House Passes Statutory PAYGO Law Blue Dog Congressman Lincoln Davis Supports the Bill, Applauds Fiscal Responsibility MeasureJuly 22, 2009

WASHINGTON, D.C. Today, the House of Representatives passed H.R. 2920, the Statutory Pay-As-You-Go Act of 2009. This bill requires Congress to offset the costs of tax cuts or increases in entitlement spending with savings somewhere in the budget. The bill would also require an across-the-board reduction in certain mandatory programs if the net effect of all legislation enacted during a Congressional session increased the federal deficit.

"PAYGO rules are essential to keeping federal spending in check," said Congressman Lincoln Davis. "If families have to account for what they spend, Washington should have to do the same with taxpayer dollars."

Today's legislation requires that any new policies that result in a reduction of revenues or an expansion in entitlement spending are offset over five and ten years. The bill takes great strides to ensure that America can afford to fund its priorities consistently and without interruption for future generations. Unlike the House PAYGO rule, which requires each bill that the House considers to be offset with savings within that bill, statutory PAYGO simply requires that the net effect of all legislation enacted during a session of Congress no increase the federal deficit, effectively allowing net savings from one bill to be used to offset other legislation with net costs.

Statutory PAYGO would hold the Federal government to a simple but important principle: new tax policies or entitlement legislation should be paid for. H.R. 2920, as passed today, would build on existing PAYGO Congressional rules by strengthening enforcement mechanisms that would require offsetting revenue increases or mandatory spending reductions. Statutory PAYGO was in place during the 1990's, when it helped to move the Federal government from large deficits to budget surpluses.