Federal Register, Volume 91 Issue 18 (Wednesday, January 28, 2026)

[Federal Register Volume 91, Number 18 (Wednesday, January 28, 2026)]
[Notices]
[Pages 3736-3738]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-01651]

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OFFICE OF MANAGEMENT AND BUDGET

Notice; 2025 Statutory Pay-As-You-Go Act Annual Report

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 an
annual report and a sequestration order, if necessary.

FOR FURTHER INFORMATION CONTACT: Payton Thomas. 202-395-7868.

SUPPLEMENTARY INFORMATION: This report can be found at https://www.whitehouse.gov/omb/paygo/.
Authority: 2 U.S.C. 934.

Kelly A. Kinneen,
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, 2 U.S.C. 934, which requires that OMB issue an annual PAYGO
report, including a sequestration order if necessary, no later than 14
working days after the end of a congressional session.
This Report describes the budgetary effects of all PAYGO
legislation enacted during the first session of the 119th Congress and
presents the 5-year and 10-year PAYGO scorecards maintained by OMB.\1\
Because neither the 5-year nor 10-year scorecard shows a debit for the
budget year, which for purposes of this Report is fiscal year 2026,\2\
a sequestration order under subsection 5(b) of the PAYGO Act, 2 U.S.C.
934(b) is not required.
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\1\ This report encompasses laws enacted between January 3, 2025
at noon and January 3, 2026 at 11:55 a.m. (Pub. L. 118-225 through
Pub. L. 119-68).
\2\ References to years on the PAYGO scorecards are to fiscal
years.
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The budget year balance on each of the PAYGO scorecards is zero
because the Continuing Appropriations, Agriculture, Legislative Branch,
Military Construction and Veterans Affairs, and Extensions Act, 2026
(Pub. L. 119-37) set the balances on both scorecards to zero for all
years. The change directed by Public Law 119-37 is discussed in more
detail in section IV of this report.
During the first session of the 119th Congress, no laws with PAYGO
effects were enacted with emergency requirements under section 4(g) of
the PAYGO Act, 2 U.S.C. 933(g). Two laws had estimated budgetary
effects on direct spending and/or revenues that were excluded from the
calculations of the PAYGO scorecards due to provisions excluding part
of the law from section 4(d) of the PAYGO Act, 2 U.S.C. 933(d).

I. PAYGO Legislation With Budgetary Effects

PAYGO legislation is authorizing legislation that affects direct
spending or revenues, and appropriations legislation that affects
direct spending in the years after the budget year or affects revenues
in any year.\3\ The PAYGO Act requires that new legislation changing
direct spending or revenue must be enacted on a ``pay-as-you-go''
basis; that is, that the cumulative effects of all such legislation
enacted during a congressional session must not increase projected on-
budget deficits.
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\3\ Provisions in appropriations acts that affect direct
spending in the years after the budget year (also known as
``outyears'') or affect revenues in any year are considered to be
budgetary effects for the purposes of the PAYGO scorecards except if
the provisions produce outlay changes that net to zero over the
current year, budget year, and the four subsequent years. As
specified in section 3 of the 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.
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The PAYGO Act's requirement of deficit neutrality is based on two
scorecards that tally the cumulative budgetary effects of PAYGO
legislation as averaged over rolling 5- and 10-year periods starting
with the budget year. The 5-year and 10-year PAYGO scorecards for each
congressional session begin with the balances of costs or savings
carried over from previous sessions and then tally the costs or savings
of PAYGO laws enacted in the most recent session.
The 5-year PAYGO scorecard for the first session of the 119th
Congress began with balances of zero in every year of both the 5- and
10-year scorecards because the American Relief Act, 2025 (Pub. L. 118-
158) set the balances on both scorecards to zero for all years at the
end of the second session of the 118th Congress.
Laws enacted during the first session of the 119th Congress created
balances on the 5- and 10-year scorecards of $529 billion and $444
billion in each year, respectively.\4\ Public Law 119-37 set the

[[Page 3737]]

balances in all years of both scorecards to zero again at the end of
the first session of the 119th Congress.
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\4\ Public Law 119-21, the Working Families Tax Cut Act,
extended the tax cuts originally enacted in the Tax Cuts and Jobs
Act of 2017 (Pub. L. 115-97). While the budgetary effects of the tax
relief due to the extension of these tax cuts are included in the
balances on the PAYGO scorecards, the Administration believes that
the baseline required by the PAYGO Act does not properly represent
the current policy outlook. A more appropriate benchmark against
which to measure policy changes would include the extension of tax
cuts originally enacted in the Tax Cuts and Jobs Act of 2017. The
entry for Public Law 119-21 on Part II of the PAYGO scorecards
reflects the Administration's assessment of the true budgetary
impact of the Working Families Tax Cut Act, which is savings of $1.4
trillion over the budget window.
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In the first session of the 119th Congress, 34 laws were enacted
that were determined to constitute PAYGO legislation. Of the 34 enacted
PAYGO laws, 13 laws were estimated to have PAYGO budgetary effects
(costs or savings) in excess of $500,000 over one or both of the 5-year
or 10-year PAYGO windows. These were:
Public Law 118-258, Supporting America's Children and
Families Act;
Public Law 118-272, Thomas R. Carper Water Resources
Development Act of 2024;
Public Law 119-2, Providing for congressional disapproval
under chapter 8 of title 5, United States Code, of the rule submitted
by the Environmental Protection Agency relating to ``Waste Emissions
Charge for Petroleum and Natural Gas Systems: Procedures for
Facilitating Compliance, Including Netting and Exemptions.''
Public Law 119-4, Full-Year Continuing Appropriations and
Extensions Act, 2025;
Public Law 119-5, Providing for congressional disapproval
under chapter 8 of title 5, United States Code, of the rule submitted
by the Internal Revenue Service relating to ``Gross Proceeds Reporting
by Brokers That Regularly Provide Services Effectuating Digital Asset
Sales.''
Public Law 119-21, Working Families Tax Cut Act; \5\
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\5\ Public Law 119-21 is also titled, ``To provide for
reconciliation pursuant to title II of H. Con. Res. 14''.
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Public Law 119-27, Guiding and Establishing National
Innovation for U.S. Stablecoins Act;
Public Law 119-31, VA Home Loan Program Reform Act;
Public Law 119-37, Continuing Appropriations, Agriculture,
Legislative Branch, Military Construction and Veterans Affairs, and
Extensions Act, 2026;
Public Law 119-39, Internal Revenue Service Math and
Taxpayer Help Act;
Public Law 119-43, Medal of Honor Act;
Public Law 119-58, Secure Rural Schools Reauthorization
Act of 2025; and
Public Law 119-60, National Defense Authorization Act for
Fiscal Year 2026.
In addition to the laws identified above, 21 laws enacted in this
session were estimated to have negligible budgetary effects on the
PAYGO scorecards--costs or savings of less than $500,000 over both the
5-year and 10-year PAYGO windows.

II. Budgetary Effects Excluded From the Scorecard Balances

A. Emergency Designations

No laws were enacted in the first session of the 119th Congress
with an emergency designation under the PAYGO Act.

B. Statutory Provisions Excluding Legislation From the Scorecards

Two laws enacted in the first session of the 119th Congress had
estimated budgetary effects on direct spending and revenues that were
excluded from the calculations for the PAYGO scorecards due to
provisions in law excluding part of the law from section 4(d) of the
PAYGO Act. These were:
Public Law 119-4, Full-Year Continuing Appropriations and
Extensions Act, 2025; and
Public Law 119-37, Continuing Appropriations, Agriculture,
Legislative Branch, Military Construction and Veterans Affairs, and
Extensions Act, 2026.
Additionally, Division A of Public Law 119-4 included a rescission
of $20.2 billion of funding for the Internal Revenue Service (IRS)
enforcement and compliance activities, which is estimated to result in
decreases to revenue collections. This decrease in revenues is excluded
from the PAYGO estimate by scoring rules established under the
requirements of section 252(d)(5) of the Balanced Budget and Emergency
Deficit Control Act of 1985, as amended.

III. PAYGO Scorecards

Statutory Pay-As-You-Go Scorecards
[In millions of dollars; negative amounts portray decreases in deficits]
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2026 2027 2028 2029 2030
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First Session of the 119th 529,120 529,120 529,120 529,120 529,120
Congress......................
Balances from Previous Sessions 0 0 0 0 0
Change in balances pursuant to -529,120 -529,120 -529,120 -529,120 -529,120
Sec. 8001(d) of Division H of
Public Law 119-37.............
5-year PAYGO Scorecard......... 0 0 0 0 0
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2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
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First Session of the 119th 444,023 444,023 444,023 444,023 444,023 444,023 444,023 444,023 444,023 444,023
Congress......................
Balances from Previous Sessions 0 0 0 0 0 0 0 0 0 0
Change in balances pursuant to -444,023 -444,023 -444,023 -444,023 -444,023 -444,023 -444,023 -444,023 -444,023 -444,023
Sec. 8001(d) of Division H of
Public Law 119-37.............
10-year PAYGO Scorecard........ 0 0 0 0 0 0 0 0 0 0
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[[Page 3738]]

IV. Legislative Revisions to the PAYGO Scorecards

Section 8001(d) of division H of Public Law 119-37, the Continuing
Appropriations, Agriculture, Legislative Branch, Military Construction
and Veterans Affairs, and Extensions Act, 2026, states: ``Effective on
the date of the adjournment of the first session of the 119th Congress,
and for the purposes of the annual report issued pursuant to section 5
of the Statutory Pay-As-You-Go Act of 2010 (2 U.S.C. 934) after such
adjournment and for determining whether a sequestration order is
necessary under such section, the balances on the PAYGO scorecards
established pursuant to paragraphs (4) and (5) of section 4(d) of such
Act shall be zero.'' Accordingly, all years on both the 5- and 10-year
scorecards are zero.

V. Sequestration Order

As shown on the scorecards, the budgetary effects of PAYGO
legislation enacted in the first session of the 119th Congress,
combined with section 8001(d) of division H of Public Law 119-37,
resulted in no costs on either the 5-year or the 10-year scorecard in
the budget year, which is 2026 for the purposes of this Report. Because
the costs for the budget year, as shown on the scorecards, were set to
zero for the budget year, there is no ``debit'' on either scorecard
under section 3 of the PAYGO Act, 2 U.S.C. 932, and a sequestration
order is not required.\6\
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\6\ Sequestration reductions pursuant to section 251A of the
Balanced Budget and Deficit Control Act (BBEDCA) for 2026 were
calculated and ordered in a separate report and are not affected by
this determination. See: https://www.whitehouse.gov/wp-content/uploads/2025/04/OMB-Report-to-the-Congress-on-the-BBEDCA-251A-Sequestration-for-Fiscal-Year-2026.pdf.

[FR Doc. 2026-01651 Filed 1-27-26; 8:45 am]
BILLING CODE 3110-01-P