Reining in Executive Overreach with Strengthening Administrative PAYGO Act

WASHINGTON, D.C. – Today, House Budget Committee Oversight Task Force Chair Jack Bergman (R-MI), Chairman Jodey Arrington (R-TX), accompanied by all Republican members of the House Budget Committee, introduced the H.R. 8195, Strengthening Administrative PAYGO (SAP) Act of 2024. 

H.R. 8195 will rein-in unchecked and costly executive actions by clarifying and permanently extending Administrative Pay-As-You-Go (PAYGO), as established by the Fiscal Responsibility Act (FRA) of 2023.

Chairman Arrington on the SAP Act:

“In the bipartisan Fiscal Responsibility Act (FRA), Republicans made a simple, good faith deal with Biden and the Democrats: unilateral executive actions must be paid for. Before the ink was even dry, the Biden Administration went back on its word by failing to pay for its policies, leaving future generations to foot the bill.

The SAP Act locks into law the accountability and transparency necessary to ensure that our nation's budget remains tethered to the principles of fiscal responsibility and congressional oversight. 

I’m proud to stand with my friend, Oversight Task Force Chair Jack Bergman, and the members of the House Budget Committee to hold President Biden and future Administrations - regardless of Party affiliation - 
accountable to the American public.” 

Oversight Task Force Chair Bergman on the SAP Act:

“The Executive Branch should not be able to spend untold amounts of taxpayer money without going through the proper congressional channels. We still have the power of the purse and as for my colleagues and I on the House Budget Committee, we will ensure that power is respected. Americans deserve transparency and accountability, as well as proper oversight, of how their tax dollars are being spent – and often wasted. The SAP Act is going to do just that.”

Background:

What is Administrative PAYGO?

• Administrative PAYGO is a budgetary measure intended to promote fiscal responsibility by requiring agencies to provide offsets for increases to direct spending above a certain threshold.

• The Bush, Obama, and Trump Administrations have all supported some version of Administrative PAYGO; and yet, President Biden unilaterally revoked Administrative PAYGO on his first day in office in January 2021.

• The bipartisan enactment of the 2023  FRA restored Administrative PAYGO to the federal budget process, in hopes of reinstating fiscal restraint to accompany efforts to raise the debt ceiling by:

• • Requiring administrative actions that increase direct spending by $1 billion over 10 years or $100 million in any given year be paid for by offsets or other pay-fors; and,

• • Granting the Director of the Office of Management and Budget (OMB), broad authority to waiveAdministrative PAYGO requirements if it is necessary for “essential services” or “effective program delivery.”

Why is Administrative PAYGO important?

• In recent years, Administrations on both sides of the aisle have increasingly employed the use of executive actions to push through costly and unchecked priorities outside of Congressional authority or consultation. 

• The Biden Administration represents a clear example of this legacy: in just three years, the President has proposed and implemented over $2 trillion worth of –oftentimes partisan– spending through various executive actions.

Has the Biden Administration misinterpreted this bipartisan provision?

• The Biden Administration’s misinterpretation of Administrative PAYGO turns a measure or legislative priority intended to exact fiscal responsibility into an ineffective budgetary exercise, permitting a lack of transparency and further circumvention of the Legislative Branch.

Executive Waivers: 

• OMB has yet to implement the full authority of Administrative PAYGO, choosing instead to utilize its waiver authority to continue spending taxpayer dollars outside of Congress’ purview. 
• These waivers get buried within the Federal Register, which hinders Congress’s ability to conduct proper fiscal oversight.

Lack of Budget Neutrality:

• OMB’s interpretation contends that Administrative PAYGO, as outlined in the FRA, “does not legally require agencies to move forward with, or ultimately implement, proposed offsets.”
• This is markedly different than previous Administration’s interpretation of Administrative PAYGO.

How does the SAP Act address these shortcomings?

• The SAP Act of 2024 addresses and corrects OMB’s misinterpretation by ensuring Administrative PAYGO is properly implemented. Specifically, the legislation:

• • Includes a requirement for the OMB Director to submit any waiver determination and an estimate of the budgetary effects of the covered action to the Budget Committees;
  • Ensures that such covered action is budget neutral;
  • Amends and clarifies the FRA’s threshold of at least $1 billion over 10 years or $100million annually in direct spending from an exemption to a formal requirement;
  • Terminates the original sunset date (12/31/24) in the FRA, making the provision permanent; and,
  • Includes a requirement for the President’s budget request to include the number of waivers granted during the prior fiscal year and the first quarter of the current fiscal year and the number of determinations expected to be submitted. 

The Bottom Line:

As our nation confronts an unprecedented debt and deficit crisis, the federal government must strive to implement financially sound decisions. 

The SAP Act encourages fiscal responsibility while ensuring Congress can conduct proper budget oversight over taxpayer dollars.

See below for more background on the House Budget Committee’s efforts to improve the implementation of the FRA’s Administrative PAYGO provision:

• Click HERE to read Rep. Bergman and Chairman Arrington’s letter to OMB calling for the implementation and execution of Administrative PAYGO.

• Click HERE to read Rep. Bergman and Chairman Arrington’s letter requesting supplemental information from the Government Accountability Office (GAO) on how the Biden Administration is implementing Administrative PAYGO.

• Click HERE to read Chairman Arrington’s comments on GAO’s report re FRA/Administrative PAYGO implementation.

• Click HERE to read a House Budget Committee explainer on Administrative PAYGO.

• Click HERE to read an ICYMI sharing a CQ News story pertaining to the Committee’s work on Administrative PAYGO oversight.

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