Tactical Genius: A Progressive Case for PayGo

Yesterday after the swearing in of the 116th Congress, marked by the historic occasions of not only the return of Nancy Pelosi to the Speakership but also a record number of women and people of color, the House Democratic leadership promptly moved, and passed, its rules package.

The package included the hotly contested Pay-as-you-go, or PayGo rule, requiring that new spending or tax cuts be offset with other new taxes or spending cuts. Despite major rambling in the media about how “progressives” as a group were opposing the rule, of the nearly 100 members of the House Progressive Caucus, just 3 voted against the package: Reps. Ocasio-Cortez, Khanna, and Gabbard.

The primary gripe of Khanna, AOC, and outside agitators is somewhat valid: Paygo rules seem to be used to impose fiscal discipline on progressive legislation, whereas whenever the Republicans take power, they jettison the principle and tack on trillions to the debt in order to give tax cuts to very rich people.

But this very argument also raises an interesting process-related counterpoint: why are progressives so eager to adopt conservative legislative destructionism? Why is it okay for us to criticize Republicans for exploding the deficit with their policies and in the next breath insist that we should do the same?

If the answer to these questions is simply that our policies are better and help more people, then progressives should stop pretending they care about the deficit and the debt, even when it comes to massive Republican tax cuts. But if we do actually care about spending - and progressives seem to when they point out that money being spent on wars could be better spent at home - then the budget is important. We are on track to spend more on interest on the national debt that Medicaid or national defense. Think about what we can do with that money!

Does it make it harder to enact progressive legislation because Democrats subject themselves to fiscal discipline that Republicans refuse to be held to? Certainly. But leaders who want to change the trajectory of a nation did not sign up for an easy job. We should not practice the same fiscal irresponsibility that Republicans do as a matter of policy.

But beyond the sound policy principle of paying for our priorities, the rule is also a stroke of political brilliance. Here are a few reasons why:

First, the rule can be waived by a majority vote in the House. This essentially makes it possible for any progressive legislation that has a majority vote to pasts in the House to waive the Paygo rule. Yes, it adds the minor annoyance of seeking a waiver, but this does not add any hurdle to pass such a waiver over what a bill would take to pass anyway.

Now, some progressives have argued that Paygo rules, for example, shrunk the size of Obamacare subsidies in order to conform to it. While technically true, the base argument that larger subsidies could have passed without the Paygo rule is suspect. The size of the subsidies were limited by moderate and conservative Democrats who would not have voted for larger subsidies to begin with, Paygo or no Paygo. In addition, the Paygo rule made it easier for many Democrats to make the case for Obamacare, given that it would shrink the federal deficit.

Second, Pay-as-you-go was signed into law by President Obama in 2010. Unless Congress specifically waives it with a legislation it passes - as it did with the Trump tax cuts - the passage of any legislation that increases the deficit would automatically trigger sequestration of a large group of mandatory federal safety net programs, including Medicare, student loans and ACA spending.

Think about that for a second. Imagine a progressive piece of legislation, without Paygo, did somehow manage to make it past the Republican Senate and be signed by Trump. What is to keep this administration from using it to start slashing Medicare and the ACA?

In other words, progressives - in order to enact progressive legislation that adds to the deficit - would have to seek a waiver of current law whether or not a Paygo rule is in effect in the House. It is also notable that in the Senate, such waiver would require Republican votes and not just Democratic ones.

The only thing progressives could do in the House without an express Paygo rule is seek votes on legislation that do not have majority support anyway. This is great if your goal is to generate press, but not if your goal is to actually pass bills. Having to muster Paygo while passing a progressive measure, on the other hand, puts extra pressure on the Senate to have to take it up on its merits rather than punting to statutory PayGo.

This is also not how large progressive legislation in this country have been historically passed. Social Security and Medicare created their own funding streams; the Affordable Care Act was fully paid for. As President Obama used to say, the American people will not trust progressives with enacting large programs unless we can prove good stewards of their money.

Yes, it’s easy to say that we should concentrate on passing our ideas into law now and worry about paying for them later. But that is a tactic that is politically infeasible, practically unworkable, and historically untenable.

In fact, progressives should use Paygo as an opportunity to pair popular initiatives with killing the GOP’s tax cuts. Pass a renewable energy investment initiative and pay for it by restoring a higher estate tax. Enact a public option under Obamacare and pay for it by rolling back the Trump tax cuts on corporate profits. Pass debt free college and pay for it by raising taxes on the top 1%.

Speaker Pelosi and the Democratic leadership have this right. Paygo is not only responsible policy, but can be a political godsend for Democratic and progressive priorities.

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