Congress's Phony Attempt at Fiscal Restraint

Washington Matters

Congress's Phony Attempt at Fiscal Restraint

Congress will quietly take a pass on a plan for self-imposed spending restraint, no matter the huge deficits and the pledges to get serious about it in advance of a massive health care overhaul. There is little sentiment among leaders or in the White House for binding rules that truly require lawmakers to find budget cuts or add taxes to pay for new legislation.

The House overwhelmingly passed legislation to write into law a so-called "pay-as-you-go" budget rules that would force the legislature to either raise revenue or find offsets elsewhere in the annual federal budget to cover the cost of tax cuts or entitlement expansions. It was an easy, feel good vote for many, and the White House heartily endorsed it, saying it was an important step in President Obama's effort to draw down the deficit. The July 22 roll call was 264-166

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But if there were any chance of it actually being enacted into law and followed to a tee, there would probably be a panic. 

Those who voted against it did so largely because they wanted it to be even tougher, without any loopholes, knowing fully they wouldn't prevail or have to live with it. An alternative amendment, which was destined to fail, would have tied the annual growth in federal spending to the same percentage increase as economic growth. Fat chance there.  

As it is, the legislation will die in the Senate where veteran lawmakers and senior members of the powerful appropriations panels ensure it stays bottled up. Maybe it will be the subject for some debate, but not action, unless, of course, it is watered down to the point of being more symbolic than effective. Congress has had versions of pay-go rules on the books in the 1990s, but the rules were often waived.

The legislation (and the earlier pay-go rules) is weak to begin with because it does not apply to added spending in existing programs, such as entitlements, and would not apply to regular annual discretionary spending for federal programs. David Broder of the Washington Post recently pointed out the illusion of its toughness.

It will be interesting to see just how much of the health care reform package, which may well probably include new taxes and entitlement expansions, will ever be paid for with so many hundreds and billions of dollars in cost savings somehow magically found elsewhere in the budget. Pay-go won't be around to force that.

There was no such offset, as you may remember, applied to the costly Republican-pushed Medicare prescription drug benefit signed by President Bush in 2003. It was considered too hard to do at the time. There also, of course, has been no offsets to pay for the trillion dollar war in Iraq.

Obama has pledged to find ways to pay for his much larger and more ambitious health care plan. Don't figure on the whole thing being paid for, though, with budget offsets. Congress will be happy to say they made a good faith effort to pay for a lot of it. And that effort probably won't end up being either good or faithful.