PAYGO Tracker: FY 2020
The first rule of getting out of a hole is to stop digging it deeper. With deficits and debt set to reach unprecedented levels soon, lawmakers risk putting us in a deeper hole by not adhering to pay-as-you-go (PAYGO) budget rules that require non-emergency legislation to be deficit-neutral or deficit-reducing. While COVID-19 legislation qualifies as an emergency, other bills should abide by PAYGO to ensure our dire fiscal situation does not get worse.
The PAYGO Tracker will track ongoing and enacted legislation starting in Fiscal Year (FY) 2020 to determine the extent to which policymakers are abiding by PAYGO. We will focus on legislation that has a significant budgetary impact and receives a floor vote by at least one chamber of Congress.
Currently, PAYGO is enforced in three different ways. Rules in the House and Senate require all tax and mandatory spending legislation to be offset; the statutory PAYGO law requires policymakers to offset the five- and ten-year cost of any tax and mandatory spending changes in legislation over the course of a calendar year; and PAYGO principles and norms encourage policymakers to ensure legislation doesn't add to long-term deficits or rely on budget gimmicks, regardless of technicalities.
Our PAYGO Tracker will highlight efforts to waive, evade, cancel, or ignore PAYGO rules, the PAYGO law, or PAYGO principles. We will also show the scored cost or savings and total cost or savings for each bill, and we will include a paragraph description of the legislation and how policymakers are abiding by or circumventing PAYGO rules.
The tracker will be regularly updated and available at http://www.crfb.org/PAYGO-Tracker.
Key: Waived=PAYGO rule was waived. Waived*=Global waiver from rules. not specific to PAYGO. Excluded=Excluded from PAYGO scorecard. Wiped=Wiped PAYGO scorecard clean. Cancelled=Cancelled PAYGO sequester. Violated=Violated PAYGO principles.
Disapproving IRS rule reinforcing the SALT deduction cap: S.J. Res. 50 is a Senate joint resolution that would disapprove of the IRS rule that combats attempts to circumvent the cap on state and local tax deductions. The IRS rule was meant to prevent states from labeling state tax payments as deductible charitable contributions. By cancelling the rule, the resolution would have allowed states to proceed with this strategy and result in reduced federal revenue, though it is unknown by how much. It would cost less than the $500 billion cost of fully repealing the cap. The resolution did not waive either Senate or statutory PAYGO rules but certainly violated PAYGO principles by increasing deficits. The resolution was voted down 43-52 in October.
Further Continuing Appropriations Act, 2020, and Further Health Extenders Act of 2019: The Further Continuing Appropriations Act, 2020, and Further Health Extenders Act of 2019 is a one-month continuing resolution to fund the government from November 21 to December 20 at current levels. The bill also includes a one-month extension of several health extenders at a cost of $426 million that is fully offset by an equivalent reduction in the Medicaid Improvement Fund and $1.1 billion increase in spending for the United States Victims of State Sponsored Terrorism Fund that is not offset. Finally, the bill cancels a $7.6 billion rescission in highway funding that was included in the 2015 highway bill to artificially reduce costs after that bill's authorization expired. However, since highway spending is considered discretionary and the Congressional Budget Office (CBO) did not count the rescission as cutting outlays before, this does not count as a spending increase. Overall, the bill is scored as costing $1.1 billion over ten years and would cost $1.3 billion including interest. The House Rules Committee provided a global waiver from House rules, including the House PAYGO rule, and the bill excludes its budgetary effects from the statutory PAYGO scorecard while shifting the small existing 2020 scorecard balance to 2021. The House passed the bill by a 231-192 vote, the Senate passed the bill by a 74-20 vote, and the bill became law on November 21, 2019.
National Defense Authorization Act for Fiscal Year 2020: The NDAA authorizes topline discretionary spending of $738 billion for FY 2020 (not subject to PAYGO) and increases mandatory spending by $5.6 billion through 2029. These spending effects primarily come from increasing the annuities received by spouses of deceased military retirees, increasing the number of visas available to Afghans who worked for the U.S. government, and allowing medical malpractice claims for military treatment. The House Rules Committee provided a global waiver from House points of order, while the Senate voted to waive budgetary discipline by a vote of 82-12. The bill did not waive statutory PAYGO, and the costs incurred will be entered on the PAYGO scorecard. The NDAA passed the House by a vote of 377-48 and the Senate by a vote of 86-8, and the bill was signed into law on December 20, 2019.
Further Consolidated Appropriations Act, 2020: The Further Consolidated Appropriations Act, 2020 is an appropriations bill containing eight of the 12 appropriations bills for FY 2020, providing discretionary funding up to levels determined in the Bipartisan Budget Act of 2019. The bill repeals three taxes enacted in the Affordable Care Act – the Cadillac tax, the health insurer tax, and the medical device tax – at a cost of almost $400 billion over ten years. The bill also protects coal miners pensions, extends expiring health care programs and other provisions like the Terrorism Risk Insurance Program, and makes non-budgetary changes like raising the age to buy tobacco products to 21. The original bill was scored by CBO as increasing the deficit by $390 billion. In a manager's amendment, the House Rules Committee added another $54 billion of tax cuts, extending through 2020 almost three dozen tax provisions that expired in 2017 and several that would have expired at the end of 2019, enacting tax-based disaster relief, and making other changes. With interest, we have estimated the bill would add $500 billion to the debt over the next ten years. The House Rules Committee provided a global waiver from House rules, including the House PAYGO rule, and the bill excludes its budgetary effects from the statutory PAYGO scorecard. The bill passed the House by a 297-120 vote, the Senate by a 71-23 vote, and was signed into law on December 20, 2019.
Disapproving Department of Education rule relating to Borrower Defense Institutional Accountability: H.J. Res.76 would disapprove of a Department of Education rule that makes it more difficult for student loan borrowers have their student loans discharged if the school misrepresents facts. Previously, student loans could be discharged for an entire group (e.g., veterans) and the new rule would require each individual borrower to apply for loan forgiveness. CBO estimates spending would increase by $13.7 billion over a decade. With interest, we estimate the resolution would cost $15.5 billion over ten years. The resolution passed the House by a 231-180 vote and the Senate by a 53-42 vote.
Emergency Supplemental Appropriations for Disaster Relief and Puerto Rico Disaster Tax Relief Act, 2020: H.R. 5687 would provide appropriations for disaster relief to U.S. territories affected by recent natural disasters. The bill expands the Earned Income Tax Credit and Child Tax Credit in Puerto Rico and other U.S. territories. It would also increase the new markets and low-income housing tax credits in Puerto Rico and increase the amount of rum excise tax revenues paid by U.S. producers and importers that goes to the governments of Puerto Rico and the U.S. Virgin Islands. In addition, the bill would authorize $3.26 billion in Community Development Block Grant funds for economic revitalization and restoration of housing and infrastructure, with $1.53 billion of these funds designated specifically for mitigation activities in areas that suffered major disasters in 2018 and 2019. CBO scores the bill as increasing the deficit by $20.8 billion over a decade. With interest, we estimate the bill would add $24 billion to the debt over the next ten years. The bill passed the House by a 237-161 vote. The White House has indicated the President will veto the bill.
Great American Outdoors Act: S. 3422 appropriates $1.9 billion per year for five years to fund national park maintenance and makes all money in the Land and Water Conservation Fund (LWCF) available to be spent rather than subject to Congressional appropriations. CBO has not estimated the bill yet, but it previously estimated that the LWCF policy would cost $7.2 billion over ten years, and presumably just about all of the $9.5 billion appropriated for national park maintenance would be spent. Therefore, we expect the bill will cost around $17 billion, or $19 billion including interest. The Senate voted 68-30 to waive all budget rules and passed the bill by a 73-25 vote.
The PAYGO tracker excludes three coronavirus-related bills passed in March and April that provide funding to respond to the pandemic and provide a variety of relief for individuals, businesses, health care providers, and state and local governments. These four bills represent legitimate emergencies that were not anticipated far in advance, so their exclusion from PAYGO rules is reasonable. The bills include:
Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020: H.R. 6074 authorizes $8.3 billion in emergency funding to help mitigate the COVID-19 outbreak. CBO estimates the bill will increase outlays by $8.1 billion over ten years, or $9.9 billion including interest. See here for more details. The bill passed the House by a 415-2 vote, the Senate by a 96-1 vote, and was signed into law on March 6, 2020.
Families First Coronavirus Response Act: H.R. 6201 requires paid leave for certain employees and increases funding for Medicaid and the Supplemental Nutrition Assistance Program (SNAP). CBO estimates the bill will cost $192 billion through 2030, and we estimate that it will cost $240 billion including interest. See here for more details. The bill passed the House by a 363-40 vote and the Senate by a 90-8 vote and was signed into law on March 18, 2020.
CARES Act: H.R. 748 provides rebates for most households, significantly increases the level of and eligibility for unemployment benefits, provides forgiveable loans for small businesses known as the Paycheck Protection Program, provides aid to state and local governments and health care providers, and cuts taxes and funds Federal Reserve lending facilities for businesses, among many other things. CBO estimates the bill will cost $1.7 trillion through 2030, and we estimate it will cost $2.2 trillion including interest. See here for more details. The Senate passed the bill by a unanimous 96-0 vote while the House passed it by voice vote, and it was signed into law on March 27, 2020.
Paycheck Protection Program and Health Care Enhancement Act: H.R. 266 provides additional funding for the Paycheck Protection Program and health care providers that was first included in the CARES Act and adds funding for COVID-19 testing and small business emergency loans. CBO estimates the bill will cost $483 billion through 2030, and we estimate it will cost about $600 billion including interest. See here for more details. The Senate passed the bill by voice vote while the House passed it 388-5, and it was signed into law on April 24, 2020.
PAYGO Tracker for COVID-19 Laws
Key: Waived=PAYGO rule was waived. Waived*=Global waiver from rules. not specific to PAYGO. Excluded=Excluded from PAYGO scorecard. Wiped=Wiped PAYGO scorecard clean. Cancelled=Cancelled PAYGO sequester. Violated=Violated PAYGO principles. Emergency=Didn't violate PAYGO principles because it was a legitimate emergency.
The PAYGO Tracker will be regularly updated and available at http://www.crfb.org/PAYGO-Tracker.