The Bad Economics of PAYGO Swamp Any Strategic Gain From Adopting It

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    • #7912
      N2Doc
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      • Total Posts: 8,316

      The obscure Congressional budget rule known as PAYGO (“pay as you go”) has burst into the news lately. A PAYGO rule means that any tax cut or spending increase passed into law needs to be offset in the same spending cycle with tax increases or spending cuts elsewhere in the budget. Incoming House Speaker Nancy Pelosi has indicated that the House of Representatives will abide by PAYGO in the next Congress, and this decision has sparked much controversy.

      Many Washington insiders assert forcefully that committing to PAYGO rules in the House for the next Congress is good politics. The argument is that it assuages fears of politicians who believe they must make public commitments to lower deficits to avoid being punished by voters who care deeply about this issue. If voters do indeed have strong preferences for reducing deficits, then policymakers—even those who want to use fiscal policy to reduce inequality by expanding public spending and investment—must first commit to PAYGO to convince these voters that budget measures can both reduce inequality and be fiscally “responsible.”

      The strength of evidence supporting this political claim is debatable. What’s less debatable is that PAYGO really has hindered progressive policymaking in the not-so-recent past. For example, it was commitments to adhere to PAYGO that led to the Affordable Care Act (ACA) having underpowered subsidies for purchasing insurance and, even more importantly, having a long lag in implementation; the law passed in January 2010 yet the exchanges with subsidies only were up and running by 2014. This implementation lag meant that the ACA’s benefits were not as sunk into Americans’ economic lives by the time a hostile Republican Congress and administration began launching attacks on it following the 2016 elections. It is a real testament to how much better the ACA made life for Americans that it has been stubbornly resistant to these attacks. But it would have been helpful to have a couple more years to have it running smoothly, but that didn’t happen largely because the ACA’s architects wanted to meet PAYGO rules over the 10-year budget window.

      more

      https://www.commondreams.org/views/2018/12/18/bad-economics-paygo-swamp-any-strategic-gain-adopting-it?fbclid=IwAR30PV4Aaxwc0r-9A9yrsYxbjGOHUqALZPZWjJBqs-qBjZTfM2t6nXn7d94

    • #7918
      elias39
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      • Total Posts: 5,089

      all other programs would go belly-up in a few years.

    • #7962
      JustSayin
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      • Total Posts: 535

      article on how great neoliberalism is/ Yawn. ACA was a repug plan and nothing more wake me when we talk about single payer

      Never expect different result by following the previous steps

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