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NTU urges all Representatives to vote “YES” on H.R. 3578 the “Baseline Reform Act of 2011.” Introduced by Rep. Woodall (R-GA), this bill would reform the calculation of the budgetary baseline by eliminating automatic inflation increases and certain other spending-hike mechanisms to provide a truer reflection of year-to-year expenditures.

The inclusion of inflation in the determination of discretionary appropriations creates a fiscal context that distorts the impact of annual reductions or increases. For instance, using Washington’s current construct, a spending increase can be labeled a “cut” if it would lead to outlays that are lower than the “baked-in” inflation assumption. A similar issue arises on the revenue side of the ledger because the tax baseline assumes the expiration of the 2001 and 2003 tax rates. This allows some policymakers to reach the nonsensical conclusion that simply maintaining current tax rates is a $4 trillion tax cut.

The Baseline Reform Act would address the biased notion that discretionary spending will increase by inflation each year and require the Congressional Budget Office to prepare a baseline assuming the extension of current tax policies. These two changes would help to level the budgetary playing field that is currently tilted toward higher spending, while also making it clearer to taxpayers the exact impact of certain spending or tax proposals.

Roll call votes on H.R. 3578 will be significantly weighted in our annual Rating of Congress and a “YES” vote will be considered the pro-taxpayer position.

If you have any questions, please contact NTU Federal Government Affairs Manager Brandon Greife at (703) 683-5700