House Budget Committee Chairman John Spratt (D-SC) made an opening statement at the hearing on Statutory PAYGO Legislation. PAYGO stands for pay-as-you-go and was part of the Budget Enforcement Act put into place by congress in the 1990s. When the Act expired in 2002, a Republican led Congress decided not to reinstate PAYGO. PAYGO controlled government spending and created budgetary restrictions forcing paying for expenditures as the program was in process. Spratt credited the $236 billion surplus to PAYGO and says that after Congress failed to reinstate it in 2002, the budget went from a surplus to a deficit of $413 billion in just four years. He is pleased that President Obama wants to make PAYGO statutory and says the House Budget Committee supports the administration on this issue.
According to Spratt, when the 110th Congress convened for the first time, their top priority was to reinstate PAYGO. Now, the president is pushing to make it statutory so that no Congress in the future can allow it to lapse again. Spratt says that PAYGO is financial responsibility and necessary to reducing the nation’s debt.
He concluding his opening remarks by saying, “Statutory PAYGO works because it reins in new entitlement spending and new tax cuts. Both tend to be long lasting – easy to pass, hard to repeal. By insisting on offsets and deficit neutrality, PAYGO buffers the bottom-line. Its terms are complex, but at its core, it is a common-sense rule that everyone can understand: when you are in a hole, stop digging.
“We share the Administration’s commitment to fiscal discipline, and believe that statutory PAYGO will put greater rigor into the budget process. I look forward to working with all interested parties as we move statutory PAYGO through Congress.”