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Obama's PAYGO Plan Means<br> Automatic Tax Hikes


Posted by Ryan Ellis on Wednesday, June 10th, 2009, 3:37 PM PERMALINK


President Obama yesterday submitted a plan for PAYGO to return.  Under his plan, the Administration would track all tax and entitlement spending throughout the year.  At the end of the year, if the net effect of all tax and entitlement legislation increased the deficit over the next decade, there would be an across-the-board cut in entitlement spending.

Sounds ok, right?  Not really.  This is a trap, and Obama, et al are hoping that well-meaning limited government conservatives will walk right into it.

Congress would never, ever let there be an indiscriminate, across-the-board entitlement spending cut.  In order to avoid this scenario, Congress will always raise taxes at least as much as they increase entitlement spending. 

In other words, this PAYGO proposal would give a built in excuse to raise the short- and long-term cost of government AND practically require Congress to raise taxes to "pay for" it.  And we can forget about cutting taxes anytime soon.  We would need to either raise taxes somewhere else, or do the politically-unthinkable (cut entitlement spending).

It's kind of like the Doomsday Device from Dr. Strangelove.  Only in this case, the inevitable outcome of action would not be nuclear war, but something almost as bad--a tax increase.

Maybe the motto should be, "how I learned to stop worrying and love tax hikes."

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