The United States Congress has a litany of arcane and complicated rules that make it very difficult to understand exactly what the hell is going on. There are rules about procedures, budgeting and all sorts of limitations around the legislative process, and some of these rules are only understood by a handful of experts. Our system is designed to be slow, which brings me to today’s topic of confusion: PAYGO.
Despite pressure from progressive Democrats, the House rules package for the 116th Congress will include a pay-as-you-go provision, requiring all new spending to be offset with either budget cuts or tax increases, a conservative policy aimed at tying the hands of government.
Alexandria Ocasio-Cortez, who will be sworn in this week to represent a district in New York, will vote against the package, her spokesperson told The Intercept. Rep. Ro Khanna, D-Calif., announced Wednesday that he would oppose it.
Presumptive House Speaker Nancy Pelosi, who will be sworn in on Thursday, has promised for months to restore the pay-go rule, which she instituted when first taking over the speaker’s gavel in 2007. She ran into resistance from progressives, who believe that the rule would make it more difficult for Democrats to pass a host of liberal agenda items, from “Medicare for All” to a Green New Deal to tuition-free public college. Critics also argue that pay-go creates an unlevel playing field, where Republicans get to blow giant holes in the tax code, as they did with the 2017 tax cuts, while Democrats must pay fealty to the deficit.
That said, this is not your simple “here go the DemocRepublicans again” kind of story. Ilhan Omar, a new congresswoman joining Khanna and Ocasio-Cortez in the progressive caucus, will vote for the new rules which contain the PAYGO provision. Per Representative Omar:
I am pleased that the rules package will include important reforms I helped negotiate, including the elimination of the ‘supermajority’ vote requirement, which would limit our ability to raise the revenue necessary to fund important priorities like health care, education and green jobs—as well as the clarification that religious headdresses can be worn in the House chamber.
I continue to have concerns about the inclusion of “pay-as-you-go” or PAYGO, but I am pleased that Chairman McGovern and House Leadership have assured us that the rule will not be used to block key progressive priorities in Congress. Budgets are an expression of our values. Going forward, I support legislation to reform PAYGO and am committed to pursuing reforms that allow us to center our politics on people’s everyday needs rather than artificial constraints. I want to thank Progressive Caucus Co-Chairs Mark Pocan and Pramila Jayapal for their leadership on this issue.
So what’s going on here? Why are progressives like Ro Khanna and Alexandria Ocasio-Cortez opposing this PAYGO rule while other progressives like Ilhan Omar and Pramila Jayapal support it?
The short answer is: politics. You’re not going to win every battle, and progressives won plenty before this, as The Intercept’s Ryan Grim wrote in his newsletter:
Over the past several weeks [progressives] fought Pelosi for several different things. They wanted proportional representation for Congressional Progressive Caucus members on “A” committees and they won that. They wanted to overturn the stupid rule that required a 3/5ths vote for tax increases, and they won that.
They wanted to get rid of paygo and lost that. So they pocketed their wins and agreed to it, rather than risk what they’d gotten. They also said they were given assurances that paygo would be waived before it blocked major progressive policy, which raises the obvious question: Then why the hell is it in there?
Agree that paygo is a bad idea, although less for pure economic reasons than for political economy: Dems can't tie their hands when Rs exploit this asymmetry. But anyway big props for using the term "austerian" https://t.co/jjXuN873Vx— Paul Krugman (@paulkrugman) January 2, 2019
When @danpfeiffer & @SenSanders both agree that PAYGO is bad policy and politics, as do leading economists @RBReich@paulkrugman@StephanieKelton, isn't it obvious we should not have this in our rules package? https://t.co/Vx1zk74J56— Ro Khanna (@RoKhanna) January 2, 2019
This is how absurd PAYGO is: We campaigned in the Better Deal for $1 trillion in infrastructure spending over 10 years. Under PAYGO, if after 6 years that plan wld produce a deficit, it would not be in order — even if in 10 years it wld create 16 million jobs and revenue growth!— Ro Khanna (@RoKhanna) January 3, 2019
You have likely never heard of PAYGO before. Hell, it's my job to pay attention to politics and I had rarely heard of it before this fight. There is simply no political constituency for this policy outside of the donor class. The billionaires who actually run this country love austerity politics, and they do everything they can to put roadblocks in front of any program that could redistribute some of their wealth.
PAYGO is a perfect example of the broken way the donor class thinks, and any party that considers itself truly liberal would never impose such an arduous rule—especially during a time where we need to make major investments in health care, our economy and in the fight against climate change. The simple fact of the matter is that if we have to pay for the entire fight against climate change up front, then we will lose the battle against the apocalypse.
But how arduous is PAYGO, really? Here's the central problem with figuring out what is going on: Congress can (and has) change or ignore rules at whim. Say that the Green New Deal came up for a vote in the House, Nancy Pelosi could include a provision in the bill that waives the PAYGO rule, and this entire fight would recede into the background. This is likely why Ilhan Omar is backing the rules package, and what she means when she said she received assurances that PAYGO will not be used to stop progressive legislation.
But that still doesn't answer the question of why we need PAYGO in the first place. Why are Democrats seemingly voting to constrain their policy before it has even began? Nancy Pelosi's deputy Chief of Staff explained their position.
We must replace CUTGO to allow Democrats to designate appropriate offsets (including revenue increases). A vote AGAINST the Democratic Rules package is a vote to let Mick Mulvaney make across the board cuts, unilaterally reversing Democratic initiatives and funding increases. https://t.co/eP5eNxrQ7b— Drew Hammill (@Drew_Hammill) January 2, 2019
The problem is that there is both a PAYGO rule and a PAYGO law. The PAYGO law was passed in 2010 under Pelosi's speakership, and it requires tax cuts and mandatory spending increases to offset any hit to the deficit from a bill that passes. The PAYGO rule is a mechanism in the House that falls along the same lines, but because it is not law, it is less of an obstacle. It seems to be the case that if you bypass the rule, you can bypass the law, but without the rule, you must adhere to the law.
That is why @RepMarkPocan and I will be introducing legislation shortly to repeal PayGo and have a hearing on it to highlight all the reasons why PayGo is bad policy and bad for millions of working Americans who deserve a bold, visionary progressive agenda.— Rep. Pramila Jayapal (@RepJayapal) January 3, 2019
But again: why is the law on the books in the first place? Why are we liberals openly constraining our ability to pass bills commensurate with the massive challenges we face? Government is not like a household, because households do no have their own Federal Reserves to print more money when it is needed, and it is simply a fallacy that you have to pay up front for any law that you pass. It’s not realistic and no government can efficiently operate under a law like this. This rule simply makes it harder to pass large, ambitious priorities and makes it easier for government decisions to fall along Republican fiscal priorities.
And ultimately, that is likely the best answer as to why Nancy Pelosi and congressional Democrats passed the PAYGO law in 2010. The donor class is in favor of austerity economics because it means they don’t need to worry about tax increases taking their “hard-earned” money away. Even if a billionaire gives money to Democrats, their personal fiscal priorities fall in line with the GOP. Some say that this fiscal conservatism is designed to help Democrats in purple districts, but again, raise your hand if you had heard of PAYGO before this week. This is not a policy that any large constituency in the populace was pushing for. It is nothing more than millionaires and billionaires handcuffing our politics for their own benefit.
This specific fight over PAYGO is not a simple, open-and-shut case, and if progressives like Ilhan Omar believe that it will not be used to block ambitious bills like Medicare for All or the Green New Deal, then we have good reason to believe Pelosi’s assertion that this is about preventing Republican chicanery from destroying liberal bills, and not about blocking liberal bills herself. That said, there is little evidence in the Democrats’ recent history that they will not use this conservative rule to block progressive bills, and Democrats like Pelosi should understand that this is very much a litmus test for how much progressives are willing to trust her. If she goes back on her promises to Representative Omar and uses the PAYGO rule to squash progressive legislation, then the squabbles of the 2016 primary will look quaint compared to the war that could come from a betrayal like that.
Jacob Weindling is a staff writer for Paste politics. Follow him on Twitter at @Jakeweindling.