I noticed this morning that Dave Roberts at Grist felt the need to put lots of pictures of puppies in his recent analysis of the methodology used by the Congressional Budget Office (CBO) for scoring of energy efficiency. Since I’m prone to find myself talking about CBO scoring of the climate bill, I’m thinking I should carrying pictures of puppies around.

Puppies aside people need to get used to talking CBO scoring and other budget wonkery, they affect everything and will for the foreseeable future! If activists want anything, even low cost initiatives, enacted they’re going to need to get familiar with PAYGO and the whole whole host of budget issues as they find they’re not fighting about if they have good idea, but if revenue method X or Y can pass muster and can get votes.

-Chris

If you’ve been following the health care debate and any other congressional debate involving money this year, you’ll notice the Congressional Budget Office has been playing a very important role, grabbing an unusual amount of headlines for such an apolitical and wonky office. For a policy idea to be considered “viable”, it has to get a good score from the CBO.

Now what exactly does that mean? In general, a good score is one that has the greatest positive (or least negative) effect on the budget over a 10-year window. This is crucial, since the House has instilled rules under the Democratic majority that mandate all policy initiatives to be at least budget neutral. PAYGO, as it’s generally called, is a pain in the ass, but also a good idea since the Republican style of credit card spending isn’t particularly viable in the long term. But that doesn’t mean it’s not a huge pain in the ass in the short term (for more on PAYGO, see CBPP’s useful primer).

So this is where the CBO gains its power. And get used to it, as long as the agents of fiscal responsibility (Dems) are in control anyway. What makes the whole dynamic so interesting is that the CBO seems to be quite capable of acting neutrally regardless of political pressure. Since they tend to take a very cautious approach to revenue estimates, you see a wide swath of policies on both sides be strewn into the political dumpster for failing to meet their strict criteria.

One such policy is the tax on oil speculation, proposed by Rep. DeFazio, that we’ve been advocating. DeFazio requested the CBO to score it along with another proposal to tax oil itself by the barrel. Although they have not yet released the official report, word is that CBO simply claimed too many variables were at play with the speculator tax (volume of trading, small transaction amounts, avoidance) and returned a combined score that only included the barrel tax. Now there may be a wide range of possibilities for the amount of revenue this measure will bring in, and nobody has any particular idea , but is it fair to effectually mark the speculator tax as zero? Wouldn’t it be more honest to estimate somewhere between zero and a bajillion dollars? But either way, it’s now difficult to imagine proponents of the plan will have the political fortitude to withstand both the Big Oil and Wall Street lobbies to push a tax that doesn’t officially raise any revenue. Oh well.

On the other hand, CBO did also throw some cold water on Kent Conrad’s insidious co-op plan. So I guess it ain’t all bad. Such is life – nonpartisan budget analysts are omnipresent in the era of PAYGO.

-Jeremy

Somewhat Irrelevant Disclosure: I personally know a number of former senior-level CBO officials, including my graduate school advisor at George Washington University, and they are all very well-intentioned budget/tax wonks.

Original post on Boot Berry

With all of these “exemptions,” does anybody really believe this bill will provide for a balanced budget? This is a typical Berry tactic. In the months leading up to an election, Berry dons a conservative hat. As soon as he’s elected, or his liberal Democratic colleagues need his vote, he’s all too willing to turn on his conservative Arkansas constituents.
Don’t let him fool you. Berry’s no fiscal conservative.

Let’s agree that we’re going to have PAYGO enforcement. That we’re not going to cry ‘emergency’ every time we have a Katrina, every time we have a Tsunami, every time we have a need for extra spending, that we don’t go call for a special appropriation that allows us to circumvent the PAYGO rules.

Of course Marsha, does this also apply when the New Madrid fault again snaps and levels Memphis? I’m told (reliably I believe) anti concurrent causation does apply in earthquakes.

(hattip to a reader and the Media Matters Action Network)

“Tunnel vision” is what happens when one focuses narrowly on just one aspect of a problem, disregarding other alternative approaches to its solution. In an argument, especially in one about policy, it can be useful (although not exactly intellectually honest) to channel attention on one specific face of the problem under discussion, so as to be able to present the desired solution as the “necessary” one.

This, it seems to me, happens all the time in political debate, particularly in economic matters. I will bring two examples: the level of government spending and the pension system.

As regards the level of government spending, it seems to be an agreed proposition that it should be kept within check, and no one – including myself – could possibly argue against that. What is contested, however, is the way by which to achieve the goal of a “healthy” public debt. Major cuts in government spending seem to be the preferred solution in today’s environment; particularly in those countries (like Italy, for instance), dominated by neoliberal constituencies.

But is this really the only way to keep public debt in check? Public debt, being measured as a share of GDP, would even diminish – without cutting down on current levels of government spending – if the GDP grew faster. One way for this to happen can be by targeted government spending, stimulating demand, which in turn attracts investment and fosters the creation of economic value.

This, if anything, seems to suggest that political debate on the levels of government spending does display some degree of “tunnel vision”, focusing only on the “spending” side of the problem, and omitting the “GDP growth” aspect of it (which might actually be undermined by severe restraint in government spending).

My second example relates to the debate on whether a shift to pre-funded pension schemes could be beneficial, in order to ease the burden imposed on workers (in countries with an aging population) under a paygo scheme. In this context, pre-funded pension schemes are presented as the solution to the problem, as no easy way out is to be seen in the presence of paygo schemes, under which – it is contended – the share of workers’ incomes to be devoted to pension payments shall otherwise continue to rise in order to cater for an aging population.

What it is omitted in this debate, however, is to observe that the incidence of payroll payments on the levels of net income of the workforce depends not only on the needs of the pension system, but also on the level of income.

In this respect, it is curious to see how – in recent years – many regulatory efforts have been directed – by neoliberal governments – at undermining the bargaining position of workers, in an attempt to make work more “flexible”, for instance by removing obstacles to the dismissal of unwanted employees. These structural measures weakening the workforce diminish, in turn, the latter’s bargaining power and ultimately reduce the share of increased productivity that workers are able to “capture” through collective bargaining (making their wages grow slower than they otherwise could).

In other words, part of the problem of the increasing burden of payroll taxes on wages has been caused by governmental policies who have contributed to make workers weaker, and wage increases slower. In light of this, it is curious to see how, omitting one side of the problem from the discussion (namely the level of workers’ wages, as opposed to the proportion thereof needed to fund paygo pension plans), the shift to a pre-funded system can be presented as an almost necessary measure, “washing one hand with the other”. Even more interestingly, it is seldom stated that the risk, in pre-funded schemes, ultimately falls on workers subject to the scheme (who risk earning less revenue on their invested capital, than would be needed to attain the expected pension level).

In sum, while the above is just scattered evidence and by no means a conclusive alternative explanation of these important problems, I hope it at least shows that it is necessary, before endorsing given policy choices, to explore the different sides of the problem such policies seek to address, and to look for alternative explanations.

The president wants Congress to adopt a pay-as-you-go approach to the federal budget and says he hopes to halve the federal deficit by 2012. Republicans say there’s no way he is sincere about it. (PAYGO means you don’t propose a spending increase without an offsetting spending cut and/or tax increase to pay for it.)

Unfortunately, this ain’t a yes-or-no question, and as a longtime deficit hawk, I say that with great pain. But here’s the deal.

First, we’re in a bad way fiscally. The deficit for FY09 topped a trillion in May, with four months still to go in the year.

Second, not only are we going to have to live with that for a while, if we want to get people back to work we ought to make it even worse. Yes, really. That’s because the economy is doing so poorly at job creation right now that federal spending is going to have to help make up the difference. The amount of federal spending needed to make a serious dent in an unemployment rate of 9.4% would create a deficit more than twice as big as the one we’ve got, but some credible economists are arguing that that’s what we need to do anyway.

Politically, it won’t happen — long-term job creation is never a big winner on Capitol Hill — but hypothetically, if it did, it would help in the long run if that money were spent on things that would help boost future productivity and, thus, economic growth. Besides being a good thing in itself, the resulting prosperity could make reducing future deficits a lot easier. (Examples of such spending areas include education/training and upgrading our Internet infrastructure. At least a dozen fairly sizable countries have significantly better networks than ours.) But, of course, that money might not be spent, or at least not concentrated on, such productive targets.

But even with that political reality, the fiscal reality is that neither Obama nor anyone else is going to halve the deficit by 2012. Doing so, even if significant tax increases were enacted, would also require so many cuts in spending that 1) significant parts of the electorate would revolt and 2) the impact on the still-fragile economy likely would be disastrous. If the deficit is no larger in 2012 than it is in 2009, that’ll probably be about the best we can hope for, and that’s not even the most likely scenario.

So Obama is being disingenuous at best — and, I would in fact argue, consciously lying — when he suggests we can halve the deficit in four years.

But the Republicans absolutely do not come to this discussion with clean hands, either. The national party has a 30-year history of profligacy. (Republicans like to point out that Dems controlled the House for Reagan’s entire presidency, and controlled the Senate for two of Reagan’s eight years. They’re less eager to point out that every single budget enacted by Congress in that era had a smaller deficit than the ones Reagan originally proposed.) It is evidence of how debased our national discourse has become that House Republican Whip Eric Cantor is given a platform by CNN to criticize what Obama has done in five months when George W. Bush and a mostly (but not entirely) Republican-controlled Congress inherited a near-surplus (accounting for raids on the Social Security trust fund, the only recent year in which the government truly ran a surplus was FY99) and then spent eight years passing irresponsible tax cuts, running two wars off-budget, and looking the other way while fraud Treasury-looting on a breathtaking scale was taking place in every arena from rebuilding Iraq to providing prescriptions for seniors.

Then there are the less obvious agendas of some — though by no means all — of those who want us moving more quickly toward restoring fiscal stability.

The people who tried to partially privatize Social Security in 2005 are still out there. They hate SS on principle and are perfectly willing to use the deficit as an excuse to claim that the program is in much worse shape than it actually is. (In fact, the changes made in 1983 to cover the Baby Boomers’ retirement are doing exactly what they were supposed to do, and the program can be kept solvent over a 75-year horizon with only minor changes.)

And the Grover Norquists of the world — the people who, over the desires of a solid majority of the electorate, want to make government small enough to “drown it in a bathtub” — are out there, too. And if at least some of the people who want to cut SS are sincere but misinformed, the Norquist crowd is simply a bunch of liars. Their roots lie with the Reagan folks who, as David Stockman famously confessed, knew tax cuts wouldn’t really raise revenue to balance the budget, as they had claimed, but would in fact create deficits so great that discretionary spending would have to be butchered — which was their point.

So how do we get back toward a balanced budget?

For one thing, health-care costs are going to have to be reduced. And unfortunately, some of the biggest contributors to that problem aren’t being targeted for solutions. The more visible problems of Medicare and Medicaid will have to be addressed as well, and it will be imperative that those programs adopt some of the documented best practices of other organizations, such as the Department of Veterans Affairs.

For another, we’re going to have to cut the defense budget, big-time. And that will mean learning to work more cooperatively with our allies to protect and advance our national and shared interests. We haven’t done such a hot job of that in recent years.

And until we get back on track fiscally, we’re going to have to ask all Americans, but particularly the wealthy and large corporations, who have benefited so much from government policies in the past 30 years and particularly in the past eight, to contribute more.

It’ll take more than all that, too, but those will be the biggies. No one or two of them will fix the problem alone. But I agree with anyone, irrespective of their underlying motive, who says we need to get the fisc back in order. There will always be bad economic times when deficit spending is called for to stimulate the economy. But to be able to do that without creating long-term damage, we need to run balanced budgets or even surpluses when times are middlin’-to- good. And not enough politicians are willing to say that.

Via Baloon Juice:

The so-called PAYGO proposal requires Congress to balance any increased spending by equal savings elsewhere, Obama said in announcing the measure that now goes to Congress.

I’m all about balancing budgets in over the long run. I never quite know what to make of these PAYGO proposals. To be useful, they need two caveats.

A. Allow for deficits in recessions, paid for with surpluses in boom periods.

B. Allow for at least 10 year budget neutrality. It shouldn’t be necessary to pay for project A with higher taxes this year if the value in increased economic activity (and thus taxes) or decreased governmental costs (and thus budget) over time will compensate for the initial cost plus financing.

To fail to include both of these in a PAYGO plan will leave us unable to make big-picture investments or mitigate the hazards of the business cycle. It would accomplish a balanced budget at the cost of quality of life. If we stick to a strict PAYGO with these two, we can balance the budget AND do the things necessary to make the lives of Americans better…IF we are willing to pay more in taxes.

The non-partisan Congressional Budget Office projects that publicly held debt will reach 56.1 percent of GDP under current law. If President Obama’s budget is implemented, CBO projects debt to reach 82.4 percent of GDP  according to http://www.heritage.org/research/features/BudgetChartBook/Obama-Budget-Increase-Debt-26-Percent-GDP.aspx 

You can keep track of our spending ways at the National Debt clock  http://www.brillig.com/debt_clock/ 

While George Bush may not be a saint, but Obama is looking more and more like a sinner- spending more than any other President in history. The National Debt was $10.6-trillion on the day Barack Obama took office, if his budget projections come to fruition, he’ll run up nearly as much government debt in four years as President Bush did in eight. 

From, A Pfennig for For your thoughts http://www.dailypfennig.com/ , “we’ll see the Budget Deficit, which is expected to be $180 Billion for the month of May… If it tallies there at $180 Billion, the Budget Deficit in the first 5 months of this year will have exceeded $650 Billion… And that’s before the $787 Stimulus gets added… And other items that will come along… And don’t forget that we posted a deficit in April!  I still believe the Budget Deficit will be at least $3 Trillion this year! That would push our National Debt to around $14 Trillion…” For a great explanation of “why do the annual federal budget deficits not match increases in the national debt,” visit http://www.independent.org/blog/?p=2355

Twice as nice for a Wednesday, both Trade Deficit and Budget Deficit will be released today. Ten Banks are going to repay their TARP (troubled assets relief program) funds, to the tune of nearly $70 billion, but that will barely put a dent in America’s economic decline, say nothing of the move toward socialized everything. 

Senators Joseph Lieberman (I-Conn.) and Lindsey Graham (R-S.C.)”vowed again Tuesday to vote against — and, if possible, filibuster — the troop-funding bill and all other legislation until they get their way,” according to http://www.huffingtonpost.com/2009/06/09/lieberman-graham-threaten_n_213262.html The hissy fit is over a photo amendment that would prevent the release of the Gitmo torture photos forever and ever.

“Transparency in government is an American value, but it is not without limits, no more than any of the values embraced in our Constitution,” Lieberman said. “The transparency in this case is needless and dangerous transparency.”

Their actions have merit.  The world does not need to see how low America stooped.  Too bad these two didn’t have the balls necessary during the campaign to warn that an Obama administration of transparency, would only come when it was convenient for Obama.  If nothing else, this Senate delay saves us a few bucks while the debate goes on.

According to CNN- President Barack Obama on Tuesday proposed making “pay-as-you-go” rules for federal spending into law.  The so-called PAYGO proposal requires Congress to balance any increased spending by equal savings elsewhere. By all accounts, added entitlement spending will be offset with spending cursor tax increases. Talk about bait and switch!

ABC points out, “discretionary spending – roughly 40% of the federal budget – is not covered by PAYGO.” The PAYGO rules will apply to new tax cuts and mandatory spending, with four major exemptions – any renewal of the 2001 and 2003 tax cuts, the continued efforts to “patch” the Alternative Minimum Tax, any effort to address physician’s payments in Medicare, and modifying the estate tax.” http://blogs.abcnews.com/politicalpunch/2009/06/president-obama-paygo-and-the-deficit-hole.html 

“”This is like quitting drinking, but making an exception for beer and hard liquor,” said Maya MacGuineas, President of the Committee for a Responsible Federal Budget (CRFB). “Exempting these measures from PAYGO would increase the ten-year deficit by over $2.5 trillion dollars. That’s not fiscal responsibility.” I’ll have a nice chardonnay please, and it better not be the frig from France.

60% of the budget is not subject to PAYGO.  Why is no one having a hissy fit over that?  While President Obama may enjoy a 60% approval rating, PAYGO and his expensive socialistic plans still don’t achieve his goals.  Bush might have spent a pretty dime, but at least is was shining in democracy. 

props to http://chalktalk-talk.blogspot.com/2009/06/worldwide-national-debt.html on the Percent of GDP.  Japan debt is equally dismal especially in light of recent military actions on the part of it’s neighbor North Korea.   Obama who continues his spiel of climate change for jobs might want to take a look at Japans which ”is doing the smart thing by not meeting it’s ‘Kyoto Protocol’ targets and is only pledging to cut it’s future CO2 emissions by 8%. Via http://motorcitytimes.com/mct/japan-will-protect-its-economy-first/  Right now they need jobs and so do we.

I think I”ll have a Saki instead of that chardonnay after all.

My share of I.O.U.S.A. debt leaves little room for more than a sip out of the White House Fountain.

The President is throwing the political pasta against the wall to see if it sticks.  He is talking PAYGO again and says that it is a sensible approach to Federal spending.  The “pay as you go” approach is intended to limit governmental spending to what is budgeted.  If you don’t have money allocated already, you have to cut something or raise the tax revenues to pay for it.

This worked well in the 1990s and is part of the reason that the US government ran budget surpluses (not actual surpluses).  Liberals have said that tax increases caused the increase in Federal tax collections in those days but that is not the true story.  The economy grew in spite of the increases as Republicans took back control of Congress in 1994 and promised fiscal responsibility and tax cuts.  The combination proved very successful.

The Internet boom if the 1990s and the associated benefits of buying over the Internet was the equivalent of a tax cut.  Consumers began to shop “online” because prices were forced lower by increased information, and competition for local vendors, along with the reduction of some sales tax burden (i.e. you don’t have to pay sales tax if the seller has no office in your state).  The expanding economy yielded more sales and income taxes across the board.

Oh, and that pesky Y2K thing drove many to employ resources (think jobs and the associated items like desks, telephones, computers, phone lines, new equipment and facilities) that otherwise would never have been bought.  All of that “boom” meant more tax revenue.  That revenue actually grew faster than government could find ways to spend for a scant two years.

Once that boom went bust, people were scaling back and the process went in reverse.  That recession started in 2000 when no catastrophe occurred.  Without much in the way of claiming that he “inherited a recession”, George W. Bush went about fixing the economy by helping people and businesses reduce costs by lowering their tax burden.  Had terrorists not attacked us in 2001, perhaps the fiscally responsible crowd could have held court and kept us out of trouble.  Instead, “power-share” agreements to give Democrats power was top of the list, followed by Democrat control and a struggle to fund war and social programs intended to get more Democrats elected.

Fast Forward – January 2009

Freshly minted President Obama asked for and got a new “stimulus” plan from Congress that ladled on more debt spending on top of the record setting spend of 2008.  The 2009 spend was something like 4 time what was spent in 2008.  He has much nerve to complain about “inheriting” a bad economy.  Obama did serve in the Senate for a term (they actually spend the money) so he is not without complicity.

He also ASKED for the huge amount of spending (measured in TRILLIONS OF DOLLARS) with not a hint of PAYGO.

This is all just a smoke screen to justify massive tax rate hikes on the “rich” which will tank the economy further.  It is increasingly obvious that these socialist-democrats like Obama actually want to break the economy so they can say that capitalism has failed and only big government solutions will fix the problems.  They cause most of the problems themselves, and destroy the good parts of capitalism to “fix” the small percentage that is not “ideal” in their eyes – but nevertheless…

Now that the future generations of Americans (not yet born) are on the hook to pay this “stimulus” money back he askes for “fiscal restraint”.

Good luck with that one.

The horses are gone, Mr. President.  Closing the barn door would have been a better idea  before they got out.

Obama, after just yesterday touting Pelosi’s ‘paygo’ said the borrowing had to stop. Paygo is nothing more than another scam scheme, a way to massively raise taxes, as the Obama’s plan to load as much debt as possible on the backs of the American people, destroying freedom the process. But it’s OK to fund healthcare with more deficit spending. Didn’t Obama say healthcare was free?

Obama: It’s OK to borrow to pay for health care

Dear Leader and the Democrats haven’t spent enough to date. They want to borrow more to pay for their disastrous health care entitlement program. Here is the record so far:

See any Bush inheritance in the out of control Democrats spending? Democrats controlled Congress since Jan 2007, so it’ all theirs — Including the spike in 2008, which was designed to destroy Bush’s budget plans. Bush’s plan had deficits zeroed out by the end of 2008, as you can see by the steady process that was being made.

As a statement of fact, the recession began in the thrird quarter 2008. Recession being defined as two consecutive down quarters in GDP.

Some Democrats Warn of Loophole in Obama’s Pay-As-You-Go Rules

President Obama called on Congress yesterday to enact pay-as-you-go budget rules to help tame a deficit forecast to top $1.8 trillion this year. But even as some Democrats applauded the plan, others complained that it would give a free pass to expensive policies that would sink the nation trillions of dollars deeper into the red over the next 10 years.

The proposal would bar lawmakers from expanding entitlement programs such as Medicare and Social Security, creating programs such as universal health coverage or cutting taxes unless they cover the cost by raising taxes or cutting spending elsewhere. If, by year’s end, the White House budget office determined that new initiatives had not been paid for, the president would be required to make across-the-board cuts in entitlement spending.

The proposal is similar to rules that briefly helped the Clinton administration transform big budget deficits into surpluses. Republicans let the law, known as PAYGO, lapse in 2002.

“The pay-as-you-go rule is very simple. Congress can only spend a dollar if it saves a dollar elsewhere,” Obama said at a White House ceremony, backed by more than a dozen lawmakers, including House Majority Leader Steny H. Hoyer (D-Md.), who said he would introduce the plan as legislation next week. “It is no coincidence that this rule was in place when we moved from record deficits to record surpluses in the 1990s — and that when this rule was abandoned, we returned to record deficits that doubled the national debt.”

One big difference between Obama’s proposal and the Clinton-era rules, however, is that Obama would exempt an array of expensive policies currently in effect. For example, lawmakers could extend the tax cuts enacted during the Bush administration past their 2010 expiration date, restrain the growth of the alternative-minimum tax and continue to forestall scheduled payment cuts for Medicare physicians without consequence. All told, those policies would increase annual budget deficits by more than $3.5 trillion over the next decade.

Some independent analysts who support PAYGO rules objected to the loophole. “This is like quitting drinking, but making an exception for beer and hard liquor,” said Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget.

And while the proposal found favor in the House, it faced serious obstacles in the Senate, where several key senators said they would oppose it.

“I’m not for waiving PAYGO for $3.5 trillion of items, much of which I think ought to be paid for,” said Senate Budget Committee chairman Kent Conrad (D-N.D.). “I don’t think at this point we can afford not to pay for those very large expenditures.”

Coming one day after Obama vowed to shovel money from the economic stimulus package out the door even more quickly, yesterday’s call for fiscal rectitude also drew catcalls from Republicans.

“The president continues to display a frightening ability to say one thing, yet do the exact opposite,” said Rep. Tom Price (R-Ga.). “It’s frankly insulting that a president who is on a path to bankrupting our government would try to play the role of fiscal hawk.”

Obama: It’s OK to borrow to pay for health care

President Barack Obama on Tuesday proposed budget rules that would allow Congress to borrow tens of billions of dollars and put the nation deeper in debt to jump-start the administration’s emerging health care overhaul. The “pay-as-you-go” budget formula plan is significantly weaker than a proposal Obama issued with little fanfare last month.

It would carve out about $2.5 trillion worth of exemptions for Obama’s priorities over the next decade. His health care reform plan also would get a green light to run big deficits in its early years. But over a decade, Congress would have to come up with money to cover those early year deficits.

See also:
Obama Urges Congress to Tighten ‘Paygo’ Budget Rules (Update3)
Concord Coalition Supports Statutory Paygo But Cautions Against Large Exemptions
Obama Urges Congress to Tighten ‘Paygo’ Budget Rules
Obama proposes making ‘pay-as-you-go’ the law
Obama: After $3 trillion spent … “Pay Go” is back
Pay-go makes a comeback

What manner of bull[expletive deleted is this, just how stupid does Obama think we are? Pretty damn dumb I guess, pretending to suddenly be fiscally responsible after he’s already maxed out all the national credit cards. Now that he’s wrapped the country around a tree and totaled it, he promises to drive safely from now on.

/it’s like closing the barn door after the horse, the barn, and the entire farm is gone!

Criticism and worries about runaway federal deficits and government spending are increasing ever so slowly among not only Republicans and conservatives, but Blue Dog Democrats and independents as well. Against this backdrop, President Obama again tried to conjure up an image of fiscal responsibility by calling on Congress to adopt stricter spending measures in an attempt to cut down on deficits. The so-called “pay as you go” legislation, which Dem. Sen. Steny Hoyer pledged to introduce on Obama’s behalf, calls for any tax cut or spending program to be paid for within the budget.

The proposal is already meeting resistance from Dem. Sen. Kent Conrad, who chairs the Senate Budget Committee, who noted that pay-as-you-go (or just pay-go to some) “doesn’t address the deficits and debts projected under existing policy.” And one teensy little detail: discretionary spending, 40% of the budget, isn’t covered by the proposal, and there are several exceptions requested by the President. And one little quote from President Obama might be noteworthy to some:

…tax cuts need to be paid for. They are not free.

So you see, returning more money to the populace is actually costlier than letting government use tax dollars however they see fit. Heaven forbid the government, you know, actually shrink in size. Nope, gotta pore over budget numbers to figure out ways to let people keep more of their own money.

With this new proposal, I’m sure Obama’s 2010 budget will be promptly reviewed and pared down, right? I’m sure that with these new pay-as-you-go proposals, the upcoming health care bill might be a little more modest and a little less costly in its scope, right? The stimulus package and omnibus spending bills will be scaled back now, right?

The obvious answer to these questions is “no.” The fact is that Obama has already spent or pledged to spend trillions of dollars, and Sen. Conrad is right when he observes that this pay-as-you-go pledge will only cover new policy. In reality, this is just more campaign-style PR to shore up the administration’s numbers as people begin to doubt their effectiveness on the economy. I have a suspicion that this will be used as a half-step toward raising taxes in that the administration can claim, “Gosh, we tried to be mindful of spending responsibility, but we just have to have more money to pay for our very important programs!”

Sorry, Mr. President, but fiscally responsible just isn’t one adjective that can be applied to your administration.

President Obama has proposed making “PAYGO” the law of the land. Under PAYGO rules the government must pay for almost everything it spends money on. Under Obama’s plan Medicare payments to doctors, estate taxes, and the tax cuts of 2001 and 2002 would be exempted from the rule.

I am a huge fan of PAYGO. Both parties have demonstrated that they are incapable of balancing the budget without being held to a legal requirement to do so. My only problem with the Obama proposal is that it would continue looking at the ten-year impact proposals would have on our budget when determining whether or not they are paid for. If the last two years have taught us anything they should have taught us that trying to predict the health of our economy more than a few years at a time is at best a foolhardy proposition. By allowing Congress to pretend that something is paid for by savings it imagines being possible nine and ten years in the future simply does not make sense. When the politicians gave us the tax cuts of 2001 and 2002 no one could have guessed how disastrous are economy would wind up being in 2007 and 2008. PAYGO is a good idea, but the period that which Congress must pay for its spending should be no more than five years down the road. After all, we can not possibly expect our elected officials to pay for the programs they spend money on with revenue generated solely in the current year.

FOR IMMEDIATE RELEASE

June 9, 2009

CONTACT: Ryan Murphy

(202) 225-2452 (Office)

(202) 689-4825 (Cell)

Wilson Statement on White House PAYGO Announcement

WASHINGTON – Congressman Joe Wilson (R-SC) issued the following statement today after the Obama Administration announced they would be encouraging their Democrat colleagues in Congress to follow Pay-As-You-Go (PAYGO) budgeting rules. President Obama made this announcement a day after his administration decided to ramp up the massive deficit spending from their so-called “stimulus” package during the summer.

Earlier in the year, the White House held a “fiscal responsibility summit.” Unfortunately, this summit occurred after the President signed into law his massive $787 billion spending package which has saddled future generations with even greater debt while failing to address mounting job losses.

“The American people would be far better off if President Obama affirmed his commitment to fiscal responsibility before borrowing and spending billions in taxpayer dollars. While I appreciate the President’s pledges to restore fiscal sanity while in front of the television cameras, his actions and that of his Democrat allies in Congress tell a different tale.

“Americans are fed up with this ‘do as I say not as I do’ brand of leadership in Washington. Fiscal responsibility means you rein in spending while making tough decisions. It does not mean you hold press conferences and then explode the public debt while raising taxes on American families to pay for a government that has grown far too big and far too costly.”

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Obama touted his “Paygo” plan this morning in an effort to look more fiscally responsible in the face of what many perceive to be out-of-control spending.  But what’s “Paygo?”

Simply, “Paygo” means “Pay as you go.”

“Pay as you go” sounds good until you think about the billions being spent already on pork – er “stimulus” – programs, and Obama’s future plans for more billions on health care and for his increases in entitlement programs.

Even though Obama is supposedly pushing Congress, to make himself look good to the public, insisting that “for every dollar” the government spends, another has to be cut somewhere else, that’s not his reality.  What “Paygo” really means is higher and higher taxes for all of us still working to support an ever increasing “nannie” society.

Link:  Politics Today: Obama To Talk “Paygo” | Political Hotsheet – CBS News.

“But with respect to [the nation's] future debt; would it not be wise and just for that nation to declare in the constitution they are forming that neither the legislature, nor the nation itself can validly contract more debt, than they may pay within their own age, or within the term of 19 years.”

–Thomas Jefferson

Congress just approved the President’s $3.5 trillion budget, a few moments before midnight. Nearly everything about it defies the US Constitution. This could be our nation’s gravest mistake.

Thomas Jefferson also once warned this great nation, “I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.”

You hear this PayGo non-sense and you want to laugh, but it isn’t funny.

The Heritage Foundation blog has a great posting on this titled “Morning Bell: The Obama PAYGO Farce.”  It starts off with a bang, and again you want to chuckle till you realize how serious the truth behind it is:

“Did you ever know anyone that would repeatedly go out to the bar, drink themselves unconscious, and then wake up the next morning and promise never to drink again? That is President Barack Obama when it comes to spending. This February, after signing the largest single-year increase in domestic federal spending since World War II, President Obama held a “fiscal responsibility” summit designed to “send a signal that we are serious” at putting the nation on sounder financial footing. The Washington Post’s Dana Milbank quipped at the time: “Holding a “fiscal responsibility summit” at the White House in the middle of a government spending spree is a bit like having an Alcoholics Anonymous meeting at a frat house on homecoming weekend.”

Personally I would of tossed the US Congress into that mix, putting it all on Obama is not entirely fair.

I listen to the President talking about PAYGO and can only shake my head. Only President Obama would have the balls to come out with such a statement. I mean WOW, what an insult to the American taxpayer considering what he has done in the last few months  along with the jokers we have in the US Congress It was bad before, but now in less than 6 months they have quadrupled (some say even that is too optimistic) our deficit over the worst deficit year we had under Bush. We’ve got continuing unemployment figures setting new all time records and approaching 7 million folks.

This administration and it’s spend happy goons in Congress have spent so much money (that we don’t have) and spent it so fast it’s dizzying to watch.  It’s literally the worst parts of the last 4 years, but on steroids.  They knew this stuff would never hold up to any real scrutiny, so it had to be passed so quickly that when asked many members of Congress admitted they never read it.

It’s just downright spooky when you stop and look back at it regardless of your political stance. Now the Obama administration and the Democrat led Congress are getting scared. Things they were told would not work appear to be failing. Surprise, surprise! We were told this stimulus bill had to be passed and passed now or else the economy would tank severely. Well they passed it and the economy has tanked to levels even WORSE than they said it would if the bill WASN’T passed! Read that last sentence again.

We’ve spent our children, our grandchildren, and their children into decades of debt and things continue to decline into record levels. You know it’s bad when the ‘economic numbers’ are “bad, but not as bad as expected” are routinely portrayed as the ‘good news’ of the day. Hey I’m glad that only 500,000 lost their jobs instead of 600,000 or so (using round numbers), but folks that is still HALF A MILLION folks out of work for that reporting figure.

Now, if you listen closely, you’re hearing talk of various taxes that may be needed to cover some of this spending. No matter that no amount of taxation is going to cover spending at these levels. Folks higher taxes are coming and their impact on a damaged economy will be….well…do I need to explain it?  Didn’t think so.

Outside of some great sounding talk (which we’ve heard variations of for 30 years now) and exaggerated claims, we’ve done  nothing about our energy problems. So if by chance we get a mini-recovery and energy demand kicks back up, guess what will happen to the price we pay for energy? So like an injured animal staggering to it’s feet, IF our economy tries to recover, the Mack truck of high energy costs will come along and crush us right back down.

In my work, I’m around some pretty sharp financial folks of a variety of political persuasions. The ‘D-word’ (depression) used to be rarely heard, not so any more. Most now say that if we don’t do a 180, at best we are going to be stuck in this recession for many years. Stuck in a real mess till someone gets a clue about basic economics and how important cheap and plentiful energy is to our economy.

My personal financial guru, who called the energy prices in 2008 like a psychic, has went from trying to be optimistic, to “I think we are in big trouble.” She predicts gas prices will hit $3.25-$3.50 by the early fall and electricity costs will continue their slow rise. You don’t have to be a Harvard MBA to figure out what this will do to an already severely damaged economy.

Oh by the way, bet PAYGO (even if it meant much) will not apply to their proposals for a government run health care system. Folks, if they pass what I think they’re going to try for, we’ll spend decades (if not a century) repairing the damage done. Even that assumes you can get a scared, manipulated, misinformed, and now highly dependent population to realize that when you’re in a hole, you put the darn shovel down!