Obama Backs Pay-As-You-Go Law
By Lori Montgomery
President Obama today threw his weight behind a new law to rein in federal spending, cheering fiscal hawks in the House who have been pressing for a vote on such a measure since Democrats claimed control of Congress in 2007.
In a letter to House Speaker Nancy Pelosi (D-Calif.), Obama urged Congress "to work with me" to enshrine the concept of pay-as-you-go spending in federal law.
"The Budget that I have proposed and that is currently being considered by Congress would cut the deficit in half by the end of my first term ... an important step in restoring fiscal discipline," Obama wrote. But "it is not enough. After years of fiscal irresponsibility, returning our nation to fiscal health also requires a budget process that can help make those plans a reality."
Obama is battling a budget deficit projected to hit nearly $1.9 trillion this year, and $1.2 trillion in the fiscal year that begins in October. Despite those massive sums, the president wants to extend some of the tax cuts enacted under former president George W. Bush and make other changes that would dramatically increase future deficits compared with current law.
Fiscal conservative in the House Democratic caucus, known as Blue Dogs, have agreed to back the president's tax plans, but only if Congress takes a vote to give legal power to the pay-as-you-go concept, known as PAYGO. In budget talks late Thursday, House leaders agreed to such a vote, but the Blue Dogs were still pushing for a similar pledge from Senate leaders. Obama's letter, aides said, gives them hope that the president will support them in that fight.
The White House has previously endorsed PAYGO, but today's letter marks the first time since he became president that Obama himself has called for passage of a PAYGO law. Such a measure would prohibit tax cuts or new spending on entitlement programs such as Social Security, Medicare and Medicaid unless the cost of those moves were offset by tax hikes or spending cuts.
"In the 1990s, statutory PAYGO encouraged the tough choices that helped transform large deficits into surpluses, and I believe that it can do the same today," Obama wrote. "Both houses of Congress have already taken an important step toward righting our fiscal course by using congressional rules to enforce the PAYGO principle. But we can strengthen enforcement and redouble our commitment by enacting PAYGO into law."
Posted at 6:55 PM ET on Apr 24, 2009
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