PAYGO goes away?

An article in yesterday's WSJ proclaims the end of the line for the Democratic attempt to implement PAYGO regulations. In theory, Pay As You Go is a great way to control spending. In budgeting, the term PAYGO refers to the requirement that newly proposed expenditures (spending) or tax cuts must be accompanied by commensurate increases in revenue(taxes) or a reduction elsewhere in the budget.

The system was reestablished as a budget rule on January 4th 2007 by the 110th Congress. Remember this: "Democrats are committed to ending years of irresponsible budget policies that have produced historic deficits. Instead of compiling trillions of dollars of debt onto our children and grandchildren, we will restore pay-as-you-go budget discipline."--Speaker Nancy Pelosi, December 12, 2006.

Fast forward to last Thursday night (88-5).WSJ: "Senate Democrats gave up on "paygo," as it's called, when they realized they lacked the votes to offset the $50.6 billion cost of protecting more than 20 million middle-class taxpayers from getting whacked by the Alternative Minimum Tax this year. They've spent the year floating all kinds of tax increases to make up the difference. But in the end they passed an AMT relief bill without a penny to pay for it. Paygo is now pay gone."

According to The Heritage Foundation, .." entitlement pro­grams that are scheduled to increase by 42 percent (after inflation) over the next decade, Congress has passed legislation adding an addi­tional $179 billion. (See Table 1.) These bills would expand govern­ment, weaken the private sector, and raise the cost of government to the taxpayers. Each embodies bad policy even without any budget gimmicks. The main legislative vehicles are the State Children's Health Insurance Program (SCHIP), college student financial aid, terrorism risk insur­ance, and farm subsidies."