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Tilting at Windmills

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December 28, 2010

GET TO KNOW 'CUTGO'.... The "pay as you go" budget policy -- aka "Paygo" -- was a basic and effective approach. In a nutshell, if policymakers want to increase spending or cut taxes, they have to figure out a way to pay for it. The point is to prevent increases to the deficit by telling officials to "pay as you go." It helped Clinton eliminate the deficit altogether and deliver some of the largest surpluses ever.

This past decade, Republicans decided Paygo was inconvenient, since they wanted to slash taxes, fight two wars, expand Medicare, and implement No Child Left Behind without paying for any of it. So, they scrapped Paygo and added $5 trillion to the debt.

Democrats brought the idea back last year, and were careful to make sure literally every major Democratic initiative considered since Obama took office, other than the Recovery Act, was fully paid for.

With an incoming House Republican majority, Paygo is once again being eliminated. The Center on Budget and Policy Priorities walks us through the new GOP rules, quietly approved last week. (via Paul Krugman)

House Republican leaders [Wednesday] unveiled major changes to House procedural rules that are clearly designed to pave the way for more deficit-increasing tax cuts in the next two years. These rules stand in sharp contrast to the strong anti-deficit rhetoric that many Republicans used on the campaign trail this fall. While changes in congressional rules rarely get much public attention, these new rules -- which are expected to be adopted by party-line vote when the 112th Congress convenes on January 5 -- could have a substantial impact and risk making the nation's fiscal problems significantly worse. [...]

The new rules would stand the reconciliation process on its head , by allowing the House to use reconciliation to push through bills that greatly increase deficits as long as the deficit increases result from tax cuts, while barring the use of reconciliation in the House for legislation that reduces the deficit if that legislation contains a net increase in spending (no matter how small) that is more than offset by revenue-raising provisions.

This may sound a little confusing, but it's pretty simple. Indeed, before the midterm elections, GOP leaders were already outlining the policy they labeled "Cutgo."

Under Paygo, new spending had to be paid for. Under Cutgo, new spending necessarily has to be offset by cuts to existing spending. That may not sound especially outrageous, but it clears the way for Republicans to keep cutting taxes -- which would fall outside Cutgo restrictions -- to their hearts' content, raising the deficit in the process.

It also deliberately shifts the focus. New spending can't be offset by, say, closing tax loopholes or creating new sources of revenue. Congress would have to offset the costs by cutting spending.

It's about limiting policymakers' options to those Republicans consider acceptable -- and nothing else. Deficit-raising tax cuts would be fine; deficit-reducing tax increases to pay for programs would be verboten. Tax cuts wouldn't need to be paid for; spending would need to be paid for.

Reviewing the move, Krugman described GOP leaders: "Yes, they're frauds." To disagree is to deny reality.

Steve Benen 2:40 PM Permalink | Trackbacks | Comments (19)

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Comments

Awesome, man.

Wonder whether the TPers know what the hell just hit them.

Posted by: Mouse Brain on December 28, 2010 at 2:48 PM | PERMALINK

Wonder whether the TPers know what the hell just hit them.
---
And libs don't know what happened 2 years ago (or what is still going on). Welcome aboard.

Posted by: SFO 2008 on December 28, 2010 at 2:51 PM | PERMALINK

The average TPer is probably dim enough to believe the GOP line.

-Z

Posted by: Zorro on December 28, 2010 at 2:53 PM | PERMALINK

"The average TPer is probably dim enough to believe the GOP line."

And Gitmo will close, asses will be kicked, etc...

Posted by: Daoud on December 28, 2010 at 2:55 PM | PERMALINK

Yes, the GOP leaders are frauds. And their supporters are pretty much sociopaths or suckers (depending on income level).

Unfortunately, our President has decided to join forces with these economic charlatans. How I can I have any respect for Obama on economic issues when he too is pushing for "austerity" and "deficit-reduction" one moment and supporting a trillion-plus extension of tax cuts the next?

Obama has been whining about the economic mess that he inherited. Well, if someone can show me the bright line between the Bush economy and the Obama economy, I'd like to know what it is.

I get that raising taxes on the middle-class (aka restoring the Clinton tax levels for everyone) is politically unpalatable in the midst of a recession. But if it makes good economic sense and the alternative is "voodoo economics", that's life.

Posted by: square1 on December 28, 2010 at 2:58 PM | PERMALINK

Obama has been whining about the economic mess that he inherited. Well, if someone can show me the bright line between the Bush economy and the Obama economy, I'd like to know what it is.
--

Both R's and D's bow to the same Masters. The End. And get used to it.

Posted by: Paulie K. on December 28, 2010 at 3:05 PM | PERMALINK

The (literally) trillion dollar question: how many teabaggers care that their new Republican friends don't really care about reigning in deficits? Hmmm ... Obama really better prove his mettle with the veto pen or it will be too obvious, not just something to sniff about the professional left et al, that he isn't trying hard enough.

Posted by: neil b on December 28, 2010 at 3:23 PM | PERMALINK

THERE THEY go again. Giving tax breaks to the über rich when AZ cuts organ transplants for the needy. If I were a member of the Idle Rich Class, I would be ashamed and embarrassed and revolted at what the GOP is trying to do to service me. My feeling is they would feel as if they were being frenched by a snake.

When 5% of country owns 85% of the wealth, for the GOP to try to kill all social safety nets even as a political tactic is obscene. It distracts from so many more important things to do.

Posted by: KurtRex1453 on December 28, 2010 at 3:32 PM | PERMALINK

"It distracts from so many more important things to do."

Like bailing out Wall Street. Thanks.

Posted by: Lloyd on December 28, 2010 at 3:39 PM | PERMALINK

Whats really stupid ,but with the intelligence of America, not surprising, is how haters on the left, blame this on Obama. Grow a brain.

Posted by: Michael on December 28, 2010 at 3:53 PM | PERMALINK
Democrats brought the idea back last year, and were careful to make sure literally every major Democratic initiative considered since Obama took office, other than the Recovery Act, was fully paid for.

Which shows how fucking stupid the Democrats are. They never have and never will get any political credit for this kind of thing, and the Republicans will always blithely blow it away when they regain power- all the while being treated by the "liberal" media as the party of fiscal conservatism.

Posted by: Steve LaBonne on December 28, 2010 at 3:56 PM | PERMALINK

-Whats really stupid ,but with the intelligence of America, not surprising, is how haters on the left, blame this on Obama. Grow a brain.-

Yep, Obama just got placed in the WH. Was never a Senator or even ran for POTUS, much less even knew a bailout was taking place. Never took a cent from Goldman Sachs or met with the wealthy elite in SFO 'bout 2 years ago...

Posted by: Not his fault on December 28, 2010 at 3:58 PM | PERMALINK

Republican plan in a working-class nutshell: If I have $500 in a savings plan, that is now off limits. If my monthly budget for food and necessities is $400, but I have an opportunity to make more money if invest $300. So instead of dipping into savings to make money, I'm forced to cut into my food budget.

Dumb republicans are dumb.

Posted by: JWK on December 28, 2010 at 4:25 PM | PERMALINK

Michael: Sorry. But "haters" on the left do not blame Obama for Republicans' actions. Indeed, I would argue that Obama's sustained favorability ratings reflect a remarkable willingness of the public to give the guy the benefit of the doubt.

But the "haters" expect more from Obama than they do from Republicans. Simply reminding us of the obvious -- that Republicans are generally worse -- is a lame defense.

I don't vote for Republicans. Period. Not even "moderate" Republicans. So, if Obama wants my vote in 2012, he better do more than just argue that he is not as bad as whichever Republican he is up against.

Posted by: square1 on December 28, 2010 at 4:28 PM | PERMALINK

'Deficits don't matter' because the goal is to destroy the power of the federal government to do anything but fight permanent wars.

Posted by: Seould on December 28, 2010 at 4:28 PM | PERMALINK

Seould: "'Deficits don't matter' because the goal is to destroy the power of the federal government to do anything but fight permanent wars."

Okay, Republican thinking is always hard to follow; it is always up-is-down. They always say they want one thing while doing the opposite. And observing at these bozos, these hypocritical, immoral charlatans, I no longer think their goal is to destroy the federal government, aka "drown government in the bathtub."

Up-is-down. When they say, "We don't like big government," they mean, "We LOVE big government." The only thing they want to destroy is the ability of government to promote the general welfare. Forget government of, by , and for the people. Republicans love using the power of a big federal government to enrich the uber-rich and to defend their global interests.

Posted by: PTate in MN on December 28, 2010 at 5:20 PM | PERMALINK

Under Cutgo, new spending necessarily has to be offset by cuts to existing spending.

Reid and the Dems should adopt the Taxgo rule in the Senate. Any tax cuts must be offset by tax increases or spending cuts.


Posted by: Joe Friday on December 28, 2010 at 6:26 PM | PERMALINK

It amazes me that those who hate the Federal Govt like the GOP/TP all want to run and get elected to go there. Bunch of stupid ass idiots....

Posted by: Beth on December 28, 2010 at 7:05 PM | PERMALINK

Actually, while it is basically stupid, it IS the job of government to allocate scare resources ("guns OR butter"). So CUTGO works if it makes politicians decide which things are the most important - US military bases on foreign soil + more military spending than the next 15 countries combined, or abstinence education.

Posted by: ned on December 29, 2010 at 12:27 AM | PERMALINK




 

 

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