Statement From the Press Secretary on Statutory PAYGOBy VJ, USGOV
Wednesday, January 27, 2010
The serious fiscal situation that our country faces reflects not only the severe economic downturn we inherited, but also years of failing to pay for new policies—including the 2003 prescription drug law and large tax cuts that most benefited the well-off. The result was that the surpluses projected at the beginning of this decade were transformed into trillions of dollars in deficits that threaten future job creation and economic growth.
In the 1990s, statutory PAYGO encouraged the tough choices that helped to move the government from large deficits to surpluses, and the President believes it can do the same today. Statutory PAYGO would hold the government to a simple but bedrock principle: Congress can only spend a dollar if it saves a dollar elsewhere. Mandatory spending increases and tax cuts must be paid for; they’re not free, and borrowing to finance them is not a sustainable long-term policy.
Statutory PAYGO would require us to pay for any new non-emergency tax cut or mandatory spending expansion with offsetting revenue increases or spending reductions. Both houses of Congress have already taken an important step toward righting our fiscal course by adopting congressional rules incorporating the PAYGO principle, but we can strengthen enforcement and redouble our commitment by enacting PAYGO into law. That’s why the President strongly supports the Senate’s efforts to pass statutory PAYGO. The President is committed to returning our government back to a path of fiscal discipline, and PAYGO represents a key step toward that goal.
Tags: Economy, Office of the Press Secretary, Statements and Releases, United States, Whitehouse