WASHINGTON (CN) – President Obama signed into law Friday a bill requiring that new legislation be paid for, after it faced uniform Republican opposition in Congress.
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.”
The act will 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 expansion.
“Entitlement increases and tax cuts need to be paid for,” Obama declared in promoting the bill. “They’re not free, and borrowing to finance them is not a sustainable long-term policy.“
Obama’s signature comes at the heals of a Congressional Budget Office Report released last month 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.
House Speaker Nancy Pelosi applauded Obama’s signature. “Strict pay-as-you-go budget rules created record surpluses in the late 1990s,” the California lawmaker said. “And when this standard was abandoned under President Bush, it created record deficits.”
Republicans – none of who voted for the bill – 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.