Obama Set to Launch Pay-as-You-Go Rules

Just one day after President Obama said he would accelerate spending of nearly $787 billion worth of stimulus funds, he is set to tell Congress to start paying for their programs, too.

Obama is expected to introduce his PAYGO initiative, tough new rules that require lawmakers to pay up-front for new programs – including health care reform -- or face automatic spending cuts.

PAYGO rules would mean that lawmakers could not expand entitlement programs like Medicare and Social Security or create new programs unless the cost of the expansion is covered by a spending cut or tax increase.  If lawmakers push ahead with those programs anyway, the bill, if approved by Congress, would authorize the White House to kill it.

The PAYGO initiative is similar to rules that were put in place during the Clinton Administration. Those rules are credited with turning deficits into surpluses during the 1990s.

The move is likely to receive applause from Congressional deficit hawks who are currently sounding alarms over unchecked government spending. The automatic trigger move, also known as sequestration, would signal a return to budget restraint.

"If the administration is going to say, 'We need to start afresh here and go forward on a pay-as-you-go basis, including health-care reform,' this is a good way to start out," Robert Bixby, executive director of the nonprofit Concord Coalition, which champions deficit reduction, told The Washington Post.

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