CRFB Urges Congress to Stick to the Pay-As-You-Go Principle
WASHINGTON -- The Committee for a Responsible Federal Budget warned Congress not to bypass pay-as-you-go rules or use gimmicks to avoid the choices inherent in the PAYGO principle.
PAYGO requires that the costs of new tax cuts or mandatory spending programs be offset. The Committee praised Congress for sticking to PAYGO when it was developing the budget. However, we also warned that there would be ongoing pressures to bend, ignore, and waive the rule as the time for tough choices arrived.
In many ways, PAYGO is working and Congress is succeeding in finding numerous offsets for new tax and spending initiatives. But, we have recently also seen multiple attempts to get around PAYGO. The farm bill relies on timing shifts to push costs into the future and bring savings forward. There is pressure not to offset the long-term costs of renewing the State Children’s Health Insurance Program (SCHIP). The biggest threat to PAYGO will come with attempts to reform the Alternative Minimum Tax, where there appears to be strong support for waiving the requirement completely.
“We urge Congress to not game the important PAYGO principle,” said Maya MacGuineas, President of the Committee for a Responsible Federal Budget. “PAYGO requires that Congress act responsibly by making choices about what constitutes a national priority and by paying for those priorities. Given existing budget deficits and long-term budget pressures, this should not be too much to ask.”
“PAYGO is only as good as the commitment of legislators to follow it. Congress should not pass PAYGO requirements, declare victory, and then attempt to bypass the intent of the principle,” said MacGuineas.
The Committee continues to support the efforts to comply with this important principle.
Related Programs: Committee for a Responsible Federal Budget
Topics: Fiscal Policy
