Congress is set to face one of its most important votes this year - whether to offset the costs of continuing to provide relief from the alternative minimum tax (AMT). The implications for the nation's fiscal and economic health are huge.

The cost of extending AMT relief for another year is $51 billion. While hardly small, that's modest compared to the costs of new tax and entitlement proposals that will likely emerge in the coming months and years (such as proposals to expand health care coverage), as well as continuing Medicare's current reimbursement rates for physicians and extending the tax cuts scheduled to expire at the end of 2010.

If Congress cannot muster the wherewithal to pay for one year of AMT relief, the chances that it will do so for these larger, far costlier items in the years ahead will diminish greatly.

Does that matter? You bet. If we remain on our current policy course - extending all tax cuts and current Medicare-payment rates without paying for them; making no cuts in projected spending; and enacting no revenue increases - by 2050, deficits will soar to at least 20 percent of the gross domestic product (GDP). In addition, the national debt will exceed 200 percent of GDP, a level unprecedented in U.S. history.

By contrast, if we rigorously adhere to Pay-As-You-Go ("PAYGO") rules for both taxes and entitlements and Congress fully offsets these costs, then we will cut the cumulative fiscal gap through 2050 by about half.

To be sure, Congress will need to make tough choices throughout the budget. But adhering to PAYGO is the crucial first step.

That's why four leading budget-watchdog organizations -- the Concord Coalition, Committee for Economic Development, Committee for a Responsible Federal Budget, and our Center -- last week issued a joint statement urging "in the strongest possible terms" that lawmakers strictly adhere to PAYGO as they turn to year-end measures, including legislation to extend AMT relief. ...

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