OMB Confirms Congressional Punt on PAYGO
This week the Office of Management and Budget (OMB) released its annual report required under the Statutory Pay-As-You-Go (PAYGO) Act of 2010, summarizing the budgetary effects of legislation enacted in 2025 and reporting the balances on the statutory PAYGO scorecards.
OMB estimates that the lawmakers in 2025 added $2.6 trillion to the deficit through 2030 and $4.4 trillion through 2035 – mainly due to the enactment of the reconciliation bill often referred to as the One Big Beautiful Bill Act (OBBBA) or Working Families Tax Cut Act.
This borrowing was in violation of statutory PAYGO and would normally lead to a $529 billion debit in the first year of the PAYGO scorecard, leading to a sequestration of up to $200 billion in mandatory spending.
Instead, policymakers passed legislation to ignore the law and wiped out the balances on both PAYGO scorecards, which avoids the requirement for PAYGO sequester for the budget year and removes the accountability for Congress to pay as they enact costly legislation.
The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
Statutory PAYGO is one of the smartest tools we have in place, yet Congress never abides by it. This is a huge lost opportunity. Yesterday’s PAYGO report is just another reminder that policymakers keep adding to the debt and skirting the rules meant to support fiscal responsibility.
Statutory PAYGO exists to require Congress and the President to offset new mandatory spending or tax cuts instead of adding to the debt – and it has an enforcement mechanism to ensure they comply.
If lawmakers couldn’t stomach the sequester cuts, they had plenty of options to replace them. Instead, as part of the November law to reopen the government, they waived the enforcement altogether.
But while Congress and the President can zero out the scorecard, they cannot zero out reality. Debt continues to grow, interest costs still compound, and fiscal space to deal with the next economic shock shrinks.
Instead of ignoring fiscal guardrails, lawmakers should strengthen them. What we really need is Super PAYGO, with stronger enforcement and a 2-for-1 offset requirement. And we need a fiscal target to help us stabilize the debt and reduce deficits to 3% of GDP.
Wiping the scorecard hides the deficit increases policymakers have enacted, but it doesn’t erase them. And now we’re deeper in debt than ever.
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For more information, please contact Matt Klucher, Assistant Director for Media Relations, at klucher@crfb.org.
