This vote was on an amendment by Senate Majority Leader Harry Reid, D-Nev., that would require any legislation that creates new mandatory spending, which Congress has no control over, not to raise the deficit. It would enforce this with automatic across-the-board spending cuts in programs that weren’t deemed exempt. This concept is often called “pay as you go,” shortened to “PAYGO.” The amendment was offered to a bill that would increase the statutory debt limit by $1.9 trillion to $14.29 trillion.
Mandatory spending is a class of funds that must go in certain amounts to certain programs, by law; Congress has no control over the amounts that get spent. The prime examples of mandatory spending are Medicare and Social Security.
Reid’s PAYGO amendment was a major concession to moderate Democrats in the House, who made it clear that they would only support an increase in the debt limit – the amount of debt the United States can carry – if Congress enacts a statutory PAYGO law.
Democrats, particularly moderate ones, have been concerned about ballooning deficits, particularly during an election year and believe PAYGO is part of the answer.
Reid laid the blame for a large part of the deficit at Republicans’ feet, saying a huge chunk of it was incurred under the administration of George W. Bush.
“Let’s not kid ourselves. We are in this financial situation and these pay-as-you-go rules are necessary because we spent the last decade spending money we did not have. We spent trillions on two wars, tax breaks for millionaires, corporations, and other red ink policies. Those days should be over. We simply can no longer afford it,” Reid said.
Republicans, on the other hand, have been critical of the PAYGO proposals, saying they would exempt several costly initiatives from the requirements and don’t call for any caps on discretionary spending, only mandatory.
“I cannot support this pay-go amendment because it would continue the double-standard that exists between taxes and spending. Under current law, more than a dozen mandatory programs will expire over the next 10 years. Extending these programs will cost nearly $1 trillion according to CBO. But, unlike tax cuts that expire during these same years, pay-go does not apply to the cost of extending these mandatory programs. This double standard is unacceptable,” Grassley said.
By a vote of 60-40, the amendment was adopted. Every Democrat present voted for the amendment. Every Republican present voted against the amendment. The end result is that the measure went forward with language that would require new mandatory spending bills not to raise the deficit , with certain exceptions.