Republicans abandon pay-as-you-go budgeting (Rep. Lloyd Doggett)

Our Democratic House rule helped ensure greater budget discipline than either Statutory PAYGO or Cut-Go. The Democratic rule required each bill affecting direct spending or revenue to be deficit neutral. In contrast, Statutory PAYGO only requires the cumulative effect of all bills approved during an entire year to be deficit neutral. Under the new, weakened rule, deficit-bloating bills that lower revenue can be adopted without concern until year’s end, at which point, it may be impossible to offset them except through statutory sequestration that enacts across the board spending cuts to priorities like Medicare and education loans without having to assume specific responsibility for what has been cut. 

Another, troubling result of this Republican “Cut-Go” rule is the distorted incentive it creates to convert spending programs — that would otherwise need to be offset — into tax expenditures, which do not and which are really just another form of entitlement spending, subject to no accountability through the Budget process. Already abused and criticized by the bipartisan Presidential Fiscal Commission, this spending through the Tax Code is often an inefficient means of accomplishing a goal. With a current estimated cost exceeding $1 trillion, these barnacles on the Tax Code can sink efforts to contain the debt. Ironically, just last August, incoming Speaker Boehner himself lamented the proliferation of these unjustified tax breaks saying, “We need to take a long and hard look at the undergrowth of deductions, credits, and special carve-outs that our Tax Code has become.”

We need pay-as-you-go budgeting like a family facing foreclosure and sky-high credit card debt does. An indebted family cannot balance its budget by reducing its income, cutting necessities like school lunch money or college tuition, and borrowing more. Neither can America.