Senate PAYGO Rule

Last Updated: July 8, 2021

As the U.S. emerges from the COVID-19 pandemic, big and bold investments are crucial to successfully rebuild and recover from the public health crisis that devastated millions of families across the country. However, the Senate’s pay-as-you-go (PAYGO) rule remains a big obstacle to these necessary investments. The Senate PAYGO rule is a budget enforcement mechanism that requires tax cuts and mandatory spending increases to be offset by tax increases or spending cuts elsewhere in the budget. At face value, PAYGO may seem like a reasonable tool to ensure fiscal responsibility. In practice, however, it is a needless hurdle that prevents effective policies from becoming law.

While the Senate’s PAYGO rule poses a problem to much-needed investments in our communities, the annual budget resolution presents an opportunity to modify or repeal the rule and deliver relief to families struggling to recover from the COVID-19 pandemic.