Back in the 1990's, President Clinton managed to eliminate the budget deficit. One big factor was a rule the Congressional leadership miraculously put into effect requiring that any new entitlements or tax cuts must be "paid for" by a corresponding cut in some other program (in effect setting a no-growth limit on the budget). The requirement, which came to be known as "pay-go," was allowed to expire in 2002 to allow more leeway for Bush's tax cuts. Deficits, of course, rapidly expanded.
Now pay-go is back, in a full-grown legislative version that was passed by the House earlier this week. Unfortunately, however, the miracle didn't last. Rather than maintaining the fairly pristine and universal requirements of the original, lawmakers of both parties have loaded up this version with several loopholes exempting significant portions of the budget. (One example: Medicare payments to doctors are exempt from pay-go, even though we are currently in the midst of health care reform, medicare is a key element of health care costs, and the most contentious issue of reform is how to pay for it.)
Political observer David Broder points out that such loopholes, and the lack of a cap on existing spending categories, could mean that pay-go this time around may actually work to increase the deficit. Broder quotes Cong. Steny Hoyer as saying that the loopholes were necessary to get the bill passed, but what's the point of passing a bill that doesn't have the teeth to do what it's designed to do? One answer: symbolism. Congress will be on record as having "done something" about the deficit. It's a political gesture but it has little practical effect; it only lulls the public (and the Congressmen themselves) into thinking something is being done.
Meantime, the passage of pay-go-lite is cited by some as one indication of the power of the fiscally conservative Democrats known as "blue dogs." Yet it's not much more than a token nod to them. I'm all in favor of working to reduce the deficit, but the only way pay-go would work is to make it fully inclusive. All programs must be on the table.
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