…because I’m an economist and a mom–that’s why!

The President Is Failing to Comfort My Boss

April 28th, 2009 . by economistmom

My boss, Bob Bixby, blogged today on Concord’s “Tabulation” blog that:

Listening to President Obama’s weekly address on Saturday was a rollercoaster experience for me. At times, I was lifted by his message of fiscal discipline. At other times, I was depressed by his unwillingness to connect fiscal discipline with politically difficult choices…

[H]is budget proposes to carve out a large PAYGO exemption for $2 trillion of expiring tax cuts; another $447 billion for reform of the Alternative Minimum Tax (AMT) and $285 billion to avoid scheduled cuts in Medicare physician reimbursements. This may reflect political reality, but waiving PAYGO for these items will add to the debt the President says our children cannot pay…

[A]t best, [PAYGO] merely prevents a bad situation from getting worse. It’s good that the President has insisted on paying for his new initiatives, including health care reform, but even if he succeeds in this the preexisting policies will remain unsustainable.

Bob’s basic point is that PAYGO rules–which require that the cost of new or expanded tax cuts or mandatory spending programs be offset by higher revenues or reductions in other spending programs–don’t amount to much meaningful fiscal discipline when you’ve already moved the “starting point” (known as “the baseline”) to include $2 trillion in extended (Bush) tax cuts–and when you choose to avoid characterizing them as “new Obama tax policy” (which it really is) relative to current law.

That’s our worry about the congressional budget resolution–how it also seems to go through the motions of fiscal responsibility under much lower standards, and without any real “teeth” to enforce such responsibility in a meaningful way.  More on this tomorrow.

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