Wednesday, January 2, 2019

PAYGO should be a no-go

I wasn't expecting to have this crop up this morning.

Among the changes I was counting on with the new House Dem majority, I didn't list the reinstatement of "pay as you go" budget rules (or PAYGO) as one of them. And I can't say I'm necessarily pleased about it, as we need to be changing the way we think about policy, and what is possible. PAYGO gets in the way of that.

To review, let’s have The Center on Budget and Policy Priorities describe how PAYGO has been handled since the large deficits of the early 1990s went away, and I’ll add a few bits of context in italics.
In the late 1990s, however, Congress and the President began waiving PAYGO in response to the booming economy and several years of budget surpluses. In 2001 they [meaning Republicans] waived PAYGO enforcement and approved very large tax cuts without offsets — a sharp departure from PAYGO discipline. This set the stage for other PAYGO exceptions. In 2002 Congress allowed PAYGO to expire, facilitating the passage of deficit-increasing tax and entitlement legislation over the next several years, including the 2003 tax cuts and the Medicare prescription drug bill.

Partly because of the return of large deficits, Congress used its internal rules to reinstate the PAYGO principle in 2007 (after Republicans lost control to the Democrats). It decided to prohibit the consideration of legislation that would break the PAYGO principle. In 2010, Congress and the President [Obama] also reestablished PAYGO as a law, very much like the 1990 law.

However, in 2011, the House of Representatives repealed its internal PAYGO rule (after Republicans retook control). As of 2018, therefore, PAYGO is enforced by a Senate rule against considering legislation that breaks the rule, and by the 2010 statute.

PAYGO doesn’t force lawmakers to make the tough decisions needed to reduce projected deficits, but it restrains them from making deficits worse or undercutting any deficit-reduction efforts they have already enacted.
And it was nice to see what my Representative had to say about it today. While it looks like the Dem House might bring back PAYGO in the short term, adjustments will be coming sooner than later.

Mark's trying to walk a fine line here, and trying to keep divisions from being the story of the Dems taking over. But the comments below Rep. Pocan's post aren't buying it, and I'll be interested in seeing which way he votes when the rules package comes to the floor tomorrow.

Look, I absolutely think the deficit has gotten out of hand under Trump and the rest of the GOP over the last 2 years, especially because of the GOP’s Tax Scam, and that something needs to be done to shrink it. But that’s because we are exploding the deficit in a time when the economy was already growing and near/at full employment.

That shouldn’t be happening, and that high deficit will tie the hands of policymakers when the economy does go through a downturn (which is likely part of the GOP's plan, as outlined in the "Starve the Beast" strategy). Given that a slowdown and/or recession seems likely over the next 12-24 months, why should the Dems in the House then limit themselves with PAYGO in how they fix with the problems caused by Trump/GOP?

An artificial handcuff isn’t needed to have Dems in the House reduce the deficit through responsible means. PAYGO doesn’t have to have anything to do with passing bills that might lower spending on ICE and the military, reverse the GOP Tax Scam’s cuts for the rich and corporate, and shore up Social Security by removing the back-door tax cut on people making more than $132,900.

Dumb deficit fears watered down the economic stimulus in 2009, and PAYGO-like budget reconciliation rules caused the Affordable Care Act to be slowly phased in from 2010-2013 instead of taking full effect right away. While both bills were improvements over the prior situation, they were flawed enough that their insufficient changes led to a void which was then filled by Trumpism and other destructive resentments.

NO MORE. Dems need to go big and remove the barriers to doing it right. It’s the end results of the economy and the deficit that matter to people, not silly, procedural poses like PAYGO. House Dems should do their talking with legislation and oversight, not with symbolism of the past.

1 comment:

  1. I will add that there is another fiscal item I do like in the rules package from House Dems. They're bringing back the "Gephardt rule", which raises the debt ceiling by the amount of the deficit in each budget. This'll stop the Baggers' reckless trick of threatening shutdowns over the debt ceiling.