June 9th, 2009
02:09 PM ET
13 years ago

Obama proposes making PAYGO the law for federal spending

[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2009/images/05/18/art.obamacash.gi.jpg caption="President Barack Obama on Tuesday proposed making 'pay-as-you-go' rules for federal spending into law."]

WASHINGTON (CNN) - President Barack Obama on Tuesday proposed making "pay-as-you-go" rules for federal spending into law.

The so-called PAYGO proposal requires Congress to balance any increased spending by equal savings elsewhere, Obama told a news conference.

A previous PAYGO mandate helped erase federal budget deficits in the 1990s, and subsequent ineffective rules contributed to the current budget deficits, Obama said. Now the PAYGO rules should be the law, he said.

"Paying for what you spend is basic common sense," Obama said. "Perhaps that's why, here in Washington, it's been so elusive."

Republican leaders said the proposal comes after record spending initiatives by the Obama administration, such as the $787 billion economic
stimulus program.

"It seems a tad disingenuous for the president and Speaker (Nancy) Pelosi to talk about PAYGO rules after ramming trillions in spending
through Congress proposing policies that create more debt in the first six months of this year than in the previous 220 years combined," said Rep. Eric Cantor of Virginia, the House Minority Whip.

A White House statement said Obama's proposal calls for the Office of Management and Budget to maintain a ledger of the average 10-year budgetary effects of all legislation affecting mandatory spending or baseline tax levels.

Any extra cost that lacks payment authorized by Congress would require the president to find money within the budget to pay it, while any tax cut would require a corresponding increase in tax revenue.

Some costs would be exempt, including Medicare payments to doctors, the estate and gift tax, and tax cuts enacted in 2001 and 2002, the White House statement said.

Filed under: President Obama
soundoff (166 Responses)
  1. ib

    Obama has spent this country into the disaster United States and then he says this. HYPOCRITE!!!!!!

    June 9, 2009 04:42 pm at 4:42 pm |
  2. mjm

    PayGo... after you spend $787 billion? Is that the plan?

    O.K.... Bush spent too much. We all know how Libs feel about Bush. How is this better? Obama is spending more than Bush in the first 100 days. That should be bad.

    You might argue Obama is spending the money differently, but you cannot spend money you do not have and expect to get ahead.

    When you are broke, spending more makes no sense. See California and Illinois as examples.

    June 9, 2009 04:43 pm at 4:43 pm |
  3. munchmom

    He should have made this a law BEFORE he spent our children into oblivion with all his bailouts and other mindless spending. Just hush and get busy governing–not spending!

    June 9, 2009 04:43 pm at 4:43 pm |
  4. mmg

    It is time for the Democratic party to stand up and take responsibility, The blame game is getting so old and childish. I agree Obama inherited alot but Obama has created ALOT more !!!! He is a great speaker but seems clueless to solve any issue....Look at the real situation. It would be nice to have him actually stay at the white house for more than a day and FOCUS at the issues at hand instead of trying to apologize and make nicy nice with other countries that are laughing at us..

    June 9, 2009 04:43 pm at 4:43 pm |
  5. RG

    He's proposing the Herbert Hoover option. If he really does this, it will make the Great Depression look like a picnic. Doesn't anyone get it? We need bigger deficits now, not smaller.

    June 9, 2009 04:43 pm at 4:43 pm |
  6. changing my screen name to see if it helps getting my comments posted

    As much as I am in favor of eliminating the national debt, I am also aware that there are proper times to increase spending and run a deficit. Just like for consumers there is good debt for governement spending and there is bad debt for government spending.

    And think of it this way. If paygo was law and somewhere down the road government spending is decreased dramatically how will that spending ever increase? Maybe spending gets cut to 1/10th of what it is now but there's another world war that requires a rediculous increase in the defense budget. How will we cut spending that is no longer there to justify increased spending?

    June 9, 2009 04:46 pm at 4:46 pm |
  7. Jim

    after reading these posts for some significant amount of time, one thing is glaringly clear.

    the republicans are profoundly adept at name calling and sensationalizing.

    they are NOT good at coming up with solutions or collaborating with the democrats.

    based only on these observations, it seems unfortunately apparent that if/when a solution comes, it's going to be coming from the democrats. it'd be nice if it was a joint venture.

    June 9, 2009 04:46 pm at 4:46 pm |
  8. Marcus, Great Lakes, IL


    The information that I posted prior were only through 2007. 2008 and this year are not a part of the equation.

    June 9, 2009 04:46 pm at 4:46 pm |
  9. Matt

    Yes Pay as you Go from the man who racked up 1.3 trillion dollars on something no one read but someone wrote.

    Obama is the classic do as I say not as I do politician.

    Wheres the Change?

    June 9, 2009 04:48 pm at 4:48 pm |
  10. donttreadonme

    After eight years of unbalanced budgets and uncontrolled spending we have elected a man that has proposed eight more years of even more spending and double the budget deficits.

    Change we can believe in?

    June 9, 2009 04:49 pm at 4:49 pm |
  11. Bill in California

    BY ALL MEANS CLOSE THE GATE after all the cattle have left the pen. I'm sure the MSM will pick it up in the evening news, DIMRATS will swoon with Opy's brilliance and integrity and sleep well knowing their country is in good hands.

    June 9, 2009 04:50 pm at 4:50 pm |
  12. Joseph

    No one believes this guy when he says PAYGO! He puts 3 trillions debts within only 4 months in office. Is it a joke?

    June 9, 2009 04:50 pm at 4:50 pm |
  13. Deborah, Lake Forest IL

    For all of you who have their panties in a bunch because of the stimulas package, just give it back. Put it towards your estimates if it is that bothersome to you.

    And for all of you who think they "know" what is going to happen. Please let me know what the winning lotto numbers are, I could use it.

    June 9, 2009 04:50 pm at 4:50 pm |

    I AM A SOCIALIST: (lets see, Social Security, Medicaid, Medicare, SSI, do you see where I'm going with this?)


    June 9, 2009 04:51 pm at 4:51 pm |
  15. Brandon - Charlotte, NC

    Has anyone looked to see what kind of ridiculous riders or attached bills this PAYGO Act has incorporated???

    With something *this* common sense, there's going to be a "GOTCHA!!!" somewhere...

    June 9, 2009 04:53 pm at 4:53 pm |
  16. Have no fear Rev. Wright is here

    Pay go next he will try to feed the world with two eggs.

    June 9, 2009 04:54 pm at 4:54 pm |
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