Congressman Byron Donalds (R-Fla.) has introduced the “Responsible and Effective Spending Cuts of Undesirable Expenditures (RESCUE) Act,” legislation which would prevent cuts to Medicare by ensuring mandatory PAYGO cuts triggered by Joe Biden’s $1.9 trillion spending plan apply to wasteful spending.
The Pay-As-You-Go (PAYGO) Act of 2010 requires mandatory spending cuts if the cost of legislation isn’t offset by revenue increases or cuts to other spending. PAYGO was initially established in order to constrain excessive spending increases, much like this $1.9 trillion stimulus bill.
As noted by the Congressional Budget Office, Biden’s spending plan would require the Office of Management and Budget (OMB) to issue a sequestration order to reduce fiscal year 2022 spending by $381 billion including $36 billion from Medicare.
Because PAYGO exempts many large accounts, like low-income programs and Social Security, in CBO’s estimation, the annual resources available to the OMB would total between $80 billion and $90 billion—significantly less than what the PAYGO law requires be sequestered. Quite literally, this stimulus bill is so large that the OMB wouldn’t even be able to comply with the law.
Under Rep. Donalds’ bill, instead of Medicare, sequestration would instead impact wasteful spending programs in the American Rescue Plan itself, such as the billions of dollars for union pension bailouts, $350 billion in funding for state and local governments, and foreign aid. COVID testing and treatment in the American Rescue Plan would be exempt from any cuts.
A recent report in the Wall Street Journal found that state tax revenues generally stayed flat during 2020, suggesting that the $350 billion state and local funding may exceed the damage Covid-19 has actually done. Not to mention, Congress has already provided $360 billion to state and local governments.
Further, union pension bailouts and expanded foreign aid have virtually nothing to do with Covid-19 relief. The idea that these expenses be included in a pandemic relief bill is, in and of itself, very wasteful.
This bill keeps Democrats accountable for their wasteful spending while also preventing cuts to Medicare.
ATR applauds Rep. Byron Donalds for introducing the RESCUE Act and urges members of Congress to support this legislation.