In this week’s Washington Budget Report, which the Concord Coalition puts out weekly (sign up for it here!), Concord’s Cliff Isenberg explains how the bottom line on the official PAYGO scorecard for fiscal year 2010 bears little relationship to what actually happened to the federal deficit and debt (emphasis added):
An OMB report concludes that exemptions in the PAYGO law have been used for legislation adding hundreds of billions of dollars to the deficit. PAYGO generally requires legislation affecting direct spending or revenues to be offset, though last year’s law included costly exceptions for several revenue and spending priorities.OMB’s official scorecard shows that legislation subject to PAYGO and enacted since last February would save $55.2 billion over 2010-2015 and $63.7 billion over 2010-2020. However, when adjustments for loopholes such as emergency designations and exemptions are taken into account, the same laws would increase the deficit by $899.4 billion over 2010-2015 and by $820.1 billion over 2010-2020.
Both parties are guilty of weakening PAYGO with loopholes, whether it is the new House rule excluding revenues or the exemptions in the PAYGO law signed by President Obama. OMB’s report is a timely reminder that these exemptions add to federal deficits that are already unsustainable. Congress should end the exemptions and return to a classic PAYGO rule that simply pays as you go.
CQ’s “Budget Tracker” newsletter on Monday elaborated on these exemptions, which don’t exactly sound like unusual cases but rather business as usual:
Such exclusions include legislation to prevent cuts to Medicare physician reimbursement rates, extend middle-class tax cuts and estate and gift tax rates, and continue alternative minimum tax “patches,” as well as any legislation designated as an “emergency” and some measures that would produce budget savings. A total of 10 enacted laws included policies exempted from PAYGO, with $545.1 billion in costs over 10 years being exempted because they had received an emergency designation. OMB says that one law alone accounted for a total of $894 billion in costs that were exempt from PAYGO: December’s tax cut-unemployment compromise (PL 111-312) which extended for two years all the Bush tax cuts (including those for the wealthy) and the estate tax at levels favored by Republicans, extended for one year unemployment benefits for the long-term unemployed and provided a one-year payroll tax reduction to all workers, and provided additional tax breaks for businesses. (All the other PAYGO exempted legislation produced a net of $10.2 billion in uncounted savings.)
An analogy that immediately popped into my (quirky) mind when I read this was that it’s like failing one’s French language exam but then lucking out because your teacher drops that test grade and instead gives you lots of extra credit for that very impressive book cover you made (to cover your French textbook) with magazine cut-out pictures of the Eiffel Tower, croissants, and French fries. And somehow you end up with an (official) “A” for the course.
(Not a total exaggeration about what “counts” in middle and high school classes these days, by the way.)
(And tell me if you “get” the photo above and any possible connection to the content of this blog post.)