PAY-AS-YOU-GO (PAYGO), AS PASSED BY HOUSE, DOESN'T APPLY TO CURRENT SPENDING & ENTITLEMENTS

Washington, Jan 5, 2007 - "The tax relief we enacted in 2003 has generated 7.2 million new jobs, low unemployment, increased after-tax income by 9.6 percent, and resulted in double-digit growth in federal revenues," stated Rep. Cliff Stearns (R-Ocala).  "The Democrat Pay-as-You-Go (PAYGO) proposal promotes higher taxes, more spending, and continued budget deficits."

PAYGO requires offsetting any new spending or tax relief with spending cuts or tax increases elsewhere.  "However, this plan assumes that extending current tax relief, which will expire automatically, represents new tax cuts that will have to be offset," explained Stearns.  "In addition, it only applies to new spending, not to current spending that is growing out of control. Also, it does not apply to current entitlement spending, which consumes 53 percent of the total budget.  The National Taxpayers Union puts the cost of the new Democrat Agenda, the 'First 100 Hours,' at $79.102 billion in new annual spending.  I see this version of PAYGO as a trapdoor in the budget process that will not control spending, but that will prevent future tax relief."