Would PAYGO Really Limit Spending?
4793278As a budget policy, PAYGO sounds more like a public toilet that requires two quarters to enter.
Actually, it's short for pay-as-you-go, a policy which, if enacted by Congress as President Obama today implored, would set what he calls a "simple" standard.
"Congress can only spend a dollar if it saves a dollar elsewhere," he explained.
With his first two federal budgets projecting the largest deficits in U.S. history, each above a trillion dollars, Mr. Obama wants to be seen speaking the gospel of fiscal discipline and distancing himself from the free-spending ways of Congress, of which he was a member for four years.
"Paying for what you spend is basic common sense. Perhaps that's why, here in Washington, it's been so elusive," he needled an audience in the East Room this afternoon that included some House members.
But briefing reporters, White House Budget Director Peter Orszag conceded some of PAYGO's limitations. It doesn't cover discretionary spending.
"PAYGO only applies to the mandatory side of the budget and to revenue," said Orszag. That means entitlement programs such as Medicare and revenue programs like taxes. It'll cover the compulsory health care plan the president wants Congress to pass – but over five or 10 years. In a single year, the plan may exceed PAYGO limits.
In addition, about 40 percent of the federal budget, programs for education, energy, the military, etc., would not be covered by PAYGO, said Orszag. A different set of Senate and House rules apply to those programs, he said.
As for existing deficits and the National Debt, which today stands at an all-time high of $11.39 trillion, PAYGO has no effect, other than to slow its growth by restraining some government spending. Orszag says the government is already in a deep economic hole and PAYGO is intended to stop further digging.
Mark Knoller is a CBS News White House correspondent. You can read more of his posts in Hotsheet here. You can also follow him on Twitter here: http://twitter.com/markknoller.
© 2009 CBS Interactive Inc. All Rights Reserved. Actually, it's short for pay-as-you-go, a policy which, if enacted by Congress as President Obama today implored, would set what he calls a "simple" standard.
"Congress can only spend a dollar if it saves a dollar elsewhere," he explained.
With his first two federal budgets projecting the largest deficits in U.S. history, each above a trillion dollars, Mr. Obama wants to be seen speaking the gospel of fiscal discipline and distancing himself from the free-spending ways of Congress, of which he was a member for four years.
"Paying for what you spend is basic common sense. Perhaps that's why, here in Washington, it's been so elusive," he needled an audience in the East Room this afternoon that included some House members.
But briefing reporters, White House Budget Director Peter Orszag conceded some of PAYGO's limitations. It doesn't cover discretionary spending.
"PAYGO only applies to the mandatory side of the budget and to revenue," said Orszag. That means entitlement programs such as Medicare and revenue programs like taxes. It'll cover the compulsory health care plan the president wants Congress to pass – but over five or 10 years. In a single year, the plan may exceed PAYGO limits.
In addition, about 40 percent of the federal budget, programs for education, energy, the military, etc., would not be covered by PAYGO, said Orszag. A different set of Senate and House rules apply to those programs, he said.
As for existing deficits and the National Debt, which today stands at an all-time high of $11.39 trillion, PAYGO has no effect, other than to slow its growth by restraining some government spending. Orszag says the government is already in a deep economic hole and PAYGO is intended to stop further digging.
(CBS)
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From the CBO "DATA" spreadsheet, the 2009 budget was already 95% planned before Obama took office.
http://www.cbo.gov/budget/budproj.shtml
1. $1.6 trillion of the $1.8 trillion defict in 2009 was already planned before Obama took office.
2. Ten years from now, deficit is 765B more with Obama spending proposals than without them
3. The main differences are caused by
- Obama's middle class tax cuts
- Obama fixing the AMT
- Obama's middle class tax credits for "making work pay" and children
The only way to pay down the debt is to re-build a country that is capable of paying it down, not just blindly balancing the budget in the middle of a deep recession. The trillion dollars of new debt from ARRA and bank bailouts is aimed at new private industries in energy, infrastructure and health while, upgrading our educational system and being able to get financing for new projects. Go to www.recovery.org to see where it is being spent in your neighborhood. Then call your congressman and make sure it gets spent right.
STOP WHINING.
Unfortunately, with all the loopholes and exclusions, it is only a political maneuver. Someone said it best in another artical on this issue. Can't remember who said it, but he/she equated this PAYGO announcement as saying " I've quite drinking, but will continue to make an exception for beer and hard liquors".
Do they really think we are fooled? STOP SPENDING WHAT WE DONT HAVE! Every household in America has to manage their finaces or go bankrupt. Why is our government an exception?
And why are so many people giving our president a free pass on all this? Quit telling me " Obama didn't make this mess" and start delivering on some of that hope. Where is the change? The corrections he was put in office for? All I have seen is a college student with his first credit card running rampant on a spending spree!
I am so disgusted by all of this!
Posted by endurorob at 5:11 AM : Jun 10, 2009
Yes, taxes pays for stuff.
Republicans are against paying for stuff?
Military
Advanced Weapon Systems
Roads and Bridges
Govement Salaries (like paid to Republicans in Congress)
stuff.
WHAT???!!! Universal Health Care has been implemented by ALL other developed countries!!!
WHAT???!!! Under Cap-and-Trade the Energy Industry simply passes-on Higher Costs directly to the consumer?with NO decrease in emissions!!!
Here Read:
+ Canadian Health Insurance: Lessons for the United States / Government Accountability Office (GAO):
--?If the universal coverage and single-payer features of the Canadian system were applied in the United States, the savings in administrative cost alone would be more than enough to finance insurance coverage for the millions of Americans who are currently uninsured.?
+ Single-Payer Protests Challenge Democrats / Washington Post, 06/06/09:
--?The White House and Democratic leaders have made clear there is no chance that Congress will adopt a single-payer approach ... because it is too radical a change.?
+ The Truth About Drug Companies / Mother Jones:
?? Angell attacks major pharmaceutical industry -- whose top ten companies make more in profits than the rest of the Fortune 500 COMBINED -- for using ?free market? rhetoric while opposing competition at all costs.?
Why not Universal Health Care with a $25 deductible after the first annual visit?
+ The Case Against Carbon Trading / Transnational Institute:
???Citigroup?s Peter Atherton confessed that the European Union?s Emission Trading Scheme had ?done nothing to curb emissions.? He admitted, ?Prices up, emissions up, profits up ?? Who wins and loses? Coal and nuclear-based generators?biggest winners. Hedge funds and energy traders?even bigger winners. Losers ? Consumers!?
Why not institute a simple Cap system, with 0-interest Govt. loans when necessary?
So?, this is why our attention is diverted to radicals Al-Qaeda and Sotomayor!!!
+ Clinton Let Bin Laden Slip Away and Metastasize / LA Times:
--?President Omar Hassan Ahmed Bashir, who wanted terrorism sanctions against Sudan lifted, offered the arrest and extradition of Bin Laden and detailed intelligence data about the global networks constructed by Egypt's Islamic Jihad, Iran's Hezbollah and the Palestinian Hamas. The silence of the Clinton administration in responding to these offers was deafening.?
+ In College Thesis, Sotomayor Appeared to Support Puerto Rican Independence / Wall Street Journal:
--?Ms. Sotomayor was born in the Bronx of Puerto Rican parents ? she dedicates her paper ?to the people of my island ? there has been ? a growing Americanization of the island.??
But Sotomayor's Anti-Americanism actually isn't even a true issue here?
Consider how The Civil Rights Act of 1871 was enacted to provide protection against the misuse of power (the KKK), yet in O?shea v. Littleton (a federal class action by African-Americans against racially-motivated illegal acts by two state judges) the Supreme Court held:
?The Complaint fails ? to allege an actual case or controversy?
Though the lone Dissent stated:
?These allegations of wrongdoing clearly state a case or controversy.?
That Court held:
?None of the named plaintiffs is identified as himself having suffered any injury in the manner specified.?
Yet the lone Dissent stated:
?The charges concerning the named plaintiffs are as follows ??
Then that Court?s Train Completely Jumped the Tracks:
?Past exposure to alleged illegal conduct does not in itself, show a present case or controversy ? if unaccompanied by any continuing, present adverse effects.?
I?m not a lawyer either--you don?t have to be to ?understand? such drivel--consider where another Supreme Court case cites O'Shea:
?The Forest Service does not deny that the checkpoint was impermissibly operated ? The mere fact that the checkpoint was used at the 1996 gathering was unconstitutional cannot alone give Ms. Parks standing. We do not think that the use of checkpoints in 1997, 1998, and 1999 is relevant ??
Here consider how the Endangered Species Act of 1973 requires each federal agency to consult with the Secretary of the Interior to ensure that any action funded by the agency is not likely to jeopardize the continued existence or habitat of any endangered or threatened species.
A subsequent EPA rule limited the scope, and environmental groups sued?
Bottom line, the Majority held that the plaintiffs lacked standing to sue?but the lone Dissent related:
?Congress has found that a wide variety of endangered species of fish, wildlife and plants are of ?aesthetic, ecological, educational, historical, recreational, and scientific value to the Nation and its people.? Given that finding, we have no license to demean the importance of the interest that particular individuals may have in observing any species in its habitat ??