Budget procedures: keep your eye on the ball

Today I’m writing about Federal budget rules, a topic that can put even the most dedicated policy wonks to sleep.  But the Republicans in Congress are counting on the MEGO (my eyes glaze over) factor to get away with some outrageous rules that will hamstring any attempts to improve entitlement programs (Medicaid, Food Stamps, Veterans’ benefits) while letting tax cuts get a free pass.  So it’s worth keeping your eye on the ball, even if it takes an extra cup of coffee to stay awake.

The issue is the "Pay As You Go" or "PAYGO" rules.  In the 1990s, determined to get the budget deficit under control, Congress adopted a set of rules that said that you couldn’t pass a tax cut or expand an entitlement program without finding an "offset."  If these rules were applied to your household budget, it would mean that if you wanted to sign up for cable, you had to give up your weekly pizza night to pay for it.  If you wanted to buy a car, you might have to get a Saturday job to cover the payments.  Everything had to be paid for. Everyone kicked and screamed about the hard choices that it forced, but it was fair and it worked: by the late 1990s, we were running a surplus.

Since last year, however, the House Budget Committee has been using a new version of these PAYGO rules that only applies to entitlements.  Tax cuts are "free" under these rules — Congress doesn’t have to find any offsets, but can run the deficit up as high as they please.  Entitlements, however, still require offsets — and they can only be offset by cuts in other entitlement programs.  So if you want to improve access to Food Stamps, for example, you have to cut access to another entitlement program.  In the household example, this is equivalent to saying it doesn’t matter to your budget if you get another job and bring in more income, or if your hours are cut in half.  All that matters is that any increased bill is offset by a decrease in another bill.  It just doesn’t make sense.

The best source of information on this sort of budgetary maneuver is the Center for Budget and Policy Priorities.  Here’s a link to their paper on the PAYGO rules and here’s one to an overall discussion of ways in which the Administration is playing games with the budget process.  Read ’em and weep.

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