Cross-posted from Rothman for New Jersey
I want to discuss with you a policy implemented by the new Democratic majority that will have an impact on everything this Congress does. The policy is called “pay as you go”, or “pay-go” for short. Simply put, pay-go states that any additional spending must either cut spending somewhere else or create new revenue. Tax cuts are treated exactly the same way – a bill that cuts revenues by slashing taxes must also identify what spending will be cut.
This policy is just common sense. Pay-go was last enacted in 1991 – back before Republicans gained control of Congress. Throughout the rest of George H.W. Bush’s time in office and for every day of Bill Clinton’s Presidency, pay-go helped Congress enforce fiscal discipline on its members. As a result, for the first time since World War II, the federal deficit began a sustained reduction. By 1998, this policy had created a budget surplus and, for the first time in generations, Congress was able to begin paying down the national debt.