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Paygo Amdt to FY Budget Resolution by Senate

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									  Building a Wall of Debt
           Gross Federal Debt Soars
         ($ in trillions)

                                                                 $11.8 T
  $12                                                             in 2011


  $11


  $10                                     $8.6 T
                                           in 2006

    $9


    $8


    $7 $5.8 T
         in 2001

    $6


    $5   2001               2003        2005            2007         2009          2011

Source: CBO and SBC Democratic staff
                        President’
Note: CBO reestimate of President’s FY 2007 Budget with AMT reform and ongoing war costs.
Former Federal Reserve Chairman
 Greenspan on Restoring PAYGO

“All I’m saying is that my general view is I
like to see the tax burden as low as
possible. And in that context, I would like to
see tax cuts continued. But, as I indicated
earlier, that has got to be, in my judgment,
in the context of a PAYGO resolution.”

              – Former Federal Reserve Chairman
                 Alan Greenspan
                Testimony before House Budget Committee
                March 2, 2005
Concord Coalition Calls for PAYGO
Applying to Spending and Tax Cuts
 “Exempting tax cuts from PAYGO does nothing to
 promote fiscal discipline. It would neither control
 spending nor shrink the deficit. All it would do is
 exempt any tax legislation from fiscal scrutiny,
 regardless of the circumstances. Such an enormous
 and unnecessary loophole would not be wise policy
 given that deficits are back for as far as the eye can
 see. Since spending and tax decisions both have
 consequences for the budget, there is no good
 reason to exempt either from enforcement rules.”

                            – Concord Coalition Release
                              March 15, 2005
              Strong Paygo Rule Helped Turn
                Deficits to Surplus in 1990's
           (deficit/surplus in $ billions)
    $300
                                       Weakened Paygo                                                Paygo Loophole
    $200                               Enacted in 2000                                                   in Effect
                                                                                                      2004 - Present
    $100


      $0


   $-100


   $-200


   $-300

                 Strong Paygo
   $-400
                    in Effect
                  1991 - 2000
   $-500
      1990            1992          1994           1996           1998           2000           2002           2004    2006
Note: FY 2000 GOP budget resolution w eakened Senate paygo rule to allow on-budget surpluses to offset tax cuts
Note: FY 2000 GOP budget resolution w eakened Senate paygo rule to allow on-budget surpluses to offset tax cuts
and spending increases. GOP blocked renew al of statutory paygo at end of FY 2002. FY 2004 GOP budget resolution
and spending increases. GOP blocked renew al of statutory paygo at end of FY 2002. FY 2004 GOP budget resolution
further w eakened Senate paygo rule by exempting all tax cuts and spending increases in any budget resolution.
further w eakened Senate paygo rule by exempting all tax cuts and spending increases in any budget resolution.
Source: CBO
Source: CBO                                                                                                               Mar 11
                 Pay-Go Amendment
                 Eliminates Loophole

    Current GOP Pay-Go Rule                        Stronger Pay-Go Rule
•   Exempts all tax cuts and                  •   All mandatory spending and
    mandatory spending increases                  tax cuts that increase deficits
    assumed in any budget                         must be paid for, or require
    resolution, no matter how much                60 votes
    they increase deficits

    Loophole:
    Failure to include stronger pay-go rule
    allows $274 billion in deficit-financed
    tax cuts or mandatory spending over
    2006-2016 with only 51 votes.
  Large Deficit Increases Allowed
    Under Senate GOP Budget
         Paygo Loophole
        ($ in billions)
 $250

                                             $213.9 B
 $200



 $150



 $100



  $50                                                             $47.8 B
                            $36.3 B
          $12.5 B
   $0
               2006             2007             2007-2011          2012-2016

                                                              2007
Note: Shows net effect of tax cuts and entitlement savings in 2007 Republican budget
Source: Senate Budget Committee

								
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