House Democrats were credited last week with taking a large step toward reducing the nation’s budget deficit by passing rules requiring that tax cuts and spending increases be offset by revenue increases or spending cuts elsewhere. While it is good news that the pay-as-you-go, or paygo, rules were reinstated in the House, how they are applied will determine if the deficit begins to decrease.

Many lawmakers view paygo as a way to control government spending. But applying the rules only to spending would result in large cuts to government programs.

The other half of the equation is revenue. Recent tax cuts, championed by President Bush, have enlarged the deficit much faster than increases in government spending, even including the billions spent on the Iraq war. Legislation enacted since 2001 has added about $2.3 trillion to the deficit, according to the Congressional Budget Office. Half of this total is due to tax cuts between 2001 and 2006. Another third was due to increases in defense and security spending. Ten percent was attributed to increases in entitlement spending and 6 percent was because of increases in other domestic spending.

The tax cuts, by 2010, will total the costs of the Departments of State, Energy Education, Veterans Affairs, Homeland Security and Housing and Urban Development combined.

For this reason, Republican fears that paygo rules could stifle attempts to make some of the tax cuts permanent are justified. But, the CBO numbers show that some of the tax cuts are not affordable.

Paygo rules were adopted by Congress in 1990 and worked to bring the then-high deficit under control. It was allowed to expire in 2002 but not before Congress had passed $700 billion in mostly tax cuts and some spending increases, which violated paygo rules.

The Senate, where Olympia Snowe and Susan Collins have long championed paygo, passed weak requirements in 2003. The paygo rules apply only to entitlement spending increases or tax cuts not assumed in budget resolutions. As long as they are part of the resolution, tax cuts and entitlement increases of any size are acceptable.

In 2004, the president proposed and the House Budget Committee endorsed paygo rules that exempted tax cuts, while applying to entitlement spending. This was an attempt to cut entitlement spending, not to shrink the deficit.

The paygo rule passed by the House, with the support of Reps. Michael Michaud and Tom Allen, is a vast improvement, but, because it will rein in tax cuts, will face difficulty passing the Senate. It shouldn’t.

Responsibly cutting spending, especially at a time of war, means also looking at revenues. Depressing revenues through tax cuts is no longer affordable and meaningful paygo rules should insist that revenue decreases are held to the same standards as spending cuts.