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.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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