Statutory Pay-As-You-Go Act
Encyclopedia
The Statutory Pay-As-You-Go Act of 2010, Title I of , , enacted on February 12, 2010, is a public law passed during the 111th United States Congress
111th United States Congress
The One Hundred Eleventh United States Congress was the meeting of the legislative branch of the United States federal government from January 3, 2009 until January 3, 2011. It began during the last two weeks of the George W. Bush administration, with the remainder spanning the first two years of...

 and signed by President Barack Obama
Barack Obama
Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...

. The act reinstated pay-as-you-go budgeting rules
PAYGO
PAYGO is the practice in the United States of financing expenditures with funds that are currently available rather than borrowed.-Budgeting:The PAYGO compels new spending or tax changes not to add to the federal deficit. Not to be confused with pay-as-you-go financing, which is when a government...

 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 Hoyer
Steny Hamilton Hoyer is the U.S. Representative for , serving since 1981. The district includes a large swath of rural and suburban territory southeast of Washington, D.C.. He is a member of the Democratic Party....

 (D-Maryland) and has been cosponsored by 169 of the 257 House
United States House of Representatives
The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...

 Democrats
Democratic Party (United States)
The Democratic Party is one of two major contemporary political parties in the United States, along with the Republican Party. The party's socially liberal and progressive platform is largely considered center-left in the U.S. political spectrum. The party has the lengthiest record of continuous...

.

The Act had initially passed the House of Representatives
United States House of Representatives
The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...

 265-166 as a standalone bill in July 2009, then was attached in the Senate
United States Senate
The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...

 to legislation raising the debt
United States public debt
The United States public debt is the money borrowed by the federal government of the United States at any one time through the issue of securities by the Treasury and other federal government agencies...

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.

New 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, net interest on debts, 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, 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.

External links

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