John Spratt: “The budget summit in 1990 ended up with a 5-year deficit reduction plan and a kit of budget process rules known as the…”

“The budget summit in 1990 ended up with a 5-year deficit reduction plan and a kit of budget process rules known as the Budget Enforcement Act of 1991. Among these process changes was something that we have come to call the PAYGO rule, or pay-as-you-go. Basically, the pay-as-you-go rule provides that any increase in entitlement benefits has to be paid for by a new revenue source, and that any cut in taxes has to be offset by equivalent cuts in entitlements or by equivalent increases elsewhere in the Tax Code. In other words, entitlement increases or tax cuts have to be deficit neutral. They cannot worsen the bottom line. This is the basic principle of PAYGO; a common-sense, truly conservative principle. PAYGO was originated by Democrats, but it was embraced by the first President Bush in 1991, in the Budget Enforcement Act. It was adopted by President Clinton in the Deficit Reduction Act of 1993. It was confirmed again by Clinton and by this Congress in a bipartisan way in the Balanced Budget Agreement of 1997. It was even endorsed by the second President Bush in his 2001 budget submission: Reinstate PAYGO.”