Publication Date: April 2004
Publisher: Committee for Economic Development; Concord Coalition (Washington, D.C.); Committee for a Responsible Federal Budget (U.S.); Center on Budget and Policy Priorities (Washington, D.C.)
Research Area: Economics
Keywords: Tax code; Federal budget; Economic projections; Fiscal future
Growing concerns that large chronic budget deficits once again threaten our economic future have led Members of Congress to consider whether to reinstate the pay-as-you-go rule (PAYGO) and, if so, whether to include an exemption for tax cuts. Our organizations strongly believe that PAYGO should be renewed in its original and successful form, applying it without exceptions to both entitlement expansions and tax cuts. This budget-wide constraint was an effective part of past bipartisan efforts to bring deficits under control. Renewing it would be the best first step to countering the current trend of digging an ever-deeper fiscal hole. In contrast, failure to renew PAYGO, or doing so in a weak form, would send an alarming signal that Washington policymakers are not yet taking our nation’s deteriorating fiscal outlook seriously.
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