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Opposition to Pay-As-You-Go Proposal Prevents Unity on House Democrats’ Rules Package

Other changes designed to open up the legislative process have broad support

Rep. Ro Khanna, D-Calif., said he will oppose House Democrats’ rules package for the 116th Congress because of a provision known as pay-as-you-go or PAYGO that requires offsets for deficit increasing legislation. (Bill Clark/CQ Roll Call file photo)
Rep. Ro Khanna, D-Calif., said he will oppose House Democrats’ rules package for the 116th Congress because of a provision known as pay-as-you-go or PAYGO that requires offsets for deficit increasing legislation. (Bill Clark/CQ Roll Call file photo)

House Democrats’ rules for the 116th Congress contain a wide array of consensus changes, but a pay-as-you-go provision that would require offsets for deficit-increasing legislation is preventing party unity on the package. 

At least two progressive members, California Rep. Ro Khanna and New York Rep.-elect Alexandria Ocasio-Cortez, said they will oppose the rules package because of the provision. 

The House will vote on the new rules package Thursday, the opening day of the 116th Congress, after a vote to formally elect longtime Democratic Leader Nancy Pelosi as speaker. 

The rules package includes dozens of provisions requested by members from different factions of the Democratic Caucus, such as changes to make it easier for a bipartisan majority to force legislative action and harder for a minority of lawmakers to oust the speaker. 

Through the rules package, the new House Democratic majority is aiming to open up the legislative process, increase transparency and diversity and strengthen ethics requirements. 

“By an historic ten million vote margin, the American people went to the polls and asked for a professionally run Congress that would be more transparent, ethical and committed to debating and advancing good ideas no matter where they come from,” Pelosi said in a statement. “Our rules package will deliver that Congress, ushering in a new era of clean government that will honor the consensus of the American people — restoring the People’s House to the people.”

Watch: Pelosi Seeks a Return to Regular Order, Like Many Before Her

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The rules package includes three titles, and the House will vote Thursday only on the first title, which encompass the majority of the rules changes, including the pay-as-you-go, or PAYGO, provision.

The second title, which would establish a select committee on modernizing Congress, will get a vote Friday, and the third title, which authorizes the House general counsel on behalf of the speaker to intervene in a federal case challenging the constitutionality of the 2010 health care law, will be considered the following week.

The rules package is always a partisan document crafted by the party in the majority, and thus doesn’t draw support from the minority party.

Democrats shouldn’t have a problem adopting the package Thursday, but they would do so without unanimous support from their caucus because of opposition to the pay-as-you-go rule. 

The budget enforcement mechanism requires legislation that would increase the deficit be offset by spending cuts or revenue increases. 

There is a pay-as-you-go law that applies to newly enacted legislation affecting mandatory spending or revenues. Emergency legislation is exempt.

Under the law, the Office of Management and Budget tracks relevant legislation for the year on PAYGO scorecards, and if the cumulative budget impact is greater than zero, the president can order a sequestration of nonexempt mandatory spending programs to offset the cost. (The vast majority of mandatory spending programs, including Social Security, Medicare, veterans programs and unemployment compensation, are exempt.)

The Senate has a longstanding rule designed to comply with the statute. 

House Democrats had a PAYGO provision in their rules when they held the majority from 2007 through 2010, but Republicans repealed it when they took over in 2011. Instead Republicans added a provision known as cut-as-you-go, or CUTGO, which also requires deficit-increasing legislation be offset but — unlike PAYGO — would not allow revenue increases.

PAYGO can be waived by a vote of Congress, and that’s happened on many occasions for priorities of both parties, such as the Democrats’ 2009 stimulus package and Republicans’ 2017 tax overhaul. 

Nonetheless, some progressives oppose pay-as-you-go for fear that it will inhibit progress on some of their policy priorities like “Medicare for All.” 

“It is terrible economics,” Khanna said in a tweet announcing that he’ll vote against the rules package. “The austerians were wrong about the Great Recession and Great Depression. At some point, politicians need to learn from mistakes and read economic history.”

Ocasio-Cortez also tweeted her opposition to the rules package over the PAYGO provision, saying it was more than bad economics.

“It’s also a dark political maneuver designed to hamstring progress on healthcare+other leg[islation],” she said. “We shouldn’t hinder ourselves from the start.”

Pelosi spokesman Drew Hammill defended the inclusion of PAYGO in the rules package.

“We must replace CUTGO to allow Democrats to designate appropriate offsets (including revenue increases),” he tweeted. “A vote AGAINST the Democratic Rules package is a vote to let Mick Mulvaney make across the board cuts, unilaterally reversing Democratic initiatives and funding increases.”

Mulvaney, the OMB director and acting White House chief of staff, has authority to implement the aforementioned statutory PAYGO sequestration cuts. 

Congressional Progressive Caucus Co-Chairs Mark Pocan of Wisconsin and Pramila Jayapal of Washington said in a statement that while they have concerns about PAYGO, they will support the rules package based on assurances from leadership that the rule can be waived. 

“We all agree that the real problem with PAYGO exists in the statute that requires it. That is why we will be introducing legislation in the 116th Congress to end PAYGO,” they said. “In the meantime, [Rules Chairman Jim McGovern of Massachusetts] and House Leadership have committed to us that PAYGO will not be an impediment to advancing key progressive priorities in the 116th Congress.”

Uncontroversial rules changes

Despite the opposition to PAYGO, most of the changes Democrats are making to House rules are uncontroversial.

For example, there’s broad support for a rules change that would require bills to be posted for a full 72 hours before a House vote. This is a clarification of the existing three-day rule that has often been abused with bills being filed late at night on a first day and the House voting early on the third. 

Another consensus change involves requiring any bill being brought to the floor under a rule to have been reported out of committee and for there to have been at least one committee hearing relevant to the legislation. This rule does not take effect until March 1, thus allowing Democrats to move more quickly on some of their early priorities such as a package of campaign finance, ethics and voting rights overhauls. 

The package would restore rules Democrats had in place the last time they were in the majority, such as providing some voting rights for delegates and the resident commissioner of Puerto Rico.

It would also repeal some of Republicans’ rules such as term limits for committee chairs and so-called dynamic scoring, or requiring macroeconomic analyses of major legislation.

The rules package also establishes two select committees, one on the “climate crisis” and one on modernizing Congress. The climate panel is designed to help the committees with jurisdiction over energy and environment policy develop a so-called Green New Deal legislative package. That deal is a pet project of Ocasio-Cortez.

The package also establishes new House offices: the Office of Diversity and Inclusion, which will help House members recruit, develop and retain a diverse workforce; and the Office of the Whistleblower Ombudsman, which will develop best practices and trainings for House offices to receive whistleblower information.

Some of the new rules were pushed by the bipartisan Problem Solvers Caucus. Eight Democrats in that group only agreed to support Pelosi for speaker after she agreed to those changes. 

One of the Problem Solvers-negotiated provisions would create a consensus calendar for legislation. 

The provision would allow sponsors of stalled bipartisan bills — those with at least 290 co-sponsors that have not been reported out of committee — to request the measures be placed on the consensus calendar. The rule requires the House to vote on at least one measure from the calendar each week the chamber is in session, although if there is no legislation to call up, one would assume that requirement would be set aside. 

Another provision pushed by the Problem Solvers and others would change the motion to vacate, a legislative maneuver used to oust the speaker, so that it can only be brought up for a vote over the objection of leadership if offered at the direction of a party caucus or conference.

That means it would take a majority of Democrats to move to oust Pelosi as speaker, whereas a motion to vacate was filed against former Republican Speaker John A. Boehner in 2015 with support of a small minority of his party.

Ethics changes

The rules package includes several new ethics provisions designed to clamp down on misconduct that was on the rise this past Congress. 

One provision would bar members and staff from serving on corporate boards, effective Jan. 1, 2020. The matter came under scrutiny last year when New York GOP Rep. Chris Collins was indicted for alleged insider trading of information he learned as a board member of Innate Immunotherapeutics.

Also relevant to Collins’s situation — and that of California Republican Duncan Hunter, who faces criminal charges for abusing campaign funds — is a new rule requiring members indicted for certain felonies to resign from leadership and committee assignments until they’re acquitted or the charges against them are dropped.

The new rules would require all members to undergo annual ethics training. Currently, staff are trained annually, but lawmakers are only trained in their first year. 

The package bans sexual relationships between House members and committee staffers, even if the staff is not a direct employee of the lawmaker. This is an extension of a prohibition already in place on relationships between lawmakers and their own staff.

The rules package also aims to address issues arising from a variety of sexual harassment and misconduct allegations that were brought to light over the last two years. 

One provision, for example, would expand lawmaker liability for paying settlements for their own wrongdoing. Under the new rules, House members would be required to pay out of pocket for any sexual harassment or discrimination settlements.

In December, Congress passed an overhaul of the reporting and resolution process established as part of the 1995 law that governs workplace harassment and discrimination claims in Congress, dubbed the Congressional Accountability Act. But under that measure, lawmakers were only required to pay for settlements related to harassment, not discrimination — which often constitutes the bulk of misconduct claims.

Holding lawmakers accountable for a wider range of misconduct violations was a clear goal of Pelosi and House Democrats last year. The House’s original proposal to overhaul sexual harassment policies included the broader language, but it was stripped out in year-end negotiations with the Senate.

The rules package also clarifies that staff or former staff bound by nondisclosure agreements are not barred from reporting wrongdoing to the House Ethics Committee or the Office of Congressional Workplace Rights.

Democrats are also using the rules package to extend bans on discrimination on the basis of sexual orientation or gender identity in the House’s official code of conduct.

It would also change a 181-year-old rule against hats in the House chamber to allow religious headwear, such as a hijab or kippa. The accommodation would primarily affect Minnesota Rep.-elect Ilhan Omar, a Muslim woman who wears a headscarf.

Katherine Tully-McManus contributed to this report.

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