The Heritage Foundation - Leadership for America

Rep. Ed Whitfield (R-KY) has proposed a novel way to strengthen the House Pay-As-You-Go (PAYGO) rule.

PAYGO – which requires that all legislation expanding entitlements or cutting taxes be fully offset – has been exposed an ineffective gimmick. PAYGO exempts discretionary spending increases (which comprise 40 percent of the budget) as well as the automatic 6 to 8 percent annual baseline increases in entitlement spending. PAYGO merely says that if Congress wants to grow total entitlement spending faster than the baseline rate, they must raise taxes accordingly. Or, if they want to reduce net taxes, they must cut entitlement spending accordingly.

Given PAYGO’s limited reach, one would assume Congress could easily comply with it, but it doesn’t. Congress has waived PAYGO every time it proved even slightly inconvenient – 12 times in the 110th Congress alone. They waived it to extend unemployment benefits. They waived it to create a $63 billion veterans’ entitlement. In the current 111th Congress, they waived it for the $787 billion “stimulus” bill. House Speaker Nancy Pelosi (D-CA) suggested that PAYGO be waived for any bill she feels will help the economy.

Waiving PAYGO is typically done before a bill comes to the floor by the Rules Committee, thus sparing lawmakers the spectacle of publicly voting to ignore their own fiscal responsibility rules.

Rep. Whitfield has authored a resolution (H. Res 671) requiring that any waiving of PAYGO require a separate up-or-down House vote. Rather than hide behind the Rules Committee, lawmakers would have to publicly go on the record. Transparency brings accountability, and voters could use these votes to judge whether their lawmakers treat PAYGO as a gimmick to be routinely ignored on spending bills, or a true constraint on Congress’ spending appetite. If the Democratic House leadership truly believes in PAYGO, they should bring H. Res 671 to the floor for a vote.