[Federal Register Volume 76, Number 13 (Thursday, January 20, 2011)]
[Notices]
[Pages 3657-3673]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-1064]


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OFFICE OF MANAGEMENT AND BUDGET


2010 Pay-As-You-Go (PAYGO) Report

    Authority:  Sec. 5, Public Law 111-139, 124 Stat. 8.

AGENCY: Office of Management and Budget (OMB).

ACTION: Notice.

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SUMMARY: This report is being published as required by the Statutory 
Pay-As-You-Go (PAYGO) Act of 2010. The Act requires that OMB issue (1) 
an annual report of all legislation affecting mandatory spending and 
revenue enacted during the prior session of Congress and (2) a 
sequestration order, if necessary.

FOR FURTHER INFORMATION CONTACT: Patrick Locke, 202-395-3945.

SUPPLEMENTARY INFORMATION: This report and additional information about 
the PAYGO Act can be found at http://www.whitehouse.gov/omb/paygo_default.

Courtney Timberlake,
Assistant Director for Budget.
    This Report is being published pursuant to section 5 of the 
Statutory Pay-As-You-Go (PAYGO) Act of 2010, Public Law 111-139, 124 
Stat. 8, which requires that OMB issue an annual PAYGO report, 
including a sequestration order if necessary, within 14 working days 
after the end of a Congressional session. This Report covers all 
legislation enacted during the second session of the 111th Congress 
since enactment of the PAYGO Act on February 12, 2010. This Report 
summarizes the budgetary effects of enacted PAYGO legislation, the 
current policy adjustments provided by the PAYGO Act, and legislation 
designated as an emergency under the PAYGO Act. This Report also 
presents the five-year and ten-year PAYGO scorecards maintained by OMB.
    Because balances on both scorecards represent PAYGO savings in net, 
a sequestration order is not necessary.

I. PAYGO Legislation With Budgetary Effects

    PAYGO legislation is authorizing legislation that affects direct 
spending or revenues and appropriations legislation that affects direct 
spending or revenues in the years beyond the budget year.\1\ For a more 
complete description of the Statutory PAYGO Act, see http://www.whitehouse.gov/omb/paygo_description. The scorecards show that 
PAYGO legislation enacted since February 12, 2010, was estimated to 
have PAYGO budgetary effects that increase the deficit by $4.3 billion 
in 2010 and $114.5 billion in 2011, and decrease the deficit by $55.2 
billion over the 2010-2015 period and $63.7 billion over the 2010-2020 
period.\2\ The scorecards also show that since February 12, 2010, 97 
laws (96 public laws and one private law) were enacted that were 
determined to constitute PAYGO legislation.\3\
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    \1\ Provisions in appropriations acts that affect direct 
spending or revenues in the years beyond the budget year are not 
considered to be PAYGO legislation to the extent that the resulting 
outyear outlay changes flow from budget authority changes that occur 
in the current or budget year, or if the provisions produce outlay 
changes netting to zero over a six-year period consisting of the 
current year, the budget year, and the four subsequent years. As 
specified in section 3 of the Statutory PAYGO Act, off-budget 
effects are not counted as budgetary effects. Off-budget effects 
refer to effects on the Social Security trust funds (Old-Age and 
Survivors Insurance and Disability Insurance) and the Postal Service 
Fund.
    \2\ Budgetary effects on the PAYGO scorecard are based on 
Congressional estimates if those estimates are placed in the 
Congressional Record according to the procedures of the PAYGO Act 
and cross-referenced in the enacted PAYGO legislation in question. 
Absent a valid Congressional cost estimate, OMB uses its own 
estimate for the scorecard. Of the 97 PAYGO laws on the scorecard, 
44 used a Congressional cost estimate and 53 used an OMB estimate.
    \3\ In addition to the 97 laws shown on the scorecards, 149 laws 
were enacted that did not affect direct spending or revenues.
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    Of the 97 enacted PAYGO laws, 13 have estimated PAYGO budgetary 
effects in excess of $500 million over the 2010-2015 and/or 2010-2020 
periods. These are:
     Hiring Incentives to Restore Employment Act, Public Law 
111-147;
     Patient Protection and Affordable Care Act, Public Law 
111-148;
     Health Care and Education Reconciliation Act of 2010, 
Public Law 111-152;
     Preservation of Access to Care for Medicare Beneficiaries 
and Pension Relief Act of 2010, Public Law 111-192;
     Dodd-Frank Wall Street Reform and Consumer Protection Act, 
Public Law 111-203;
     Public Law 111-226, an act that provides education jobs 
and Medicaid assistance to States;\4\
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    \4\ P.L. 111-226 was amended before enactment to strike its 
original provisions and substitute provisions that provided funding 
to States for education jobs and Medicaid assistance. The amendment 
did not change the official title, which refers to the bill's 
original provisions concerning reauthorization of the Federal 
Aviation Administration and modernization of the air traffic control 
system. OMB's PAYGO scorecard refers to the bill using this official 
title.
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     Small Business Jobs Act of 2010, Public Law 111-240;
     The Physician Payment and Therapy Relief Act of 2010, 
Public Law 111-286;
     Claims Resolution Act of 2010, Public Law 111-291;
     Healthy, Hunger-Free Kids Act of 2010, Public Law 111-296;
     Medicare and Medicaid Extenders Act of 2010, Public Law 
111-309;
     Omnibus Trade Act of 2010, Public Law 111-344; and
     Post-9/11 Veterans Educational Assistance Improvements Act 
of 2010, Public Law 111-377
    In addition to these 13 laws, 21 laws were enacted that were 
estimated to have PAYGO budgetary effects greater than zero but less 
than $500 million over the 2010-2015 or 2010-2020 period. These are:
     Social Security Disability Applicants' Access to 
Professional Representation Act of 2010, Public Law 111-142;
     Capitol Police Administrative Technical Correction Act of 
2009/Travel Promotion Act of 2009, Public Law 111-145;
     An Act to provide that Members of Congress shall not 
receive a cost-of-living adjustment in pay during fiscal year 2011, 
Public Law 111-165;
     Haiti Economic Lift Program Act of 2010, Public Law 111-
171;
     Homebuyer Assistance and Improvement Act of 2010, Public 
Law 111-198;
     A Joint Resolution approving the renewal of import 
restrictions contained in the Burmese Freedom and Democracy Act of 2003 
and for other purposes, Public Law 111-210;
     United States Manufacturing Enhancement Act of 2010, 
Public Law 111-227;
     General and Special Risk Insurance Funds Availability Act 
of 2010, Public Law 111-228;
     An Act making emergency supplemental appropriations for 
border security for fiscal year ending September 30, 2010, and for 
other purposes, Public Law 111-230;\5\
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    \5\ Public Law 111-230 law was the single appropriations law 
enacted during the second session of the 111th Congress that was 
determined to constitute PAYGO legislation. The law made changes to 
direct spending beyond the budget year by increasing immigration 
fees; these changes constitute PAYGO budgetary effects under section 
3 of the PAYGO Act.

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     Star-Spangled Banner Commemorative Coin Act, Public Law 
111-232;
     Firearms Excise Tax Improvement Act of 2010, Public Law 
111-237;
     Security Cooperation Act of 2010, Public Law 111-266;
     Veterans' Benefits Act of 2010, Public Law 111-275;
     Coin Modernization, Oversight, and Continuity Act of 2010, 
Public Law 111-302;
     Regulated Investment Company Modernization Act of 2010, 
Public Law 111-325;
     An Act to require the Federal Deposit Insurance 
Corporation to fully insure Interest on Lawyers Trust Accounts, Public 
Law 111-343;
     James Zadroga 9/11 Health Compensation Act of 2010, Public 
Law 111-347;
     Section 202 Supportive Housing for the Elderly Act of 
2010, Public Law 111-372;
     Pedestrian Safety Enhancement Act of 2010, Public Law 111-
373;
     An Act to clarify the National Credit Union Administration 
authority to make stabilization fund expenditures without borrowing 
from the Treasury, Public Law 111-382; and
     Ike Skelton National Defense Authorization Act for Fiscal 
Year 2011.
    Finally, in addition to the laws identified above, 63 laws enacted 
since February 12, 2010, were estimated to have a negligible PAYGO 
budgetary effect. The PAYGO budgetary effect of these laws was 
estimated to fall below $500,000 each year and in the aggregate from 
2010 through 2020.

II. PAYGO Legislation Excluded From the Scorecard Balances

    Some or all of the budgetary effects of a number of PAYGO laws 
enacted since February 12, 2010, are not included in the calculations 
for the PAYGO scorecards due to emergency designations and other 
exclusions required by law. As noted above, the 97 PAYGO laws enacted 
during the second session of the 111th Congress were estimated to 
result in PAYGO savings of $55.2 billion over 2010-2015 and $63.7 
billion over 2010-2020, after reflecting emergency designations, 
current policy adjustments, and other adjustments. Before applying 
these adjustments, these laws were estimated to increase the on-budget 
deficit by $899.4 billion over 2010-2015 and by $820.1 billion over 
2010-2020. The budget effects that were excluded from balances on the 
PAYGO scorecards are discussed below.

Legislation Subject to Current Policy Adjustments

    Current policy adjustments are excluded from the budgetary effects 
of certain legislation, as specified in sections 4(c) and 7 of the 
PAYGO Act. Legislation affecting Medicare physicians' payments, the 
estate and gift tax, the alternative minimum tax (AMT), and certain 
provisions of the 2001 and 2003 tax acts is subject to current policy 
adjustments. In addition to excluding current policy adjustments from 
the scorecards, any savings from the Community Living Assistance 
Services and Supports (CLASS) Act or amendments to the CLASS Act are 
excluded from the scorecards, as specified in Section 4(d) of the PAYGO 
Act. The following 8 laws were enacted that contain provisions subject 
to current policy adjustments and the CLASS Act provision:
     Temporary Extension Act of 2010, Public Law 111-144;
     Patient Protection and Affordable Care Act, Public Law 
111-148;
     Continuing Extension Act of 2010, Public Law 111-157;
     Preservation of Access to Care for Medicare Beneficiaries 
and Pension Relief Act of 2010, Public Law 111-192;
     Small Business Jobs Act of 2010, Public Law 111-240;
     The Physician Payment and Therapy Relief Act of 2010, 
Public Law 111-286;
     Medicare and Medicaid Extenders Act of 2010, Public Law 
111-309; and
     Tax Relief, Unemployment Insurance Reauthorization, and 
Job Creation Act of 2010, Public Law 111-312.
    The total costs excluded from the scorecards due to current policy 
adjustments are $436.4 billion over 2010-2015 and $433.8 billion over 
2010-2020. The total savings excluded from the scorecards through the 
CLASS Act provision are $39.9 billion over 2010-2015 and $78.6 billion 
over 2010-2020. As discussed in the next section, three of these laws, 
the Temporary Extension Act of 2010, the Continuing Extension Act of 
2010, and the Tax Relief, Unemployment Insurance Reauthorization, and 
Job Creation Act of 2010, also contain provisions that were designated 
as emergencies.
    Section 7(c) of the PAYGO Act exempts from the scorecards some of 
the costs of providing relief from the scheduled cuts to Medicare 
physician payments that would have occurred under the Sustainable 
Growth Rate (SGR) formula. Under the PAYGO Act, the cost of extending 
physician payments through 2014 at December 2009 levels is excluded 
from the scorecard. The Temporary Extension Act of 2010, Public Law 
111-144, and the Continuing Extension Act of 2010, Public Law 111-157, 
extended physician payments at the December 2009 levels through March 
31, 2010, and May 31, 2010, respectively. The PAYGO Act's current 
policy adjustment excluded these extensions from the PAYGO scorecards. 
The Preservation of Access to Care for Medicare Beneficiaries and 
Pension Relief Act of 2010, Public Law 111-192, extended physician 
payments through November 30, 2010, at a level that was 2.2 percent 
above December 2009 levels. The current policy adjustment applied only 
to the cost of extending the December 2009 payment rates; the cost of 
the additional 2.2 percent was included on the scorecards. The 
Physician Payment and Therapy Relief Act of 2010, Public Law 111-286, 
and the Medicare and Medicaid Extenders Act of 2010, Public Law 111-
309, extended these higher rates through December 31, 2010, and 
December 31, 2011, respectively, and the current policy adjustment 
applied only to the extension of December 2009 payment levels. All 
three of these bills that extended higher payment levels resulted in 
net savings on the PAYGO scorecards because of the combination of the 
current policy adjustments and other provisions in the bills that 
reduce direct spending.
    Section 7(f) of the PAYGO Act exempts from the scorecards the costs 
of extending the middle class tax cuts enacted under the Economic 
Growth and Tax Relief Reconciliation Act (EGTRRA) and the Jobs and 
Growth Tax Relief Reconciliation Act (JGTRRA), as amended. In addition, 
section 7(e) exempts from the scorecards the cost of extending AMT 
relief through 2011, and section 7(d) exempts from the scorecards the 
cost of extending a portion of estate and gift tax relief through 2011. 
The PAYGO scorecards include a current policy adjustment for the 
provision of the Small Business Jobs Act of 2010 that amended Section 
179(b) of the Internal Revenue Code to extend and increase expensing 
limitations for small businesses. The scorecards also include current 
policy adjustments for three provisions of the Tax Relief, Unemployment 
Insurance Reauthorization, and Job Creation Act of 2010, Public Law 
111-312: the two-year extension of the middle-class tax cuts, the two-
year extension of AMT relief, and the amount of the estate tax relief

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that would correspond to a two-year extension of estate and gift taxes 
at the tax rates, exemption amount, and related parameters in effect in 
2009. The Patient Protection and Affordable Care Act, Public Law 111-
148, also included a current policy adjustment for a provision 
affecting the adoption credit, which was originally enacted as a 
middle-class tax cut in EGTRRA.

Legislation Designated as an Emergency

    As shown on the scorecards, five laws were enacted that contain 
provisions that received an emergency designation under the Statutory 
PAYGO Act: The Temporary Extension Act of 2010, Public Law 111-144; the 
Continuing Extension Act of 2010, Public Law 111-157; the Unemployment 
Compensation Extension Act of 2010, Public Law 111-205; an Act to 
extend the deadline for Social Services Block Grant expenditures of 
supplemental funds appropriated following disasters occurring in 2008, 
Public Law 111-285; and the Tax Relief, Unemployment Insurance 
Reauthorization, and Job Creation Act of 2010, Public Law 111-312. The 
total costs excluded through emergency designations were $570.1 billion 
over 2010-2015 and $545.1 billion over 2010-2020. Although shown on the 
scorecards, the budgetary effects of provisions designated as 
emergencies are not included in the PAYGO effects shown on the 
scorecards, as specified by Section 4(g) of the PAYGO Act.

Emergency Offsets

    Scorekeeping guidelines adopted by the Office of Management and 
Budget, the Congressional Budget Office, and the Congressional budget 
committees preclude scoring savings for the subsequent repeal of 
legislative provisions that were designated as emergency spending when 
enacted. Although the laws repealing the emergency provisions are 
reported on the PAYGO scorecards maintained by OMB, the savings 
associated with repeal are not included in the balances on the 
scorecards that are used to determine the need for a sequestration. Two 
such laws were enacted during the second session of the 111th Congress: 
The Education, Jobs and Medicaid Assistance to States Act, Public Law 
111-226, and the Healthy, Hunger-Free Kids Act of 2010, Public Law 111-
296. These adjustments excluded $12.0 billion of savings over 2010-2015 
and $16.5 billion of savings over 2010-2020.

Total Exclusions

    In total, a net of $883.8 billion in costs over 2010-2020 were 
enacted by Congress but excluded from the PAYGO scorecards through 
current policy adjustments, emergency designations, or other 
adjustments. Of that amount, $894.0 billion of costs were enacted in 
the Tax Relief, Unemployment Insurance Reauthorization, and Job 
Creation Act of 2010, Public Law 111-312. All other exemptions or 
exclusions produced a net of $10.2 billion in uncounted savings.

III. Sequestration Order

    As shown on the scorecards, the budgetary effects of PAYGO 
legislation enacted since enactment of the PAYGO Act did not result in 
a ``debit'' on either the five-year or the ten-year scorecard in the 
budget year, 2011, which means that costs for the budget year as shown 
on the scorecards do not exceed savings for the budget year. For this 
reason, a sequestration order is not necessary and is not included in 
this Report.
    The savings shown on the scorecards for 2011 will be removed from 
the scorecards that are used to record the budgetary effects of PAYGO 
legislation enacted in the first session of the 112th Congress. The 
savings shown in 2012 through 2020 will remain on the scorecards and 
will be used in determining whether a sequestration order will be 
necessary at the end of future sessions of Congress.
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[FR Doc. 2011-1064 Filed 1-19-11; 8:45 am]
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