The Perils of Pelosi’s ‘Pay-Go’ Promise

The Perils of Pelosi’s ‘Pay-Go’ Promise

The Perils of Pelosi’s ‘Pay-Go’ Promise

Democratic leaders need to present a vision of a progressive future, not run as fiscal conservatives.


Ayanna Pressley’s surprise victory in Tuesday’s Democratic primary in Massachusetts illustrates an unsurprising fact: Democrats want politicians who represent the antithesis of Donald Trump. The winning insurgent candidates of the summer of 2018—including Pressley, Florida’s Andrew Gillum, and New York’s Alexandria Ocasio-Cortez—are united not only by youth and diverse racial and economic backgrounds but also commitment to progressive policy priorities like Medicare for All and serious action on climate.

Earlier in the week, in outlining a legislative agenda for the coming Congress, Democratic leader Nancy Pelosi found a very different way of presenting Democrats as the antithesis of Trump. As a counterpoint to the current administration’s fiscal profligacy—including the $1.5 trillion tax bill and ramped up military spending—Pelosi proposed that a future Democratic majority would reinstate “pay-as-you-go” or “pay-go” rules that require any new spending be offset with budget cuts or tax hikes.

While Democrats’ prospects for retaking Congress are looking better and better, these twin pieces of news from the past week demonstrate why Democrats face a conundrum upon retaking Congress. Bold progressivism and “pay-go” fiscal conservatism are mutually exclusive.

While Democrats have plenty of policy ideas for raising revenues, Republicans have been governing through utterly unaccountable giveaways to their donor class. Making binding promises about fiscal probity is a kind of unilateral disarmament in today’s politics.

When the economy is facing an inflationary risk, or borrowing costs are too high, there’s certainly a case for constraining public spending. But we’re nowhere near that situation today. Inflation is still below the Fed’s target (which many economists believe is too low). And the government can borrow at real interest rates that are zero or very near zero.

At the same time, we’re in a moment of serious need for public investment. The existential challenge of climate change demands that we fully overhaul our energy and transportation infrastructure in a short period of time. The issues of America’s rising inequality and frayed social contract—including stagnant wages, unaffordable college, and exorbitant health care—can only be fixed with major new investments. While much of this needed spending can and should be offset—for example with cuts to our exorbitant and wasteful military budget—it’s far more important that the underlying problems are solved.

Of course, Democrats should aim to be “adults in the room” when dealing with an irrational White House. But this is not the same thing as bowing to the demands of the defunct Simpson-Bowles Commission and the shrinking Blue Dog caucus on fundamental matters of policy.

In this age of so many economic, environmental, and social dislocations—when people fear they’re losing control over their lives to incomprehensible and impersonal forces like hedge funds, automation, offshoring, and data algorithms—it’s imprudent to try to win elections as “the capable stewards of the status quo.” Fiscal conservatism is not the winning message for 2018.

For all the ostensible unpredictability of the Trump wrecking ball, there’s something of a coherent vision behind it. His administration is pushing the same long game of deregulation, privatization, military buildup, and upward redistribution of income and wealth that’s driven the far right since Barry Goldwater.

Democrats need to present a coherent framework of their own. Voters are asking how government can be a force for good in dealing with serious economic and environmental uncertainties. Progressives, including this summer’s winning insurgents, are showing how Democrats can win by articulating a vision that’s positive, emotionally resonant, and clear-eyed about our challenges. It’s time for Pelosi and her lieutenants, including Steny Hoyer, to start hearing the message of the 2018 primaries.

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