The 110th Congress has brought attention once again to a well-known but little-understood fiscal responsibility mechanism: the pay-as-you-go rule, or PAYGO. The House has already enacted a PAYGO rule. The Senate has introduced a PAYGO bill (S. 10), and is expected to pass its own PAYGO rule in the FY 2008 Budget Resolution, which is now being considered in the Senate.

On March 15, the Senate Budget Committee approved a $2.9 billion budget resolution for Fiscal Year 2008 on a 12-11 party-line vote. The full Senate is expected to take up the measure on March 20, with 50 hours of debate, votes on numerous amendments, and a final vote scheduled before the end of the week. The House Budget Committee is set to mark up its own budget resolution, with floor action likely the week of March 26. (Click here for links to resolution summary and details.)

The 110th Congress is barely two months old, but several lawmakers have introduced proposals to create "entitlement commissions" that would be charged with formulating policies to address projected long-term fiscal challenges in Social Security and Medicare. The plans have surfaced just as there are increasing concerns on Capitol Hill about the fiscal gap — that is, the amount of spending reduction or tax increases needed to keep the national debt as a share of gross domestic product (GDP) at or below the current ratio. There are currently three plans: