House considers pay/go bill

The House Wednesday began consideration of pay/go legislation that would require that any new tax and mandatory spending bills that would add to the deficit be offset. On a party-line vote, lawmakers approved the rule for the bill, 243-182.

Democrats argued passage of the bill would be an important move toward fiscal discipline. House Budget Chairman John Spratt cited pay/go as a key reason for the drop of the deficit in 1990s, and noted after its 2002 expiration, the deficit swelled.

Spratt said pay/go "is not the ultimate solution to deficits, but it is a significant step in the right direction and was proven to work in the 1990s and needs to be reinstated for that purpose now."

Rep. John Tanner, D-Tenn., said the measure "is one small step" to address the urge of lawmakers who tend to "want to vote against any taxes and ... want to vote for all the programs."

Tanner is a member of the Blue Dog Coalition, which has made passage of statutory pay/go a top priority. The bill is also supported by President Obama. But the Senate is not expected to follow suit.

Republicans countered the bill's passage would make it easier for Democrats to raise taxes without helping reduce the deficit, in part because it does not restrict discretionary spending, about 40 percent of the total budget.

House Budget ranking member Paul Ryan said "this tool does not work," and that since it was instituted as a rule, deficits have swelled. "The budget deficit under the last Republican budget was $161 billion. The [projected fiscal 2009] deficit today is $1.8 trillion," he said.

Ryan noted examples of recent spending, including the $787 billion stimulus package and the $700 billion financial rescue package, that were not subject to pay/go.

Democrats said Republican economic and tax policies were mostly to blame for the deficits, and they pointed to Obama's insistence that Iraq and Afghanistan war costs be put on the federal budget rather than financed through emergency supplemental bills.

At an event Wednesday, Ryan said he believes Democratic leaders will seek to pass the bill in an effort to win support from Blue Dogs for their healthcare reform proposal.

"It is part of an attempt to get votes next week for the creation of the largest entitlement system since the 1960s," Ryan said. "Instead of tackling our entitlement crisis, we are just adding to it, and this is meant to present a fiscal facade."

Ryan said that Republicans will offer a pay/go substitute amendment that would ensure that federal spending cannot grow more quickly than the economy. It would also establish a cap on discretionary spending to no more than the rate of inflation.