PAYGO...Big spenders want you to think they’re actually deficit hawks. They’re lauding themselves for passing PAYGO legislation in the U.S. House, with praise from President Obama. But this bill is more loophole than substance. And Congress retains the power to waive its flimsy requirements whenever it wishes.
PAYGO is about creating political cover, not about controlling spending. Supposedly, pay-as-you-go requires that extra spending in one area must be offset by reducing spending elsewhere, or raising taxes, or requiring the President to sequester funds before they are spent.
The Congressional Budget Office says the measure “would allow the Congress to enact legislation that would increase deficits by an amount in the vicinity of $3 trillion over the 2010–2019 period without triggering a sequestration.”
Washington Post columnist David Broder agrees that the loopholes are enormous. For example, he writes, “the 40 percent of the budget reflected in annual appropriations bills for ongoing or new government programs does not have to be paid for.”
The moderate-dominated Committee for a Responsible Budget outlines the exemptions and concludes, “By exempting such costly policies, this PAYGO legislation keeps us on an unsustainable fiscal path.”
The conservative House Republican Study Committee states, “The idea seems great on the surface, but the Democrat version of PAYGO is so riddled with loopholes and exemptions that it only continues the mockery of fiscal restraint this Congress has come to represent.”Most of the praise is coming from the lawmakers who wanted to give themselves political cover and now are patting themselves on the back. Rep. Allen Boyd (D-FL) called it, “a tremendous victory for the American people and for those of us who know that our federal government cannot afford to continue to live outside its means.”
The bill gives House members “an ability to put out a press release to make it look like they’re being fiscally responsible,” Paul Ryan, the top Republican on the House Budget Committee, told Reuters.The House approved the bill yesterday by 265-166. Will the Senate approve the bill? Very possibly, although Senate Budget Chairman Kent Conrad (D-ND) told reporters he agreed with Republicans that the PAYGO bill includes too many loopholes.
The Associated Press reported, “By itself, pay-go does nothing to address the government’s deficit woes. . . .The pay-go measure wouldn’t force lawmakers to find the courage to actually do anything to stanch the flow of red ink; it instead seeks to prevent lawmakers from making it even worse. . . . But even if pay-go has the force of law, it can be waived.”
In typical Washington-speak, the bill never labels the loopholes as “exemptions,” but instead calls them “current policy adjustments.” Analysts says these exemptions include Social Security payments, food stamps, Medicaid, most of Medicare, payments to federal retirees, the pay of the President and former Presidents, all discretionary (non-entitlement) spending, estate and gift taxes, the alternative minimum tax for individuals, the middle-income tax cuts of 2001 and 2003, anything designated as an “emergency”, children’s health, Pell Grants, all economic recovery programs, veterans’ benefits, and much more.In this case, the holes are bigger than the cheese.