Fiscal Responsibility

November 18 - Democratic Senator Max Baucus, who last week released his own proposal for comprehensive reform of the U.S. health care system, expressed doubt that his proposal could adhere to pay-as-you-go (PAYGO) budget rules.  PAYGO rules, which are designed to prevent increases in the federal deficit, require that any new spending or tax cuts be offset by other tax increases or spending cuts over either a five or ten-year period.  Since the most recent PAYGO rules were adopted in 2007, Congress has waived the provision several times.  The article quotes Robert Bixby of the Concord Coalition, on these developments:

"If they want to waive PAYGO for health care, [Democrats] are going to have to come up with a rationale for why the resulting deficits aren't as bad as the deficits from Bush's tax cuts," Bixby said. "People are going to argue it's better to have health care coverage than to have tax cuts for upper-income people. That's a legitimate political debate. But if ‘x' amount of deficit is economically ruinous, it doesn't matter what causes it."

November 11 - Democratic representative Pete Stark, chair of the House Ways and Means Health Subcommittee, declared yesterday that Congress should waive its PAYGO rules to pass a fundamental reform of the healthcare system and to avoid massive Medicare payment cuts to physicians. Stark cited the waiving of PAYGO for other spending measures like the $700 billion dollar rescue package and Iraq war costs, and asked why large numbers of uninsured should not represent an equally urgent priority. US Budget Watch estimated that plan for health care reform put forward by the Obama campaign would add $52 to $106 billion to the deficit in 2013.

October 31 - To help voters better understand the fiscal implications of the candidates' campaign proposals, CRFB released four reports this week:

• Guide to Social Security: The 2008 Presidential Election
• Guide to Stimulus Proposals: The 2008 Presidential Election
• Guide to Health Care: The 2008 Presidential Election
• Guide to Tax Policy: The 2008 Presidential Election

In addition, CRFB released a special health care update to its voter guide: "Promises, Promises: A Fiscal Voter Guide to the 2008 Election".

October 29 - The New York Times published an article this morning that looks at how both presidential candidates' spending policies might affect the deficit.  The piece reviews the largest components of McCain's and Obama's spending plans-and their proposals to pay for them-along with the candidates' prospects for narrowing the deficit.  An excerpt:

Conservative and liberal analysts agree that the next president should not be expected to balance the budget in his first term, because short-term deficit spending can stimulate the economy and the crisis is forcing the government to spend more in aid even as it collects less in taxes.  But for the long run, they say, the president's fiscal record will hinge on whether he can achieve the health care cost savings each promises, which in turn will help control the fast-rising expenses for Medicare and Medicaid. Neither candidate has a comprehensive proposal to address unsustainable growth in those programs.