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By Benjy Sarlin
WASHINGTON — Rep.-elect Alexandria Ocasio-Cortez, D-N.Y., announced Wednesday that she would vote against her own party’s rules for the incoming House over restrictions on deficit spending, pushing long-simmering Democratic divisions into public view.
At issue is the House leadership’s plan to include “PAYGO,” short for pay-as-you-go, a rule Democrats have adopted in the past that requires them to offset any increase in the deficit by cutting spending or raising revenue elsewhere.
“PAYGO isn’t only bad economics … it’s also a dark political maneuver designed to hamstring progress on healthcare + other leg.,” Ocasio-Cortez tweeted on Wednesday. “We shouldn’t hinder ourselves from the start.”
She joined Rep. Ro Khanna, D-Calif., who came out against the rules package while warning that PAYGO “unilaterally disarms the incoming Democratic majority’s ability to govern.”
The issue has also emerged as a stand-in for a larger divide between the party’s progressive wing and more centrist Democrats — including the next House speaker, Nancy Pelosi, who supports the spending rule — over the role fiscal responsibility should play in their agenda.
“At a time when climate change threatens our planet, when our infrastructure is crumbling, when 30 million people have no health insurance, when millions of Americans are struggling with outrageous levels of student debt, I am concerned that the concept of PAYGO will make it harder for Congress to address the many crises facing our working families,” Sen. Bernie Sanders, I-Vt., said in a statement on Wednesday.
Potential 2020 contenders, including Sanders, are currently proposing tens of trillions of dollars in new spending on progressive priorities. Given that Republicans passed a $1.9 trillion tax cut and boosted spending under Trump, substantially increasing the deficit, some Democrats argue they shouldn’t let deficit concerns get in the way when they retake power. There’s also growing interest among activists in economic theories that put less stock in fears of a rising debt.
The rule is not ironclad and has been waived in the past. Pelosi’s spokesman, Drew Hammill, noted on Twitter that Congress is already governed by a stricter version of PAYGO that President Barack Obama signed into law in 2010. That legislation forces cuts to programs unless Congress overrides them, which they’ve done under President Donald Trump.
“It reinforces the notion that if you vote for Democrats, the first thing they’re going to do is prioritize budget outcomes over human ones,” Stephanie Kelton, an economist and former adviser to Sanders, who has criticized the PAYGO rule, told NBC News.
While many in the party have rallied around pricier proposals under Trump, the midterms also featured a slew of Democrats who ran successful campaigns in swing seats attacking Republicans for spilling too much red ink. Their priorities could come into tension as Democrats take on more power.
“Such new House Democrats are likely to find it much harder to vote for major policy advances that progressives strongly support if those measures would add significantly to deficits and debt,” Robert Greenstein, president of the progressive Center on Budget and Policy Priorities, wrote in an article defending the PAYGO rules.
Activism against PAYGO has been driven by the party’s left flank, but Rep. Tim Ryan, D-Ohio, who led a largely centrist coalition against Pelosi’s speakership, also announced his opposition Wednesday.
“Critical investments in education, infrastructure, and health care should not be held hostage to budgetary constraints that Republicans have never respected anyhow,” he said in a statement. “We all believe we need to ultimately bring our budget into balance, but these investments are too important right now to pass up and will yield significant returns for the U.S. Treasury.”
His spokesman Michael Zetts told NBC News that Ryan is undecided on the overall rules package.
Pelosi earned a key endorsement ahead of the rules vote, however, from Congressional Progressive Caucus co-chairs Pramila Jayapal, D-Wash., and Mark Pocan, D-Wisc. In a joint statement, they said they had been “concerned about PAYGO for months,” but were satisfied with commitments from House Democratic leaders not to let it get in the way of progressive legislation.
“With the assurances that PAYGO can be waived, we do plan to vote for the House rules package and proceed with legislation to fix the statute,” they said.