Why is everyone talking about PAYGO?

Picture: Marit & Toomas Hinnosaar

Democrats announced they were changing some rules for the 116th Congress. PAYGO rule comes after Republicans ran up the federal deficit by $1 trillion this year.

PAYGO is wordplay for pay-as-you-go. The rule means any legislation increasing mandatory spending should be offset with budget cuts or tax increases.

But for progressive Democrats, PAYGO means putting handcuffs on possible ambitious plans such as a ‘Green New Deal’ or universal healthcare. That’s why Congress members like Alexandria Ocasio-Cortez or Ro Khanna spoke out against the rule change.

Ro Khanna’s explanation of his decision was clear, “even if in 10 years —any spending plan— would create 16 million jobs and revenue growth — it would not be in order.”

Bernie Sanders preferred to be more specific. “At a time when climate change threatens our planet, when our infrastructure is crumbling, when 30 million people have no health insurance, I’m concerned that the Concept of PAYGO will make it harder for Congress to address the many crises facing our working families,” he said.

Nancy Pelosi spoke out — but avoided to explain any consequences of PAYGO rule by saying, “we asked the President to open up the government, giving him a path Republicans have supported previously. Why would he not do it?”

Ro Khanna said on Wednesday: “It is terrible economics. The austerians were wrong about the Great Recession and Great Depression” and told politicians they need to “learn from mistakes and read economic history,” mentioning Nobel laureate Paul Krugman, who has long argued that increased government expenditure is more beneficial for aiding a recovering economy rather than tough fiscal austerity.










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