Posted by Brad @ 12:27 pm on January 29th 2010

Pay-As-You-Go Reinstated

To my surprise, following Obama throwing his support behind it in the State of the Union, the Senate just passed a bill reimposing Pay-As-You-Go (already passed by the House). The vote was 60-40. With every Democrat voting aye, and every single Republican voting no.

Statement from Nancy Pelosi:

“Today the Senate joined the House in taking a critical step toward ensuring fiscal discipline for the long term by passing pay-as-you-go budget rules into law.

“Strict pay-as-you-go budget rules created record surpluses in the late 1990s. And when this standard was abandoned under President Bush, it created record deficits. One of the first actions Democrats took when we assumed the majority in 2007 was to make pay-as-you-go fiscal discipline the rule of the House. Now it will be the law of the land, and our future generations will benefit. Like every American family, Congress cannot make spending commitments it cannot afford.

“As the President made clear last night, we must make tough decisions to get our fiscal house in order after a decade of failing to do so. We can strengthen our nation without undermining our future; with pay-as-you-go spending rules, we will.”

I have been trying to figure out why this was a party line vote, despite Republicans having made noise in support of it in the past. Nearest I can get (from a Hill blog mention):

Republicans have said that by installing the rule, pay-go would become an excuse for tax hikes, since spending cuts are frequently unpopular.

Huh.

Any fiscal conservatives around here want to defend that?

3 Comments »

  1. Baffling.

    The Dems reversal on this is as suprising as that of the Republicans, frankly. As I noted in the SOTU liveblog, the Democratic leadership effectively killed paygo not long after it was implemented; Pelosi’s statement on the matter is boldly revisionist in what it leaves out.

    But the reversal of the Dems on the issue is welcome. I cannot fathom the motives of the Republicans except in terms of political gamesmanship.

    I’ve been entirely clear that I regard deficit spending as a greater evil than taxation. Of COURSE spending restraint is preferable to either. But where paygo is concerned, that’s not the issue. It is a simple question of whether the government should pay for itself. If the Republicans aren’t in favor of that, I’m not in favor of Republicans.

    Comment by Rojas — 1/29/2010 @ 12:45 pm

  2. Yeah, I’m taken aback that this got through both easily and quietly as well (and I quoted the Pelosi release for your benefit :)), from the Democratic side. But I’m weirdly shocked about the Republican party line here. This would seem to me to be a relative no-brainer—I certainly understand the argument they’re making, but as you say, it seems a little daft. If spending increases, taxes should go up, and even from a purist anti-taxation POV, one would think that at least directly coupling spending with tax pain for the citizenry would be a pretty effective psychological step forward for the anti-spending crowd.

    I can’t decide if this is anti-tax fetishism even at the expense of fiscal solvency, or if it’s oppositional fetishism at the expense of the same, wherein at this point Obama could propose overturning Roe v. Wade and the GOP would vote him down. Probably half and half, and I might have expected that from a large segment of the Republican caucus—but every single one of them? McCain? Gregg? Voinovich? Wtf?

    Comment by Brad — 1/29/2010 @ 1:04 pm

  3. What it means will depend on who is in control. With Democrats in control, it’s bound to mean tax hikes. With Republicans in control, it’s bound to mean spending cuts.

    If I were a Republican strategist I’d say that voting against it and saying it’ll bring tax increases is exactly the right strategy, because it will and that’ll be great for campaigning on.

    Personally, I think that annual pay-go is moronic; the budget should balance over an economic cycle, not annually.

    Comment by Adam — 2/1/2010 @ 2:09 pm

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