WASHINGTON (CN) – The Senate voted 60-40 on Thursday to require that new legislation be paid for; no Republicans voted for the bill. “Strict pay-as-you-go budget rules created record surpluses in the late 1990s,” House Speaker Nancy Pelosi, a California Democrat, said. “And when this standard was abandoned under President Bush, it created record deficits.”
The House passed the bill in July 2009.
Senate approval comes at the heals of a Congressional Budget Office Report released Tuesday that predicts the 2010 fiscal year would bring a towering $1.35 trillion deficit and that an expected decade of deficits will take the national debt to more than $21 trillion by 2020.
President Obama proposed the legislation back in June. “Paying for what you spend is basic common sense,” he said in submitting the proposal. “Perhaps that’s why, here in Washington, it’s been so elusive.”
Republicans have pointed out that today’s pay-as-you-go legislation includes more exemptions to the rule than that adopted from 1990 until 2002, although the rule was consistently waived by Congress towards the end.
The act would only apply to new laws, so growing demands by aging baby boomers on entitlements that are already written into the law, such as Social Security and Medicare, would not need to be countered by tax increases or other measures.
Entitlement programs are expected to drive the largest growth in the deficit, so the act would not eliminate the deficit, but could help rein in its growth.
“Entitlement increases and tax cuts need to be paid for,” Obama declared. “They’re not free, and borrowing to finance them is not a sustainable long-term policy.“
Responding to the growing debt, the Senate also voted 60-49 Thursday to raise the debt ceiling by nearly $2 trillion, again with no Republican support. The bill would allow the
Despite voting against the pay-as-you-go bill, Republicans have decried the growing deficit under the Obama administration.
Democrats have called Republicans hypocrites, pointing to former President Bush, under whose watch government spending rose by 8.4 percent, as compared to a 3.5 percent growth under former President Clinton.
Needless to say, Congress is responsible for spending, but the president traditionally submits a budget and can use his veto pen.
Democrats still control 60 seats on the Senate. Massachusetts Democratic Sen. Paul Kirk has not yet been replaced by Republican Scott Brown, who was voted into office last week in what was widely interpreted as an ominous sign for Democrats in the upcoming November elections.
Obama is expected to sign the bill into law.