Federal Reserve Chairman Alan Greenspan testified before the House Budget Committee yesterday and painted a grim fiscal picture of the current state of the federal government. Greenspan noted decreasing the current deficits would require Congress and President Bush to make difficult political decisions. He said both decreases in spending and paying for future tax cuts would be necessary to tackle the deficit. Greenspan emphasized his long-standing position for the reinstatement of pay-as-you-go rules (PAYGO). These rules, a key aspect of the deficit reduction package that worked well in the 1990s, would require Congress to offset further tax cuts or increases in spending with savings elsewhere in the budget. The Bush administration and many top Republicans in Congress believe PAYGO rules should apply only to new spending. Read more about Greenspans testimony.