I am personally glad to see leadership in the House recognizing the need to restore fiscal discipline and take proactive measures to stop increasing our nation’s deficit. Everyday, Americans are forced to make choices and balance their own budgets. Understanding the way Americans must balance the rising costs of living versus the expenses of everyday life is an important first step to understanding the lives of many Americans. Moreover, instituting PAYGO does much more than signal that Congress understands the difficulties of being fiscally responsible. Instituting PAYGO sends a signal to the American people that Congress recognizes that cutting the deficit matters for financing programs that will help future generations.

According to the Congressional Budget Office, the 2006 deficit totaled $248 billion, or roughly $825 for every American. The CBO estimates that the average deficit from 1994-2001 was 0.1% of GDP. Where, and how, did America go from a surplus to a deficit? The answer is multifaceted; however, one major change was Economic Growth and Tax Relief Reconciliation Act of 2001. The ECTRRA lowered tax rates for 401(k) and 403(b) pension plans, while also changing the U .S . Internal Revenue Code which affected income tax levels, gift tax deductions, estate tax deductions, and retirement plans. Since 2001, the deficit has continued to increase. $248 billion is 1.9% of our country’s GDP.

Why does the deficit matter? To quote Diane Lim Rogers, of the Brookings Institution, “The irony is that while the cost of deficit spending is discounted in people's minds, in truth, the real cost of new spending or tax cuts is magnified when we put off paying the bills—because of the curse (for debtors) of compound interest. … In other words, the true price of tax cuts or greater spending received by current generations is that future generations will have to face higher taxes and lower spending that will be many-fold times the initial value of the additional debt.”(Click here to read the full article). American s spoke out against irresponsible spending, when voters elected a Congress that vowed to be more fiscally disciplined. On January 3, 2007, President Bush signaled he would work with the 110 th Congress when he opined in The Wall Street Journal that a balanced budget could be achieved by 2012, five years from now. I look forward to watching the President and Congress practice responsible spending which balances our country’s indispensable entitlement programs against a strong economy that benefits all Americans.

Rogers, Diane Lim. “Returning to Bipartisan Fiscal Responsibility.” The Washington Post. December 5, 2006. http://www.brookings.edu/views/op-ed/20061205rogers.htm