by Countable | 12.1.17
A short version of "pay-as-you-go", PAYGO is on many minds in light of the likely passage of the GOP tax reform bill. The tax cuts dictated by the bill are massive, and though they are based on the idea that tax cuts will spur economic growth, there are no guarantees.
PAYGO originates in the Budget Enforcement Act of 1990, and was updated in 2010.
If Congress does not act to waive the mandated cuts, a step that they have taken 16 times since the law was enacted, then Congress may be forced into sequestration. Sequestration applies across-the-board spending cuts throughout the federal government.
Given the projected increase to the deficit under the GOP plan — $1 trillion over 10 years — there would be as much as $100 billion in cuts required annually from Medicare, farm subsidies, student loans, support services for crime victims, and more.
If Congress waives the mandated cuts then the deficit will climb even higher. It topped $20 trillion for the first time this fall.
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— Asha Sanaker
Written by Countable