sec. 3. DEFINITIONS AND APPLICATIONS.
As used in this title—
(1) The term “BBEDCA” means the Balanced Budget and Emergency Deficit Control Act of 1985.
(2) The definitions set forth in section 3 of the Congressional Budget and Impoundment Control Act of 1974 and in section 250 of BBEDCA shall apply to this title, except to the extent that they are specifically modified as follows:
(A) The term “outyear” means a fiscal year one or more years after the budget year.
(B) In section 250(c)(8)(C), the reference to the food stamp program shall be deemed to be a reference to the Supplemental Nutrition Assistance Program.
(3) The term “AMT” means the Alternative Minimum Tax for individuals under sections 55–59 of the Internal Revenue Code of 1986, 26 U.S.C. 55–59, the term “EGTRRA” means the Economic Growth and Tax Relief Reconciliation Act of 2001 (Public Law 107–16), and the term “JGTRRA” means the Jobs and Growth Tax Relief and Reconciliation Act of 2003 (Public Law 108–27).
(4)(A) The term “budgetary effects” means the amount by which PAYGO legislation changes outlays flowing from direct spending or revenues relative to the baseline and shall be determined on the basis of estimates prepared under section 4. Budgetary effects that increase outlays flowing from direct spending or decrease revenues are termed “costs” and budgetary effects that increase revenues or decrease outlays flowing from direct spending are termed “savings”. Budgetary effects shall not include any costs associated with debt service.
(B) For purposes of these definitions, off-budget effects shall not be counted as budgetary effects.
(C) Solely for purposes of recording entries on a PAYGO scorecard, provisions in appropriation Acts are also considered to be budgetary effects for purposes of this title if such provisions make outyear modifications to substantive law, except that provisions for which the outlay effects net to zero over a period consisting of the current year, the budget year, and the 4 subsequent years shall not be considered budgetary effects. For purposes of this paragraph, the term, “modifications to substantive law” refers to changes to or restrictions on entitlement law or other mandatory spending contained in appropriations Acts, notwithstanding section 250(c)(8) of BBEDCA. Provisions in appropriations Acts that are neither outyear modifications to substantive law nor changes in revenues have no budgetary effects for purposes of this title.
(5) The term “debit” refers to the net total amount, when positive, by which costs recorded on the PAYGO scorecards for a fiscal year exceed savings recorded on those scorecards for that year.
(6) The term “entitlement law” refers to a section of law which provides entitlement authority.
(7) The term “PAYGO legislation” or a “PAYGO Act” refers to a bill or joint resolution that affects direct spending or revenue relative to the baseline. The budgetary effects of changes in revenues and outyear modifications to substantive law included in appropriation Acts as defined in paragraph (4) shall be treated as if they were contained in PAYGO legislation or a PAYGO Act.
(8) The term “timing shift” refers to a delay of the date on which outlays flowing from direct spending would otherwise occur from the ninth outyear to the tenth outyear or an acceleration of the date on which revenues would otherwise occur from the tenth outyear to the ninth outyear.
This section is classified to the U.S. Code at 2 U.S.C. 932.
 Drafting Note: The use of the term “mandatory spending” in a formal document such as a legislative measure or statute is improper since it is a synonym for the specifically defined term “direct spending”. The provision refers to this term immediately after when it states: “notwithstanding section 250(c)(8) of BBEDCA.
S-PAYGO Section-by-Section (Congressional Record)
The Statutory Pay-As-You-Go Act of 2010 (Pub. L. 111-139) does not have a formal report for it. Senator Kent Conrad (D-ND) inserted a section-by-section in the Congressional Record, which summarized this section:
Section 3. Definitions and Applications: Section 3 sets forth definitions of terms used in the PAYGO statute. Many terms are defined by cross-references to the standard definitions used in other budget laws, including the Congressional Budget Act of 1974 and the Balanced Budget and Emergency Deficit Control Act (BBEDCA) of 1985.
Terms that are of particular importance include:
Budgetary effects. Budgetary effects are defined as the amount by which PAYGO legislation changes mandatory outlays or revenues relative to the baseline. The budgetary effects of changes in tax or mandatory spending law are measured relative to what revenues or mandatory spending would otherwise have been if not for the legislation, as measured by the baseline (as defined in section 257 of BBEDCA). Off-budget effects (i.e., Social Security trust funds and the Postal Service fund) and debt service are not counted as budgetary effects.
“Mandatory spending” and “direct spending” (the term used in the statutory language) are synonymous.
PAYGO legislation/PAYGO Act. Legislation, or provisions thereof, that increases or reduces revenues, or increases or reduces the cost of mandatory programs, is called PAYGO legislation or a PAYGO Act. In this Act, the terms are used interchangeably. PAYGO legislation is subject to statutory PAYGO.
Legislation subject to PAYGO also includes provisions in annual appropriations bills that change revenue or mandatory spending law in appropriations bills. Changes in mandatory spending law are considered discretionary in the current and budget years because the Appropriations Committees can offset the costs or use the savings by adjusting funding levels for discretionary programs in those years. But mandatory spending provisions in appropriations bills having outyear budget authority effects–that is, effects in those years after the budget year–are considered PAYGO legislation. This is generally consistent with the existing point of order in the Senate against ChIMPs (Changes in Mandatory Programs). However, such provisions for which the mandatory outlay effects net to zero over the period consisting of the current year, the budget year, and the four subsequent years shall not be counted as having budgetary effects.
Timing shift. A timing shift involves a shift of costs from within the PAYGO window, i.e., the ten-year period covered by the PAYGO scorecard, to outside the window (or savings from outside the window to within the window). More technically, the term is defined to refer to a delay of the date on which mandatory outlays would otherwise occur from the ninth outyear (the last year taken into account in the PAYGO calculation) to the tenth outyear (not taken into account in the PAYGO calculation) or an acceleration of the date on which revenues or offsetting receipts or collections would otherwise occur from the tenth outyear to the ninth outyear. Timing shifts are not counted for purposes of statutory PAYGO to prevent gaming the PAYGO scorecard.
LEGISLATIVE HISTORY NOTES
Pub. L. 111–139, title I, §3, Feb. 12, 2010, 124 Stat. 8 (Statutory Pay-As-You-Go Act of 2010).
References in Text
The reference to “this title” in the text means title I of Pub. L. 111–139, Feb. 12, 2010, 124 Stat. 8. This public law has the long title as a joint resolution “Increasing the statutory limit on the public debt.”. Section 1 of of that Act states that Title I “may be cited as the ‘Statutory Pay-As-You-Go Act of 2010′.”
The Balanced Budget and Emergency Deficit Control Act of 1985, referred to in paragraph (1), is title II of Pub. L. 99–177, Dec. 12, 1985, 99 Stat. 1038.
The Economic Growth and Tax Relief Reconciliation Act of 2001, referred to in paragraph (3), is Pub. L. 107–16, June 7, 2001, 115 Stat. 38.
The Jobs and Growth Tax Relief Reconciliation Act of 2003, referred to in paragraph (3), is Pub. L. 108–27, May 28, 2003, 117 Stat. 752.