House Passes Statutory PAYGO Legislation

Costa: It Is Time To Stop Running Our Nation On A Credit Card And Burdening Future Generations With Our Debts

WASHINGTON, D.C. – Today, the House of Representativespassed HR 2920, the Statutory Pay-As-You-Go Act (PAYGO) of 2009 by a vote of265 to 166. Congressman Jim Costa (D-Fresno) is an original co-sponsor ofthis legislation and supported the legislation during today's vote on thefloor. Overall, the legislation requires offsets for tax cuts orentitlement expansion over five years. The bill now moves onto the Senatefor consideration.

"WhenCongress enacted the Budget Enforcement Act in 1990, it was attempting to reinin deficits that the federal government had experienced yearly since 1970,"Costa said. "It is disappointing that the sensible tax policies andinvestments in smart, pro-growth policies our country achieved from 1990 to 2001were squandered for a large, unsustainable deficit. I am hopeful thislegislation will move quickly in the Senate so we can bring our fiscal houseback in order."

HR 2920ensures lawmakers in Congress make tough choices by requiring any spendingincrease or tax cut be paid for, rather than pushed on to futuregenerations. Statutory PAYGO would apply to new policies that reducerevenue or expand entitlement spending; it will exempt extensions of currentpolicy on the Alternative Minimum Tax, the estate and middle-class income taxcuts passed in 2001 and 2003, and Medicare payments to doctors.

The billalso makes changes to President Obama's original proposal, due to concerns thatwere raised. The first notable change deals with extensions of tax cutsand the time period for deficit neutrality. Under the President'sproposal, extension of any of the tax cuts enacted in 2001 and 2003, includingthose for upper income taxpayers, would not be subject to statutory PAYGO;under the passed House bill, the exemption has been limited to middle-class taxcuts. The House bill also requires any legislation passed by Congress tobe deficit neutral over both five and ten years.