The Statutory Pay-As-You-Go Act of 2010, Title I of , is a public law passed by the

111th United States Congress The 111th United States Congress was a meeting of the legislative branch of the United States federal government from January 3, 2009, until January 3, 2011. It began during the last weeks of the George W. Bush administration, with th ...

and signed by US President

Barack Obama Barack Hussein Obama II ( ; born August 4, 1961) is an American politician who served as the 44th president of the United States from 2009 to 2017. A member of the Democratic Party, Obama was the first African-American president of the U ...

on February 12, 2010. The act reinstated pay-as-you-go budgeting rules used in Congress from 1990 until 2002, ensuring that most new spending is offset by spending cuts or added revenue elsewhere (with several major policy exemptions).

Legislative history

The Act was introduced in the House of Representatives on June 17, 2009, by Majority Leader

Steny Hoyer Steny Hamilton Hoyer (born June 14, 1939) is an American politician and attorney serving as the U.S. representative for since 1981 and as House Majority Leader since 2019. A Democrat, Hoyer was first elected in a special election on May 19, 198 ...

( D-

Maryland Maryland ( ) is a state in the Mid-Atlantic region of the United States. It shares borders with Virginia, West Virginia, and the District of Columbia to its south and west; Pennsylvania to its north; and Delaware and the Atlantic Ocean ...

) and has been cosponsored by 169 of the 257

House A house is a single-unit residential building. It may range in complexity from a rudimentary hut to a complex structure of wood, masonry, concrete or other material, outfitted with plumbing, electrical, and heating, ventilation, and air condi ...

Democrats. The Act had initially passed the

House of Representatives House of Representatives is the name of legislative bodies in many countries and sub-national entitles. In many countries, the House of Representatives is the lower house of a bicameral legislature, with the corresponding upper house often ca ...

265–166 as a standalone bill in July 2009, then was attached in the

Senate A senate is a deliberative assembly, often the upper house or chamber of a bicameral legislature. The name comes from the ancient Roman Senate (Latin: ''Senatus''), so-called as an assembly of the senior (Latin: ''senex'' meaning "the e ...

to legislation raising the

debt Debt is an obligation that requires one party, the debtor, to pay money or other agreed-upon value to another party, the creditor. Debt is a deferred payment, or series of payments, which differentiates it from an immediate purchase. The ...

limit to $14.3 trillion. A majority of 241 Democrats supported the bill while a majority of 153 Republicans opposed it. In the Senate, the amendment attaching pay-as-you-go language to the debt-limit increase passed on a party-line vote of 60–40, and the debt-limit bill subsequently passed 60–39. After the House passed the bill by a vote of 233–187 on February 4, 2010, the bill was sent to Obama's desk. He signed it into law on February 12, 2010.

Exemptions

The Act under section 11 lists out programs and activities exempt from PAYGO rules. Outlays not subject to offsetting revenues include Social Security payments, all programs administered by the Department of Veterans Affairs, net interest on the debt, and income tax credits. Over 150 additional programs, funds, and activities are listed under section 11 as exempt from the law including outlays to

Fannie Mae The Federal National Mortgage Association (FNMA), commonly known as Fannie Mae, is a United States government-sponsored enterprise (GSE) and, since 1968, a publicly traded company. Founded in 1938 during the Great Depression as part of the N ...

, Freddie Mac, the FDIC, Health Care Trust Funds, the Postal Service Fund, low-rent public housing loans and expenses, and the Special Inspector General for the TARP program. A recent example of Congress passing legislation exempt from the PAYGO rules is for emergency disaster relief for

Hurricane Sandy Hurricane Sandy (unofficially referred to as ''Superstorm Sandy'') was an extremely destructive and strong Atlantic hurricane, as well as the largest Atlantic hurricane on record as measured by diameter, with tropical-storm-force winds span ...

. These exemptions allow money to move more quickly through the legislative process without having to find an offset.

References

Acts of the 111th United States Congress United States federal government administration legislation {{US-fed-statute-stub