WASHINGTON —
With budget negotiations between the House and
Senate now underway, The Concord Coalition today strongly recommended that
negotiators agree to reinstate the traditional pay-as-you-go (paygo) rule for
entitlement expansions and tax cuts. This fiscally responsible rule played a key
role in past bipartisan efforts to rein in ballooning budget deficits. The
Senate version of the budget resolution contains a paygo provision, but the
WASHINGTON —
With budget negotiations between the House and
Senate now underway, The Concord Coalition today strongly recommended that
negotiators agree to reinstate the traditional pay-as-you-go (paygo) rule for
entitlement expansions and tax cuts. This fiscally responsible rule played a key
role in past bipartisan efforts to rein in ballooning budget deficits. The
Senate version of the budget resolution contains a paygo provision, but the
House version does not.
“With concern mounting
over the rapidly deteriorating fiscal outlook, returning to the pay-as-you-go
standard is a matter of common sense. It reminds us that we all have a duty to
pay our bills. To have a meaningful effect, however, the rule must apply to both
spending increases and tax cuts,” said Concord Coalition Executive Director
Robert Bixby.
“Removing tax cuts from paygo would do nothing to promote
fiscal discipline. It would neither control spending nor shrink the deficit. All
it would do is exempt tax cuts from fiscal scrutiny, regardless of the
circumstances. Such an enormous and unnecessary loophole would not be wise
policy given that deficits are back for as far as the eye can see. Since
spending and tax decisions both have consequences for the budget, there is no
good reason to exempt either from enforcement rules. If spending is viewed as
the main problem, Congress has a duty to cut spending before giving itself a
free pass to cut taxes. Doing otherwise would simply encourage a steady
expansion of deficits,” said Bixby.
“A further danger of exempting tax cuts from paygo is the
incentive it would provide to create additional ‘tax entitlements’ where
benefits are funneled through tax breaks. This subterfuge complicates the tax
code while growing the deficit just as inexorably as new entitlement spending,”
said Bixby.
The Concord
Coalition is a nonpartisan, grass roots organization dedicated to balanced
federal budgets and generationally responsible fiscal policy. Former U.S.
Senators Warren Rudman (R-NH) and Bob Kerrey (D-NE) serve as Concord’s co-chairs
and former Secretary of Commerce Peter Peterson serves as president.
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