The Washington Post’s Lori Montgomery reports on today’s Senate passage of the required increase in the debt limit:
The Senate agreed Thursday to raise the legal limit on government borrowing to $14.3 trillion, a historic high that would permit the Treasury Department to cover the nation’s bills through early next year.
The vote fell along party lines, with all 60 Democrats supporting and 39 Republicans opposing a plan to increase the cap by a record $1.9 trillion. The 40th Republican, Sen. Mike Enzi of Wyoming, said his no vote was accidentally unrecorded. If lawmakers had approved a smaller increase, Democrats would have had to revisit the deeply unpopular topic of the soaring national debt before facing voters in November.
Along with the debt limit increase, however, the Senate passed a statutory version of pay-as-you-go budget rules, which in general is a good way to promote bipartisan fiscal discipline, except that this endorsement of PAYGO was far from bipartisan, and this form of the PAYGO rule far from highly disciplined:
Even as they extended Treasury’s authority to borrow, Democrats moved to rein in large budget deficits that are projected to drive the debt to dangerous levels by the end of this decade. As part of the debt limit bill, the Senate voted again along party lines to revive pay-as-you-go budget rules that bar lawmakers from increasing future deficits through tax cuts or new entitlement spending. The House is expected to take up the legislation next week.
A similar rule helped the nation balance its budget in the 1990s, but the new version would carve out $1.6 trillion in exceptions so Democrats could extend tax cuts for the middle class and avert a scheduled pay cut for doctors who treat Medicare patients without finding ways to offset those costs.
Why didn’t any Republicans support the PAYGO provision? As Sam Stein explains, it’s probably mostly because the PAYGO rule would apply to tax cuts as well as mandatory spending increases. Both would have to be paid for with offsetting tax increases or spending cuts…. well, unless you’re talking about the ever-deficit-financed Bush tax cuts–or the “doc fix” which proliferated during the Bush Administration as well.
So much for a renewed concern for fiscal responsibility bringing the parties together to meet in the center. As I spoke of in this NPR story today, until President Obama starts leveling with the American people and talking with them about the tough choices that need to be made on both the tax and the spending sides of the budget, none of the members of Congress are going to work that hard at compromising and coming together with the other side. And why should the Republicans have to give up their deficit-financed tax cuts when President Obama himself is proposing to continue them?
No policymaker likes to admit that tax cuts are no better than spending programs–well, because they are better to a politician, because they don’t get scrutinized the way direct spending programs do, they look like they reduce the economic burdens on current Americans, and if deficit-financed will merely shift the economic burden onto those future generations who don’t yet vote. The naivety that most people have about tax policy is a big problem and is the motivation for the new documentary featured above (to be released on April 15th). This naivety encourages the President to avoid talking about (let alone proposing) fiscally responsible tax policy, which I believe in turn leads to the sort of (”lite”) PAYGO rule and (”unipartisan”) vote we’ve seen today.