2009 PAYGO Bill Finds Itself on Shaky Constitutional Footing


When the House of Representatives debated the statutory pay-as-you-go bill July 22, no one questioned its constitutionality. Yet for those who labored on the Gramm-Rudman-Hollings Balanced Budget and Emergency Deficit Control Act of 1985, only to have it overturned by the Supreme Court a few months later, there are eerie echoes of GRH in PAYGO.

One tipoff to possible constitutional problems is a provision in the majority's substitute for the president's bill. It incorporates by reference the judicial review section from the 1985 GRH law that authorizes any Member of Congress to challenge the act's constitutionality. Moreover, its expedited judicial review provision leapfrogs the appeals court, sending any appeal directly from the district court to the Supreme Court.

That's the provision that produced such a quick Supreme Court decision in Bowsher v. Synar in 1986. In that case, Rep. Mike Synar (D-Okla.) filed suit against General Accounting Office chief Charles Bowsher challenging the constitutionality of the GRH act. Synar argued that the act ceded to the GAO, an auditing arm of Congress, an executive function and therefore violated the Constitution's separation of powers doctrine.

Under GRH, the Congressional Budget Office and the Office of Management and Budget scored Congressional spending, and if specified deficit targets were not met, the two agencies would report the estimated excess to the comptroller general, who would then make an independent calculation as to how much spending exceeded the target. The president would then have to use the GAO estimate to order across-the-board discretionary spending cuts (sequestration) to make up the difference.

The Supreme Court held that the comptroller general was an agent of Congress, even though appointed by the president, because he could be removed by enactment of a joint resolution and by impeachment. It was therefore unconstitutional for Congress to delegate to the GAO a law-executing function that compelled the president to order specified spending cuts.

Interestingly, the statutory PAYGO bill just passed by the House puts the CBO in a similar position. The pay-as-you-go statute requires the president's Office of Management and Budget to keep a cumulative scorecard each year on new tax and entitlement enactments. However, the OMB must use the CBO's five- and 10-year estimates if they are referenced in the legislation being scored. If, at the end of each year, the average annual estimate would increase the deficit, the president must pull the sequestration trigger to rectify the imbalance.

How does this compare to the GRH situation and the court's ruling in 1986? There's no question that the director of the CBO is the sole agent of Congress. However, the PAYGO bill differs from the GRH process by referencing the CBO estimates in each tax or entitlement law, giving them the aura of statutory respectability. The president is not being bound by some future determination of an agent of Congress, but by a Congressional agent's ongoing estimates as referenced in each budgetary law.

Despite this twist, the courts may conclude this is a distinction without a difference when they examine the mechanics of PAYGO 2009. Under the terms of the legislation, the House and Senate Budget chairmen must put the CBO estimates in the Congressional Record before the final vote is taken on the entitlement or tax legislation. However, it is not until after both chambers finally approve the bill that the Clerk of the House or the Secretary of the Senate (depending on which chamber acts last before sending the measure to the president) includes the CBO estimate (by reference to its Record placement) in the final enrollment of the measure. Put another way, the final bill is further amended by an agent of Congress after both chambers have voted on final passage. It is difficult to reconcile this extra-parliamentary codification of the CBO estimates with the constitutional requirement of bicameral lawmaking.

Why wouldn't the PAYGO law simply require that the actual CBO estimates be included in the bill at the time of final passage to avoid any question of their legal force? The answer is that this was tried when the original statutory PAYGO law took effect in 1991. The House adopted a rule that said it would not be in order to consider a bill or conference report increasing or decreasing receipts or direct spending unless the actual CBO cost estimate was included in the legislation on final passage.

The purpose of the rule was to force the OMB to use the CBO's estimates in compiling its scorecard (the PAYGO law had only required the OMB to consider the CBO's estimates). Two years after the adoption of that rule, the House repealed it because, in the words of Rep. Louise Slaughter (D-N.Y.), majority manager of the rules package, "the rule proved to be difficult to implement."

That's especially understandable in instances in which conference reports are rushed through shortly after they are approved by conferees. The CBO is squeezed because it cannot score the budgetary impact until final conference language is available. Since conference reports can only be voted up or down by each chamber and cannot be amended, the only way around that obstacle is by using a "chaser resolution" that directs the clerk to include certain additional provisions in the bill's final enrollment. The required approval by both chambers of chaser resolutions legitimates the enrolling clerk's actions. PAYGO 2009 has no such process.

Some may speculate that the looser arrangement in PAYGO 2009 is a cynical attempt by the majority leadership to give the fiscally conservative Blue Dog Democrats the bone that they asked for, knowing full well it could be taken back by the courts. However, that overlooks the fact that the Blue Dogs prefer the CBO role because they don't trust the OMB's numbers. One needn't question anyone's motives to appreciate the beauty of political ambiguity: This wouldn't be the first time Members can both have their cake (or bone) and lose it, too.


Experts & Staff