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PAYGO Tracker: FY 2020

Dec 16, 2019 | Budget Process

The first rule of getting out of a hole is to stop digging it deeper. Yet with deficits projected to exceed $1 trillion this fiscal year, lawmakers continue to regularly evade or ignore pay-as-you-go (PAYGO) budget rules requiring new spending and tax cuts to be offset.

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.

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.

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 House passed the bill by a 297-120 vote, and it is expected to be voted on in the Senate later this week.

The PAYGO Tracker will be regularly updated and available at http://www.crfb.org/PAYGO-Tracker.