Statutory Pay-As-You-Go Act of 2009

STATUTORY PAY-AS-YOU-GO ACT OF 2009 -- (House of Representatives - July 22, 2009)

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Mr. HOYER. I thank the chairman for yielding. I also want to thank the gentleman from Wisconsin (Mr. Ryan) for whom I have a great deal of respect. I said the other night that he was my friend, but friends have disagreements. And on this, on fiscal policy, we clearly have had a very significant disagreement.

I've heard a lot of speakers on this floor talk about how this bill doesn't get us to where we want to get. I've heard a lot of people talk about how we have four exceptions in this bill. Most of the people that have talked about the four exceptions in this bill have repeatedly talked, over the last 4 or 5 years, as to how this was current baseline spending, and certainly we didn't have to pay for current baseline spending, i.e., continuing tax cuts that were in place. Your side of the aisle has argued strenuously that that was current baseline funding and we didn't need to pay for it. We have taken the position that we needed to pay for it. In fact, we paid for the AMT through the House. We paid for the tax extenders through the House. Unfortunately, our brethren on the other side of the Capitol did not pay for them, sent them back. I voted against the AMT extension. I voted against the AMT extension, I was one of a small minority in the House, because it wasn't paid for. If we're going to have discipline, we need extrinsic discipline.

There's only one real discipline--having to pay for what you buy. During the nineties, we paid for what we bought. During the eighties we didn't. And during the 2000s we didn't. And there was an inevitable result; deficits exploded for the 20 years that Republican Presidents were in office, and we didn't pay for things. In fact, the gentleman talks about spending, and he talks about caps in his substitute. The gentleman knows full well that during the Clinton years, spending rose at about 3 1/2 percent per year, on average, discretionary spending. The gentleman knows full well that for the 8 years of the Bush administration, it rose at the average of about 7 percent, or twice as high as it rose during the nineties. So, in terms of caps, spending, which are in the budget, we ought to have budget caps. We ought to stick with those budget caps. And, in fact, the Democrats, under the rule that he said we adopted, stuck with that rule, even when it had consequences that were tough for us. He remembers the District of Columbia vote. By adding a Member, it cost a little over $1 million; we had to pay for it, even though it caused us a problem, then opened it up for an MTR that was a problem.

But, let me speak to the substance of this bill. The gentleman is correct. Other Republicans are correct. We've incurred extraordinary debt during the first 6 months. Why? Because the economic program and the fiscal policies that were argued for by the Republicans and put in place by the Republicans, with little, if any, Democratic support--but they had the Presidency, they had the House, and they had the Senate--led to the worst economy that this country has seen in 75 years. So, according to Mr. Bernanke and others, we had an economic crisis confronting our country; and if we did not act, we could possibly be in a depression, not just a severe recession. So, we inherited the worst recession in 75 years when we took office, having been urged by the Republican administration to put $700 billion on the fiscal tab in the last Congress, urged by the President, by Secretary Paulson and by Ben Bernanke. The gentleman and I voted together on that bill. It was a tough bill. Nobody wanted to vote for it. But we believed that there was a crisis and it was necessary.

So we find ourselves having passed, because we were still, and frankly, falling into a deeper recession in January and February of this year, and responding to that with the Recovery and Reinvestment Act, and we borrowed $787 billion to do that. I believe it's been helpful. The stock market's up 1,000 points since the start of this administration. Housing starts have now been higher for the last 3 months. The Dow is up. NASDAQ is up very substantially. In addition, we've lost 200,000 less jobs per month, on average, over the last 3 months than we lost during the last 3 months of the Bush administration. Is that what we want? No. Is it progress? I suggest to you it is. It's 33 percent less loss of jobs than we had in the last 3 months of the Bush administration. Now, that's not where we want to be. We want to be at zero and growing.

The economic policies that were pursued by my friend and on the Republican side of the aisle created 4,240 jobs per month over a 96-month administration of the policies pursued by my friends on the other side of the aisle. The economic policies that were pursued in the nineties, with the opposition, to a person, of the Republicans, created an average of 216,000 jobs per month. That's a pretty stark difference. As a matter of fact, 2 million jobs created during the last year of the Clinton administration and 3 million jobs lost during the last year of the Bush administration. That's a 5 million turn around. Is there any wonder why there's so much stress among families and individuals?

Now, ladies and gentlemen, maybe you've heard the first rule of holes. When you're in one, stop digging. That's what this bill does. It says stop digging. The fact is that our Nation is in a deep hole. The deficit for this fiscal year is $1.7 trillion. That ought to be of great concern to every one of us. We differ on why we have that deficit. We believe we have it because the economic program supported by the Republicans was such a failure, demonstrably, factually, in terms of every indication. Our debt has never been higher. Unless we do something to remove ourselves from this hole, the future of our children and grandchildren will be severely constrained, and interest payments will crowd out nearly all of the investment Americans know are vital to their future, from education to clean energy to health care.

The energy bill. There's no tax in the energy bill. There is no tax in the energy bill. But so many of you come and say there's a tax in this bill. That's not honest. You ought to know that. There's one thing to make a mistake. There's another thing to not tell the truth.

Mr. RYAN of Wisconsin. Would the gentleman like me to respond?

Mr. HOYER. No. But I will yield to you if you want. But I am not particularly interested in your responding. If you, on your own time, want to say at some point in time that there is a tax in the bill, you can point it out to me. Are there consequential costs in actions we take? There are. The worst-case scenario, a fiscal meltdown, has a nightmare to offer both parties. For Republicans, the prospect that taxes will be forced through the roof, I understand that concern. I suggest to you there's a constraint on that: Voters throwing people out of office who do that to them. Hopefully, voters will return to office, however, people who have the honesty to say, you want us to buy something, then we will pay for it. You didn't do that. You didn't do it for the war. I understand that. I voted for that funding. For Democrats, the prospect that the programs we value will be slashed and that the weakest and least powerful will suffer most. But there is a way out, reclaiming the principles of responsibility that have served our country so well.

I fully believe that we are in this hole because the last administration set responsibility by the wayside. They waived PAYGO. It was inconvenient to pay for things, and you couldn't do your tax cut and pay for them. That's why we waived PAYGO, because you wanted to do something that you could not and would not and did not pay for. In fact, a recent New York Times analysis tells us that 90 percent of our deficit can be attributed to Bush administration policies, the extensions of those policies, and the economic crisis that the administration left behind.

But whatever we think brought us to this point, I'm confident that we can agree on a tried and tested plan for a new beginning. It is a simple one; the principle that from here on out, this country will pay for what it buys. It's called pay-as-you-go or PAYGO for short. It was a key part of turning deficits into surpluses once, and it can be a part of that objective again. Essentially, this PAYGO bill requires Congress to find savings, to balance out the dollars it spends so that all new policies that reduce revenues or expand entitlement spending are fully offset over five and 10 years, an improvement over the President's bill.

In 1990, a similar PAYGO rule was enacted as part of a budget agreement between a Republican President and a Democratic Congress. In other words, in a bipartisan agreement, we reached a consensus on paying as we go. What was the result? The result was an administration that, for the first time and only time in the lifetime of anybody in this Chamber, we had 4 years of surplus. Now, it wasn't the President alone. It wasn't Democrats alone, because in 1997, we reached another bipartisan agreement to extend this principle of PAYGO when Speaker Gingrich and President Clinton, which I voted for, reached agreement. And by forcing Congress to make difficult choices between taxes and spending, to scrutinize wasteful subsidies and loopholes, and to fully weigh the real cost of tax cuts, PAYGO was instrumental in creating a projected 10-year surplus of $5.6 trillion.

That was squandered. The economy that was supposed to grow so well under your economic policies didn't do so. It created less than 2 million jobs, less than 10 percent of what was created during the 1990s. Its repeal in 2002 paved the way for the fiscal excesses of the last administration.

On winning the congressional majority in 2006, as the ranking member has pointed out, Democrats made it part of the House rules; and today we have the chance to give PAYGO the force of law.

With this law in place, advocates of spending will have to find ways to offset the new costs. That's the discipline. That's the extrinsic constraint. Advocates of tax cuts will no longer be able to finance them with debt. Instead, they will have to tell us which programs they would cut. I make that statement knowing full well that if there's a crisis, if there's an emergency, if there's a war, if there's a Katrina, if there's an economic meltdown, yes, we will waive this, and we will borrow money to try to stem the existing crisis. However, generally speaking, we won't do that.

PAYGO won't make those debates go away and won't make those decisions for us. It means hard choices for all of us and for the citizens whom we represent, but continuing to shun hard choices is the road to fiscal ruin.

Exempted from this bill's PAYGO requirements are extensions of current policy on the alternative minimum tax, estate and middle class income tax cuts passed in 2001 and 2002, and Medicare payments to doctors. As a result, some have criticized this bill for not going far enough; but supporters of PAYGO, including President Obama, see exemption as a crucial concession to political reality and to the votes on your side of the aisle, by the way, who on at least three of those instances don't want to pay for them because they are current policy. You've made that argument over and over and over again. I've disagreed with it, but it is reality.

It is clear that there is bipartisan support in Congress for extending those current policies without offsetting savings. I've told my friend Senator Conrad that if he sends back from the Senate any one of those four bills paid for, I will fight for them. I will advocate for them being paid for. I hope he can do that.

That gives us two choices. On the one hand, we can pass an all-encompassing bill that is waived again and again, one that turns into what the nonpartisan Center on Budget Priorities calls ``a transparently phony fiscal responsibility promise,'' because we've waived them. I think that's unfortunate, but that's what we do. That's what we have done. A promise, I would add, that would weaken the cause of responsibility as a whole.

On the other hand, we can make a promise we are prepared to keep, and we're prepared to keep that to the extent that the Speaker and I have both indicated we will not put a bill on this floor coming out of conference on health care or any other issue dealing with those four unless statutory PAYGO is in the bill, statutory PAYGO has been passed, or it is paid for. The Speaker and I have both indicated we will not put a bill on this floor coming out of conference unless one of those three criteria is met.

In other words, we have the choice between a satisfying, but weak, statement of ideals or of action in the real world of politics. This bill takes the latter path. It draws a line before future budget busting plans, this far but no further.

Is that enough? No, Mr. Speaker, it is not nearly enough. Even if this bill is passed and signed, we will still be in our hole. There will still be years of hard work ahead of us. Hopefully, we can do that on a bipartisan basis. Before our heads can be above ground, we need to deal with entitlements further. We need to deal with spending further. We need to make sure that we have vigorous efforts to rid ourselves of waste, fraud and abuse in the Federal Government on spending and other efforts that we can take to put us on the path, again, of fiscal responsibility to once again get back to an era where we had Clinton surpluses and Clinton 216,000 job-per-month creation.

That's where we want to go. Does this bill get us there? It does not. Does this bill take a critical step towards that end? It does.

I urge my colleagues to reject the substitute, to pass this bill, and to put us once again on the road to fiscal responsibility.

I congratulate Mr. Spratt for his leadership. I want to thank Mr. Welch and Mr. Miller, who is one of the early leaders on PAYGO, and Mr. Baron Hill of the Blue Dogs for cosponsoring this, along with literally 180 or more Democrats supporting this important step.

I will tell my friends, I would hope this was bipartisan, but the economic program we adopted in 1993 was not bipartisan either, and it led to the best economy I have seen in my lifetime in this country. The principal reason for that economic well-being in America was the chip, not government, the chip where the information technology age exploded and provided extraordinary revenues for our country.

It is the private sector that drives our economy. It is the private sector that will give us wealth and that creates jobs, not the government; but the government can create policies within which the private sector and particularly venture capitalists can have the confidence that we are managing our finances responsibly. That's what this bill does.

Vote for this important piece of legislation.

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