Certain "Compromises" On Pay-As-You-Go Rule Would Gut The Rule

Publication Date: April 2004

Publisher: Center on Budget and Policy Priorities (Washington, D.C.)

Author(s): Richard Kogan; Robert Greenstein

Research Area: Banking and finance

Keywords: Economic inequality; Tax code; Income diversity

Type: Report

Abstract:

When Congress returns from its spring recess, Republican leaders will seek to resolve the differences between the Senate and House positions on the “pay-as-you-go” rule. The Senate budget resolution includes a provision resurrecting for five years the type of pay-as-you-go rule that was in force in the 1990s, under which both tax cuts and entitlement increases have to be paid for. The House budget plan contains no such provision. Separate legislation that the House Budget Committee has approved, and which the House Republican leadership and the White House support, would apply this rule to entitlement increases only. Under that approach, tax cuts would not have to be offset.