The Progressive Case for PAYGO
America is in a massive fiscal hole. And on behalf of President Obama, we have helped to introduce a bill designed to start digging us out: pay-as-you-go, or PAYGO. The idea behind PAYGO is simple: our country, like any family struggling with deep credit card debt, must start paying for what it buys.
PAYGO helped President Clinton turn Reagan's deficits into a record $5.6 trillion projected surplus. PAYGO stood in the way of President Bush's massive tax cuts for the most privileged, leading congressional Republicans and the president to choose instead to finance the tax cuts with borrowed money and ultimately repeal PAYGO, turning the surplus back into massive deficits. Today, recommitting ourselves to paying for what we buy is crucial to rolling back deficits once again -- and equally crucial to achieving progressive goals for all Americans.
There has long been a misconception that fiscal discipline is somehow only a conservative position. The truth is that PAYGO has long been embraced by progressive members of Congress. They are well-represented among the more than 160 House Democrats who have already co-sponsored the President's PAYGO legislation.
Why is PAYGO important for progressives? For one, the investments that matter most -- clean energy technology, affordable higher education, and health care access -- demand long-term commitment, year after year. None of them are one-time payments. But the deeper our deficit gets, the more and more interest payments on our debt will crowd out spending on everything progressives value. As Bob Greenstein of the respected Center on Budget and Policy Priorities put it, "Without changes in current policies, we face the prospect of rapidly growing federal deficits and debt over time that will pose a significant threat to the U.S. economy, to the standard of living of all Americans, and to the ability of the government to meet the needs of its citizens."
Fiscal discipline today will make sure that we can afford to pay for our most important priorities 10 or 20 years down the road.
Additionally, PAYGO would apply to new entitlement and new tax cuts but not to programs that are funded through the annual appropriations process such as funding for elementary and secondary education, Head Start, health research, environmental protection and other basic government functions. Mandatory programs that assist low-income Americans, such as Medicaid, Social Security, the Children's Health Insurance Program, and Temporary Assistance to Needy Families, are also protected against any across-the-board cuts that result from a PAYGO violation.
Should Republicans come back into power, they'd find a PAYGO law to be a powerful bulwark against reckless debt-financed tax cuts. President Bush was able to push through his unaffordable tax cuts only by waiving PAYGO. The costs were not paid up-front, by those who reaped the benefits -- instead, the costs will be borne, with interest, by our children. With a PAYGO law in place, future tax cutters would have to explain just which programs they would cut in order to send a windfall to the wealthy. PAYGO will force Republicans and Democrats alike to make clear the consequences of our actions.
President Obama's PAYGO proposal exempts some spending, such as extending current policy on the Alternative Minimum Tax, the estate and income tax cuts passed in 2001 and 2003, and Medicare payments to doctors. Some have criticized those exemptions, but we agree with the President that we need them to keep PAYGO enforceable and credible. No one believes there enough votes to offset extensions of those policies; a law pretending otherwise would look like an empty promise.
PAYGO is a fresh start. It is the beginning of many years of hard work to get our country back in the black while meeting our most pressing priorities. The interests of progressives will be well served by making PAYGO law again.
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Why all the complaints or concerns on raising taxes? We have much to share. Start with Windfall profits tax. Any legal settlement over $1million has a 50% tax. An entertainment tax of 50% on any pay or income of over $1 million for actors or athletes, it’s only fair. They make more, they can afford more taxes. There should be a national viewer/listener tax for all TV, movies, concerts, and radio and sports events. Add a remote control, per click tax.
Benefits tax – add a tax for all employer paid insurance, health insurance, pensions and 401K’s. We should also income tax all gains each year in 401K or pension plans. Paper paychecks need to be taxed so people will handle electronically. We need to put the marriage penalty back in place.
The computer has not been tapped. Tax ink cartridges, digital photos ($0.10 each), $0.10 per song or U-tube video, $0.10 per each text or email (goes to USPS). We might add a tax per key stroke or blog read.
Hey, I know a way we can save money! How about if we stop using tax dollars to provide Federal Employees with Healthcare Coverage! What with how great the private market is, I'm sure all those folks can get great, affordable programs on their own. Then we can use that money to help pay down the debt we've generated by bailing out all those struggling bankers!
Yes, Good Idea.
First start with Congress. At the minimum, those congressmen who have no faith in public healthcare. If Public Healthcare is bad for America, then it must be bad for Congressmen too.
My appeal to all congressmen opposing Public Health Care option: Give Up Your Current Coverage and choose your favorite Private Health Care Provider and buy out of your own pocket.
That makes too much sense.
Yeah, where was this idea for the bailouts for the establishment and the military industrial complex in Iraq?
I've been wondering why our government is "borrowing?" money when section 8 of the constitution gives congress the authority to "coin" money. In case you haven't noticed our economy is cash starved. BBackSoon is right on. A balanced budget is not an immediate problem nor is it appropriate to address that when our economy is in free-fall. It's like checking to see if you have a full tank of gas as your out of control car hurtles toward a brick wall. Just start printing greenbacks. If the extra currency manages to repair our economy and inflation threatens, then raise taxes and balance the budget.
Great Idea, Bad Timing.
Many people believe the Great Depression was extended some 5 year because Republicans wanted to balance the budget far too early. We have not begun to come out of our current predicament and you are worried about balancing the budget?
How about if we worry about putting people back to work and balance the budget when we are back to near full employment?
If you’re that worried about money there are giveaways to big business that could be axed. I for one as an IT professional would love to see a change to the tax code to make it less attractive to send jobs overseas.
Regardless of political party, there should be a stressed importance on the reduction of the national debt and the warnings made by Ross Perot should have been heeded. Unfortunately, a surplus is like a giant revolving door, which can leave as quickly as it enters. Surplus money funds numerous pork barrel projects and is rarely saved. Considering the recent housing boom, increased revenue from property taxes, impact fees, and economic growth from the housing market could have been invested intelligently to allow for more prolonged prosperity.
[There has long been a misconception that fiscal discipline is somehow only a conservative position.]
Its a misconception, because the right-wing hasn't shown the slightest bit of fiscal discipline in 30 years.
I cannot wait to help ALL progressives wanting to run against blue-dog republicrats.
I love the paygo idea. Unfortunately you cannot pass 780+billion in stimulus on credit, and all this other stuff (bailouts) then start the paygo system.
The bail outs and Stimulus were an emergency response to a fiscal crisis that could have become a Depression. That was INHERITED and had to be dealt with. In fact, it may not have been big enough to deal with the mess left by Bush/Pauls
These are 2 different issues. Once we begin a recovery, we need to have a responsible PAYGO policy, but to NOT spend now to stimulate the economy and keep people working would be irresponsible. Even Reagan's top economic advisor Martin Feldstein believes the stimulus was not big enough and Greenspan has admitted he was totally wrong in believing that markets always correct themselves. We need to know that our elected leaders have learned from deregulated, unfettered, greed and self interested financial Corportations and protect the American economy.
Cut military spending, eliminate the income cap on Social Security, allow for negotiation of prescription drug prices for Medicare and let the Bush tax cuts expire. AND STOP BAILING OUT THE JERKS ON WALL STREET.
Then start your PAYGO, you'll have my full support. But to do anything else when we are in such a dire unemployment situation is positively Hooveresque and monumentally irresponsible.
In theory, PAYGO is a great idea. However, for it to work, it has to be applied all the time on all items. If Congress passes a bill to fund military action, bank bailouts, health care, etc., and those bills increase spending, then the bill needs to include either tax increases and/or spending cuts to offset the increase spending. Also, PAYGO needs to apply to the existing operations. The idea of PAYGO is to pay for items at the time they are passed/implemented. However, if it does not apply to the existing programs and all future programs it is a farce. It should not be a system to use when it is politically convenient.
In the old days, long before PAYGO, we used to rely on something similar. What was that called now? Oh yes, I remember. COMMONSENSE. Whatever became of that?
As I recall it wasn’t even an add on. Most had it built in. And those that used it tended to survive. While those that didn’t, didn’t.
[COMMONSENSE. Whatever became of that? ]
Common Sense is now an oxymoron, as it is no longer common.
Just look at Dubya's and Palin's approval numbers.
Bu$ine$$ as usual "USA Today reported this week that "counties that supported Obama last year have reaped twice as much money per person from the administration's $787 billion economic stimulus package as those that voted for his Republican rival, Sen. John McCain."
ABC News reported this week that the failed stimulus tracking website run by the White House, Recovery.g
"The change we can believe in" Yeah Right!?! Hoyer didn't get the memo, LoL
Not only that but there are a ton of exceptions to the PAYGO bill. Anything Obama and his merry band of spendthrifts want dont have to follow the same guidelines.
Actually that's not true in every case. I don't know where USA Today is getting their info.
In Ohio, Cuyahoga County supported Obama overwhelmingly yet the capitol in Columbus just pulled 200 mil in stimulus money meant to replace a very very very dangerous bridge that is vital to the commerce of the city of Cleveland.
They're building a road in a rural area with 1/20th the population and traffic with that money instead. The governor 'says' they have funds for the bridge elsewhere but that's hard to believe when the state is literally passing a budget to keep going weekly.
What's happening with the stimulus money is that the urban projects are getting the shaft for the suburbs and rural areas. Huge mistake. Our urban cores are crumbling.
cc, this article may help explain?
http://www
And Ohio's listed projects:
http://www
It appears some of the projects are still undergoing the bidding and awarding process. It does look like about a third haven't been authorized yet though.
p.s.
Cleveland Rocks! :D
Considering the Obama excelled in CITIES (you know, where most of the people in this country LIVE), it makes sense that's where more money goes.
I know, its not the Rushpublican way of spending millions to build a bridge to nowhere to benefit 76 people rich enough to own their own helicopter and ferry system.
You mean like Senator Byrd (D) from WV "highway to nowhere" and Rep. Murtha's (D) from Penn. little airport so he can commute to Washington?
"The imbalance didn't start with the stimulus. From 2005 through 2007, the counties that later voted for Obama collected about 50% more government aid than those that supported McCain, according to spending reports from the U.S. Census Bureau. USA TODAY's review did not include Alaska, which does not report its election results by county."
http://www
I like the idea of PAYGO in the good times. But during a crash like this I want deficit spending on the table to stimulate the economy.
Unless you include our obscenely HUGE military budget, especially unneeded weapons such as the F-22, F-35, and more aircraft carriers and nuclear warheads, your proposal is a farce.
How many of our unnecessary 800+ military bases in more than 130 other countries are you willing to dismantle? Maintaining this empire costs over $100 billion per year.
Our "defense" (war) budget is more than that of all other countries combined, once we honestly add in our nuclear weapons and "special operations" such as the $400 million we're spending on special operations inside Iran.
Cut the military budget by 50% and use those funds for health care and infrastructure here at home.
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