|
(Washington D.C.)- The House of Representatives approved the Statutory Pay-As-You-Go Act today which requires Congress to offset the costs of new entitlement spending or tax cuts with savings elsewhere in the budget. Rep. Levin is a co-sponsor of the legislation, which passed by a vote of 265 to 166.
“At the end of the 1990s, the federal government was balanced. We were actually running large budget surpluses and paying down the national debt. The pay-as-you-go rules that were in effect throughout the 1990s deserve a lot of credit,” said Rep. Levin. “In 2002, the pay-as-you-go rules expired and the Bush Administration and Republican-led Congress refused to extend them. The public debt nearly doubled under the previous Administration, rising from $3.4 trillion in 2001 to $6.3 trillion.”
“We need to get back to commonsense budgeting. We know these pay-as-you-go rules can work.”
The PAYGO bill passed today is similar to the statutory pay-as-you-go law that was in place in the 1990s, which compelled Congress to fully pay for new tax cuts and entitlement spending by identifying savings elsewhere in the budget. During the 1990s, the PAYGO rules helped balance the budget and turn massive deficits into record budget surpluses.
President Bush and the Republican-controlled Congress allowed the PAYGO rules to expire in 2002, which contributed to the dramatic turnaround in the budget since 2001, adding trillions of dollars to the national debt and transforming a projected ten-year budget surplus of $5.6 trillion into a projected $4.5 trillion deficit.
The House-passed bill is designed to force tough choices: the cost of any entitlement spending increase or tax cut would have to be paid for, rather than pushed onto future generations. Those who want to cut taxes will have to identify what spending we will have to do without because of that lost revenue. Likewise, PAYGO will require any increase in entitlement spending to be offset by spending decreases elsewhere, or by higher taxes.
The bill requires Congress to offset all new policies that reduce revenues or expand entitlement spending over five and ten years. If Congress fails to do so, there would be an across-the-board cut in certain mandatory programs. Exceptions can be made for emergencies.
(####)
|
