Senate and House won’t abide PAYGO—empirics Williams 11 (Roberton, Senior Fellow at the Tax Policy Institute, Crhistian Science Monitor, http://www.csmonitor.com/Business/Tax-VOX/2011/0111/PAYGO-in-the-House-What-it-means-and-won-t-mean, accessed 6-29-11, CH)
While the new rules will make it easier for House Republicans to pass more budget-busting tax cuts, the combination of the Democrats’ majority in the Senate and President Obama’s veto pen could limit the fiscal damage. But don’t be so sure. Remember that in recent years, the House obeyed its strict PAYGO rules by offsetting AMT relief with higher taxes on managers of hedge funds and other investment firms. But the Senate then ignored its own PAYGO requirements and let each year’s patch add to the deficit. And last month, after insisting for two years that fiscal restraint demanded that the Bush-era tax cuts expire for high-income taxpayers, the president quickly gave away that revenue in his compromise agreement with Republicans.
No PAYGO—it’s just a gimmick Bernstein 11 (Jonathan, staff, The Atlantic, 4/6, http://www.theatlantic.com/daily-dish/archive/2010/03/budget-gimmicks/189731/, accessed 6-29-11, CH)
The important thing to remember about all budget gimmicks is that they there are really only two ways to change the federal deficit: raise more revenues, or cut spending. The presidents and Congresses that have really wanted to cut deficits (most notably George H.W. Bush in 1990 and Bill Clinton in 1993, along with Democratic Congresses in both cases) have done so by actually supporting proposals that would change government revenues and/or outlays. Any time you hear someone propose a budget gimmick instead of proposing to raise revenues or cut spending, you can be fairly certain that it's just hot air. The only exception I'd make would be for a pol who does both. Barack Obama, for example, is putting together a commission which is purely a public relations gimmick, but he's also supporting a health care plan that will, if implemented, probably cut the long-term deficit quite a bit. (Commissions can work if everyone involved wants to do something but doesn't want to leave fingerprints; that's not the case with Obama's commission). In general, I'd probably be willing to speculate that the more distant the gimmick, the less serious the authors are about it. So the one gimmick that actually might matter is the Democrats' PAYGO rules...although even there, the only real way it's going to matter is if Congress and the president abide by those rules, which means that the rules themselves are close to, although not quite completely, irrelevant.
Among the most deceptive measures passed in the 111th Congress was the Statuary Pay-As-You-Go Act of 2010, or, in Washington vernacular, Pay/Go. Democrats passed Pay/Go in February 2010 to convince Americans of their fiscal moderation while plotting to raise taxes and engage in more shameless spending. Though they proposed to bypass Pay/Go within a week of its enactment, congressional Democrats and the White House told us that the bill established pay-as-you-go rules that would require legislation affecting mandatory spending to be "budget-neutral" -- in other words, that it would not increase the deficit. The bill also directed the Office of Management and Budget to review enacted legislation to determine if president-ordered, automatic, across-the-board spending cuts would be required to bring the federal budget into balance. In fact, the bill contained loopholes through which you could drive a dealer's showroom's worth of unsold federally subsidized Chevy Volts.
The measure is unsubtly titled "Repealing the Job-Killing Health Care Law Act," lest some of the slower members not realize they're voting to kill President Obama and the Democrats' prize health-care reform. Republicans freely concede repeal is going nowhere as long as the Democrats control the Senate and the White House, but they argue it is not a complete waste of time because of the vote's symbolic importance. It is also symbolically important for another, less honorable reason. To get to that vote, the Republicans, who took office on a pledge to cut the deficit, had to ignore a critical mechanism called pay-as-you-go intended to put a brake on the deficit by requiring that tax cuts and spending increases be offset by tax increases and spending cuts elsewhere in the budget. The nonpartisan Congressional Budget Office reported Thursday that repealing the new health-care law will add $230 billion to the deficit over the next 10 years. The Republicans have no plans to cover that cost under the "pay-go," as it's commonly called. Apparently adding to the deficit is bad only as long as the other party is doing it. Moreover, House rules changes adopted by the Republicans leave a gaping hole in pay-go. New spending will still have to be offset but new tax cuts do not. The rules change will make tightening the leaky tax code that much tougher by treating loophole closings as tax increases. Future tax cuts, even though deficit financed, will not have to be justified.
No one follows PAYGO—Congress finds loopholes and it exempts trade-off of expensive initiatives The Daily News 11(2/22, Editorial, http://tdn.com/news/opinion/article_034e181c-1da9-11df-b772-001cc4c002e0.html, accessed 6-29-11, CH)
A couple of weeks ago, congressional leaders and the administration tried to calm those investors, along with an increasingly nervous American public, by signaling a new commitment to fiscal restraint. The principal vehicle they chose was the old "pay as you go" budget rule that supposedly requires lawmakers to offset any new spending or tax cut with spending cuts and/or tax increases in other areas. The rule, commonly referred to as PAYGO, can be an effective restraint when strictly applied. It was helpful during ‘90s in turning large budget deficits into significant budget surpluses. The rule was abandoned in 2002 to accommodate the previous administration's tax cuts and post-9/11 spending in Afghanistan and on homeland security. It's doubtful that the PAYGO rule enacted earlier this month will be nearly so effective as the ‘90s version. Unlike its predecessor, this Congress' budget exempts many costly spending initiatives. It will allow Congress to extend middle-class tax cuts enacted by the Bush administration without any corresponding spending cuts or tax increases. The rule allows Congress to restrain the growth of the alternative minimum tax, lower the estate tax and cancel scheduled payment cuts for Medicare physicians - all without corresponding cuts in spending of tax hikes. Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget, was dismissive of this porous budget rule during last year's debate. "This is like quitting drinking," she said, "but making an exception for beer and hard liquor." Advocates acknowledge the new PAYGO rule's flaws, but argue that it is preferable to no rule at all. It's true, we suppose, that the budget rule has value if it helps focus congressional attention on the need to restrain spending and convinces foreign investors that U.S. lawmakers are indeed committed to getting the nation's fiscal house in order. But this budget rule will do little restrain spending or reassure investors unless congressional leaders are willing to follow it to the letter. Unfortunately, that doesn't appear to be happening. About a week after enacting PAYGO, congressional Democrats were attempting to carve out a loophole large enough to slip a costly jobs bill through the rule.