CRS: Congress has excluded $17 trillion from Statutory PAYGO Enforcement

Congress has excluded or erased over $12 trillion in deficit-increasing provisions from the five-year Pay-As-You-Go (PAYGO) scorecard and over $17 trillion from the ten-year scorecard between 2010, when the Statutory PAYGO Act became law, and 2025, according to a new report from the Congressional Research Service (CRS).

Of the $17 trillion excluded from the ten-year scorecard, more than $10 trillion was excluded either because of exemptions included in the original Statutory PAYGO Act (including for provisions designated as emergencies) or because of PAYGO exemptions included in new spending or tax laws. In addition, Congress has passed legislation that erased another $7 trillion in balances from the ten-year scorecard.

Budgetary Effects Excluded or Erased from PAYGO Scorecards, 2010-2025

Source: Congressional Research Service. Figures may not sum due to rounding.

The Statutory PAYGO Act of 2010 generally requires that lawmakers offset the cost of new mandatory spending increases or revenue decreases. The Office of Management and Budget (OMB) is required to maintain cumulative scorecards that record the deficit impact of legislation passed each Congressional session over 5- and 10-year periods. If either scorecard shows a net cost at the end of a session, the law requires a commensurate across-the-board cut from certain mandatory spending programs, known as a PAYGO sequester. Statutory PAYGO is distinct from PAYGO provisions in the rules of the House and Senate, which effectively prohibit deficit-increasing legislation from being considered without a waiver.

CRS identified 82 laws with exemptions covering some or all of their budgetary effects from PAYGO scorecards. A further five laws were identified that eliminated existing PAYGO scorecard balances entirely. In total, these exemptions and eliminations excluded over $12 trillion from the five-year scorecard and over $17 trillion from the ten-year scorecard. Had the Statutory PAYGO Act been followed, lawmakers would have had to either find offsets for these deficit-increasing laws before enacting them or allow the PAYGO sequester to be enforced. However, as the CRS report points out, lawmakers have never allowed the PAYGO sequester to actually take place.

While the CRS report demonstrates the troubling degree to which lawmakers have circumvented PAYGO in the past, the 120th Congress offers an opportunity to change that approach through changes to House rules.

For instance, the House should:

• Restore Full PAYGO. House rules currently require “CUTGO,” which bars legislation that increases mandatory spending over specified five- and ten-year periods but does not apply the same requirement to tax cuts. The 120th Congress should replace CUTGO with a full PAYGO rule covering both changes in mandatory spending and changes in revenues and model it on the Senate’s PAYGO rule, creating a point of order against violating PAYGO. Ideally, a waiver of this rule would require a separate vote with a supermajority (three-fifths) threshold.
• Enhance Transparency and Enforcement of PAYGO. House rules should require the House Reading Clerk to read a statement on whether legislation violates PAYGO. Furthermore, the PAYGO rule should have a high waiver threshold. Any waiver should require a separate, recorded vote preceded by dedicated debate.
• Require an explicit vote to bypass PAYGO. Establish a supermajority threshold and require a separate, recorded vote preceded by dedicated debate on provisions that waive House PAYGO rules or Statutory PAYGO enforcement. This requirement should cover both waivers of the House PAYGO rule and consideration of legislation that excludes costs, erases balances, or delays enforcement of Statutory PAYGO. A decision to remove fiscal guardrails should receive its own vote instead of being bundled into a broader procedural vote.

These reforms would preserve Congress’s ability to respond to emergencies while ensuring that lawmakers are fully aware of their actions when they choose to circumvent PAYGO. While stronger rules will not necessarily ensure fiscal responsibility among lawmakers, they can help make it the default setting and ensure the public is aware when fiscally irresponsible decisions are made.