Are Pelosi And Hoyer Just Too Damn Old To Understand Modern Monetary Theory? Is That Why They're Still Whining About PAY-GO?

A Washington Post headline-- The Deficit Hawks Are Dead-- And Few In Washington Muster Any Outrage-- points a finger at Washington's most dedicated Ayn Rand disciple, Speaker Ryan and his GOP zombies "who had, wrote Paul Kane, railed against deficits in the first years of the Obama administration pushed through a massive tax cut despite CBO projections of a surge in federal borrowing." But what the Post isn't counting on is the presumptive next Speaker and her chief Deputy-dog Steny. Their first priority seems to be PAY-GO, the crowning jewel of Deficit Hawkism, the trap the Democrats always fall into when the GOP loses Congress, trap that guarantees the Democrats will never be able to diver on anything the voters went to the polls and supported them-- setting up another GOP take-over. This is in Pelosi's and Hoyer's DNA because of their age. This was ingrained in them from a time when the Republicans really did care about deficits and balanced budgets. But the GOP was smart enough to pay attention to MMT even if Pelosi and Hoyer never even tried.

Given possible high ground on the issue, Democrats have largely fielded a crop of candidates across the nation who have ignored, downplayed or outright rejected the significance of the still-growing deficits.

The Democrats have, across all factions of their party, lambasted the Republican tax-cut legislation of December and the $1.5 trillion shortfall it is estimated to leave in the budget over the next decade. But they have not attacked that as money that should go to the U.S. treasury to pay down the overall $21 trillion debt. Rather, they have almost universally pledged that the money be used for other federal spending, such as infrastructure or an expansion of the Affordable Care Act.

That’s a far cry from 2006, when House Democrats marched toward a decisive midterm victory that thrust them into the majority. Then, their numbers were populated by fiscal conservatives in Southern and rural districts who pledged to cut the deficit, as well as antiwar liberals who wanted to bring troops home from Iraq at a time when the war was costing more than $100 billion a year.

Some Democrats from that era acknowledge that the issue simply does not have as much resonance now, in large part because of the economic collapse that occurred 10 years ago this week and stagnating wages that followed years thereafter.

“When they write the history of this time, the financial collapse and the Great Recession is going to be the defining moment that changed the politics around a lot of these issues, around things like deficits,” said Rep. Joe Courtney, D-CT) a member of the 2006 Democratic class.

Rather than worry about surging deficits, Democrats are pushing for ways to boost everyday life for working Americans, Courtney said. “That economic fragility that people felt in the wake of the Great Recession has kind of overtaken the fiscal-hawk sort of priorities,” he said.

With Democrats not focusing on the issue, Republicans have been given a free ride with voters. A June survey by the Pew Research Center found a remarkable data point: Voters trust Republicans over Democrats, 41 percent to 35 percent, to do a better job with deficits.

In April, just 14 percent of Americans cited the deficit as the most important issue, according to the Kaiser Health Tracking Poll. Deficits trailed the economy (25 percent), health care (24 percent), gun issues (23 percent) and immigration (17 percent).

Ryan, a onetime preacher about the evil of debt, now brushes aside any questions about how annual deficits rocketed under his watch-- from about $430 billion in 2015, when he took the gavel, to almost $1 trillion as he heads for the exits three years later.

“Revenues are up. The problem is a predictable one-- it is spending,” Ryan said in a farewell event with Wisconsin media Wednesday at the Capitol. He pinned the blame on Medicare and Social Security costs.

“It is baby boomers retiring, a country not prepared for it,” Ryan said. “It’s health inflation, and it’s the entitlement programs.

This outrages the deficit hawks, most of whom have long since retired.

“History will show you there’s no country in history that’s been strong and free and bankrupt,” John Tanner (D-TN), a co-founder of the Blue Dog Coalition who retired in 2010, told the Washington Post’s Erica Werner.

If Democrats take back the House in November’s midterms, it will be the first time in more than 70 years the majority has flipped without deficits or government overreach playing some key role in creating the backlash to the party in power.

In 1994, when Republicans won the House majority for the first time in 40 years, Newt Gingrich’s troops campaigned against the emerging Clinton administration health-care plan, panned as “Hillarycare” for first lady Hillary Clinton, even though it never even got a vote in Congress. Once in power, Gingrich (R-GA) led a fiscal standoff over a bid to save $270 billion from Medicare, ending in a government shutdown around the 1995 holidays.

The 2006 switch came as a reaction to the war. Dozens of Blue Dog Democrats, as the fiscal conservatives were known, went on to impose a new House rule known as “PAYGO,” a briefly held statute requiring offsetting cuts to any new spending.

And in 2010, as John Boehner’s House GOP roared back to the majority, Republicans campaigned against the ACA as a pricey government takeover of the health-care system at a time of ballooning deficits. Most of the Democratic losers came from the Blue Dog caucus, drastically shrinking its influence.

Throughout 2011 and 2012, Speaker Boehner (R-OH) staged several fiscal showdowns with President Barack Obama that led to some modest deficit reduction, through spending caps on annual federal agency budgets and higher taxes on families with more than $400,000 in income.

Those deals were essentially scuttled by the December passage of the tax cuts and a subsequent budget blueprint that was a bipartisan binge for the House and Senate appropriations committees, which set defense and domestic agency spending.

If you want to rein in the debt, do not bother the appropriators. “If you want to deal with deficits, you’re going to have to deal with entitlements. That’s where the spending is,” said Rep. Tom Cole (R-OK), a senior member of the House Appropriations Committee.

Some lawmakers predict that, eventually, the financial markets will force Congress into action.

“It’s not really just candidates who get to decide whether deficits matter or not,” Courtney said. “I think external forces are going to show up and change that.”

"Deal with entitlements. That’s where the spending is." That's the way Republicans-- and the Democrats from the Republican wing of the Democratic Party (the New Dems and Blue Dogs)-- talk about weakening and eventually eliminating Social Security, Medicare, Medicaid and other social safety net programs. Imagine all the tax cuts for the wealthy that would produce! So why Nancy Pelosi would identify PAY-GO as one of her top 3 priorities if she wins the speaker's chair again is too frightening to contemplate. I've been defending her as the best of all possible horrible options. But I'm rethinking that now. She's got to stop with the PAYGO bullshit or she's going to lose her whole left flank.