Newspaper article The Christian Science Monitor

A Clamp on Deficits

Newspaper article The Christian Science Monitor

A Clamp on Deficits

Article excerpt

Alan Greenspan, the nation's economic helmsman, suggested last week that Congress and the White House dust off their fiscal toolbox. Warning of a drift toward higher deficits, he said Washington needs to "reestablish budget discipline." He endorsed a budgetary gadget - the "paygo" - as a way to do this.

That's "pay as you go," a requirement that additional spending on federal entitlement programs or new tax cuts be offset by other spending cuts or tax increases.

So, for example, spending on a Medicare prescription-drug benefit would have to be made up elsewhere, as would lost revenue from the president's proposal to end double taxation of stock dividends.

In 1990, untamed deficits became such a political liability that Democrats and Republicans crafted paygo as a way to help force budget restraint on entitlements and tax cuts. They also used "budget caps" in the '90s - fiscal clippers that helped control the other part of the budget - discretionary spending. …

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