Brad DeLong says:
We need PAYGO. We need super-PAYGO with standby tax increases and spending sequesters. We need it now.
The NY Times agrees:
Phony Deficit Hawks, editorial, NY Times: The Republican base is angry about deficits, and suddenly administration officials and tax-axing lawmakers cannot stop talking about fiscal discipline. If they were sincere, they would reinstate the pay-as-you-go budget rules that were enforced from 1990 through 2000 and were instrumental in creating budget surpluses from 1998 to 2001. Lawmakers had to pay for new tax cuts and new entitlement spending by raising other taxes or cutting programs.
But the foxhole fiscal conservatives do not really mean what they are saying. An audacious administration talking point ... is that the original pay-go rules are biased against tax cuts and in favor of spending.
The complaint is ridiculous, but easy for the administration to make given the complexity of the details. Suffice it to say that pay-go would treat nearly all of the tax and spending laws passed by Congress in exactly the same way. ...
Unwilling to submit to the fiscal discipline of pay-go, House Republicans are instead hashing out a line-item veto that would give President Bush the ability to delete specific items from budget bills. In the Senate, Judd Gregg, chairman of the Budget Committee, has proposed a kitchen sink of moldy ideas from the bad old days of budget deficits in the 1980's and early 1990's — none of which have ever shown much promise as a means of thwarting big budget deficits.
It's all a pathetic attempt to look tough while avoiding the tried-and-true — and truly tough — deficit fix: reinstating the original pay-as-you-go rules.
Brad DeLong has more on PAYGO here and here, and for a video, see here. Greenspan supports PAYGO as well. Something needs to change, and reinstating PAYGO would be a strong signal of commitment to fiscal restraint.