In 1990, President George H.W. Bush broke his famous "Read my lips, no new taxes" pledge and it was one factor in costing him a second term two years later. The less well know fact about that decision was that it made way for a "pay as you go" rule in federal spending. That law "required that program increases be financed with offsetting tax hikes or spending cuts." (29). This rule is widely credited with assisting the federal government balance the budget in the late 1990's. But pay as you go was waived by Congress in 2001 and allowed to expire in 2002 to allow for tax cuts. (29).

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Tax Cuts