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The Pay-for-Hardly-Anything-As-You-Go Rule

January 20th, 2011 . by economistmom

mary-tyler-moore-tossing-beret

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.)

15 Responses to “The Pay-for-Hardly-Anything-As-You-Go Rule”

  1. comment number 1 by: SteveinCH

    Gosh, if only someone had pointed out what a waste of time statutory PAYGO is, we might have saved the OMB the trouble of writing that report.

  2. comment number 2 by: Jason Seligman

    …it’s Mary Tyler Moore… circa 1972… Minneapolis…

    She’s…going to make it if she tries…. No…

    She’s… she’s… being frivolous! Being frivolous that’s it - Mary don’t throw your hat around like that - it is not fiscally prudent. For God’s sake you are a single secretary with a grumpy boss, it’ll be a decade before you make associate producer and until then you might loose your job. In the winter. And with no hat!

    Tisk tisk Mary.

    (I dunno, I give up… what is the connection)

  3. comment number 3 by: AMTbuff

    From the theme song lyrics: “It’s time you let someone else do some giving”. Meaning in this case that it’s finally time to cut Medicare and Social Security benefits, I guess!

  4. comment number 4 by: Brooks

    Mary can “take a nothing date and suddenly make it all seem worthwhile.”

    Politicians can do the same with a nothing budget provision.

    Emphasis on seem.

    And it would be better expressed as taking a meaningful concept of a budget provision, turning it into nothing, and still making it seem (to an uninformed public) seem worthwhile.

    All that said, I still think we should try to make budget rules part of the solution, despite the potential for abusing them as political cover for a lack of fiscal responsibility.

  5. comment number 5 by: SteveinCH

    Rules that can be set aside aren’t really rules, now are they. While you may be right in theory, the practice says the rules do more harm than good.

  6. comment number 6 by: Vivian Darkbloom

    This is like taking a Rohrschach test. Anyway, the central figure in the photo is indeed the care-free Mary Tyler Moore throwing her hat in the air in blustery Minneapolis. But, the star of the photo is nicely framed by MTM’s outstretched arm. It’s Hazel Frederick looking on in the background with a disapproving scowl on her face. When Hazel was later spotted in the photo by editors, they invited her on the show where she made appearances for seven years. And, the other person on the opposite side of MTM serves as a compliments Hazel frames Mary like another bookend. He appears to be a cop who doesn’t seem to notice what is going on.

    So, there she is, MTM with her carefree ways and Hazel looking on disapprovingly but powerless to do anything about it. Much less the cop, who doesn’t notice at all, and who seemingly doesn’t care. That pretty much sums up the characters in this budget drama (or is it a tragic comedy?).

    By the way, that big red light in the background signals danger.

  7. comment number 7 by: Vivian Darkbloom

    Opps.

    “…serves as a compliment to Hazel and frames…”

  8. comment number 8 by: Arne

    “they invited her on the show where she made appearances for seven years”

    It is too bad that so much of the cool stuff I learn on blogs turns out not to be true.

    “Frederick’s TV identity remained a mystery until Mary Tyler Moore came to Minneapolis in 1996 on a book signing”

  9. comment number 9 by: Vivian Darkbloom

    Well, one can take a little poetic license now and then, can’t one? Hazel in fact did make guest appearances for seven years—the length of the MTM show —as far as I know. If memory serves the famous photo of her appeared in the montage at the opening of the show and she was there on the show whether her identity was known or not. Hazel in fact was the main reason that photo was shown for seven years. She was one of the stars of the show.

  10. comment number 10 by: RH

    Mary is all excited and celebratory, but the lady in the white coat is saying, “not so much…”

    OMB/Congress is Mary Tyler Moore; Economist mom/Concord is the lady in the white coat.

  11. comment number 11 by: Jason Seligman

    so Diane = Hazel? I dunno about that ….

    But I think the quote from above should be changed:

    “take a nothing [date] and suddenly make it all seem worthwhile.”

    I think it’s “day” not “date,” otherwise it’s a bit too… Geisha…

  12. comment number 12 by: economistmom

    LOL — you are all reading way too much into this! The only connection in my mind was the French(?) beret Mary is tossing… connecting to my reference to the French book cover which made me think of berets, which made me remember Mary tossing her beret (yes, with carefree glee) into the air. (In case you have ever wondered how I come up with some of the odd images I choose to accompany my otherwise-less-interesting fiscal policy posts.) But I like your other theories. (Although I’d rather be likened to Mary than the scowling woman.)

  13. comment number 13 by: Vivian Darkbloom

    Sorry EconMom but the hat definitely was not a French beret. Shortly before the toss one can see that it had circular light blue stripes against a dark blue background and a yarn pom-pom (called a toorie) on top. Definitely more like a Scottish Tam o’Shanter. The connection here, of course, is that the Scots have a reputation for frugality. And, remember, that the family name Moore of is Scottish/Gaelic origin, not French. The writers of that program did pay attention to their details.

  14. comment number 14 by: Brooks

    Jason,

    Indeed, you’re correct about my error. I always thought it was “date” but never Googled it until now.

    I’ve seen on the web a list of common mistakes re: lyrics, some of which are pretty funny. Like in Purple Haze when Hendrix says “Excuse me while I kiss the sky” and some people thought it was “Excuse me while I kiss this guy”. (and yes, “Excuse” is written as “‘Scuse” sometimes in those lyrics)

  15. comment number 15 by: Brooks

    I recall that great ad promoting the WNBA when the league started, with a cover version of that MTM song (”Love Is All Around”). Searched a bit but couldn’t find the ad online, but I did find out the cover was by Joan Jett. Here’s the song, but it really was more fun hearing it while watching the ad with clips WNBA players in action http://www.youtube.com/watch?v=e4tkLy9AaD4