House Set To Vote On 'Pay As You Go' Budget Plan

The House votes Thursday on a budget proposal known as "pay as you go," or "pay-go." It requires that mandatory spending and tax cuts be offset by revenue increases or spending cuts elsewhere. President Obama supports the concept and has promised to cut the deficit in half by the end of his first term.

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STEVE INSKEEP, host:

It's MORNING EDITION from NPR News. I'm Steve Inskeep.

LINDA WERTHEIMER, host:

And I'm Linda Wertheimer. The federal government will spend far more money this year than it ever has before, and Congress is now looking at ways to impose some limits on itself. House lawmakers have approved legislation that would enshrine their so-called pay-as-you-go budget rule into law. It means that any spending increase would have to come with matching cuts or tax increases. But the rule may not be as strict as it sounds. NPR's Audie Cornish reports.

AUDIE CORNISH: The pay-as-you-go rule isn't new. Congress had similar laws in the 1990s that expired under President George W. Bush in 2002. And during the House floor debate, the air was thick with '90s-era nostalgia from Democrats such as Allyson Schwartz of Pennsylvania.

Representative ALLYSON SCHWARTZ (Democrat, Pennsylvania): In fact, in the 1990s, as a result of statutory pay-go, this country saw record deficits transformed into record surpluses.

CORNISH: The bill is supposed to discourage Congress from passing new spending initiatives unless there's a corresponding cut or tax increase. But unlike the '90s, this pay-as-you-go provision doesn't include a cap on appropriation spending. In fact, it adds exemptions for some Bush-era tax cuts - the estate tax - a fix for the alternative minimum tax, and increased reimbursement pay for Medicare doctors - this on top of the last few months of spending had Republicans crying foul.

Representative PAUL RYAN (Republican, Wisconsin): It's really kind of like buying a fire extinguisher after your house has burned down.

CORNISH: Wisconsin Republican Paul Ryan.

Representative RYAN: We're going to do this bill after we borrowed 1.1 trillion for a stimulus, after we passed a 410 bloated omnibus appropriations bill. This is PR politics.

CORNISH: But with the budget deficit estimated to top $1.8 trillion, the provision satisfies Connecticut Representative Jim Himes and the other fiscally conservative Democrats it was revived to please.

Representative JIM HIMES (Democrat, Connecticut): Is it perfect? No, it's not perfect. Does it have some exceptions I'd rather not see as exceptions? Yes, it does. But it is a very, very constructive step in the right direction, and it will...

CORNISH: The bill heads next to the Senate, with President Obama urging them to consider it a budget reform priority.

Audie Cornish, NPR News, the Capitol.

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