Washington (Oct. 2, 2002) -- House Budget Committee ranking member John M. Spratt, Jr., D-S.C., has introduced legislation to extend the pay-as-you-go (PAYGO) rules and the discretionary spending caps, which expired at the end of the 2002 fiscal year on Sept. 30.
Spratt's bill extends the PAYGO rules through fiscal year 2007. The PAYGO rules require that the cost of all mandatory spending increases and all tax cuts enacted during a session of Congress be fully offset.
The bill also extends the discretionary spending caps. "The precise levels at which these caps should be extended can only emerge from bipartisan negotiations," said Spratt, "but this bill puts the Congress on record as supporting a renewal of the caps, and it provides for the extension of key provisions of the Budget Act pertaining to the caps once such levels are agreed to."
The Bush Administration and the Federal Reserve support the Spratt bill. Federal Reserve Chairman Alan Greenspan testified recently that the spending caps and PAYGO rules have been effective and said "failing to preserve them would be a grave mistake."
-- Electronic Accountant Newswire staff
