OMB Watch released a statement yesterday afternoon harshly criticizing the Democratically control Congress and the president for abandoning fiscal responsibility in the final hours of 2007 after they entire year was spent adhering to or attempting to adhere to righting our nation's fiscal course. From the statement: Adding insult to a year of fiscal policy injuries, Congress has abandoned fiscal responsibility by waiving pay-as-you-go (PAYGO) rules in order to pass a one-year patch to the alternative minimum tax (AMT) without offsets. This tax cut adds another $50 billion to an already expanding deficit next year, and will give fewer options for our children and grandchildren to seek solutions to the problems of tomorrow. While I expect as much from President Bush, this is a huge disappointment from the new Democratic majority in Congress whose number one promise was to uphold pay-as-you-go (PAYGO) rules. So much for promises: This vote is particularly disappointing as Democrats have gone to great lengths this year to comply with PAYGO rules, particularly on spending. From student loan reforms to expansions of the State Children's Health Insurance Program and Food Stamps, Democrats have negotiated the turbulent fiscal waters of the federal budget responsibly, diligently, even courageously. That is why at this point, after all that work and sacrifice, the compromises and the concessions needed to construct balanced solutions to the AMT problem, it is unacceptable for them to abandon their stated principles of fiscal responsibility because they fear Americans will not accept paying up front for the services and benefits the country demands. As the statement makes clear, there is plenty of blame to go around in Washington for this policy failure. What an awful way to end 2007.

The President and his taxophobic colleagues in Congress, refusing to abide by the rules of PAYGO, have succeeded in giving the lie to their campaign to re-invent themselves as fiscally responsible. This death-bed conversion for Bush and his Congressional co-conspirators was obliterated for good today, when House Ways & Means Committee Chair Charles Rangel (D-NY) conceded that, while he had long supported Blue Dogs and other defenders PAYGO,

Two developments yesterday that are impacting the 2007 congressional end game this month. First, Democrats appear to have reached a deal (i.e. caved) on FY 2008 appropriations: From BNA ($): Democratic leaders agree in principle to try to meet President Bush's proposed spending target for the 2008 fiscal year, potentially setting aside one of the main stumbling blocks to a deal to wrap up a drawn-out fight over appropriations. However, the bill may not come up for consideration until next week. Despite the major concession by Democrats, other potential issues that could hinder a final agreement—short-term funding for the war in Iraq and various policy provisions—appear unresolved and a short-term continuing resolution is expected, to keep the government funded through Dec. 21 Also, the House has passed another fully paid-for, one-year AMT patch. Also from BNA ($): The House, in defiance of the White House and Senate, passes a second revenue-neutral patch for the AMT, but also—for the second time—fails to secure a veto-proof margin. The bill passes by 226-193, with three Democrats crossing party lines to vote with Republicans in opposition to the bill. So it looks right now that President Bush is getting his way on making cuts to important domestic investments that will negatively impact millions of Americans but make no difference in promoting fiscal responsibility and also may also get his way in actively opposing long-term fiscal responsibility by forcing Congress to pass another $50 billion tax cut that will add to the debt. It's dark times in Washington these days. Happy Holidays!