When the Democrats swept into power last year, they promised to restore fiscal responsibility in Congress.  Key to their plan was reestablishing the “pay-as-you-go” or PAYGO rules. This would mean that any new spending increase or tax cut would be offset equally by other spending cuts or tax increases. Both sides of the Hill and both parties have since been playing cynical games with this common sense budgetary principle by sidestepping the rules, which contributes to our nation’s record deficits and skyrocketing debt.

The tricks and games to avoid PAYGO are numerous.  Lawmakers designate non-emergency spending as an emergency, shift cuts and spending with gimmicks to mask costs, simply agree to ignore the rules, or offer spending offsets to advance new spending, only to jettison it before the bill makes the trip up Pennsylvania Avenue to become law.

PAYGO has been abused by both parties so much that it runs the risk of becoming a tired joke.  House and Senate Democrats have completely jettisoned PAYGO more than a few times when it suited them. The fiscally conservative Blue Dog Democrats in the House have forced House Leadership to at least pay lip service to PAYGO, but when legislation reaches the Senate, they treat the Blue Dogs like some crazy uncle and go back to business as usual.

Republicans aren’t above blame either.  In fact, while Congressional Republicans gleefully point out the Democratic majority’s PAYGO failures, they were never too keen on the idea in the first place. In fact the first major breach of PAYGO occurred because Senate Republicans refused to consider paying for a one-year middle-income taxpayer relief from the alternative minimum tax (AMT), a tax originally intended for only the wealthiest taxpayers. So both parties agreed to just ignore the budget rule and away they went.  “Fixing” AMT is not cheap – repealing it is estimated to leave an annual hole in the budget of over $80 billion (pdf).  Republicans, and some Democrats, routinely refuse to pay for such big ticket items.

After the dam broke late last year on AMT, the economic stimulus went ahead without any spending or tax offsets. So that stimulus check you just received in the mail has been added to the nation’s tab, the national debt.  And the just-passed farm bill contained billions of dollars of PAYGO avoidance tricks to pay for things like a pet provision of Senator Mitch McConnell (R-KY) that gives a $229 million tax break to racehorse owners.

Another favorite ploy of Congress to avoid PAYGO is to add expensive provisions to must pass appropriations or war-related bills, or to “emergency” legislation.  Uh-oh, there’s one of those bills before Congress now.  Not to disappoint, Congressional Leadership added a new GI Bill –education benefits for veterans – to the bill. This bill provides funding for the wars in Iraq and Afghanistan and other supposedly unanticipated, emergency needs (more on the ridiculous “emergency” war funding here).

Just about everyone agrees that helping our troops pursue higher education after their service is a laudable goal. To their credit, the Blue Dogs have pointed out paying for it and not adding its $52 billion cost to the debt is a laudable goal as well. House leadership has trotted out an offset that will predictably run into a Senate buzz saw of opposition.  The real question is will Congress then just go for the cheap political points of slamming this popular, but expensive new benefit through, or will they roll up their sleeves and figure out a way to do this responsibly – both for veterans and the budget.

PAYGO can be one of the best and most effective tools that lawmakers have on their fiscal responsibility tool belt.  Unfortunately, they don’t use it the way it was intended.  The only way PAYGO is effective is when both sides commit to implement it, and make the tough spending decisions it calls for.