The most important things that should be asked about PAYGO are not what have been asked over the past week or so, that is, to what it would and would not apply and how would it work. In fact, the most critical issue has almost nothing to do with PAYGO at all. The real question is what do we want a federal budget process to accomplish.
This is not as simple a question as it seems. PAYGO was originally intended to make it harder to increase rather than reduce the budget deficit. The plan was to use PAYGO and appropriations caps to keep the White House and Congress from adding to the red ink and allow economic growth to eliminate the deficit in the coming years.
But thats anything but the only choice for a federal budget process. For example, there could be an outcome-neutral process that can be used to increase or decrease the deficit or surplus depending on what Congress and the president determine is needed each year. This was, in fact, the goal of the Congressional Budget Act, which in 1974 stated no specific overall goals and instead simply set up a budget-writing process for Congress to use.
Other options include a process that requires making annual reductions in the deficit until the budget is balanced, going beyond balance by running a surplus and paying down the national debt, preventing tax increases or Social Security cuts, protecting military spending, and making it easier for Washington to pay for capital projects.
All of these options should sound familiar because they have all been repeatedly proposed, demanded, and debated since PAYGO and many of the other provisions of previous federal budget processes were allowed to expire. But no new budget process has been enacted during this time because no consensus has ever developed over what it should do.
The most important thing to keep in mind when considering the presidents plan is that it is not the main course. In fact, like salt and pepper in everything from cheeseburgers to tofu with mixed vegetables, PAYGO in some form has been included in each of these budget process proposals. It can easily be a part of every discussion and will add some fiscal taste to them all.
But its not a meal unto itself. It might work perfectly. It might be the single ingredient needed to transform the very nondescript cheeseburger you get at the typical casual dining chain restaurant into an unforgettable budget eating experience worthy of being featured on Diners, Drive-ins, and Dives on the Food Network.
But theres simply no way to determine that until you first know what youre attempting to cook.
Stan Collender is a partner at Qorvis Communications and author of The Guide to the Federal Budget. His blog is Capital Gains and Games.