G. Pay-As-You-Go Procedures
§ 22. Introduction
There have been several pay-as-you-go procedures for budget enforcement applicable in the House, provided by statute or by standing rule of the House. Although these procedures share common elements, they have varied in terms of applicability and enforcement mechanisms.
The Budget Enforcement Act of 1990
The Budget Enforcement Act of 1990 created a pay-as-you-go procedure that applied to direct spending only. An annual scorecard, maintained by the Office of Management and Budget, tracked spending and revenue legislation by Congress, and if such scorecard showed a net debit at the end of a congressional session (due to spending increases or a reduction in revenues), an automatic sequestration process was triggered. The PAYGO procedure did not require each bill to be deficit-neutral, but instead enforced budget neutrality in the aggregate.
This budget neutrality goal was enforced by sequestration (automatic canceling of budget authority). If deficit targets were not met, the sequestration process required across-the-board cuts to be made in certain non-exempt categories to reach the target. Spending designated as emergency spending did not count towards the PAYGO scorecard.
This PAYGO mechanism was extended several times, but finally expired in 2002. The remaining balance on the PAYGO scorecard was, by law, reduced to zero, thus avoiding sequesters of funds for the subsequent fiscal years.
House PAYGO Rule
The House maintained its own pay-as-you-go rule applicable to House proceedings during the 110th and the 111th Congresses. In 2011, the rule [p. 316] was replaced by a cut-as-you-go point of order (see below). The former rule required budget neutrality over six- and 11-year time periods for each bill, joint resolution, amendment, or conference report. Any such measures that increased spending or decreased revenues were required to be offset by decreased spending or increased revenues. Thus, unlike the prior statutory PAYGO system, the House PAYGO rule required budget neutrality on a measure-by-measure basis.
In terms of spending analysis, the House PAYGO rule was concerned solely with direct spending and did not apply to discretionary spending. The budgetary effect of each measure was determined on the basis of estimates provided by the Committee on the Budget relative to baseline estimates supplied by the Congressional Budget Office. Amendments to measures were also required to be PAYGO-compliant under the former House PAYGO rule. Amendments were evaluated on their marginal budgetary effect on the pending legislation.
The Committee on Rules reported special orders of business that waived the PAYGO rule. Special orders of business also ‘‘self-executed’’ the adoption of amendments that cured PAYGO violations in the underlying legislation.
After the revisions of the 111th Congress, amounts in a measure designated as emergencies did not count for purposes of PAYGO determinations. However, amounts in amendments could not be designated as emergencies under the rule. If a bill, joint resolution, amendment made in order as original text by a special order of business, conference report, or an [p. 317] amendment between Houses included a provision that expressly designated it as an emergency (under the rule), the Chair was required to put to the House the question of consideration. The question of consideration was automatic and did not require action from the floor for the question to be put before the body. In this way, the House could decide whether or not to proceed to consider the measure, notwithstanding the presence of emergency designations.
House CUTGO Rule
In the 112th Congress, the House replaced its pay-as-you-go rule with a cut-as-you-go rule (CUTGO). The rule provides that it shall not be in order to consider a bill or joint resolution, or amendment thereto, or conference report if its provisions have the net effect of increasing direct spending over 6- and 11-year periods. Like the former PAYGO rule, an amendment under CUTGO is evaluated on the basis of its marginal effect on the bill (and not against a ‘‘baseline’’ of existing law). Unlike the former PAYGO rule, CUTGO does not take revenues into consideration. Thus, an increase in spending may not be offset by an increase in revenues.
The rule applies to direct spending only, not discretionary spending, and direct spending is specifically defined by reference to section 250 of Gramm-Rudman-Hollings. The CUTGO rule maintains the same measure-by-measure approach of budget neutrality as the former House PAYGO rule. The Chair is authoritatively guided by estimates from the Committee on the Budget with respect to the net effect of a measure on direct spending. Rule XXI clause 7 also provides a point of order against concurrent resolutions on the budget containing reconciliation directives that are not CUTGO compliant. Specifically, it shall not be in order to consider a concurrent resolution on the budget, or an amendment thereto, or a conference report thereon that contains reconciliation directives under section 310 of the [p. 318] Congressional Budget Act that specify changes in law that would cause an increase in net direct spending for the period of the concurrent resolution on the budget.
In 2010, the Statutory Pay-As-You-Go Act was enacted. This Act mirrored the original PAYGO procedure of the Budget Enforcement Act of 1990 by providing a running PAYGO scorecard followed by enforcement through end-of-session sequestration. Thus, like the previous PAYGO procedure, the PAYGO scorecard is used to determine budget neutrality in the aggregate, (i.e., over the course of a congressional session) rather than on a measureby-measure basis. As with the prior PAYGO statute, Stat-Paygo applies only to direct spending, not discretionary spending.
With respect to the types of measures to which Stat-Paygo is applicable, the act defines ‘‘PAYGO legislation’’ or ‘‘PAYGO Act’’ as a bill or joint resolution. This definition has also been interpreted to cover amendments between the Houses.
Amounts considered as emergencies are not counted on the PAYGO scorecard under Stat-Paygo. Estimates of the budgetary effects of a given piece of legislation are to be provided by the Congressional Budget Office, at the request of the chairman of the Committee on the Budget, and printed in the Congressional Record. If such an estimate is not provided, the Office of Management and Budget is authorized to estimate the budgetary effect of the legislation. Like the former House PAYGO rule, measures containing amounts designated as emergencies under Stat-Paygo require the Chair to put an automatic question of consideration prior to consideration of that measure.
Section 306 of the Congressional Budget Act does not apply to directed scorekeeping language included in a bill pursuant to Stat-Paygo. While such language does trigger the jurisdiction of the Committee on the Budget, Stat-Paygo provides a specific exception to section 306.