Statutory PAYGO Bill Passes The House Of Representatives

Press Release

Today, Congressman Donald M. Payne voted to restore fiscal discipline by putting the "pay-as-you-go" principle into law.

"Every American knows that our nation needs to confront the enormous deficits and debt we are facing," said Payne. "By passing statutory PAYGO today, the House has taken a necessary step to put us back on the path of fiscal restraint. While this will not solve the problem on its own, it will prevent the hole from getting deeper. Unless we reduce the deficit, we will not be able to sustainably invest in critical areas like health care, education, and clean energy."

The PAYGO bill that passed the House today is similar to the statutory PAYGO law that was in place in the 1990s, which helped turn massive deficits into record surpluses. The Republican-controlled Congress allowed these rules to expire in 2002, which contributed to the dramatic turnaround from a projected surplus of $5.6 trillion to projected deficits of more than $11 trillion. Click here for a summary of the PAYGO bill.

"Today's vote shows once again that Democrats are committed to fiscal responsibility," said Payne. "Restoring statutory PAYGO means that we have to make the same hard choices that families make every day to balance their own budgets."

The statutory PAYGO bill requires Congress to pay for the costs of tax cuts or increases in entitlement spending with savings elsewhere in the budget. Exceptions can be made if a situation is deemed an emergency, so that Congress is always able to respond quickly if necessary. There are consequences for not paying for legislation, which will ensure that this new law is adhered to: If the net effect of all legislation enacted during a session of Congress increased the deficit, there would be an across-the-board reduction in certain mandatory programs, known as a sequester. Programs that assist low-income Americans would be protected, as would Social Security, and the effect on Medicare would be limited.

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