Dem Party Platform Supports Pay-Go, Nixes COLA Changes

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By Jonathan Nicholson

July 1 — The draft version of the Democratic Party's platform for 2016 commits the party to pay-as-you-go requirements for new entitlements or tax cuts but opposes curtailing Social Security or Medicare programs.

The party's presidential nominating convention is slated for July 25-28 in Philadelphia. The draft of the party platform was unveiled on the convention's website July 1, ahead of a platform committee meeting July 8-9 in Orlando, Fla., to finalize its form.

“Democrats understand responsible fiscal stewardship is key to American democracy and to the country’s long-term economic prosperity. We believe that we can pay for ambitious progressive investments that create good-paying jobs and offer security to working families without adding to the debt by making those at the top and the largest corporations pay their fair share,” the platform draft said.

“We will also ensure that new spending and tax cuts are offset so that they do not add to the nation’s debt over time,” the platform said, echoing language usually used by Democrats to refer to pay-as-you-go. In general, pay-go requires the costs of new permanent mandatory spending and tax cuts be offset with revenues or spending cuts elsewhere in the budget.

A statutory version of pay-go (Pub. L. No. 111-139) was enacted in 2010, but it has often been waived for big bills that would add to the deficit. Procedural pay-go rules in the House and Senate that were in effect when Democrats controlled the chambers were rolled back by Republicans when they took over.

Expanding Social Security

While anti-deficit groups generally favor pay-go, they also say it does little to change the long-term trajectory of the budget, which would require new taxes, new spending cuts or some combination of both.

In the platform, Democrats make no mention of limiting Medicare or Social Security spending and explicitly reject some ideas for extending the solvency of the latter program.

“We will fight every effort to cut, privatize, or weaken Social Security, including attempts to raise the retirement age or to diminish benefits by cutting cost-of-living adjustments. Democrats will expand Social Security so that every American can retire with dignity and respect, including women who are shortchanged by the current system because they are widowed or took time out of the workforce to care for their children, aging parents, or ailing family members,” according to the platform.

President Barack Obama had once proposed changing the inflation measure that determines most federal COLAs to one most economists say gave a more accurate picture of inflation. Such a change would have trimmed benefits and increased revenues by limiting tax bracket adjustments. It was never acted on by Republicans in Congress.

The platform said it would ensure Social Security's future instead by “asking those at the top to pay more, and will achieve this goal by taxing some of the income of people above $250,000.”

On Medicare, the platform said Democrats support allowing Americans to access the program through a “public option” and allowing Medicare to save money by negotiating drug prices with manufacturers.

To contact the reporter on this story: Jonathan Nicholson in Washington at jnicholson@bna.com

To contact the editor responsible for this story: Heather Rothman at hrothman@bna.com

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