PoliticalChic
Diamond Member
I was surprised to see how many on the board were talking about economics...so you might like to check this out:
1. PAYGO: how to look responsible The idea was to track all new entitlement spending and tax legislation, and, if these are not deficit-neutral by years end, automatic spending cuts would kick in. Congress passed the Budgetary Enforcement Act (BEA) of 1990, which specified two new deficit reduction mechanisms: pay-as-you-go (PAYGO) rules and statutory discretionary spending caps. http://mercatus.org/sites/default/files/publication/Budget_Gimmick_WP1030.pdf
a. Nancy Pelosi: When I became Speaker of the House, the very first day we passed legislation that made PAYGO the rule of the House. Today we will make it the law of the land. Speaker Nancy Pelosi | News Room | Speeches
b. I Believe In PAYGO. If I Start A New Program I Will Pay For It. (Sen. Obama, Remarks, New York City, NY, 3/27/08)
c. First, politicians exempted major categories of mandatory spending, including Social Security. Cuts in Medicare were limited to 4%
Mercatus, Op. Cit.
d. It was never enforced. Over those 12 years, Congress enacted $700 billion in non-offset entitlement expansions and tax cuts, and then cancelled every single sequestration that would have enforced the law. Congress typically waited until the final spending bill of the year, and then simply added a paragraph mandating that PAYGO not be enforced against any past bills.
PAYGO is an Unworkable Gimmick | The Heritage Foundation
2.Congress can avoid PAYGO simply by declaring that legislation is too important to worry about the deficit, then they issue a waiver. During the 110th Congress, they dodged PAYGO to the tune of over $400 billion, including the Auto Bailout, Unemployment Extension, two Alternative Minimum Tax patches, Farm Bill, S-CHIP, several Stimulus Bills, and a dozen other.
3. By designating legislation emergency, the legislation can avoid many of the normal budget rules, and, instead, enter the supplemental appropriations process. Realize, the process is designed for events like wars and natural disasters but each year over the last two-and-a-half decades, Congress and the President have enacted between one and eight supplemental bills, rnging form $1.3 billion in FY 1988 to $120 billion in FY 2007.
http://mercatus.org/sites/default/files/publication/Budget_Gimmick_WP1030.pdf
a. And, of course, pork projects always get added. For instance, the War Supplemental Appropriations Act (2003) appropriated $348 million
for 29 projects unrelated to the war, such as $110 million for the National Animal
Disease Center in Ames, Iowa. The Emergency Supplemental Appropriations Act for
Defense, the Global War on Terror, and Tsunami Relief (2005) contained $1.13 billion
for projects that had nothing to do with defense or tsunami relief, including $55 million
for wastewater treatment in De Soto County, Mississippi and $25 million for the For Peck Fish Hatchery in Montana. Ibid.
4. And the pols use the calendar, If the payout is due toward the end of a fiscal year, cutting the checks a few days later, in the next fiscal year, makes the bottom line look better.
5. Check this one out: David Stockman, Reagans budget director, invented the magic asterisk which he added when he couldnt justify expenditures: it included the phrase Future saving to be identified. An asterisk that made billions of expenditure disappear! More David Stockman Magic Asterisk Blogging - Grasping Reality with Both Hands
6. And if a new program is far too expensive to reveal, use the Healthcare gambit: get OMB to calculate the costs over 10 years, but dont set the program to begin for two or three years, essentially costing for seven years. They did this Medicare Part D, 2003, which didnt fully phase in until 2006. This gave it the expense of only $395 for ten years but it is now estimated to be $952 billion for the next ten years, or an unfunded $7.2 trillion over seventy-five years.
6. This one is based on psychology rather than accounting: when the pols cant justify the spending, they warn the populace of dire events if they dont pass the bill!
a. When the government threatened cuts to the budget of the National Parks Service, they trumpeted that they would have to close the most popular tourist attraction, the Washington Monument. Gordon Tullock, Arthur Seldon, and Gordon L. Brady, Government Failure: A Primer in Public Choice, p. 60.
b. DHS Director Marianne Udow said the state must make a difficult decision: cut money for food banks and homeless shelters for the living or cut money for burials for the dead. The same state that two weeks ago was planning to spend $38 million on iPods for schoolchildren now says it can't afford to bury the dead. The Tax Foundation - In a New Low for Government Service, Michigan Threatens to Let the People Rot
c. How do you get the folks to vote against a bill to cap state spending? The campaign pressing for a Taxpayer Bill of Rights is attacking Public Safety Commissioner Anne Jordan for an e-mail in which she says the proposal would eliminate a $50,000 payment to families of law enforcement officers, firefighters and EMTs who die in the line of duty. Dispatches | The Portland Press Herald / Maine Sunday Telegram
d. NY Governor David Paterson spoke on the radio, warning that if he didnt get Republican support, you have no money to pay your police your corrections officers your firefighters your emergency health care workers you could have anarchy Albany, NY - Gov. Paterson In Stern Warning: Shutdown Over Budget Would Cause 'unimaginable chaos,' Crime in New York -- VosIzNeias.com
1. PAYGO: how to look responsible The idea was to track all new entitlement spending and tax legislation, and, if these are not deficit-neutral by years end, automatic spending cuts would kick in. Congress passed the Budgetary Enforcement Act (BEA) of 1990, which specified two new deficit reduction mechanisms: pay-as-you-go (PAYGO) rules and statutory discretionary spending caps. http://mercatus.org/sites/default/files/publication/Budget_Gimmick_WP1030.pdf
a. Nancy Pelosi: When I became Speaker of the House, the very first day we passed legislation that made PAYGO the rule of the House. Today we will make it the law of the land. Speaker Nancy Pelosi | News Room | Speeches
b. I Believe In PAYGO. If I Start A New Program I Will Pay For It. (Sen. Obama, Remarks, New York City, NY, 3/27/08)
c. First, politicians exempted major categories of mandatory spending, including Social Security. Cuts in Medicare were limited to 4%
Mercatus, Op. Cit.
d. It was never enforced. Over those 12 years, Congress enacted $700 billion in non-offset entitlement expansions and tax cuts, and then cancelled every single sequestration that would have enforced the law. Congress typically waited until the final spending bill of the year, and then simply added a paragraph mandating that PAYGO not be enforced against any past bills.
PAYGO is an Unworkable Gimmick | The Heritage Foundation
2.Congress can avoid PAYGO simply by declaring that legislation is too important to worry about the deficit, then they issue a waiver. During the 110th Congress, they dodged PAYGO to the tune of over $400 billion, including the Auto Bailout, Unemployment Extension, two Alternative Minimum Tax patches, Farm Bill, S-CHIP, several Stimulus Bills, and a dozen other.
3. By designating legislation emergency, the legislation can avoid many of the normal budget rules, and, instead, enter the supplemental appropriations process. Realize, the process is designed for events like wars and natural disasters but each year over the last two-and-a-half decades, Congress and the President have enacted between one and eight supplemental bills, rnging form $1.3 billion in FY 1988 to $120 billion in FY 2007.
http://mercatus.org/sites/default/files/publication/Budget_Gimmick_WP1030.pdf
a. And, of course, pork projects always get added. For instance, the War Supplemental Appropriations Act (2003) appropriated $348 million
for 29 projects unrelated to the war, such as $110 million for the National Animal
Disease Center in Ames, Iowa. The Emergency Supplemental Appropriations Act for
Defense, the Global War on Terror, and Tsunami Relief (2005) contained $1.13 billion
for projects that had nothing to do with defense or tsunami relief, including $55 million
for wastewater treatment in De Soto County, Mississippi and $25 million for the For Peck Fish Hatchery in Montana. Ibid.
4. And the pols use the calendar, If the payout is due toward the end of a fiscal year, cutting the checks a few days later, in the next fiscal year, makes the bottom line look better.
5. Check this one out: David Stockman, Reagans budget director, invented the magic asterisk which he added when he couldnt justify expenditures: it included the phrase Future saving to be identified. An asterisk that made billions of expenditure disappear! More David Stockman Magic Asterisk Blogging - Grasping Reality with Both Hands
6. And if a new program is far too expensive to reveal, use the Healthcare gambit: get OMB to calculate the costs over 10 years, but dont set the program to begin for two or three years, essentially costing for seven years. They did this Medicare Part D, 2003, which didnt fully phase in until 2006. This gave it the expense of only $395 for ten years but it is now estimated to be $952 billion for the next ten years, or an unfunded $7.2 trillion over seventy-five years.
6. This one is based on psychology rather than accounting: when the pols cant justify the spending, they warn the populace of dire events if they dont pass the bill!
a. When the government threatened cuts to the budget of the National Parks Service, they trumpeted that they would have to close the most popular tourist attraction, the Washington Monument. Gordon Tullock, Arthur Seldon, and Gordon L. Brady, Government Failure: A Primer in Public Choice, p. 60.
b. DHS Director Marianne Udow said the state must make a difficult decision: cut money for food banks and homeless shelters for the living or cut money for burials for the dead. The same state that two weeks ago was planning to spend $38 million on iPods for schoolchildren now says it can't afford to bury the dead. The Tax Foundation - In a New Low for Government Service, Michigan Threatens to Let the People Rot
c. How do you get the folks to vote against a bill to cap state spending? The campaign pressing for a Taxpayer Bill of Rights is attacking Public Safety Commissioner Anne Jordan for an e-mail in which she says the proposal would eliminate a $50,000 payment to families of law enforcement officers, firefighters and EMTs who die in the line of duty. Dispatches | The Portland Press Herald / Maine Sunday Telegram
d. NY Governor David Paterson spoke on the radio, warning that if he didnt get Republican support, you have no money to pay your police your corrections officers your firefighters your emergency health care workers you could have anarchy Albany, NY - Gov. Paterson In Stern Warning: Shutdown Over Budget Would Cause 'unimaginable chaos,' Crime in New York -- VosIzNeias.com