Should the government be able to create new spending without finding a corresponding spending cut?
Under a law called the Statutory Pay-As-You-Go Act of 2010, the cost of any new legislation must be offset by either cuts elsewhere in the federal budget or increased revenues. This reinstated rules that were previously in place from 1990 to 2002, the latter part of which was the only time in the past half-century that the government ran a surplus instead of a deficit.
It was passed in 2010 by Democrats ahead of the midterm elections, trying to counter a public image that they were reckless spenders ballooning the deficit. It didn’t work. Republicans won back the House, in large part based on such concerns among voters.
What the bill does
H.R. 242 is a new bill to repeal those rules, so that spending on new federal legislation could occur without the requirement that it be offset by cuts elsewhere.
The left wing of the Democratic Party harshly criticized House leadership’s continuation of current “pay as you go” requirements in the House’s rules package for this Congress. Many of them voted against the rules on the first day of the session, although some grudgingly voted for it under the promise that they would introduce standalone legislation to repeal the rules.
Thus this bill, introduced on January 4 by Rep. Pramila Jayapal (D-WA7).
What supporters say
Supporters argue “pay as you go,” while it sounds like a noble attempt to live within your means, actually kneecaps the potential for bold but not-inexpensive legislation the country needs.
“We have been concerned about PAYGO for months, and have had numerous conversations with… House leadership about these concerns. We all agree that the real problem with PAYGO exists in the statute that requires it,” Rep. Jayapal said in a press release.
“In the meantime… House Leadership have committed to us that PAYGO will not be an impediment to advancing key progressive priorities in the 116th Congress. With the assurances that PAYGO can be waived, we do plan to vote for the House rules package and proceed with legislation to fix the statute.”
It’s “a political policy lacking economic merit that sabotages progress where Americans value it most: healthcare, education, housing, and more,” Rep. Alexandria Ocasio-Cortez said.
“PAYGO isn’t only bad economics… It’s also a dark political maneuver designed to hamstring progress on healthcare and other leg[islation],” she added.
What opponents say
Opponents counter that the status quo reduces the deficit and limits the national debt.
“We all have responsibility for reducing the debt for our children… Democrats believe that you must pay as you go. Whatever you want to invest in, you must offset or pay for,” Speaker Nancy Pelosi told an interviewer last year.
“The difference between Democrats and Republicans in that regard is Republicans think you don’t have to pay for tax breaks. That is what has added so much to our national debt. Pay as you go is something we have believed in and tried to implement since 1982.”
Republicans entirely oppose pay-as-you-go, fearing it would result in cuts to military and similar programs. When pay-as-you-go was reinstituted by Democrats in 2010, it received no Republican votes in the Senate nor in the House.
Odds of passage
The best chance to eliminate the “pay as you go” rules were probably in the House rules set at the beginning of the session, but that effort failed. It’s unclear how much support that effort would have in the Democratic-controlled House as standalone legislation, though it would likely fail in the Republican-controlled Senate anyway.
The legislation has 32 House cosponsors, all Democrats. It awaits a possible vote in either House Budget or Rules Committees.