Washington, D.C. — U.S. Rep. Bob Etheridge, a member of the House Budget Committee and the House Ways and Means Committee, issued the following statement today on final House passage H.J. Res. 45 the Statutory Pay-As-You-Go Act (PAYGO):
“As a former small business owner, I know the importance of keeping your books balanced and your budget in order. The PAYGO Act’s concept is simple, if you propose new spending or reducing revenues, it must be paid for.
“Today’s passage of Statutory PAYGO is one of the most important actions Congress has taken towards ensuring economic discipline and restoring a balanced federal budget. PAYGO does not solve all of our budget problems overnight, but it has a history of bi-partisan support and proven results.
“And “paying as you go” has a proven track record of success, during my first term in the 1990’s under President Clinton we righted the ship using PAYGO rules and put our nation on a path toward replacing deficits with surpluses. As we work to address the deficits we inherited from the last Administration, PAYGO will be a key part of our effort to restore balance. Congress must now put aside partisan politics and work together to put our nation’s books back in order.”
Statutory PAYGO requires that any new tax and budget spending measures that would add to the deficit be offset with spending reductions. Today’s House-passed bill is similar to the statutory PAYGO law that was in place in the 1990s. The law, in effect from 1990 to 2002, required that tax cuts or new entitlement spending be paid for through budget cuts or tax increases. Over the next 12 years the United States saw its economy improve from a net budget deficit to a budget surplus and an improved economy.