KAI RYSSDAL: Leave it to Allan Greenspan to spoil the economic party. The former chief of the Federal Reserve said today it’s entirely possible we’re heading for a recession. Maybe by the end of the year. And he warned the budget deficit’s still too big.
Democrats in Congress say they have a plan to deal with all that red ink. It’s an oldie but a goodie called pay-as-you-go. With Congress back in session this week, commentator Jeff Birnbaum says corporations are getting nervous.
JEFF BIRNBAUM: Pay-as-you-go legislation has sparked near hysteria in the nation’s capital. Lobby groups — especially corporate lobby groups — are frantically trying to avoid becoming a “pay for” in the new pay-as-you-go scheme.
Hospitals are worried that their Medicare reimbursements will be shaved.Natural gas distributors are defending the tax write-offs for their pipelines. And industries ranging from pharmaceuticals to airlines are concerned about new and higher fees in the form of, in effect, higher federal taxes.
All over town, in fact, thousands of lobbyists are spending millions of dollars to persuade Congress not to turn their industries’ favorite subsidies into budgetary offsets.
But I wonder how much they really need to worry. As with everything in the capital, there’s always a loophole. And the one in the pay-as-you-go system is about as wide as it can get.
If lawmakers want to pass a big tax cut, for example, but they don’t want to pay for it, all they have to do is pass a separate bill that waives the pay-go rules.
And the number of votes they needed to slip those rules? A simple majority. What that means is that if lawmakers have enough votes to pass an expensive new program or a major tax reduction, they also have enough votes to avoid having to pay for either of them.
My guess is that the pay-as-you-go noose will be slipped with increasing frequency as we get closer to the 2008 elections. After all, why would Congress resist popular spending or tax cuts when, really, it just doesn’t have to?
RYSSDAL: Jeff Birnbaum is a columnist at the Washington Post.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.