Statutory Pay-As-You-Go Act of 2010

Statutory Pay-As-You-Go Act of 2010
U.S. Government · Public domain · source
Name	Statutory Pay-As-You-Go Act of 2010
Enacted by	111th United States Congress
Introduced in	United States House of Representatives
Introduced by	John Boehner
Effective date	2010
Public law	Public Law 111-139

Statutory Pay-As-You-Go Act of 2010 was federal legislation enacted by the 111th United States Congress and signed during the administration of Barack Obama to reinstate statutory pay-as-you-go rules for certain federal fiscal measures. The statute revived a framework first adopted in the 1990s under the Budget Enforcement Act of 1990 and interacted with budget procedures used by the United States Senate, the United States House of Representatives, and the Congressional Budget Office. It influenced reporting by the Office of Management and Budget and shaped deliberations involving the United States Department of the Treasury, Biden administration advisors, and fiscal policy advocates.

Background and legislative history

The Act was developed in the aftermath of the 2008 financial crisis amid debates involving figures such as Nancy Pelosi, Harry Reid, Mitch McConnell, and John Boehner and institutions including the Committee on the Budget (House of Representatives), the Senate Budget Committee, and the Bipartisan Policy Center. Proponents cited precedents from the Budget Enforcement Act of 1990 and enforcement mechanisms used during the Clinton administration and the George W. Bush administration. Opponents referenced analyses by the Heritage Foundation, the Brookings Institution, and the Cato Institute. Legislative text was shaped during negotiations between staff from the House Republican Conference, the Senate Democratic Leadership, the Joint Committee on Taxation, and the Government Accountability Office. Passage followed votes in the United States House of Representatives and the United States Senate and culminated in a signature by President Barack Obama.

Provisions of the Act

The statute required that new legislation affecting mandatory spending or revenues be evaluated for its ten-year budgetary impact by the Congressional Budget Office and reported to the Office of Management and Budget and the Congressional Budget Office. It established procedures for sequestration administered by the Office of Management and Budget in coordination with the Department of the Treasury and directed the Director of the Office of Management and Budget to prepare adjustments when projected changes in mandatory programs or tax policy produced net increases in the projected deficit. The Act referenced mechanisms akin to those in the Balanced Budget and Emergency Deficit Control Act of 1985 and set triggers similar to those used under the Budget Control Act of 2011. It addressed outlays and receipts across programs such as Social Security (United States), Medicare (United States), and Medicaid (United States), and required scoring consistent with Congressional Budget Office methodologies and Joint Committee on Taxation estimates.

Implementation and reporting requirements

Implementation depended on routine scoring by the Congressional Budget Office, formal notifications by the Director of the Office of Management and Budget, and administrative action by the Office of Management and Budget under guidance from the President of the United States. The Act mandated periodic reports to the Congress and required agencies such as the Department of Health and Human Services, the Social Security Administration, and the Internal Revenue Service to provide data to enable accurate ten-year estimations. Enforcement relied on sequestration rules adaptable by the United States Court of Appeals for the Federal Circuit and subject to oversight from the Government Accountability Office. Annual budget resolutions by the House Budget Committee and the Senate Budget Committee incorporated pay-as-you-go scorekeeping into reconciliation processes and interaction with the Appropriations Committees (United States Congress).

Impact on federal budgeting and deficit projections

Analysts at the Congressional Budget Office, scholars at the American Enterprise Institute, and researchers at the Urban Institute examined effects on projected deficits, noting that statutory pay-as-you-go influenced the treatment of tax extenders debated by lawmakers including Charles Rangel and Orrin Hatch. The rule changed legislative incentives around entitlement reform advocated by policymakers from the Heritage Foundation and the Center on Budget and Policy Priorities and affected deficit projections used in presidential election campaigns and negotiations over the debt ceiling with the United States Secretary of the Treasury. While some credit the mechanism with improving fiscal discipline reminiscent of outcomes during the 1990s United States federal budget, others argue it had limited effect when exemptions or legislative waivers were used by the Congress.

Political debate and legal challenges

The Act generated debate between lawmakers including Paul Ryan and Steny Hoyer and interest groups such as the AARP and the National Taxpayers Union. Critics argued the statute constrained options during crises like the Great Recession and the COVID-19 pandemic, while supporters pointed to its role in formalizing scorekeeping procedures used by the Congressional Budget Office and the Office of Management and Budget. Litigation over sequestration mechanics and statutory interpretation drew attention from constitutional scholars at institutions like Harvard Law School and Yale Law School and appeared in filings before the United States District Court for the District of Columbia and appellate courts, though major Supreme Court adjudication was limited.

Subsequent amendments and related legislation

The Act interacted with later statutes including the Budget Control Act of 2011, the American Taxpayer Relief Act of 2012, and provisions adopted during the COVID-19 pandemic in the Coronavirus Aid, Relief, and Economic Security Act. Congress modified pay-as-you-go procedures through amendments proposed by members of the House Ways and Means Committee and the Senate Finance Committee and through scorekeeping adjustments by the Congressional Budget Office. Debates continued in subsequent sessions of the United States Congress about restoring, strengthening, or waiving pay-as-you-go rules in the context of proposals from presidential administrations such as Donald Trump and Joe Biden.

Category:United States federal budgeting laws