An emerging Democratic talking point — echoed recently by 11th District Rep. Heath Shuler and 2nd District Rep. Bob Etheridge — is that the health-care bill will be “revenue-neutral” (Etheridge’s term) or “deficit-neutral” (Shuler’s). The line is, Congress passed pay-as-you-go rules in early July forcing Washington to either cut spending or raise taxes before introducing new programs.
Etheridge, on WPTF’s Bill LuMaye show yesterday*, restated the pay-go line.
To say that pay-go would prevent the health-care bill from increasing the deficit, is, well, fanciful. The ultimate Beltway insider, David Broder, says pay-go is “full of loopholes.” Broder cites a memo from the Congressional Budget Office:
“In effect,” it said, “that rule would allow the Congress to enact
legislation that would increase deficits by an amount in the vicinity
of $3 trillion over the 2010-2019 period without triggering a
sequestration.”
The reason is that the bill exempts from pay-go all of the spending
involved in Medicare physician payments and all of the revenue
dependent on estate and gift taxes, the alternative minimum tax for
individuals and the administration’s plan to continue the middle-income
tax cuts of 2001 and 2003.
That is not the only giant loophole in this version of pay-go.
Unlike the one enacted in 1990, it is not accompanied by any multiyear
cap on discretionary spending. That means the 40 percent of the budget
reflected in annual appropriations bills for ongoing or new government
programs does not have to be paid for. [my emphasis]
Pay-go is a scam, because even the Democrats aren’t about to raise taxes $1 trillion-plus to pay for their health-care schemes.
*Listen to the entire interview with LuMaye if you want to hear a member of Congress twist and turn when confronted with details of the actual legislation — including mandates for individuals and employees to either purchase health insurance or be taxed.
