Release Pay Go Sept 2008

PRESS RELEASE COMMITTEE CO-CHAIRMEN Bill Frenzel Leon Panetta PRESIDENT Maya MacGuineas DIRECTORS Barry Anderson Roy Ash Charles Bowsher Steve Coll Dan Crippen Vic Fazio Willis Gradison William Gray, III William Hoagland Jim Jones Lou Kerr Jim Kolbe James Lynn James McIntyre, Jr. David Minge Marne Obernauer, Jr. June O’Neill Rudolph Penner Tim Penny Peter Peterson Robert Reischauer Alice Rivlin Charles W. Stenholm Gene Steuerle Lawrence Summers David Stockman Paul Volcker Carol Cox Wait David M. Walker Joseph Wright, Jr. SENIOR ADVISORS Henry Bellmon Elmer Staats Robert Strauss

FOR A

RESPONSIBLE FEDERAL BUDGET

FOR IMMEDIATE RELEASE September 22, 2008

Contact: Erin Drankoski 202-986-2700 [email protected]

CRFB Urges Senate to Stick to PAYGO for Upcoming Bills WASHINGTON, D.C. – This week the Senate will be considering a large tax bill to create new energy tax incentives, extend a number of expiring tax breaks, and “patch” the alternative minimum tax (AMT) for another year. In its current form, the $18 billion in energy tax credits would be fully paid for, roughly $25 billion in revenue-raisers would be offered for the $67 billion in tax extenders, and the $64 billion AMT patch would have no offsets. The Committee for a Responsible Federal Budget urges both houses of Congress to abide by pay-as-you-go (PAYGO) budget rules and pass a fiscally-responsible tax bill which offsets all of its provisions. “The deficit is ballooning, bailouts are adding to the government’s bottom line, and Congress wants to borrow more?” said Maya MacGuineas, President of the Committee for a Responsible Federal Budget. “Honestly, when is this dangerous borrowing binge going to stop?” “I am glad to see that Congress is offering some offsets for this bill. But even accounting for the new revenue, abandoning PAYGO would increase our record deficits by over $100 billion” added MacGuineas. “PAYGO rules are based on the central premise that we shouldn’t be making our dismal long-term fiscal situation any worse; we can’t just afford to wave them whenever they are inconvenient.” According to the Congressional Budget Office, even if PAYGO rules are upheld the federal government will face deficits indefinitely – totaling $2.3 trillion over the next ten years, and rising considerably after that. A recent CRFB analysis suggests that both candidates for President would make the situation far worse if elected. (See http://www.usbudgetwatch.org/files/crfb/usbw0915promises.pdf.) “The current financial crisis provides a good model for what happens when organizations attempt to live well beyond their means,” MacGuineas explained. “We can’t continue to borrow from our future and expect there to be no consequences.” The Committee for a Responsible Federal Budget is a bipartisan organization committed to educating policy makers and the public about issues related to fiscal policy. The Committee is located at the New America Foundation. Please visit www.crfb.org.