House Budget Committee Chairman John Spratt (D-SC) issued the following statement today backing legislation to make the Pay-As-You-Go rule statutory. The PAYGO bill passed the House and has also passed the Senate; it now moves to the President's desk.
"At the outset of the 1990s, Congress passed the Budget Enforcement Act for a simple purpose: to ensure that the Budget Summit Agreement we passed was actually carried out. Among its provisions was a new rule called PAYGO - Pay As You Go. I can remember how our critics disdained our resort to budget process. They accused us of dodging the hard choices that we had to make if we were going to wipe out the deficit. By the end of the 1990s, the budget was in surplus for the first time in 30 years, and it was clear that the budget process rules we had put in place, like PAYGO, played a big part in our fiscal success.
"The Budget Enforcement Act expired in 2002 and was not reinstated. Without these process rules in place, the budget plunged, as a matter of record, from a surplus of $236 billion in 2000 to a deficit of $413 billion in the year 2004. When Democrats took back the House, we made PAYGO a rule of the House the first day we convened the 110th Congress.
"Since December 2007, our country has experienced the worst recession since the Great Depression. As economic recovery measures help to pull us out of recession, we should turn our attention to the longer-term fiscal fate of our country. Statutory PAYGO works, it's proven to work. It reins in new entitlement spending, and it requires new tax cuts to be offset, as well. Both tend to be long lasting - easy to pass, hard to repeal. By insisting on offsets, and by insisting on deficit neutrality, PAYGO buffers the bottom line. The terms are complex, but at its core, it's a common-sense rule. When you find yourself in a hole, quit digging.
"Statutory PAYGO was first put in place with bipartisan support, renewed on a bipartisan basis in 1997. When the House passed the PAYGO rule in July, two dozen Republicans joined 241 Democrats in voting for it. A vote for PAYGO is a vote for fiscal responsibility. It will put more rigor in the budget process, it will help us reduce the deficit, both short term and long term. While it can't solve all our problems, it does represent one solid step forward toward getting us back on the path of fiscal sustainability and fiscal responsibility."