111th Congress' Version of the PAYGO Gimmick

Posted: Jan 07, 2009 1:20 PM

I am no fan of the Democrats pay-as-you go (PAYGO) rule that was put in place at the beginning of the 110th Congress, in fact their rule was nothing more than a cheap gimmick which they ignored on a wide range of bills. When taken together this would amount to an increase in the deficit by more than $420 billion.

Well the 111th Congress will further weaken the PAYGO by:

  • Providing an exception for emergency legislation (theoretically anything could be termed “emergency legislation” in order to bypass PAYGO)
  • Allowing the “banking” of savings in one bill so they can be used to offset spending in another bill. In addition to circumventing their rule in the 110th Congress, increasing the deficit by $420.1 billion, the Majority manipulated the rule by using the same offsets for multiple pieces of legislation (in one case they used a single offset 25 different times). Instead of addressing these violations and gimmicks, this new change stretches the rule to accommodate even more spending.
  • The Democrats instituted their pay-as-you-go [PAYGO] rule at the beginning of the 110th Congress with a promise that it would end deficit spending. Since then, however, the fiscal imbalances have worsened dramatically: the deficit has swollen from $162 billion 2 years ago to current projections of more than $1 trillion this year; and the debt, which exceeded $10 trillion in September, may force the Treasury to borrow an additional $2 trillion this year alone, according to some analysts.
  • Allowing the Majority to “shop” for budget baselines to make PAYGO compliance easier. Specifically, the rules package modifies the requirement that the House use the most recent baseline from the Congressional Budget Office. In 2008, the Majority waived the PAYGO rule for the Farm bill and justified the waiver based on an out-dated baseline.

The majority makes these exceptions, but still fails to plug existing loopholes in the overarching rule.  PAYGO does nothing to tackle the out of control growth of entitlement spending and it does not apply to entitlement spending increases in appropriations bills. It is clear that PAYGO indiscriminately favors tax increases.