmed what the Blue Dog Coalition and others have been concerned about for some time — that there will be negative long-term fiscal effects if Congress fails to pass Alternative Minimum Tax (AMT) relief that does not comply with pay-as-you-go (PAYGO) rules.

I want to thank Senate Budget Committee Chairman Kent Conrad (D-ND) for requesting the study, which was released Thursday under the title, “Long-Term Effects of Indexing the Alternative Minimum Tax and Extending the Tax Reductions of 2001 and 2003.”

A separate CBO analysis requested last year by House Budget Chairman John Spratt and 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 Thursday 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.

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.

This entry was posted on Friday, July 18th, 2008 at 12:37 pm and is filed under Politics .