Democrats’ Welcome Discipline
On this tax- filing weekend, a bit of consolation is coming from an unexpected quarter in Washington. Instead of promising more unaffordable tax cuts that go mainly to the richest Americans, as their Republican counterparts have done for the past six years, key Democrats are imposing some real spending discipline on themselves.
That is the underreported story in the budget resolutions passed by the House and Senate just before the Easter recess and now headed for tweaking in a conference between the chambers and final approval in the next few weeks.
The resolutions differ in detail but have an important common feature: a pay- as- you- go rule, short- handed as pay- go, which requires Congress to offset every increase in an entitlement program or new tax cut with an equivalent saving somewhere else to prevent further additions to the budget deficit.
The return to pay- go, which Republicans jettisoned in 2001 to make it easier to pass their tax cuts, is a triumph for two stubborn men in particular — the Democratic chairmen of the Senate and House budget committees, Sen. Kent Conrad of North Dakota and Rep. John Spratt of South Carolina.
The Committee for a Responsible Federal Budget, a nonpartisan watchdog group committed to the battle against deficits, said in a statement on April 6 that it “ strongly applauds both the House and Senate Budget Committees for reinstating and adhering to pay- as- you- go. It took a tremendous amount of resolve to comply with the pay- go principle . . . in the face of pressures to pay for popular programs like SCHIP [ the children’s health insurance program] and the farm bill through deficit spending.”
The same statement cautioned that “ the heavy lifting on pay- go . . . still lies ahead,” when offsets must be found for proposed increases in spending for programs such as SCHIP or for extending some popular middle- class tax cuts now scheduled to expire in 2010. Both parties in Congress and President Bush have also promised to protect millions of people from automatic tax increases through the alternative minimum tax.
In an interview last week, Spratt said that he agrees that tough tests of the pay- go principle will come up in the months ahead and that he is prepared for the inevitable fights. “ I have three people on the Budget Committee staff spending their full time monitoring legislation to see that every bill meets the pay- go standard,” he said.
Some Republicans have complained that Democrats have given themselves an easy “ out” by writing a pay- go rule that allows the required offsets to take effect not in the same year as the increased spending but within the budgetary “ window” of six to 11 years.
Spratt said that this is not a dodge but a simple concession to the reality that changes in entitlements and taxes have delayed effects. “ No one is trying to game the system,” he said. “ The discipline [ of pay- go] is strongly supported by Speaker Pelosi and by our members.”
That is certainly true of the Blue Dogs, the 43- member caucus of conservative House Democrats, but I told Spratt that I wondered if it was really the case for the more liberal members such as Nancy Pelosi.
Spratt responded that the Democrats have been changed by the events of the past 14 years, starting with Bill Clinton’s first election. “ Democrats take pride in the budget we passed in 1993,” Spratt said. “ You remember it passed by one vote in both the House and Senate, with no support from Republicans. Despite the opposition saying it would lead to a recession, it produced eight years of economic growth, and every year the budget picture got better, until finally we were running a surplus and paying down debt. It changed the country’s perception of Democrats.
“ Then George Bush came in with his deep tax cuts, and the deficits returned. So he changed the country’s perception of Republicans in a negative way.
“ The contrast has worked to our advantage — and that’s why Pelosi made pay- go one of the priorities for the first 100 hours.”
As Spratt readily concedes, paygo is no more than a first step toward fiscal responsibility in Washington.
By itself, it does not deal with the long- term and massive problems of financing Social Security and Medicare benefits for the retiring baby boom generation. But it can be, if enforced, an effective way of preventing the budget deficit from getting worse.
By the standards of Washington, that is real progress.