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. The new Congress will face many challenges that will test its commitment to PAYGO rules as it considers expensive changes to tax law, notably relief from the Alternative Minimum Tax (AMT), and modest expansions of some federal programs, such as the State Children's Health Insurance Program. The challenge for the majority will be in addressing these policy issues and still paying for them without being labeled as a party that supports tax increases. Because PAYGO will be involved in most of the major policy decisions over the next two years, it is important to understand exactly what PAYGO is, and how it impacts enacting new policies in Congress. Continue reading the full analysis of PAYGO and the Senate provisions by clicking here.