Number: RL31194
Title: Pay-As-You-Go Requirement for FY2002: A Procedural Assessment
Authors: Robert Keith, Government and Finance Division 
Abstract: The 1985 Balanced Budget Act, as amended, establishes a "pay-as-you-go" (PAYGO) requirement for direct spending and revenue legislation. Under this procedure, legislation proposing new direct spending or decreasing revenues for a fiscal year must not result in a net cost for that year on the "PAYGO scorecard." Any violation of the PAYGO requirement would trigger a sequester after the end of the session, involving automatic, largely across-the-board spending cuts in nonexempt programs. This requirement presently applies to legislation enacted through FY2002 and covers the effects of such legislation through FY2006. In determining whether a sequester will be needed for FY2002, the balance on the scorecard for that year will be combined with the balance for FY2001.
Pages: 9
Date: Updated May 23, 2002