Rep. John M. Spratt Jr. Holds a Hearing On Statutory Paygo

Political Transcript Wire › October 07, 2009

Linked as:

Extract

Rep. John M. Spratt Jr. Holds a Hearing On Statutory Paygo

HOUSE COMMITTEE ON THE BUDGET HOLDS A HEARING ON STATUTORY PAYGO

JUNE 25, 2009

SPEAKERS: REP. JOHN M. SPRATT JR., D-S.C. CHAIRMAN REP. ROSA DELAURO, D-CONN. REP. CHET EDWARDS, D-TEXAS REP. ALLYSON Y. SCHWARTZ, D-PA. REP. MARCY KAPTUR, D-OHIO REP. XAVIER BECERRA, D-CALIF. REP. LLOYD DOGGETT, D-TEXAS REP. EARL BLUMENAUER, D-ORE. REP. MARION BERRY, D-ARK. REP. ALLEN BOYD, D-FLA. REP. JIM MCGOVERN, D-MASS. REP. ROBERT E. ANDREWS, D-N.J. REP. ROBERT C. SCOTT, D-VA. REP. BOB ETHERIDGE, D-N.C. REP. TIMOTHY H. BISHOP, D-N.Y. REP. GWEN MOORE, D-WIS. REP. NIKI TSONGAS, D-MASS. REP. JOHN YARMUTH, D-KY. REP. CHARLIE MELANCON, D-LA. REP. BETTY MCCOLLUM, D-MINN. REP. JIM LANGEVIN, D-R.I. REP. RICK LARSEN, D-WASH. REP. KURT SCHRADER, D-ORE. REP. GERRY CONNOLLY, D-VA.

REP. PAUL D. RYAN, R-WIS. RANKING MEMBER REP. SCOTT GARRETT, R-N.J. REP. MARIO DIAZ-BALART, R-FLA. REP. JEB HENSARLING, R-TEXAS REP. PATRICK T. MCHENRY, R-N.C. REP. CONNIE MACK, R-FLA. REP. MIKE SIMPSON, R-IDAHO REP. JOHN CAMPBELL, R-CALIF. REP. JIM JORDAN, R-OHIO REP. CYNTHIA M. LUMMIS, R-WYO. REP. STEVE AUSTRIA, R-OHIO REP. ROBERT B. ADERHOLT, R-ALA. REP. DEVIN NUNES, R-CALIF. REP. GREGG HARPER, R-MISS.

WITNESSES: OFFICE OF MANAGEMENT AND BUDGET DIRECTOR PETER ORSZAG

ROBERT GREENSTEIN, FOUNDER AND EXECUTIVE DIRECTOR, CENTER ON BUDGET AND POLICY PRIORITIES

DOUGLAS HOLTZ-EAKIN, PREVIOUS CONGRESSIONAL BUDGET OFFICE DIRECTOR

[*] SPRATT: I think more of the committee will be joining us later in the morning, but in the interest of time I think we should also get this hearing started.

The purpose of today's hearing is to review statutory pay as you go, PAYGO, and examine the president's proposal to renew it. Initially, we had planned this hearing for last Thursday, and I would like to thank both our witnesses and our ranking member, Mr. Ryan, for their cooperation in helping us reschedule it for today. At the outset of the 1990s, Congress passed the Budget Enforcement Act to ensure that the budget summit agreement was carried out. Among its provisions was a rule that we colloquially called "pay as you go," or PAYGO for short.

Our critics disdained our resort to budget process. They accused us of dodging the hard choices we had to make if we were going to wipe out the deficit. But by the end of the 1990s, the budget was in surplus for the first time in 30 years. And it was clear that process rules like PAYGO played a big part in our success.

Republicans were in the majority in 2002 when the BEA expired, and they chose not to reinstate PAYGO, knowing that it would impede passage of their tax cut agenda. Without the process rules, the budget plunged from a surplus of $236 billion in the year 2000 to a deficit of $413 billion in the year 2004.

When Democrats took back the House, the reinstatement of PAYGO was on the top of our agenda. We made PAYGO a rule of the House the first day we convened the 110th Congress.

Two weeks ago, the president proposed a bill to make PAYGO statutory, and last week that bill was introduced, with over 150 co- sponsors, as a starting point toward making statutory PAYGO part of our budget process.

The Obama administration and the current Congress have inherited a colossal deficit, swollen this year to accommodate needed recovery measures. As these measures help pull us out of the slump, we need to re-focus our attention on the longer term fiscal fate of this country and this government.

Earlier this month, Chairman Bernanke told our Budget Committee that the long-run fiscal path is simply not sustainable, and witness after witness comes to us bearing the same message.

Statutory works -- statutory PAYGO works because it reins in new entitlement spending and new tax cuts. Both tend to be long lasting -- they are easy to pass, and hard to repeal. By insisting on offsets and deficit neutrality, PAYGO buffers the bottom line. Its terms are complex, but at its core, it's a common-sense rule that everyone can understand: When you're in a hole, stop digging.

We share the administration's commitment to fiscal discipline, and believe that statutory PAYGO will put greater rigor into the budget process.

To help us understand the proposed legislation, our first witness will be no stranger to this committee. He's the former CBO d...

See the full content of this document