Say Anything Blog

Remember back when the Democrats took office and hyped these “paygo” budget rules?  They said it wouldn’t allow any hikes in spending or tax cuts unless those things were paid for by spending cuts or tax hikes.  But in reality, it didn’t work that way.  The Democrats completely ignored their own rule, and even if they’d been following that budgeting process it was so full of holes and exceptions that all it really did was make tax cuts impossible while spending hikes could continue unabated.

Senate Democrats gave up on “paygo,” as it’s called, when they realized they lacked the votes to offset the $50.6 billion cost of protecting more than 20 million middle-class taxpayers from getting whacked by the Alternative Minimum Tax this year. They’ve spent the year floating all kinds of tax increases to make up the difference. But in the end they passed an AMT relief bill without a penny to pay for it. Paygo is now pay gone.

We should stress that this is the right decision for the economy and the federal budget. The AMT was never supposed to hit the middle class, and it only does so now because the Democrats who designed it failed to index it for inflation and raised AMT rates under Bill Clinton in 1993. With the economy in a slowdown, the last thing anyone needs now is a tax hike. The budget deficit is a little above 1% of GDP, which is below the 25-year average, and should remain so as long as the economy keeps growing.

But paygo shouldn’t be allowed to expire without everyone kicking sand on its grave. That’s because it has been nothing but a confidence game from the very start. Paygo doesn’t apply to domestic discretionary spending, and it doesn’t restrain spending increases under current law in entitlements like Medicare and Medicaid. Its main goals are to make tax cutting all but impossible, while letting Democrats pretend to favor “fiscal discipline,” a la Ms. Pelosi’s boast above.

What’s particularly interesting for North Dakotans is that “paygo” was the brainchild of self-anointed “budget hawk” Kent Conrad.  He made a big deal of the paygo rules back during the beginning of this Congress, and North Dakota’s media gave him a lot of praise for it.

But now that the budgeting rules have been exposed as a fraud, will anyone from North Dakota even bother to ask Conrad about it?