Pay-as-you-go legislation could eventually reform national budget deficits by offsetting new or increased spending, Rep. Baron Hill said at a news conference in New Albany on Friday.
Hill authored the House PAYGO bill and has pushed for its implementation for several years. Still, with the measure being blocked before in the Senate, he didn’t expect PAYGO to be re-established in 2010.
Thursday “the Senate did something I never thought they would do,” Hill said.
As part of an amendment to a larger bill, the Senate approved PAYGO. If signed into law, it requires Congress to identify funding for any legislation before its approved.
That means either a budget cut or a new revenue stream has to be chosen to foot a bill. Health care reform, for example, would have to be funded without creating a deficit before it would meet PAYGO standards.
Hill said the federal budget dipped from a surplus of $236 billion in 2000 with PAYGO in place to a shortfall of $413 billion in 2004 without the regulations.
“As a result, we’ve run up these huge deficits,” Hill said.
Statutory PAYGO was established by the Budget Enforcement Act of 1990, and later renewed in 1997. When it expired in 2002, PAYGO was discontinued by the Republican-controlled Congress.
Having President Barack Obama back PAYGO was a trade-off for Hill supporting the administration’s bail-out spending packages, the Indiana 9th District Democrat said.
Hill and other House Blue Dog Democrats insisted on the PAYGO rules before supporting the stimulus measures.
A fiscal Conservative is how Hill defined his approach to economic and budget issues, but the PAYGO vote in the Senate was straight down the party line with no Republicans voting in favor of the bill that passed 60-40.
Some Conservatives have painted PAYGO as a means to pushing tax increases through Congress. The rules could also make it difficult to extend permanent tax cuts since PAYGO would stipulate the breaks be covered with another tax increase or a budget cut.
According to an Associated Press report, Congress can extend President George W. Bush’s middle-class tax cuts in 2011, but it would add another $1.4 trillion in national debt.
Thursday’s press conference was held at Coast to Coast Advertising, which is located at 1911 Unruh Court.
Especially in hard economic times, Coast to Coast President Karen Bannon said businesses can’t survive in the red for long. Government should follow the same strategy and keep budgets balanced, Bannon said.
“We should know how we’re going to pay for something before we go out and start buying,” she said.
With a November election looming for Hill, he conceded Congress is under intense scrutiny on how its handling spending and the economy. With Democrats in control, he said the party will naturally face the most criticism as unemployment continues to sag on financial recovery.
“No question, the political climate is different right now for Democrats,” he said. “I understand the anger, I understand the frustration, and I’m sensitive to it.”
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