“PAYGO Compliant” Bill Increases the Deficit
Just to follow up on my colleague Jon Lieber’s update below, the substitute language to H.R. 1586 currently on the hotline would extend the COBRA subsidies for the unemployed and the Medicare physician payment fix for one month, through March 28. The bill also includes an extension of the Medicare therapy caps exceptions process – the extension would also go through March 28, and would be retroactive to December 31 of last year (when this provision expired).
The cost of the bill is more than $10 billion, according to the CBO score linked below; the bill would exempt all but the doc fix (costing just over $1 billion) from PAYGO using an emergency designation. However, under the PAYGO bill enacted earlier this month, the doc fix provisions are exempt from statutory PAYGO anyway; thus all the spending provisions would increase the deficit.
This morning Senator Reid hotlined a substitute amendment to H.R. 1586 (the TARP bonus bill that passed the House) including a one-month extension of expiring provisions including UI, COBRA, flood insurance, various Medicare extenders, a one-month doc fix, the SBA provisions from last year’s stimulus, 2009 poverty guidelines, a one-month satellite extension, and a one-week extension of the Patriot Act (a one-year extension of the Patriot Act was hotlined this morning as well).
CBO estimates this one-month extension will result in increased spending and decreased revenues (i.e. an increased deficit) totaling $10.267 over ten years.
To comply with statutory PAYGO, an emergency designation is applied to most ($9.2 billion) of the bill. The $1.04 billion one-month doc fix is exempt from statutory PAYGO and so did not require such a designation.
Under PAYGO, the Democrats’ budget enforcement mechanism, expect to see a lot of legislation given emergency designations, since “In order to spend a dollar, we have to have that dollar in our wallet. This law will enforce that commonsense approach.” (Harry Reid, January 28, 2010). Except when it doesn’t.