Comics entrepreneur Eric July and Cato agree that the latest Congressional deal ending the government shutdown is yet another “kick it down the road” short term routine to get past the next election, while propping up more borrowing, and the corporate welfare state:
…Rather than kicking the can down the road, Congress should pair full-year discretionary appropriations with budget-process reform, restoring binding discretionary caps, curbing the abuse of emergency designations, and cutting spending to pre-pandemic levels. Until that happens, any new funding deal will amount to a continuation of Biden-era spending (or worse). With $2 trillion deficits, Congress desperately needs to credibly signal fiscal restraint. That starts with good fiscal planning.
Unfortunately, as Senator Rand Paul warned, Congress plans to entirely waive the existing statutory requirements to offset new borrowing under Pay-As-You-Go (PAYGO). Under PAYGO, deficit-financed laws trigger automatic offsetting spending reductions spread over the subsequent five to ten years. Because Congress authorized $3.4 trillion in new borrowing through the One Big Beautiful Bill Act (OBBBA), PAYGO requires that future spending be automatically reduced by a corresponding amount. By wiping the PAYGO scorecard clean and avoiding planned automatic offsets, Congress is officially blessing the massive deficit impact of the OBBBA. The deal also sneaks in $2.1 billion in new mandatory spending increases—mostly for health care—which Congress also excludes from the PAYGO scorecard. Note that PAYGO rules only apply to direct spending and revenues—not discretionary appropriations…Read More