The second provision, cut as you go, requires that increases in mandatory spending programs, including programs such as Social Security, Medicare, veterans’ benefits and unemployment compensation, be offset by cuts to other mandatory spending programs. “This means that the House cannot even pass increases to these programs that are fully paid for with new revenue, unless they also cut some other program in this category,” Hughes notes.
This could make passage of enhancements to popular tax provisions more problematic. For example, the cut as you go rule “makes it harder to enhance proven and effective policies like the Child Tax Credit (CTC) or Earned Income Tax Credit (EITC) because the refundable portions of the credits — the amount that can exceed the income tax a family would otherwise owe — are counted as mandatory spending under the budget scoring rules used by Congress,” Hughes writes, noting that any improvements would require cuts to another essential program like Social Security or Medicare.
“Advocates and lawmakers hoping to restore the 2021 expansion, or otherwise improve the CTC or EITC, will now face an even tougher road ahead” due to the cut as you go rule, he states.