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GAO-24-106968 1 (2023-11-30)

handle is hein.gao/gaopnt0001 and id is 1 raw text is: Why This Matters Key Takeaways What steps has OMB taken to implement the act? The Fiscal Responsibility Act of 2023 included a provision-known as Administrative Pay-As-You-Go (PAYGO)-that requires federal agencies to identify increases in direct spending-also referred to as mandatory spending- that may result from federal rulemaking.1 For final rules that increase direct spending above certain thresholds, agencies must identify one or more additional agency actions that could offset the direct spending associated with the rulemaking or request and receive a waiver.2 The act does not legally require agencies to move forward with, or ultimately implement, proposed offsets. Since the 1990s, Congress has implemented multiple PAYGO procedures to constrain the extent to which new legislation increases the deficit.3 From fiscal years 2001 through 2021, more than 60 percent of federal spending in any given year came from direct spending. This includes spending for certain entitlement programs such as Social Security, Medicare, and Medicaid, as well as certain other payments to individuals, businesses, and state and local governments.4 Direct spending is generally governed by criteria contained in statutes other than annual appropriation acts. For example, spending for entitlement programs is generally governed by program eligibility criteria and benefit or payment requirements established by statute and implemented by rules promulgated by federal agencies. Those rules can be adjusted through federal agencies' administrative actions, including rulemaking. The Fiscal Responsibility Act of 2023 includes a provision for us to report on the progress in implementing Administrative PAYGO.5 This report explains the Administrative PAYGO requirements and how they have been implemented. The Office of Management and Budget (OMB) issued guidance for implementing Administrative PAYGO requirements on September 1, 2023, that addressed the elements included in the Fiscal Responsibility Act of 2023. As of November 1, 2023, federal agencies have not submitted any notices or legal opinions to OMB pursuant to Administrative PAYGO requirements since the law passed in June 2023. OMB issued guidance on September 1, 2023, that addressed the Administrative PAYGO provisions in the Fiscal Responsibility Act of 2023.6 The guidance describes (1) exemptions to the Administrative PAYGO requirements, (2) the process for waiving the requirements, and (3) the process for how federal GAO-24-106968 Federal Rulemaking Page 1

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