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Democrat supported PAYGO rule "Timid" and "biased toward new taxes"
Posted by: McQ on Thursday, January 04, 2007

Those are the conclusions which Rep. Paul Ryan (R-WI) reached after reviewing the new PAYGO rules the Democrats have been talking about as a part of their incoming Congressional agenda. Ryan, who is the incoming ranking minority member for the House Budget Committee, outlined 5 problems with the PAYGO rule the Democrats are proposing:

1. It is essentially a plan to raise taxes as it mostly ignores spending. The bias is plainly tilted drastically toward taxation.

2. PAYGO will not apply to increased spending on programs in place. It only applies to new spending.

3. It does nothing to address deficit reduction. At best it maintains the present deficit and has no spending caps.

4. Not all new spending will be effected. All that has to be done to avoid PAYGO is to include a new spending proposal in the budget resolution's baseline and the PAYGO rule can be waived.

5. The rules are designed to enable spending now and payment in the future. Of course, that's how we've gotten in the deficit situation we now find ourselves in.

USA Today describes PAYGO as follows:
One of the toughest and most effective rules was a "pay-as-you-go" restriction. PAYGO, as it was called on Capitol Hill, required that any new tax cut or spending program, such as the Medicare drug benefit, be offset by raising taxes or cutting other entitlements. It was unpopular, because politicians generally like nothing better than handing out something for nothing, but it worked.

Republicans allowed PAYGO to expire in part on the theory that tax cuts pay for themselves by juicing the economy. History, most economists and record-high budget deficits all suggest the opposite: There's no free lunch.

If Congress and the president are serious about restoring fiscal sanity, bringing back PAYGO is a big step in the right direction.
Note the emphasized line. Per Rep. Ryan, the new PAYGO rules would not require spending cuts in existing entitlements to fund new spending. That pretty much leaves one source for funding.

Ryan pointed out that the new rules also make it impossible to bring tax cuts to the floor and they will make spending permanent.

Stating that Washington has a spending problem, not a tax problem, Ryan favors a PAYGO system focused on spending cuts and caps.

On a related matter, when asked why President Bush was suddenly proposing a balanced budget in 5 years without tax increases when he hasn't in the past, Ryan said that they were 3 years ahead of schedule on deficit reduction and could now make that proposal.

Asked if there was a chance of a compromise budget agreement with the Democrats, Ryan said Democrats would have to be willing to reform entitlement programs for there to be a chance at such an agreement.

He did say he was pleased with Democratic proposals dealing with earmarks and thought the possibility of passing a line item veto may be there.

Is PAYGO another in a seemingly increasing list of broken or misrepresented promises by Democrats (bipartisanship, deficit reduction, and Iraq and implementing all the recommendations of the 9/11 commission)? We'll see. But my guess is if PAYGO is based on tax increases and little or no progress is made in the area of deficit reduction and reducing the tax burden in the immediate future, "fiscal responsibility" may join the list.
 
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History, most economists and record-high budget deficits all suggest the opposite: There’s no free lunch.
Except that tax receipts are now at a record high. The real problem with the Federal Government is spending not income.
 
Written By: Jeff the Baptist
URL: http://jeffthebaptist.blogspot.com
Yup:
Stating that Washington has a spending problem, not a tax problem, Ryan favors a PAYGO system focused on spending cuts and caps.
This, btw, was some original reporting since I had the opportunity to listen in on a media conference call addressing PAYGO (and no, it was not a result of something Jon did. Remember, this was on the House side).
 
Written By: McQ
URL: http://www.qando.net/blog
Good post McQ, and as I have pointed out in the past, the key to fiscal responsibility is Republican behavior, not Democrats. The Democrats will spend more if they can, it is just how much the Republicans will enable or join in that is up in the air. In recent years it has been quite a bit.
 
Written By: Lance
URL: http://asecondhandconjecture.com
Well, since the Democrats haven’t released their plan for PAYGO, maybe we should wait and see what they actually propose.

It does seem odd that a post on a Democratic proposal has quotes from a Republican, quotes from a newspaper article, but not a word from the folks who are assumably making the proposal.

Then again, the Dems have been in power for over two hours now and the Iraq war is still a mess so to heck with them.
 
Written By: Davebo
URL: http://
Well, since the Democrats haven’t released their plan for PAYGO, maybe we should wait and see what they actually propose.
That is what they’re proposing. The points are from the ranking Rep on the Budget Committee who was reading from their proposal as he was discussing it.
 
Written By: McQ
URL: http://www.qando.net/blog
In all seriousness, the Republicans should just shut up. They had 12 years to demonstrate their fiscal discipline and they failed. At this point, they just sound like whiners.
 
Written By: Steven Donegal
URL: http://
In all seriousness, the Republicans should just shut up. They had 12 years to demonstrate their fiscal discipline and they failed. At this point, they just sound like whiners.
So we all get taxed because you don’t like what republicans and democrats did in the past? What kind of attitude is that? "Please don’t do the right thing now because you misbehaved in the past"?
 
Written By: ChrisB
URL: http://
This is all about taxes and social progarams, but

=The costs of the Iraq war are not part of the regular budget, so if you are talking about budget deficits in recent years, this doesn’t even figure. These costs are piling up in the national debt, however, and it strikes me as odd, bordering on self-serving, that deficits and debts are never addressed in the same breath.

=Paying off the debt by ONLY referring to optimistic expectations for future revenues seems like a huge risk. If that raise I’m expecting next year fails to mterialize, and I lose my job instead, ...

=In talking about the evils of ’big government’, we could stop at mid-step to talk about the waste and inefficiensy of said gobetnment.

As ONE example, I read that the Defense Deot has such a lousy accounting system, that it can’t cite specific data for any fiscal question. We just give them huge amounts of money and hope for the best.






 
Written By: Laime
URL: http://

 
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