Speaker Pelosi Joins President Obama In Urging Passage of Pay-As-You-Go Legislation

Speaker Pelosi joined President Obama and Democratic Members of Congress at a news conference this afternoon as the President expressed his strong support for legislation that would reinstitute statutory pay-as-you-go (PAYGO) rules, restoring fiscal discipline to the federal government. Budget Chairman Spratt explained, "its terms are complex, but at its core, it is a common-sense rule that everyone can understand: when you are in a hole, you should quit digging."

After the press conference, Speaker Pelosi issued the following statement:

Pay-as-you-go budget accountability has been a centerpiece of Democratic budget discipline since the early 1980s. In the 1990s, when a Democratic Congress and President Bill Clinton were able to implement this discipline, we reversed the huge deficits of the Reagan-Bush years and produced four years of budget surpluses while funding American priorities. That fiscal discipline helped produce an economic boom with rising household incomes for millions of Americans.

But when President George W. Bush came to office, he and Congressional Republicans abandoned the PAYGO rule. A projected surplus of $5.6 trillion was allowed to collapse into more than $5.8 trillion in deficits -- a turnaround of more than $11 trillion in the wrong direction.

Since the first day Democrats reclaimed the majority in 2007, PAYGO has been part of the rules that govern how the House conducts its business. Now we are fully committed to enacting PAYGO rules into law with enforceable consequences.

As we have shown before, we can fund America's priorities while abiding by the strict rules of pay-as-you-go accountability. Working with President Obama, we will establish PAYGO as the discipline for all future spending and tax policy. And when we do, our economy, our citizens, and our future generations will achieve greater stability and greater security.

Learn more about fiscal responsibility under Democratic leadership:

CUTTING THE DEFICIT

In 2007 and 2008, the House passed a budget resolution that brings the budget into surplus by 2012 -- for the first time since President Bush took office.

This year's budget slashes the deficit by nearly two-thirds in four years (by 2013) and even further by 2014, to 3.0% of GDP.

It also provides for health care reform, critical to reducing the deficit -- with reduced costs, affordable coverage and improved health reducing the strain on businesses, families, and federal and state budgets.

PAY-AS-YOU-GO BUDGET DISCIPLINE

The first thing the Democratic-led Congress did in January 2007 was reimpose PAYGO budget rules that Republicans had let lapse -- placing them in the House and Senate rules. The PAYGO rules had helped President Clinton turn over an historic budget surplus to President Bush--who quickly turned it into a record deficit. Simply put: Under PAYGO, Congress can only spend a dollar if it saves a dollar.

This year's budget reaffirmed our commitment to statutory PAYGO--to make it law.

Now, on June 9, President Obama and several Democratic Members of Congress, including Blue Dog Democrats, announced an effort to get statutory PAYGO enacted into law.

CUTTING WASTE, FRAUD, AND ABUSE

On February 19, 2009, the House Democratic Leadership directed Committee Chairs to develop a schedule of oversight hearings and carefully review all federal spending within their jurisdiction in order to eliminate waste, fraud, abuse, and obsolescence.

On April 27, the House Democratic Leadership also directed Committee Chairs to develop a specific set of initiatives to reduce costs, end duplication, and promote efficiency in the programs within their jurisdiction.

The budget contains key integrity initiatives to protect taxpayer money by rooting out waste, fraud and abuse, investing in efforts to crack down on health care provider fraud, strengthen efficiency, and reduce improper payments in such programs as Medicare and Social Security.

MILITARY PROCUREMENT REFORM

President Obama signed into law reforms to crack down on Pentagon waste and cost overruns, which GAO says amount to $296 billion just for the 96 largest weapons systems. The reforms dramatically beef up oversight of weapons acquisition, promoting greater use of competition and curbing conflicts of interest.

COLLECTING UNPAID TAXES

The budget steps up IRS enforcement to collect unpaid taxes from those who are not paying what they owe, which is estimated to total $300 billion per year. Every $1 spent on IRS enforcement generates $5 in owed taxes collected.