Chairman Spratt, Congressman Ryan, and members of the Committee, I appreciate the opportunity to appear hear today to explain why I think the pay-as-you-go discipline is important and appropriate, and why establishing a statutory pay-as-you-go rule to reinforce Congressional rules is a sound idea.
My testimony will cover the following:
- Adherence to the pay-as-you-go principle is important because we face an extremely serious long-term budget problem and cannot afford to make that problem worse through entitlement increases or tax cuts that are deficit financed, rather than offset;
- The pay-as-you-go rule proved in the 1990s to be a highly effective tool to help restore fiscal responsibility;
- Pay-as-you-go does not prevent Congress and the President from enacting program expansions or tax cuts; it simply requires that the costs of those actions be paid for;
- Pay-as-you-go is not biased in favor of entitlement expansions and against tax cuts;
- There is not a valid argument for exempting tax cuts from pay-as-you-go on the grounds that requiring the cost of tax cuts to be paid for will hurt the economy;
- Establishing a statutory pay-as-you-go procedure backed up by sequestration will not produce a dramatic improvement compared with the current Congressional pay-as-you-go rules, but it will help to highlight and reinforce the importance of pay-as-you-go and, in particular, make it harder for a future Congress to quietly back away from pay-as-you-go.
Click here to read the full-text PDF of this testimony (10pp.)