Get to know ‘Cutgo’

GET TO KNOW ‘CUTGO’…. The “Paygo” policies of the 1990s proved to be pretty popular and effective. It’s a basic idea — in a nutshell, if policymakers want to increase spending or cut taxes, they have to figure out a way to pay for it. The point is to prevent increases to the deficit by telling officials to “pay as you go.” It helped Clinton eliminate the deficit altogether and deliver some of the largest surpluses ever.

Republicans of the Bush era didn’t care for the policy, and quickly scrapped it. The GOP couldn’t pay for massive tax breaks, or two wars, or Medicare expansion, or No Child Left Behind, but they passed them all anyway, each time just throwing the costs onto the deficit. It’s how Republicans managed to add $5 trillion to the national debt in just eight years.

Last year, Democrats brought Paygo back, though they waived it for emergency spending. When Dems took up health care reform, for example, they made sure it was paid for. Indeed, all of the major Democratic initiatives considered in this Congress, other than the Recovery Act, were careful not to add to the deficit at all. (When Senate Dems voted to bring back Paygo, literally all of the Republicans balked — including the Republicans who claimed to support it.)

With Republicans apparently poised to regain power — ironically while talking about fiscal responsibility — the GOP is once again poised to scrap Paygo, but Boehner & Co. intend to replace it. The new plan is to go with something called “Cutgo.”

And what’s Cutgo all about? Instead of paying for new initiatives as they’re considered, Republicans want to cut existing spending to offset the costs of any new spending.

If this sounds dubious to you, there’s a good reason. Jon Chait explains:

Looking ahead to controlling Congress, Republicans again propose to eliminate Paygo, as they did under Bush. But this time they propose to replace it with a different rule, Cutgo, which would require that new spending be offset with spending cuts. That would indeed be an effective way to limit new spending programs. Of course, it would retain the ability to pass tax cuts with no offsets whatsoever. The decision once again reflects the core Republican belief that tax revenues do not need to bear any relationship to expenditures.

Right. This is precisely the kind of shell game one expects from politicians who don’t take policy or fiscal responsibility seriously.

Republicans don’t like the idea of “paying for” policies, because that opens the door to all kinds of possibilities. If they want trillions of dollars in new tax cuts, for example, Paygo ties their hands, since they can’t find trillions of dollars in spending cuts to make up the difference.

Indeed, some crazy people, drunk on communist wine, might even try to pay for new programs by, say, closing tax loopholes. Worse, they might go so far as to raise a tax on someone by some amount at some point, in order to help deal with the budget mess Republicans created through 2008.

And since that’s wholly unacceptable on its face, Boehner & Co. prefer “Cutgo,” precisely because it limits options. If policymakers are going to make new investments, they’re going to have to cut — and only cut — somewhere else.

Republicans exist, in other words, to (a) cut taxes; and (b) prevent tax increases. It’s a shallow, destructive charade, but that probably won’t matter on Tuesday.