'PayGo' Resurrected: Where Did 'Pay' Part Go?

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WASHINGTON - President Obama says the government needs to pay for new programs by cutting spending rather than going deeper into debt.

But the President also says it's okay to borrow tens of billions of dollars to pay for his health care plan.

Obama is pushing a law that would make Congress come up with ways to pay for what it spends.

"The pay-as-you-go rule is very simple: Congress can only spend a dollar if it saves a dollar elsewhere," Obama said.

Click play for more analysis from Charles Dunn of the Regent University School of Government, following Paul Strand's report.

Obama points out that the rule -- called "PayGo" -- was in place in the 1990s when record surpluses piled up, and...

"When this rule was abandoned ... we returned to record deficits that doubled the national debt," Obama said.

But critics say there are so many exemptions to Obama's PayGo plan, they wonder where'd the Pay part Go?

It's most likely the Democrats' coming $1 trillion-plus health care plan will be exempt for a decade or so.

Social Security will be untouchable. And discretionary spending, which makes up around 40 percent of the budget, is exempt.

One deficit-hawk organization stated, "This is like quitting drinking, but making an exception for beer and hard liquor."

And House Republican Whip Eric Cantor suggested, "The quickest way to save money is to stop recklessly spending it."

Cost will be a big part of the battle over health care reform.

The Obama administration says such reform may be expensive at the start, but will eventually save money.  They warn if health care costs continue to grow unchecked, just Medicare and Medicaid alone will make up 20 percent of the economy by mid-century.

Democrats on Capitol Hill are starting to outline their health care reform proposals:

-Everyone would be required to buy health insurance and pay a penalty if they don't.

-Employers will have to buy health insurance for workers or pay a penalty.

-There may be a plan to let citizens buy health insurance from the government.

-Families making less than $88,000 a year might get federal subsidies to help them pay for health insurance.

And to help pay for it all, some in Congress are considering a tax on health benefits workers receive from their employers.

These measures are all quite controversial and could lead to some serious political fights on Capitol Hill. 

But President Obama has said health care reform is a top priority of his first year in office, so the battle is about to be joined.    

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Paul  Strand

Paul Strand

CBN News Washington Sr. Correspondent

As senior correspondent in CBN's Washington, D.C., bureau, Paul Strand has covered a variety of political and social issues, with an emphasis on defense, justice, and Congress.  Follow Paul on Twitter @PaulStrandCBN and "like" him at Facebook.com/PaulStrandCBN.