As support for the Democrats’ health-care plans craters, a new talking point has emerged: Pay-go. Recently, 11th District Rep. Heath Shuler and 2nd District Rep. Bob Etheridge have said the health-care bill will be either “deficit-neutral” (Shuler’s term) or “revenue-neutral” (Etheridge’s) because in July, Congress passed pay-as-you-go rules. The sales pitch says that any new programs enacted by Congress must be paid for by raising taxes or cutting spending elsewhere.
Etheridge echoed that yesterday on WPTF’s Bill LuMaye Show.*
There’s a big problem with this argument. It’s, er, fanciful. The pay-go sham passed in July exempts 40 percent of the federal budget from any discipline, including any health-care changes. The quintessential Beltway insider, David Broder, said pay-go was “full of loopholes.” He cited 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]
Since even congresssional Democrats aren’t likely to pass a trillion-dollar tax increase, the Dems’ health-care plans would add to the deficit and pile on the debt, no matter how our congressional delegation tries to spin it.
*Listen to the entire interview with Etheridge if you want to hear an elected official twist and turn when confronted with actual details of the bill he’s stumping for. (Besides, if the bill is “revenue-neutral” — meaning it would not result in a net tax increase — then Congress is going to have to do a heap of tax and spending cuts.)
