Obama pitches pay-as-you-go plan for Congress
The president is seeking binding legislation for the House and Senate
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Obama endorses 'Pay as you go'
June 9: President Obama proposes turning the "Pay as you go" rule into law, requiring Congress to save a dollar to spend a dollar in the federal budget.
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updated 3:18 p.m. ET, Tues., June 9, 2009
WASHINGTON - President Barack Obama on Tuesday challenged Congress to pay for new increases in federal benefit programs as it goes rather than sink the nation deeper into a debt, calling it a matter of public responsibility.

Republicans lashed back that Obama is no voice of fiscal restraint as the deficit soars.

The president's plan would require Congress to pay for new entitlement spending, such as health care, by raising taxes or coming up with budget cuts — a "pay-as-you-go" system that would have the force of law. Under the proposal, if new spending or tax reductions are not offset, there would be automatic cuts in so-called mandatory programs — although Social Security payments and some other programs would be exempt.

Not noted by the president: Tuesday's plan is a watered-down version of the so-called "PAYGO" rules proposed just last month in his own budget plan.

That version would have required, on average, all affected legislation to be paid for in the very first year. The new plan only requires such legislation to be financed over the coming decade. That mirrors congressional rules and reflects the likelihood that health care reform will add to the deficit in the early years.

Spend a dollar, save a dollar
Obama said the principle is simple: Congress can only spend a dollar if it saves a dollar somewhere else.

"It is no coincidence that this rule was in place when we moved from record deficits to record surpluses in the 1990s — and that when this rule was abandoned, we returned to record deficits that doubled the national debt," Obama said, flanked at the White House by supportive Democratic lawmakers.

"Entitlement increases and tax cuts need to be paid for," he said. "They're not free, and borrowing to finance them is not a sustainable long-term policy."

Republican leaders, critical of the Obama-championed $787 billion stimulus package and other deficit spending, called the president disingenuous.

"It's as if the administration and these Democrat leaders are living in an alternate universe," said House Republican Whip Eric Cantor of Virginia. "The quickest way to save money is to stop recklessly spending it."

The pay-as-you-go rules would not apply to discretionary spending — the portion that Congress decides how to spend each year — which accounts for almost 40 percent of the budget, said Peter Orszag, the administration's budget director.

Obama's call for binding legislation comes as a reward to moderate-to-conservative "Blue Dog" Democrats who are big believers in pay-as-you go. Their votes were crucial to passing a congressional budget blueprint that generally follows Obama's budget.

Existing PAYGO rules
The House and Senate already have their own PAYGO rules, but have routinely found ways around them. For example, a bill to effectively double GI Bill education benefits was enacted last year because of a loophole in congressional rules.

Obama's "PAYGO" plan would also require future tax cuts to be financed by tax increases elsewhere in the code, though exceptions are made for extending President George W. Bush's 2001 and 2003 tax cuts, as well as other tax cuts that are scheduled to expire.

The federal deficit is on pace to explode past $1.8 trillion this year, more than four times last year's all-time high.

The deficit figures flow from the deep recession, the Wall Street bailout and the cost of the economic stimulus bill. Obama has defended the massive stimulus plan as essential to helping pump some life back in the economy, one that is still shedding jobs but showing more signs of life in recent weeks.

"The fact is, there are few who aren't distressed by deficits," Obama said. He said restoring a pay-as-you-go method under law would force lawmakers to deal not just with the politics and crises of the day, but also remain fixed on the nation's long-term financial health.

I'm kinda tired of hearing about Obama or what he does or doesn't 24/7

No offense.

Tax Cuts yester year, in debit today


WASHINGTON, March 30 ? House Republican leaders avoided an embarrassing setback on Tuesday, barely defeating a nonbinding resolution favoring new restrictions on future tax cuts that are the centerpiece of President Bush's economic program.

The major budget fight between the House and Senate this year is not over provisions of the budget itself, as both Republican-controlled chambers have passed $2.4 trillion spending blueprints for next year that largely track Mr. Bush's proposal. Instead, it is over rules that would make it more difficult for Congress to pass new tax cuts that are not paid for by increases in other taxes or spending cuts. The Senate has approved such a "pay as you go" measure that covers taxes, but Mr. Bush and Republican Congressional leaders strenuously oppose it.

In a vote reflecting the apprehension of many lawmakers that the $478 billion budget deficit is becoming a major election-year concern for voters, the House split 209 to 209 on Tuesday on a measure urging members negotiating a budget deal with the Senate to accept Senate tax-cut restrictions. At one point, 212 members had voted for the measure, but House leaders kept the vote open for more than 20 extra minutes to pressure a handful of members to change their votes. The tie meant that the measure was defeated.

With House leaders able to maintain their chamber's opposition to the "pay as you go" rule, attention is turning to two senators who may hold the budget's fate in their hands: Olympia J. Snowe and Susan Collins, both Republicans from Maine.

Earlier this month, both women joined with two other Republican senators, John McCain of Arizona and Lincoln Chafee of Rhode Island, and all but one Democrat to approve, 51 to 48, an amendment to require 60 votes for the Senate to approve any new tax cuts in the next five years that are not offset by spending cuts or increases in other taxes. White House officials acknowledge that the provision could make it difficult for Mr. Bush, if he is re-elected, to win extensions of tax cuts passed in the last three years that expire by the end of the decade.

Mr. McCain and Mr. Chafee say they will vote for a final budget only if it includes the provision. On Tuesday, Ms. Collins said she was open to a compromise, perhaps a provision of shorter duration.

"It might be possible to have something that was more limited in time," she said. "I am open to discussing any reasonable alternative."

Ms. Snowe indicated she was less inclined to compromise. "I'm not likely to vote for a conference report without pay-go that treats tax cuts and spending equally," Ms. Snowe said Tuesday, referring to the legislative shorthand for "pay as you go."

If the provision is stripped in House-Senate negotiations, and the budget fails to win Senate approval as a result, Congress would be forced to operate without a budget, making it more difficult to control spending.

Reflecting the high stakes of this debate, the White House has been leaning on both Ms. Snowe and Ms. Collins. After the vote in the Senate earlier this month, Ms. Collins said a White House official called "to protest my vote." And Ms. Snowe said that she recently talked to Mr. Bush about the issue.

"The president wants to make sure that these tax cuts are extended," Ms. Snowe said.

House Republican leaders say they still oppose applying "pay as you go" to taxes. On Tuesday, the majority leader, Representative Tom DeLay of Texas, restated a view that has been cited by other Republican House leaders: tax cuts pay for themselves by generating economic growth that more than makes up for lost revenue.

"We, as a matter of philosophy, understand that when you cut taxes the economy grows, and revenues to the government grow," Mr. DeLay said. "The whole notion that you have to cut spending in order to cut taxes negates that philosophy, and so I'm not interested in something that would negate our philosophy."







OK during the Bush year House Republicans hated PAYGO in favor of tax cuts that was supposed to the grow the economy which would then in grow government revenue. ??????? FAIL!


Now Republicans are whining about Obama and his plans for PAYGO.

The problem is the same in both cases. The republicans hated paygo because they wanted the tax cuts. If they had been real fiscal conservatives it would have been no large matter. Unfortunately, Between the tax cuts and the extra spending the wars required, it was only half the total debt we fell into. The congress spent like madmen and it's getting no better now.

Obama is the last person to speak of fiscal responsibility. I admit, the republicans were leading when we went largely into debt, but now the democrats are leading and almost single-handedly putting us even further into debt. I mean, even if you take out the bank bailout drafted mostly by democrats and signed by bush and the 2009 budget, Obama will still break the deficit record set for 2008.


I'm sure their definition of zero in all this is at the least last year's deficit of half a trillion. We need pay as you go from true zero. That means no sticking your grubby little hands into the medicare/social security trusts and no borrowing and actually balance a budget both internally and externally. Nobody has done it since Andrew Jackson. If Obama has the cajones to actually do that and not achieve it by taxing the snot out of everyone, he will have my utmost respect. As for now... Pot, meet kettle.

yep that i do nt wanna hear about it got the country into a really good place

i must agree lets ignore what the govt is doing

after all what we do not know can't hurt us (can it)

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No offense.

but no one makes any one click on any particular thread (do they)