- The Washington Times - Saturday, October 25, 2008


Democrats are now pushing in Washington for a new $300 billion stimulus package. Earlier this month, House Speaker Nancy Pelosi had been talking up a $150 billion stimulus package. Apparently the cost of stimulation is rising, and fast. Do I hear $450 billion?

Democratic presidential candidate Barack Obama’s rescue plan also grew from $60 billion to $175 billion. Republican presidential candidate John McCain’s stimulus package is holding steady at $52 billion — which makes it seem, well, almost quaint.

If passed, the new Son of Stimulus package will follow on the heels of the $700 billion bank bailout, $110 billion of sweeteners added onto the first bailout, and February’s $168 billion stimulus package, which did not deliver much hoped-for stimulus.

Is there an end in sight, or will Washington continue this spending spree well into the next administration? If you are looking for an inkling that fiscal restraint is out there somewhere, the signs are not good, friend.

You may recall, two short years ago, Democrats promised that if they were in charge of Congress, they would restore pay-as-you-go (also known as PAYGO) budget rules, which require Congress to pay for new spending either by cutting other spending or raising taxes. In January, new Speaker Pelosi proudly trumpeted new PAYGO rules in the House.

PAYGO is still on the books, but the rule has become more of a fictional device than accounting tool.

The Senate vote to add $110 billion in tax cuts to the Bush-proposed $700 billion bailout plan bypassed PAYGO. The more profligate Senate has arm-twisted until fiscally conservative House Blue Dog Democrats caved and supported PAYGO-lite bills before. As Taxpayers for Common Sense spokesman Steve Ellis noted, the House Blue Dogs are “getting rolled on a regular basis.”

Together both Houses have gimmicks and trickery to bypass PAYGO to pass a measure to prevent the Alternative Minimum Tax from dinging middle-class taxpayers, to approve a pork-fest of a farm bill, to push through the energy bill, and more.

According to Mr. Ellis, Democrats don’t like the fact that PAYGO makes it harder for them to propose new spending, while Republicans like the idea of PAYGO - until they’re asked to forgo tax cuts. So both parties have a stake in ditching PAYGO.

Brian M. Riedl, an economist with the right-leaning Heritage Foundation, agrees. As he sees it, PAYGO makes Congress offset tax cuts, if they are extended, but not spending programs that are extended. “The idea that PAYGO means fiscal responsibility is ridiculous.”

In that Washington’s spending spree has continued unabated under PAYGO, Mr. Riedl has a point.

Democrats can argue — rightly — that the binge started before Democrats took over Congress. As Mr. Riedl noted in a Heritage backgrounder last October, “nondefense discretionary spending has expanded nearly twice as fast under President Bush as under President Clinton.” But by last October, Democratic leaders had “used their majority to increase discretionary spending even faster.”

And that was before the bailout.

Maybe PAYGO isn’t such a great deal for conservatives, who see it as a trigger for raising taxes, but not cutting spending. On the other hand, if Congress cannot find ways to offset new spending in a $3 trillion budget, then there is no ceiling on what Washington will spend.

Mr. Ellis noted, “Every time you ignore PAYGO, or you do an end run around it, you reduce its credibility and effectiveness in the future. Eventually, it will become a laughingstock. It’s getting close.”

Surely it must be better to have the semblance of restraint than no pretense whatsoever.

In that sense, PAYGO may be similar to earmarks. At the last presidential debate, Mr. Obama pointed out that, “Earmarks account for 0.5 percent of the total federal budget” - or $18.3 billion in 2008, according to Taxpayers for Common Sense. Ergo, Mr. Obama argued, eliminating earmarks is “not going to solve the problem.”

But if Washington can’t cut fat targets like earmarks, then Washington will never get a hold on runaway spending. And if Congress can’t legislate within the PAYGO rules, then it’s a go-cart with no brakes.

Do I hear $450 billion?

Debra J. Saunders is a nationally syndicated columnist.

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