John Spratt: “this was not just serendipity or good luck. We had a good economy, but we also had a good set of budget policies and a…”

“this was not just serendipity or good luck. We had a good economy, but we also had a good set of budget policies and a good budget converging with a good economy. One of the things that we did in 1991 under the first President Bush, we adopted a set of budget rules in the Budget Enforcement Act. One of these required every budget to be a 5-year budget. Secondly, another rule required that we put a cap on discretionary spending. We cap and limit on a 5-year basis the money that we appropriate every year for discretionary programs. These are discretionary programs. Thirdly, we adopted something called a pay-as-you-go rule. It was a very effective rule which simply provided if Members want to increase the benefits under an entitlement program, Medicare, Social Security, whatever it may be, you have to either pay for it or cut some other entitlement by an equal amount. By the same token, we said if you want to cut taxes when we have a huge deficit, you have to pay for those tax cuts, offset those tax cuts, either with a spending cut of equal amount or with a tax increase elsewhere in the Code of an equal amount so it is deficit-neutral, it does not impact and worsen the deficit. Those rules proved to be extremely helpful as we moved the budget from a $290 billion deficit in 1992 to a $236 billion surplus in the year 2000.”