Congress used government funding bill to ‘erase’ $3.4 trillion in deficits

(The Center Square) – Quietly tucked inside Republicans’ funding deal to end the government shutdown is a provision wiping the congressional Pay-As-You-Go (PAYGO) scorecard, effectively forgiving nearly $3.4 trillion in deficits. When Republicans passed their budget reconciliation bill in July, which included a permanent extension of the 2017 tax cuts, they broke

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(The Center Square) – Quietly tucked inside Republicans’ funding deal to end the government shutdown is a provision wiping the congressional Pay-As-You-Go (PAYGO) scorecard, effectively forgiving nearly $3.4 trillion in deficits.

When Republicans passed their budget reconciliation bill in July, which included a permanent extension of the 2017 tax cuts, they broke precedent by operating under the current policy baseline. This accounting method treats tax cut extensions as a continuation of the current policy that costs nothing, rather than a new policy that decreases federal revenues.

As a result, Senate Republicans were able to codify the tax cuts via a simple majority vote without having to fulfill reconciliation rules that require offsetting the deficit impact. Senators could not, however, bypass similar PAYGO rules unless they had 60 votes.

Under PAYGO, a law meant to ensure budget neutrality, the Office of Management and Budget records the deficit impact of legislation.

If Congress passes legislation that hikes mandatory spending or decreases revenue, and does not offset the deficits by the end of the year, automatic spending cuts to Medicare and other programs are triggered. 

The tax cuts in the reconciliation bill added roughly $3.4 trillion to the PAYGO scorecard. But rather than finding offsets or accepting the automatic

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Articles written by Lance Haynie are licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

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The views and opinions expressed are those of Lance Haynie, and do not represent the official position of his employer or any affiliated organization.
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