OMB Controls on Agency Mandatory Spending Programs: 'Administrative PAYGO' and Related Issues for Congress [August 19, 2010] [open pdf - 674KB]
"On May 23, 2005, during President George W. Bush's second term, then-Office of Management and Budget (OMB) Director Joshua B. Bolten issued a memorandum to the heads of agencies. The memorandum announced that OMB would involve itself systematically in some aspects of how agencies execute laws related to mandatory spending. Under the process outlined in the OMB memorandum, if an agency wished to use discretion under current law in a way that would 'increase mandatory spending,' the memorandum required the agency to propose the action to OMB. Such actions might include regulations, demonstration program notices, and other forms of program guidance. […] The memorandum did not address, however, whether agencies' administrative actions and corresponding spending changes would be consistent with congressional intent or expectations, or whether agencies' proposals and OMB's decisions would be transparent to Congress and the public. […] The Administration characterized the OMB review process as 'augmenting its ... controls' on agency decisions. It also referred to the process as 'administrative PAYGO.' In using the term 'PAYGO,' the Administration juxtaposed this OMB involvement in agency decision making with a statutory and comparatively transparent mechanism that Congress has used when carrying out its legislative function. In 2009, the Barack Obama Administration said it would continue the OMB memorandum's process. After several years of implementation, however, very little is publicly known about the scope and effect of OMB's process, the rationales for OMB determinations, or whether the process has achieved its stated purpose of constraining mandatory spending."
CRS Report for Congress, R41375
National Agricultural Law Center: http:// www.nationalaglawcenter.org/