WASHINGTON, DC – House Majority Leader Steny H. Hoyer (MD) spoke on the House Floor today in support of the Statutory Pay-As-You-Go Act of 2009, which passed the House by a vote of 265-166 . This legislation reestablishes statutory “pay-as-you-go” (PAYGO) requirements that helped turn deficits into surpluses during the Clinton Administration. Below are his remarks as prepared for delivery:
“Maybe you’ve heard ‘the first rule of holes’: when you’re in one, stop digging.
“The fact is that our nation is in a deep hole. The deficit for this fiscal year is $1.7 trillion. Our debt has never been higher. Unless we do something to remove ourselves from this hole, the futures of our children and grandchildren will be severely constrained, and interest payments will crowd out nearly all of the investments Americans know are vital to their future, from education to clean energy to health care. The worst-case scenario of fiscal meltdown has a nightmare to offer both parties: for Republicans, the prospect that taxes will be forced through the roof; 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. In fact, a recent New York Times analysis tells us that 90% of our deficit can be attributed to Bush administration policies, the extensions of those policies, and the economic crisis that that administration left behind.
“But whatever we think brought us to this point, I am 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 is called pay-as-you-go, or PAYGO. It was a key part of turning deficits into surpluses once, and it can be a key part 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 ten years. In 1990, a similar PAYGO rule was enacted as part of a budget agreement between a Republican President and a Democratic Congress. In 1997, it was reaffirmed by President Clinton and Speaker Gingrich. 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 ten-year surplus of $5.6 trillion.
“Its repeal, in turn, paved the way for the fiscal excesses of the last administration. On winning the Congressional majority in 2006, Democrats made it part of 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. Advocates of tax cuts will no longer be able to finance them with debt—instead, they’ll have to tell us which programs they would cut. PAYGO won’t make those debates go away; it won’t make those decisions for us. It means hard choices for all of us. 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, the estate and middle-class income tax cuts passed in 2001 and 2003, 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 exemptions as a crucial concession to political reality that keep the cause of responsibility credible. It is clear that there is bipartisan support in Congress for extending those current policies without offsetting savings.
“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 and Policy Priories calls ‘a transparently phony fiscal responsibility promise’—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. 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 before our heads are again above ground. But today, we can do something absolutely necessary: we can choose to stop digging.”