Pay-As-You-Go Rules in the Federal Budget Process

Publication Date: March 2001

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Government

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Abstract:

The pay-as-you-go (PAYGO) rules in the federal budget process require that new direct spending and revenue legislation be deficit neutral. The net effect of all such legislation enacted during a session must not cause a net increase in the budget deficit (or a net decrease in the budget surplus). If direct spending or revenue legislation causes an increase in the deficit, it must be offset by an equivalent amount of direct spending reductions, revenue increases, or a combination of both.