PAYGO

PAYGO -- (House of Representatives - July 21, 2009)

BREAK IN TRANSCRIPT

Mr. HOYER. Mr. Speaker, ladies and gentlemen of the House, this week the House will debate legislation and give the principle of pay-as-you-go, or PAYGO, the force of law. Quite simply, supporting PAYGO means that we agree to pay for what we buy; and it can be one of the most important actions we take for fiscal discipline in this Congress. PAYGO is essential because America faces unprecedented debt and a fiscal year 2009 deficit of $1.7 trillion. A New York Times analysis found that 90 percent of that deficit is attributable to the economic downturn, Bush administration policies, and the extension of those policies. However we got into this hole, it's imperative that we find a way out of it. PAYGO is not a cure-all, not a solution entirely to our deficits. But it is an important and valuable start, and it is a proven first step to deficit reduction.

In the 1990s, the Clinton administration turned record deficits, accumulated by the two previous Republican administrations, into record surplus; and the PAYGO rule, supported on a bipartisan basis by Republicans and Democrats, was a key part in that fiscal transformation. As President Obama has recognized, and I quote, ``It is no coincidence that this rule was in place when we moved to record surpluses in the 1990s and that when this rule was abandoned, we returned to record deficits that doubled the national debt.''

Today we can once again use PAYGO to begin rolling back the dangerous fiscal situation that confronts us. Under statutory PAYGO, Congress will be required to find savings to balance the dollars we spend. On the one hand, it will constrain unnecessary spending and subsidies. On the other, it will force those in favor of tax cuts to explain exactly what they want to go without in return. In other words, pay for them. Of course none of those choices are easy, but it is exactly the avoidance of hard choices that saddles our children and grandchildren with the debt that confronts us. In addition, deficit reduction will mean fewer interest payments on our debt which, in turn, will help us make sustainable entitlements in the priorities that matter most to the American people, including education, clean energy and health care.

The PAYGO law would apply to new policies that reduce revenue or expand entitlement spending. It will exempt extensions of current policy on the alternative minimum tax, the estate tax and middle-income tax cuts passed in 2001 and 2003 and Medicare payments to doctors. Some would criticize these exemptions, but I see them as an important way of keeping PAYGO credible and enforceable. It is clear that there is bipartisan support in Congress for extending those policies without offsets. Now, very frankly, I would vote for offsets; but we have seen that that does not happen in the United States Senate; and there is an inclination not to do it here. A PAYGO bill that does not exempt them would have to be waived again and again, turning the cause of fiscal discipline into an empty promise.

I find it much more sensible to make a fiscal discipline promise we can keep. I would also note that the exemptions in the House legislation are narrower than those sent to us in the President's original proposal. Most notably, they only apply to the middle-class tax cuts passed in 2001 and 2003 and not to tax cuts generally.

Mr. Speaker, pay as you go cannot remove us from our deficit hole in a single stroke, nor will it. That will take much hard work. PAYGO is not enough in and of itself, but it is absolutely necessary because it keeps us from digging the hole any deeper. It is tested and proven. We adopted this policy in a bipartisan way in 1990. We reaffirmed that policy in a bipartisan vote in 1997, with Speaker Gingrich and President Clinton reaching agreement on that proposition. Yes, it's tested and proven, as I said. I hope that all of my colleagues, Democrats and Republicans alike, will support it when it comes to the House floor later this week.

BREAK IN TRANSCRIPT

Source