Obama Will Endorse ‘Paygo’ Law
President Obama is calling for a so-called paygo law — as in, “pay as you go — that would require Congress to offset the cost of new tax cuts or spending on entitlement programs, like Medicare, with tax increases or spending cuts to avoid adding to the deficit, according to his press office.
The president will make his support clear in his State of the Union address tonight. A major theme of the speech will be his intention — as the economy recovers — to focus on reducing deficits that have become so large that they are a political liability.
Mr. Obama also will confirm that he will create a bipartisan debt-reduction commission and propose a three-year freeze on a one-eighth slice of the budget for domestic spending. The paygo legislation he’s endorsing is a compromise reached among Congressional Democratic leaders; it exempts future extensions of some existing tax cuts for the middle class.
Here’s an excerpt from the White House this morning:
“…In the 1990s, statutory paygo encouraged the tough choices that helped to move the government from large deficits to surpluses, and the President believes it can do the same today. Statutory paygo would hold the government to a simple but bedrock principle: Congress can only spend a dollar if it saves a dollar elsewhere….
“…Both houses of Congress have already taken an important step toward righting our fiscal course by adopting congressional rules incorporating the paygo principle, but we can strengthen enforcement and redouble our commitment by enacting paygo into law.”
