President's Pay-As-You-Go Plan Guarantees Higher Taxes

On the surface, it seems the height of fiscal responsibility — if Congress adopts an expensive new health care entitlement, it has to find a way to pay for it.

That's the challenge delivered by President Barack Obama, who urged lawmakers last week to adopt pay-as-you-go legislation to cover the cost of his health initiative. So-called pay-go rules require Congress to cut spending somewhere else or raise taxes to cover the cost of a new program. But it doesn't work that way.

When pay-go was law between 1991 and 2002 and control of Washington was mostly split between the two parties, Congress still added more that $700 billon to the budget deficit, and simply ignored pay-go when it chose to, according to Brian Reidi of the Heritage Foundation.

With the White House and Congress under the control of the Democrats, who have shown little interest in spending cuts, chances of a budget reduction are remote.

Obama promised to cut waste but so far has come up with just $17 billion in savings, or a half-percent of the budget.

Pay-go also doesn't cover the 40 percent of the budget that is discretionary spending.

A pay-go mandate for a health insurance bill will guarantee a tax hike. This entitlement will be so expensive it will require a broad tax hike that will touch every taxpayer.

And it should.

Right now, Most Americans who have employer-provided health insurance are responsible for some of the cost. There's no reason they and their employers shouldn't continue to pay a portion of the insurance once the new government plan is in place.

If Congress adopts national health insurance, it should fund it with a payroll tax similar to Social Security or Medicare.

That's the more hones way to pay for this budget buster than pretending the enormous costs will be covered with elusive spending cuts.

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