Why Progressives Find It Difficult to Take the “Fiscal Responsibility” Movement Seriously

Portrait of the Deficit Hawk as a Liberal Democrat from Massachusetts

Yesterday was the presentation of the “Fiscy Awards,” which go to politicians that the fiscal responsibility movement likes:

Today, the non-partisan Fiscy Awards announced the 2011 Award recipients: Sen. Kent Conrad (D-ND), Rep. Paul Ryan (R-WI) and Gov. Mitch Daniels (R-IN). The recipients were selected by the Fiscy Awards Committee for their notable fiscal leadership in fiscal year 2010.

The Awards Committee comprised of the Honorable David M. Walker (Comeback America Initiative); Maya MacGuineas (Committee for a Responsible Federal Budget); and Robert Bixby (Concord Coalition) will present the Fiscy Awards to the recipients at an open-press event on Wednesday, January 5, 2011 at 6:45 p.m. EST at the Newseum in Washington, D.C.

The Award recipients were chosen for their frequent efforts to promote fiscal discipline and leadership to restore fiscal health.

Now let’s ask Maya MacGuineas’ Committee for a Responsible Federal Budget about the new House rules promoted by Rep Paul Ryan (PDF):

One major concern relates to the changes in PAYGO budget rules. Replacing the two-sided PAYGO rule with a one‐sided CUTGO rule will not only make it harder to offset legislation, but also exempt potentially budget‐busting tax cuts from any discipline. The one‐sided focus on spending also could result in the further proliferation of tax expenditures. As the Bowles‐Simpson commission has highlighted, tax expenditures are simply spending by another name and should not be exempt from scrutiny.

We have a similar concern with the new budget reconciliation rules, which will no longer allow budget reconciliation to increase spending but will permit it to be used for tax cuts which increase the deficit. This is a step backward that would allow for a return to the process that was used to enact the tax cuts in 2001 and 2003 that continue to contribute to our fiscal problems. The special procedures for budget reconciliation legislation are intended to make it easier for Congress to enact the tough choices necessary to reduce the deficit, and should not be used for politically easy and fiscally irresponsible legislation.

Changes to statutory PAYGO (which differs from PAYGO rules both in substance and legal authority) also are disappointing. Although internal budget rules cannot change the PAYGO law directly, they are able to indirectly weaken the implementation of the law by allowing the Chairman of the Budget Committee to exclude the costs of certain policies from the cost estimates for statutory PAYGO.

In particular, the rules allow the Chairman to exempt the extension of all the 2001 and 2003 tax cuts (including those for taxpayers with incomes above $250,000), the more generous estate tax relief enacted in the tax cut deal at the end of 2010, repeal of the health care legislation enacted last year, legislation providing small business tax relief, and trade agreements from having to be offset. CRFB was critical of the exemptions for extension of certain policies when statutory PAYGO was enacted, and strongly opposes any changes to further weaken PAYGO.

So under the circumstances, where’s the “fiscy” award for a progressive icon like Barney Frank or Nancy Pelosi? Do Frank and Pelosi uniformly support the goal of deficit reduction above all else? Of course not. But nobody does. Not Paul Ryan and not Kent Conrad and not them either. But Frank and Pelosi both did support PAYGO rules that are stronger than Ryan’s. They supported budget reconciliation rules that are stronger than Ryan’s. They backed deficit-reducing early withdrawals of US military forces from Iraq. Unlike Ryan, they backed the deficit-reducing American Climate and Energy Security bill. Unlike Ryan, they backed the deficit-reducing Affordable Care Act. Unlike Ryan, they backed the deficit reducing Dodd-Frank Wall Street regulation bill. Unlike Ryan, they backed the deficit-reducing DREAM Act. And unlike Ryan, Representative Frank has led the charge for lower defense spending.

So where’s Frank’s award?