The Congressional Budget Office today released its long-term budget outlook. Just like the long-term outlook in our own Budget, the CBO report concludes that we are on an unsustainable fiscal course. About this, there is no ambiguity.But here's liberal blogger Matthew Yglesias, who appears to have found at least some ambiguity:
if congress sticks by current law the fiscal situation is more-or-less okay for the next 20-25 years. It’s also true that according to the CBO and most everyone you meet, Congress seems unlikely to do that. So the message here should be: “Congress! Don’t live up to your bad reputation! If you don’t want to enact scheduled tax increases and payment cuts to doctors, then you ought to pay for those moves.”So basically we are on "an unsustainable fiscal course" but we are going to be OK as long as Congress sticks with the rules that are on the books, which include paying for additional spending and tax cuts. Those rules about spending are known as PAYGO, and they have simply not proven effective in the past, so why should this time be any different.
Here's Lakeshore Laments on Paygo:
It's usually those on the right who are charged with being immune to reality, but if the left is relying on PAYGO to save our fiscal fat from the fire, then I think the reality based community may have just lost another member.
The truth of the matter is, PAYGO is a giant smokescreen and always was; as pointed out by Appleton-native and one of D.C.'s smartest guys on the federal budget Brian Riedl points out in this Heritage Foundation web memo.
PAYGO has proven to be more of a talking point than an actual tool for budget discipline. During the 1991-2002 round of statutory PAYGO, Congress and the President still added more than $700 billion to the budget deficit and simply cancelled every single sequestration. Since the 2007 creation of the PAYGO rule, Congress has waived it numerous times and added $600 billion to the deficit.
Creating a PAYGO law and then blocking its enforcement is inconsistent and hypocritical. And given their recent waiving of PAYGO to pass a $1.1 trillion stimulus bill, there is no reason to believe the current Congress and the President are any more likely to enforce PAYGO than their predecessors were. And even if it were enforced, PAYGO applies to only a small fraction of federal spending (new entitlements). Consequently, PAYGO is merely a distraction from real budget reforms that could rein in runaway spending and budget deficits.
Riedl goes on to point out the six problems with PAYGO.
- PAYGO Would Not Decrease the Growth of Federal Spending.
- PAYGO Exempts Discretionary Spending.
- PAYGO Exempts Current Entitlement Benefits.
- PAYGO Employs a Double Standard That Raises Taxes.
- Previous PAYGO Statutes Were Never Enforced--Even Once.
- Current PAYGO Rules Are Not Enforced.