Great Explications and IRS Commissioner v. Grassley President Bush and Senate Republicans continue to insist that the patch extending the hold-harmless provision, or "patch," keeping 20 additional Americans from having to pay the Alternative Minimum Tax (AMT) must not be offset, because PAYGO is an only an excuse for tax hikes. Bush swiftly threatened to veto the House-passed bill providing for an AMT patch extension earlier this month... precisely because the bill pays for the cost of the patch.. The reasoning is explicated most eloquently by Senate Finance Committee Ranking member Charles Grassley (R-IA): Many of the members on the other side are using pay-go as a smoke screen [to] insure that the Federal government's tax base is at record levels. They now rely on pay-go as cover to keep revenue we did not intend to collect. They rely on pay-go as rationale to insure that the future tax base will be at record levels. Their insistence [that] Congress should ... be trying to replace revenues that were never intended to be collected over enactment of an AMT patch makes the point very clear. "Never intended to be collected"? Because the tax was never indexed for inflation, maybe? The ruling in IRS Commissioner v. Grassley must have been issued in record time and unfavorably against the Senator, who had withheld tax payments owed under the AMT, citing the Grassley Defense that the IRS never intended to receive payment for the tax, despite the provision in the federal tax code mandating its collection. That's pretty funny -- and if you had such an unexpectedly large load of fresh rubbish dropped on your street, would you believe someone who told you that the Department of Sanitation won't touch it because it "never intended" to collect it? The Center on Budget shreads this argument neatly in The AMT's Growth Was Not "Unintended". But we must accept the distinct possibility that the Grassley Defense will win the day in the Senate, which is likely to waive PAYGO the instant it gets an opportunity to do so -- next week when it reconvenes. And that would be that for Congress' commitment to the bedrock principle of fiscal responsibility through PAYGO. As the majority party in Congress, Democrats would be embarrassed by this development, though they would also be powerless to prevent it -- thanks to the institution of the filibuster. And Republicans would again have carte blanche to pursue additional tax cuts without paying for them. No wonder Bush's deathbed conversion to fiscal responsibility, evidenced by his refusal to sign any spending bills to hit his desk this year, except for the defense bill, rings hollow.