Democrats late last week announced they were changing a bunch of rules for this newly elected House of Representatives. The rule changes involved automatically raising the debt ceiling when a new budget is passed along with other procedural tweaks. One rule that involves spending offsets, however, is causing controversy between Democrats.
The issue at hand is called “pay-as-you-go,” or “Paygo,” and it essentially requires that all new spending proposed by the House be offset either by tax increases or budget cuts. Despite the Democrats making strides on many rules changes, some are putting their foot down about the re-inclusion of this one:
I will be voting NO on the Rules package with #PayGo. It is terrible economics. The austerians were wrong about the Great Recession and Great Depression. At some point, politicians need to learn from mistakes and read economic history. @paulkrugman @StephanieKelton @RBReich https://t.co/avimV0SU4t
— Ro Khanna (@RoKhanna) January 2, 2019
Tomorrow I will also vote No on the rules package, which is trying to slip in #PAYGO.
PAYGO isn’t only bad economics, as @RoKhanna explains; it’s also a dark political maneuver designed to hamstring progress on healthcare+other leg.
We shouldn’t hinder ourselves from the start. https://t.co/WW3UaBs7vh
— Alexandria Ocasio-Cortez (@AOC) January 2, 2019
To understand why progressive reps like Ro Khanna and Alexandria Ocasio-Cortez oppose this Nancy Pelosi-proposed rule, it’s important to learn the context. Though many believe it to be a logical way to rein in spending, some argue that Paygo is a way to handicap progressive programs. In this telling, it is essentially a perfect articulation of conservative bad faith, in that it lets Republicans have a check on new spending after completely overhauling the tax code to favor the rich, which increased the deficit to new heights.
What’s more important is that Paygo has been shown to do real political damage. The New Republic, citing a recent paper, explains that “Affordable Care Act’s subsidies were artificially made smaller because of pay-go rules.” That same publication describes the rule as specifically harmful to the U.S. economy when the country is in the midst of an economic downturn (which is likely to happen any moment now).
In short, despite it being a rule embraced by many in the center–and championed by Democrats like Pelosi–Paygo is seen by progressives as a way to gesture bipartisanship while both pandering to conservatives and likely hindering the country’s economy. Which is why some member of the new progressive-leaning House are fighting its reintroduction to the House rules. Lawmakers like Ocasio-Cortez are fighting for new legislations like Medicare for all–and Paygo rules would make it nigh impossible to pass such new and effective programs.
A number of Democrats will need to oppose these House rules in order to halt their passage. But with high-profile politicians like Khanna and Ocasio-Cortez signaling their opposition, it may be able to happen.