Blue Dogs and PAYGO – Living in La La Land
On April 28, 2009, members of the so-called fiscally conservative “Blue Dog” Coalition introduced H.R. 2116, the “Fiscal Honesty and Accountability Act of 2009.” According to their website, the measure “would strengthen Congress’ commitment to fiscal responsibility and accountability by reinstituting statutory pay-as-you-go (PAYGO) rules. The legislation, which would require both the House and Senate to abide by PAYGO rules if enacted into law, has been a cornerstone of the Blue Dogs’ efforts to restore fiscal discipline to the federal government.”
The Blue Dog Coalition, formed in 1995 and currently boasting 51 Democratic members of the House of Representatives, claims to represent the fiscally conservative wing of the Democratic party by “adhering to a set of core values that transcend partisan politics,” with a “deep commitment to the financial stability and national security of the United States.” The name derives from its origins among southern Democrats, who claimed that while they had been “choked blue” by the increasingly liberal tilt of their party, they would still sooner vote for an old yellow dog than vote Republican. Politically, they tend to hail from districts with a significant percentage of fiscally conservative voters.
In an effort to polish those fiscally conservative credentials, the Blue Dogs point to their ardent support of pay-as-you-go rules, or PAYGO, which dictate that any new entitlement spending must be deficit neutral and that offsets must be implemented in order to pay for the increases. PAYGO grew out of the Budget Enforcement Act in the 1990 reconciliation bill and requires that bills that would introduce new direct spending or revenue reductions not result in any net cost. PAYGO expired as a law in 2002 but was revived as a House rule in January 2007.
The Blue Dogs balked at the passage of President Obama’s $787 billion American Recovery and Reinvestment Act (ARRA) and his fiscal year (FY) 2010 $3.6 trillion budget proposal. In order to woo the coy Blue Dogs into voting for the big-spending agenda, Office of Management and Budget Director Peter Orszag sent a letter in which he explicitly promised to support efforts to reinstate PAYGO. The President also mentioned his intention to usher in a new age of PAYGO when he announced his desire to whittle a paltry $17 billion out of his budget.
The group has behaved like Blue Dogs with a bone over the issue of PAYGO, but they have been particularly incoherent on taxes, spending and deficits based upon a review of their members’ voting records. Large percentages of them vote consistently in favor of massive domestic spending increases time and again, even as they publicly preen as deficit hawks.
For example, there is Rep. Baron P. Hill (D-Ind.). On Feb. 13, 2009, along with all but six of the Blue Dogs, he voted for the $787 billion stimulus package. Yet, on February. 26, 2009 he submitted a letter to his hometown paper explaining the double standard by saying “Yes, we are in a time of economic crisis that requires decisive and timely action. We stepped up to the plate and passed a recovery package aimed primarily at creating and saving roughly 75,000 jobs in our great state. But now, we must get back to dealing with the elephant in the room — our mounting federal deficit.” Huh? He stepped up to the plate alright, a heaping plate of partisan-inspired spending programs.
Rep. Allen Boyd (D-Fla.), Chair of the Blue Dog Task Force on Budget and Financial Services, said on the group’s website in April 2009 that “By putting PAYGO back into law we will end years of budgetary mismanagement and irresponsible deficit spending and put the federal government back on a path toward fiscal responsibility and long-term sustainability. The Blue Dogs will continue to work with the President and the Senate and House Leadership in the coming weeks to accelerate this issue even more and put statutory PAYGO back on the books.” And Rep. Charlie Melancon (D-La.), Blue Dog Co-Chair for Communications, said “We cannot continue to kick this can down the road. With the President’s support, the Blue Dogs look forward to enacting PAYGO into law, a critical step toward putting the country back on a fiscally sustainable path…If we do not take action now, we will continue to short-change future generations who will face higher taxes and cuts to federal investments in priorities such as education, health care and national security.”
These statements are the very definition of cognitive dissonance. All but nine of the Blue Dogs voted to authorize the second tranche of the $700 billion Troubled Asset Relief Program (TARP) money. The $410 billion fiscal 2009 omnibus bill, crammed with pork, passed with the help of 36 of the 51 Blue Dogs. Many of the group’s members are inveterate pork-barrel spenders and have voted against efforts to eliminate corruptive congressional earmarking. Rep. Stephanie Herseth Sandlin (D-S.D.) ranked second in the House for congressional pork in fiscal year 2009 with 62 earmarks costing taxpayers $230 million.
During floor debate over the fiscal year 2008 appropriations bills, Rep. Jeff Flake (R-Ariz.) offered dozens of amendments to strike egregious earmarks. Blue Dogs systematically voted with their party to fund them.
Half of the current members of the Blue Dog Coalition have abysmal single-digit ratings on government waste votes. The ratings for the remainder of the group hover between 20 and 30 percent, with the distinct exception of Rep. Jim Cooper (D-Tenn.), an outlier with a respectable record of 69 percent for 2007.
These voting patterns bear no resemblance to fiscal conservatism whatsoever and support for PAYGO, no matter how vocal, does not make up for such dreadful track records.
In fact, PAYGO is deeply flawed. It leaves untouched existing entitlement programs, which account for 40 percent of total federal outlays and is biased against tax cuts. Using Office of Management and Budget (OMB) numbers, the Heritage Foundation calculated that “annual mandatory spending (excluding net interest) grew by 40 percent between 1980 and 1991 (before PAYGO) and by 49 percent between 1991 and 2002 (during PAYGO).” Since it only applies to new entitlement programs, supporting PAYGO does nothing to address the structural problems plaguing Social Security and Medicare, which are mushrooming at 6 percent and 7 percent a year respectively, which is unsustainable. In fact, when the Congress authorized the a brand new entitlement program in 2003, the Medicare part D prescription drug benefit plan, it waived the PAYGO rules in order to avoid having to make offsets. When PAYGO was written in statute in 1991, Congress routinely waived it. Under PAYGO as a rule, Congress has routinely ignored it and enacted hundreds of billions of dollars in new entitlement spending.
Current PAYGO rules treat tax cuts differently than spending increases. According to the Heritage Foundation’s Brian Reidl, “…PAYGO allows the extension of expiring SCHIP and farm subsidy laws, but it does not allow the extension of the 2001 and 2003 tax cuts or the Alternative Minimum Tax (AMT) to be patched without offsets. Even President Obama has criticized this double standard and Congress should eliminate this baseline disparity from any PAYGO statute.”
PAYGO is one of those concepts that sound morally superior and unassailable on the campaign trail and in speeches. It is an easy rhetorical flourish to demand that Congress live within its means and spend only as much as it takes in and is an especially attractive talking point for those who desperately need to appear like fiscal conservatives and deficit hawks. But it is almost comical to see the Blue Dogs scrambling to cover their tails after they opted to saddle taxpayers with $6.8 trillion in new obligations in 2008, and a total debt of a record $63.8 trillion with their votes on the TARP, ARRA, and the bloated 2009 omnibus.
In the era when politicians say anything to get reelected, these canny congressional canines are trying to hitch their pork and deficit-laden wagons to PAYGO, flawed as it is, when their voting records on cutting taxes and government waste tell a very different story. If taxpayers want to know whether a member of Congress truly cares about the fiscal future of the country, they should review the votes and ignore the rhetoric. Them Blue Dogs just won’t hunt.
