[Congressional Record (Bound Edition), Volume 153 (2007), Part 17]
[Senate]
[Pages 24287-24288]
[From the U.S. Government Publishing Office, www.gpo.gov]




                                 PAY-GO

  Mr. CONRAD. Madam President, I have come to the floor because at the 
end of last week the ranking member of the Budget Committee made a 
speech on pay-go in which he suggested it is a meaningless exercise and 
that it makes no contribution to fiscal responsibility. I come to the 
floor because I beg to differ, and I think I have a responsibility, as 
chairman of the Budget Committee, to give the other side of the story.
  The Senate pay-go rule says that any new mandatory spending or tax 
cuts must be offset or get a supermajority vote. So if you want new 
spending or new tax cuts, you can have them, but you either have to pay 
for them or get a supermajority vote. That is the Senate rule. It is a 
good rule, and it has been effective at contributing to fiscal 
discipline.
  If we look back in history, here is what we see, as demonstrated on 
this chart. We had a strong pay-go rule in effect from 1991 to 2000, 
and the deficit was reduced each and every year. In fact, we moved into 
surplus--in fact, a surplus so large that for 2 years we stopped using 
the Social Security trust fund to fund the operating expenses of the 
Federal Government. That is what happened with a strong pay-go rule.
  Then our colleagues on the other side took control of both Chambers, 
took

[[Page 24288]]

control of the White House, weakened the pay-go rule, and look what 
happened to deficits afterward. The surplus was squandered. We moved 
into deficits that grew year after year after year to record levels.
  Now we have restored pay-go, and we are moving back toward a balanced 
budget. Pay-go, in fact, is working. The Senate pay-go scorecard shows 
a positive balance of $450 million. So, in fact, pay-go is working. 
Every bill coming out of conference this year has been paid for. Every 
one that has come out of conference has been paid for, or more than 
paid for. Pay-go also has provided a significant deterrent, preventing 
many costly bills from ever being offered. Let me say I know that 
because as the Budget Committee chairman, I am besieged by Members who 
want to somehow get around pay-go. When we tell them: No, we are going 
to insist that things be paid for, it is quite remarkable how many of 
these things go away or are reduced so that they can be paid for.
  Now, Senator Gregg himself, in a previous incarnation, was a strong 
supporter of pay-go. Here is what he said previously:

       The second budget discipline, which is pay-go, essentially 
     says if you are going to add a new entitlement or you are 
     going to cut taxes during a period, especially of deficits, 
     you must offset that event so that it becomes a budget-
     neutral event that also lapses. If we do not do this, if we 
     do not put back in place caps and pay-go mechanisms, we will 
     have no budget discipline in this Congress and, as a result, 
     we will dramatically aggravate the deficit which, of course, 
     impacts a lot of important issues, but especially impacts 
     Social Security.

  Senator Gregg was exactly right then. Why he has done a U-turn I 
don't know. The fact is pay-go has been a useful discipline in this 
Congress, and he previously--even he has acknowledged that fact.
  Now, the Senator from New Hampshire also criticized the use of the 
reconciliation process that was just used to extend assistance to 
college students. He said that was an abuse of reconciliation. I would 
remind him and our colleagues on the other side of the aisle of what 
they did when they controlled the reconciliation process. In the bill 
we just passed, we paid for it completely, and had over $700 million of 
deficit reduction. That is what reconciliation is intended to do--to 
provide for deficit reduction.
  Here is what they did when they controlled the reconciliation 
process. They adopted legislation that was not paid for, tax cuts that 
were not offset, and they added $1.7 trillion to the debt using 
reconciliation, which was designed to reduce deficits and reduce debt. 
They stood the whole process on its head and used those special rules, 
those fast-track procedures to explode the deficits and debt.
  In using reconciliation, we have not only been able to increase the 
assistance that will go to college students in this country, but paid 
for it completely. In the 2005-2006 budget reconciliation our friends 
on the other side controlled, they increased the deficit by $31 
billion. It is true they had some spending cuts, but they had even more 
tax cuts, so once again, they added to the deficit and debt.
  So let's be clear. In the Senate reconciliation rule we have adopted, 
we have said reconciliation--which is a special fast-track procedure 
that has a limited time for discussion and debate and limits 
amendments--that special procedure can only be used if deficit 
reduction is the result. That is not what they did with reconciliation. 
They used it to explode deficit and debt. But on our side, we use the 
reconciliation process for the reason intended. There is a 60-vote 
point of order against any reconciliation bill that would increase the 
deficit or reduce a surplus.
  The higher education reconciliation bill that was criticized by my 
colleague on the other side--which, by the way, passed here with an 
overwhelming bipartisan vote--but that bill increased the Pell grant to 
$5,400 by 2012; cut the student loan interest rates in half; and 
reduced the deficit by $752 million. That is in keeping with the spirit 
of reconciliation that is for deficit reduction. We compare and 
contrast that with what the other side has done. When they had the 
control of reconciliation, they used that fast-track procedure not to 
reduce deficits, which was the whole reason for reconciliation; they 
instead used it to explode deficits and debt.
  Our colleague on the other side also attacked the children's health 
insurance legislation that will cover 4 million additional children and 
is paid for. Let's review what that legislation does. It provides 
health care coverage to 4 million additional children. It is fully paid 
for over both 6 and 11 years, as required under pay-go. It is a 5-year 
reauthorization; Congress will reauthorize in 2012 with new policies 
and new offsets. Hopefully, by then we will have enacted reform of 
health care in America and we will have provided coverage, universal 
coverage. I think there is a growing bipartisan consensus that any 
health care reform should provide universal coverage, because that is 
the way we can most effectively run a health care system. It also 
provides important coverage to kids, while spurring action on broader 
health care reform.
  Let me get back to the simple fact. This bill is paid for. The 
reconciliation bill for education was paid for. It was paid for because 
we put in place a pay-go requirement that says: If you are going to 
have new spending, you have to offset it or get a supermajority vote. 
We might have been able to get a supermajority vote without paying for 
these things. We didn't choose to do that. We chose to be fiscally 
responsible. We chose to pay for an expansion of children's health 
care. We chose to pay for additional assistance to our young men and 
women going to college. That was the right thing to do.
  I might add, if you compare and contrast what they are complaining 
about, which is the outyear potential funding for children's health 
insurance, I am talking about this little line out here. This is what 
they are complaining about, this little tiny gap, and that is a 
theoretical gap. It is fascinating, because these tax cuts they want to 
extend without paying for them creates this chasm. They make no 
complaint about this chasm. They direct all of their attention to this 
theoretical gap, this tiny thing you probably can't even see on 
television. There is no credibility to that complaint. They say nothing 
about this chasm, and they focus all of their complaint on this tiny 
difference that is wholly theoretical, because this is a 5-year bill. 
It doesn't extend beyond 2012. They are talking about what is going to 
happen in the sweet by and by. Nobody can tell us what is going to 
happen past 2012. We know this bill is paid for until 2012. What 
happens in the future will be dependent upon the actions of future 
Congresses.
  So as I have reviewed the remarks of my colleague on the other side 
criticizing pay-go, criticizing the higher education bill that passed 
here overwhelmingly; criticizing the children's health care insurance 
expansion that is fully paid for, I don't find much merit. A lot of 
rhetoric there, but not much merit.

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