Democrats unveil 'pay go' bill with 155 backers

Citing the need to bring down the nation's ballooning deficit, House Democratic leaders Wednesday introduced pay/go legislation requiring that new tax and mandatory spending legislation that adds to the deficit be offset.

"The legislation introduced today to make pay-as-you-go budgeting the law of the land will help return our nation to sound fiscal health," said House Speaker Nancy Pelosi, D-Calif., in a statement. "Just as every American family must live within their means, so must the federal government."

The bill, which has 155 cosponsors, comes after President Obama last week called on Congress quickly to restore pay/go spending constraints that so many have credited with the surpluses of the late 1990s.

"When Democrats implemented pay-as-you-go budgeting in the 1990s, we reversed huge deficits of the Reagan-Bush years, created budget surpluses, and produced an economic boom," Pelosi said. "Today, we are taking the first step in the direction of greater stability and greater security for our economy, our citizens, and our future generations."

However, the bill exempts four types of legislation from the law: middle class tax cuts, the estate tax, patching the alternative middle class tax, and providing higher Medicare payments to physicians, which Congress has typically failed to offset.

"The reason for doing that was that there is no point in adopting a statutory pay/go discipline and then immediately abandoning it" for these items, House Majority Leader Stney Hoyer, D-Md., said at a briefing. "That would undermine its credibility. We have realized the issue that confronts us with respect to those particular items."

Hoyer said that there is interest in passing the bill in the Senate, though Senate Budget Committee Chairman Kent Conrad, D-N.D., has said he has concerns with statutory pay/go because the White House would effectively control the baseline.

Hoyer said that he has been in talks with Conrad and will continue to discuss the issue with him.

Reps. Baron Hill, D-Ind., and Allen Boyd, D-Fla., leaders of the Blue Dog Coalition, who attended the briefing, both praised the proposal. Pay/go has been a leading issue for the group.

"This concept works and it is vitally important to the long-term fiscal health of our country that we do this," Hill said.

Boyd added that "Congress does not have the self discipline to be fiscally responsible if there are not tools in place to make it do so."

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