Enact Robust PAYGO Requirements
Pay-as-you-go (PAYGO) policies that require mandatory spending increases or tax cuts that increase the deficit to be fully paid for are routinely waived—rendering them ineffective. Since 2010, despite statutory PAYGO being in place, the debt has ballooned by $24 trillion. While not all of that increase resulted from a failure to strictly enforce PAYGO, it shows a clear need to tighten and better enforce the existing rules.
Under current law, Congress can waive PAYGO violations—and avoid automatic spending cuts—with a simple House majority and 60 Senate votes. Key programs like Medicaid and SNAP are exempt from spending cuts, Medicare cuts are capped at 4%, and the law does not include tax hikes to offset deficit increases.
- Reform Statutory PAYGO: The vote threshold to waive sequestration should be raised in the house to a three-fifths majority to align with the Senate. The list of programs available for automatic sequestration should be expanded and tax increases should be added as an alternative to sequestration.
- Use PAYGO to lower the deficit: The Committee for a Responsible Federal Budget has proposed Super PAYGO in which every dollar of new spending or tax cuts would be offset by at least two dollars of revenue increases or spending reductions, thus ensuring that new tax cut and mandatory spending legislation also includes deficit reduction.
Balanced Budget Amendment
The federal government’s growing debt poses a serious threat to long-term economic stability, yet Congress continues to spend more than it collects without fiscal accountability. Without a constitutional requirement for a balanced budget, lawmakers can pass deficit-heavy policies that accumulate debt, weakening the economy, and burdening future generations.
A federal balanced budget amendment would ensure that government spending does not exceed revenue, preventing irresponsible fiscal practices and forcing legislators to make sustainable, responsible financial decisions. Strengthening fiscal discipline through a balanced budget amendment is essential to protecting national prosperity, reducing economic uncertainty, and safeguarding financial security for all Americans.
There are several different ways to structure a balanced budget amendment to account for economic volatility and other contingencies. In recent history, balanced budget amendments have been proposed by both Democrats and Republicans, showing that there is a bipartisan path forward.
Balanced budget amendment to the Constitution of the United States – H.J.Res.55 – 116th Congress (2019-2020), Primary and Original Sponsors: Rep. McAdams, Ben (D-UT-4); Rep. Murphy, Stephanie N. (D-FL-7); Rep. Case, Ed (D-HI-1) Rep. Cooper, Jim (D-TN-5); Rep. Correa, J. Luis (D-CA-46); Rep. Crist, Charlie (D-FL-13); Rep. Cunningham, Joe (D-SC-1); Rep. Gottheimer, Josh (D-NJ-5); Rep. Lipinski, Daniel (D-IL-3); Rep. Schrader, Kurt (D-OR-5); Rep. Spanberger, Abigail Davis (D-VA-7); Rep. O’Halleran, Tom (D-AZ-1).
This proposed balanced budget amendment would constitutionally prohibit the federal government from spending more than it collects in a given fiscal year—unless both chambers of Congress approve the excess with a three-fifths roll call vote. It excludes certain categories from the balance requirement, such as debt repayments, borrowing receipts, and the Social Security and Medicare trust funds.
The President would be required to submit a balanced budget annually. Exceptions to the requirement apply during wartime, military conflict posing a serious threat, or economic downturns marked by recession or high unemployment. Courts would be barred from enforcing the amendment through cuts to Social Security or Medicare unless trust fund insolvency necessitates it. The amendment would take effect five fiscal years after ratification.
Balanced budget amendment to the Constitution of the United States – H.J.Res.113 -118th Congress (2023-2024), Primary and Original Sponsors: Rep. Arrington, Jodey (R-TX); Rep. Yakym, Rudy (R-IN); Rep. Estes, Ron (R-KS); Rep. Burchett, Tim (R-TN); Rep. Ellzey, Jake (R-TX); Rep. Duncan, Jeff (R-SC); Rep. Huizenga, Bill (R-MI); Rep. Franklin, Scott (R-FL); Rep. Guthrie, Brett (R-KY).
This constitutional amendment prohibits total federal expenditures for a year from exceeding the average annual federal revenue collected in the three prior years, adjusted for changes in population and inflation. Expenditures for payment of debt and revenues derived from borrowing are excluded. Congress may authorize specific expenditures in excess of the limit for up to one year by declaring an emergency with a roll call vote of two-thirds of each chamber. The requirements take effect in the first year beginning at least 90 days following ratification, except that expenditures are permitted to exceed the limit by specified amounts during each of the first nine years that the requirements are in effect.