This was a vote on House passage of the “Pay-As-You-Go” Act. This Act required that any action reducing federal revenues be offset by new revenue increases, and any spending increases be offset with other spending reductions. It also required an automatic reduction in federal spending in the event that the Act was violated.
Rep. Spratt (D-SC), the Chairman of the Budget Committee, was leading the effort on behalf of the Act. He said it was a move “towards budget discipline”. He noted that the Obama Administration had “inherited a colossal deficit swollen to accommodate massive recovery measures. As these measures pull us up out of the slump, we must focus attention on our longer-term fiscal fate.” Spratt acknowledged that: “By themselves, budget process rules cannot convert deficits into surpluses, but . . . they can play a vital role. Statutory ‘Pay-As-You-Go’ works by reining in both new entitlement spending and new tax cuts . . . by insisting on deficit neutrality for these new policies, Pay-As-You-Go buffers the bottom line, holds it constant . . . at its core, it's a commonsense rule that everybody can understand: When you are in deficit, don't make it worse. When you want to spend a dollar, save a dollar.” Spratt acknowledged that the bill does not, in itself, solve the federal fiscal and deficit problems, but said “it is a significant step in the right direction.”
Rep. Ryan (R-WI), the Ranking Republican on the Budget Committee, was leading the opposition to the Act. He first criticized the procedure the Democrats had adopted for bringing the bill to the House floor directly, rather than following the usual procedure of having the Budget Committee review and amend it before consideration by the entire House. Ryan described this procedure as an example of what he called “a disturbing trend” of having legislation developed “in the (Democratic) leadership offices, rush it to the (House) floor, ram it through Congress without legislators legislating.”
Ryan then moved to criticizing the substance of the bill. He said that “we have got to do some things to get our fiscal house in order. We need to equip Congress with more and better tools to get this budget under control. Unfortunately, this (‘Pay-as-You-Go’ bill) isn't the tool. This tool does not work.” Ryan also said the bill was “well-intended”, but then noted that there were already pay-as-you-go rules in effect and the deficit had increased from $161 billion to $1.8 trillion since those rules were adopted.
Ryan added that, unless specific spending caps that he had previously proposed unsuccessfully were included in the Pay-As-You-Go rules, the result would be “a machine to raise taxes to pay for new and more costly government programs. It does nothing to attack the fact that just this year alone, discretionary spending is going up 8 percent . . . .” He concluded by arguing that passage of the proposed Act would be “like buying a fire extinguisher after your house has burned down. Congress is going to commit all of these fiscal crimes only to put Pay-As-You-Go in place after they've been committed.”
Rep. Doggett (D-TX) responded by arguing that: “Republican ideologues (had previously) urged the irresponsible approach of fiscal deficit with more borrow-and-spend and tax cuts as the best tactic to starve government and ensure that Democrats would never be able to address the other deficits in our society: Educational deficits, health care deficits, and more . . . This year, (Democrats,)with only 7 months so far to correct 8 years of (Bush Administration) failure, as we clean up the mess that we were given, we reaffirm our commitment to pay-as-you-go . . . Today's vote signals that we are abandoning the Republicans' fiscal model, which is straight out of the Magic Kingdom. Their rule, like the first law of Disney, is that ‘wishing will make it so.’ That may work well in the law of fairy tales, but it has been a budgeting disaster and an economic nightmare that we begin correcting today.”
Rep. George Miller (D-CA) then asked, rhetorically, why the Republicans “when they controlled the House, the Senate and the White House, all of our government, for 8 long years, why didn't they control Federal spending?”
The vote was 265-166. Two hundred and forty-one Democrats and twenty-four Republicans voted “aye”. One hundred and fifty-three Republicans and thirteen Democrats voted “nay”. As a result, the House passed the “Pay-As-You-Go” Act and sent it on to the Senate.