The U.S. House of Representatives today elected Nancy Pelosi (D-Calif.) as speaker, her second stint in the role (she was speaker from 2007-2011). Barring a change in leadership, Pelosi will be speaker throughout the 116th Congress, which runs through January 2021. Pelosi’s rules package, which sets out how Democrats intend to run the House, contains a measure that has drawn opposition from her left flank.
PAYGO, congressional shorthand for “pay as you go,” is a measure designed to the keep the deficit from growing. It holds that any passing of tax cuts or increases in spending must be offset by a corresponding tax increase or spending cut in the same cycle. The way that this functions as a check on the deficit is simple: tax cuts (where the government brings in less) and spending increases (where the government spends more) both grow the deficit. PAYGO, therefore, is offered as a nod to fiscal responsibility. (As far as shorthand goes, PAYGO cannot compete with the JAWS Act, which stands for Justice Attributed to Wounded Sharks.)
But PAYGO is distrusted by some legislators on the left. Abiding by PAYGO, they argue, is what kept Obamacare subsidies
from making more of an impact early on in the law’s implementation. More significantly, PAYGO presents a real problem for big-ticket legislative visions such as Medicare-for-all and the Green New Deal. Since these proposals would likely add to the deficit over a 10-year span, they would be in violation of the PAYGO law absent a corresponding package of deep spending cuts (a non-starter for Democrats) or significant tax increases (which the Democrats would not survive electorally).
Alexandria Ocasio-Cortez (D-N.Y.), sworn into office earlier today, publicly denounced PAYGO, tweeting
: “PAYGO isn’t only bad economics…it’s also a dark political maneuver designed to hamstring progress on healthcare + other [legislation]. We shouldn’t hinder ourselves from the start.” Unfortunately for Ocasio-Cortez, the Progressive Caucus leadership backed Pelosi’s rules proposal, which include PAYGO. They’ve argued that since the rule can be waived (as legislators on both sides of the aisle have done in the past), the rule doesn’t preclude Democrats from getting hearings for their biggest proposals. In fact, as the Washington Post reported today
, Pelosi has given the nod for Medicare-for-all to get hearings in the upcoming session.