(CNN) - Discussing the budget deficit on Capitol Hill on Monday, Senate Majority Leader Harry Reid revived a long-running debate over the effectiveness of so-called "pay-as-you-go" spending rules.
"With pay-go we have some experience," declared Reid, D-Nevada. "We know it works. It worked during the Clinton years. We paid down the national debt as the result of what happened during the Clinton years. Pay-go was dismissed during the Bush years."
President Barack Obama signed legislation last month that requires the government to offset any spending increases with spending cuts or tax increases. A similar law was in effect in the 1990s.
Fact Check: Did "pay-go" pay down the national debt during the 1990s?
Get the facts and the bottom line after the jump:
- The provision was a key part of Budget Enforcement Act (BEA) of 1990, signed by President George H.W. Bush.
- The annual federal budget deficit began declining as President Bill Clinton took office in 1993, and budget surpluses were recorded from 1998 though 2001. But despite those annual surpluses, the U.S. national debt - which includes interest on money owed from previous years - continued to rise.
- The non-partisan Congressional Budget Office says the BEA "helped to provide budget discipline for most of the 1990s." But it notes that in 1999 and 2000, "Lawmakers enacted record levels of emergency appropriations - which are effectively exempt from budget enforcement procedures - and used other funding devices to boost discretionary spending."
- George W. Bush became president in 2000, and the law was allowed to expire in 2002. The Concord Coalition, a non-partisan anti-deficit group, says many Republicans opposed it because they feared it could be used to block tax cuts.
- The annual budget deficit returned in 2002, just as the rule expired. But the CBO attributes that to the economic slowdown of 2001, not to the elimination of the pay-as-you-go requirement.
- In a 2007 report, the Congressional Budget Office concluded that "pay-go rules probably influence fiscal outcomes, but that influence may be stronger in some instances than others."
The budget legislation may have been a factor in eliminating the federal budget deficit for a few years during the 1990s, but it did not reduce the overall national debt.