* (c) 2002 by Cheryl D. Block, Professor of Law, The George Washington University. All Rights Reserved. I would like to acknowledge helpful comments on earlier working drafts of this article from Professors Elizabeth Garrett, Peter Raven-Hansen, Steven Schooner, Michael Selmi, Peter Swire, and numerous other colleagues at The George Washington University Law School who participated in a workshop at which I presented an earlier draft. Thanks also to Larry Ross, Instructional Services Librarian at The George Washington University Law Library, for his assistance in tracking down hard-to-locate sources. I also appreciate the excellent work of my student research assistants, Anetria Cabrera and Mary Lyons. Finally, I gratefully acknowledge research grant support from The George Washington University Law School.
1 Allen Schick, The Federal Budget: Politics, Policy, Process 56 (rev. ed. 2000) (emphasis added).
2 Id.
3 The OMB prepares the President’s budget, complete with its analysis of revenue impact and revenue projections. Given its mistrust of economic budget information prepared by OMB for the President, Congress initially established the CBO to provide Congress with its own set of budgetary figures. “The CBO was set up to provide a congressional counterpart to the OMB and the President’s economic staff, the Council of Economic Advisors (CEA). . . . The CBO was to provide a bastion of neutral analysis, loyal to the institution of Congress, rather than to committees or to parties.” Aaron Wildavsky & Naomi Caiden, The New Politics of the Budgetary Process 78 (4th ed. 2001). The CBO provides information and assistance to the Budget and Appropriations Committees of the House and Senate and otherwise assists the Senate Finance and House Ways and Means Committees. 2 U.S.C. � 602(a), (b) (2000). Among its other duties, the JCT is to “investigate the operation and effects of the Federal system of the internal revenue taxes.” 26 U.S.C. � 8022(1)(A) (2000). The JCT provides revenue estimates of considered or enacted tax legislation to the CBO. 2 U.S.C. � 601(f) (2000). Professor Michael Graetz laments the tax policy considerations lost when legislators play games with numbers from these three different entities. See Michael J. Graetz, Paint-By-Numbers Tax Lawmaking, 95 Colum. L. Rev. 609, 614–18 (1995).
4 Schick, supra note 1, at 54.
5 Id. at 61–62.
6 See, e.g., id. at 68 (“The easiest way to remove a spending increase from the score is to schedule it to take effect beyond the period covered by the baseline.”); Elizabeth Garrett, Harnessing Politics: The Dynamics of Offset Requirements in the Tax Legislative Process, 65 U. Chi. L. Rev. 501, 527 (1998) (“delaying revenue loss until the ‘out-years’ is not an uncommon strategy for advocates of new programs”).
7 See Garrett, supra note 6, at 529–30.
8 This is a process that Professor Garrett refers to as “downstreaming.” Id. at 530–36.
9 Glen S. Krutz, Hitching a Ride: Omnibus Legislating in the U.S. Congress 52–57 (2001) (documenting the increasing use of omnibus packaging from 1949 through 1994); Barbara Sinclair, Unorthodox Lawmaking: New Legislative Processes in the U.S. Congress 70 (2d ed. 2000) (“The contemporary Congress now often legislates through enormous omnibus bills, something it rarely did in the past.”).
10 Graetz, supra note 3, at 612.
11 Ticket to Work and Work Incentives Improvement Act of 1999, Pub. L. No. 106–170, � 536, 113 Stat. 1860, 1936 (adding a new � 453(a)(2) to the Internal Revenue Code, which disallowed installment reporting for most accrual basis taxpayers).
12 Joint Comm. on Tax., 106th Congress, General Explanation of Tax Legislation (JCS-2–01) app. 184 (Apr. 19, 2001).
13 Thus, the repeal of installment reporting for accrual method taxpayers was included in Subtitle C, specifically entitled, “Revenue Offsets,” of the Tax Relief and Extension Act of 1999, which, in turn, was included in the Ticket to Work and Work Incentives Improvement Act. See 113 Stat. 1860, tit. V, subtit. C.
14 A discussion of the PAYGO rules and their relationship with other budgetary offset rules follows at infra notes 91–116 and accompanying text.
15 H.R. 3594, 106th Cong. (2000).
16 Installment Tax Correction Act of 2000, Pub. L. No. 106–573, � 2(b), 2000 U.S.C.C.A.N. (114 Stat.) 3061 (instructing that the Internal Revenue Code “shall be applied and administered as if [� 453(a)(2)] . . . had not been enacted”).
17 Consolidated Appropriations Act, 2001, Pub. L. No. 106–554, � 2(b), 2000 U.S.C.C.A.N. (114 Stat.) 2763, 2763–64.
18 For a detailed discussion of the installment sale repeal story, see infra notes 117–163 and accompanying text.
19 See, e.g., Kay Lehman Schlozman & John T. Tierney, Organized Interests and American Democracy 314–15 (1986).
20 See Sinclair, supra note 9, at 77–79; see also Elizabeth Garrett, The Congressional Budget Process: Strengthening the Party-in-Government, 100 Colum. L. Rev. 702, 724–29 (2000) (describing changes in the budget and tax legislative processes that tend to alter the balance of power in favor of political party leaders).
21 For sequestration purposes, however, the PAYGO rules continue to apply through 2006. See U.S. Gen. Accounting Office, Budget Issues: Budget Enforcement Compliance Report, GAO–02–794, at 11 (2002) [hereinafter 2002 GAO Budget Report] (“Although BEA expires in 2002, the sequestration procedure applies through 2006 to eliminate any projected net costs stemming from PAYGO legislation enacted through fiscal year 2002.”).
22 S. Res. 304, � 2(b), 107th Cong. (2002) (enacted) (extending Senate PAYGO point-of-order rule to April 15, 2003); S. 2791, 107th Cong. � 2 (2002) (would extend statutory PAYGO rules through 2011, with exceptions for on-budget surplus years), id. � 3(d) (would extend Senate PAYGO point of order); Budget Enforcement Act of 2002, S. 2465, 107th Cong. � 3 (would extend PAYGO through 2007, with exception that there be no sequestration for fiscal years in which a surplus exists); Budget Fraud Elimination Act of 2002, H.R. 5259, 107th Cong. �� 261, 271 (would extend PAYGO through 2007 and include provisions to reduce sequester amounts to the extent of budget surplus); Assuring Honesty and Accountability Act of 2002, H.R. 4593, 107th Cong. � 3 (would extend PAYGO indefinitely).
23 Office of Mgmt. & Budget, Exec. Office of the Pres., Budget of the U.S. Government Fiscal Year 2003: Analytical Perspectives 284 (2002) [hereinafter 2003 Analytical Perspectives] (President’s budget concedes in advance that his administration would support “PAYGO requirements that would carry out the 2003 budget’s proposals for mandatory spending and receipts.”).
24 The House has passed its own budget resolution for fiscal year 2003 and is moving forward under its own guidelines. H.R. Con. Res. 353, 107th Cong. (2002)(enacted). The Senate Budget Committee adopted its own budget resolution, S. Con. Res. 100, 107th Cong. (2002), but the resolution never made it to the floor. The Senate is moving directly to appropriations without a resolution. Although the failure to adopt a concurrent budget resolution is highly unusual and contrary to statutory budget requirements, see infra note 50, this would not be the first time Congress proceeded without a budget. As budget observer Allen Schick described, “In 1998, for the first time since Congress established its own budget process a quarter of a century earlier, it failed to adopt the annual resolution. But this failure did not stop other legislative actions related to the budget.” Schick, supra note 1, at 106.
25 See infra notes 28–116.
26 See infra notes 117–163.
27 See infra notes 164–268. The entire budget process, particularly the scoring methodology, has been the subject of intense scrutiny in recent years. See, e.g., U.S. Gen. Accounting Office, Budget Issues: Budget Enforcement Compliance Report, GAO–01–777 (2001) [hereinafter 2001 GAO Budget Report]. For a good overview on the current need for reforms, see Issues in Budget Reform: Hearings Before the House Comm. on the Budget, 107th Cong. (May 2, 2002) (statement of William G. Gale, Brookings Institute). Larger budget reform issues, however, are beyond the scope of this Article, which generally is limited to the discussion of PAYGO and related budget offset procedures used in connection with enactment of new tax legislation.
28 The classic old quip attributed to Otto von Bismark was that “legislation is like sausage: it’s better not to watch it being made.” More recently, Professor Eustice added, “It has been said that there are three events one should never observe close up: the making of sausages, fudgsicles, and tax legislation.” James E. Eustice, Tax Complexity and the Tax Practitioner, 45 Tax L. Rev. 7, 14 (1989) (emphasis added). My children would surely beg to differ with regard to the fudgsicles.
29 See, e.g., Paul L. Caron, Tax Myopia, Or Mamas Don’t Let Your Babies Grow Up to Be Tax Lawyers, 13 Va. Tax Rev. 517, 547–54 (1994) (“Legislative Process Theory”); Julie A. Roin, United They Stand, Divided They Fall: Public Choice Theory and the Tax Code, 74 Cornell L. Rev. 62 (1988); Daniel Shaviro, Beyond Public Choice and Public Interest: A Study of the Legislative Process as Illustrated by Tax Legislation in the 1980s, 139 U. Pa. L. Rev. 1 (1990); Edward A. Zelinsky, James Madison and Public Choice at Gucci Gulch: A Procedural Defense of Tax Expenditures and Tax Institutions, 102 Yale L.J. 1165 (1993).
30 See, e.g., Caron, supra note 29, at 539–47 (“Statutory Construction Theory”); John F. Coverdale, Text as Limit: A Plea for a Decent Respect for the Tax Code, 71 Tul. L. Rev. 1501 (1997); Mary L. Heen, Plain Meaning, the Tax Code and Doctrinal Incoherence, 48 Hastings L.J. 771 (1997); Michael Livingston, Practical Reason, ‘Purposivism,’ and the Interpretation of Tax Statutes, 51 Tax L. Rev. 677 (1996); Michael Livingston, Congress, the Courts and the Code: Legislative History and the Interpretation of Tax Statutes, 69 Tex. L. Rev. 819 (1991); Daniel M. Schneider, Empirical Research on Judicial Reasoning: Statutory Interpretation in Federal Tax Cases, 31 N.M. L. Rev. 325 (2001).
31 The most dramatic exception is Elizabeth Garrett. See Garrett, supra note 6, at 502–04; Elizabeth Garrett, Rethinking the Structures of Decisionmaking in the Federal Budget Process, 35 Harv. J. on Legis. 387 (1998); see also Graetz, supra note 3; Mary L. Heen, Reinventing Tax Expenditure Reform: Improving Program Oversight Under the Government Performance and Results Act, 35 Wake Forest L. Rev. 751 (2000).
32 For enacted and pending legislation as of the publication of this article, see supra note 22.
33 Donald B. Tobin, Less is More: A Move Toward Sanity in the Budget Process, 16 St. Louis U. Pub. L. Rev. 115, 117 (1996).
34 Pub. L. No. 93–344, 88 Stat. 297 (codified as amended at 2 U.S.C. �� 602–692 (2000)).
35 For example, Congress increasingly has come to rely on combining numerous pieces of legislation together as part of an “omnibus” package. Krutz, supra note 9, at 52–57 (documenting the increasing use of omnibus packaging from 1949 through 1994). Legislative deals are more frequently hammered out through “summits” involving high-level negotiations between high-ranking executive branch officials and congressional leaders. Sinclair, supra note 9, at 77–79; Garrett, supra note 20, at 724–29. Political scientist Barbara Sinclair describes these as developments of “unorthodox lawmaking,” and argues that the old traditional textbook diagram of the legislative process describes fewer and fewer pieces of major legislation. Sinclair, supra note 9, at 4; see also id. at 70–81 (ch. 5, “Omnibus Legislation, the Budget Process, and Summits”).
36 � 300, 88 Stat. at 306 (codified at 2 U.S.C. � 631) (timetable with respect to the congressional budget process for any fiscal year).
37 See Schick, supra note 1, at 74–104 (ch. 5, “The President’s Budget”).
38 The Economic Recovery Tax Act of 1981, Pub. L. No. 97–34, � 101, 95 Stat. 172, 176–85 (phased-in an approximately twenty-three percent reduction in individual tax rates over four years).
39 In this budget message, President Reagan boasted,
Our package includes a proposal to reduce substantially the personal income tax rates levied on our people and to accelerate the recovery of business with capital investment. These rate reductions are essential to restoring strength and growth to the economy by reducing the existing tax barriers that discourage work, saving, and investment.
Message to the Congress Transmitting Fiscal Year 1982 Budget Revisions (Mar. 10, 1981), 1981 Pub. Papers of Ronald Reagan 222. Congress didn’t go along, however, and actually cut back some of the earlier tax and spending cuts. Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. No. 97–248, 96 Stat. 324.
40 Office of Mgmt. & Budget, Exec. Office of the Pres., Budget of the U.S. Government, Fiscal Year 1994, at 5, 12 (1994).
41 Schick, supra note 1, at 140.
42 Congressional Budget Act of 1974, Pub. L. No. 93–344, 88 Stat. 297 (codified as amended at 2 U.S.C. �� 602–692 (2000)).
43 Although the CBO provides Congress with general budget numbers and baselines, the JCT has its own staff of revenue estimators who provide information to the tax-writing committees on the revenue and distributional effects of proposed tax legislation. 2 U.S.C. � 601(f) (2000). The CBO is directed to use the JCT revenue estimates provided by the JCT for any revenue legislation considered or enacted by Congress.
44 See Wildavsky & Caiden, supra note 3, at 78; see also Philip G. Joyce & Robert D. Reischauer, Deficit Budgeting: The Federal Budget Process and Budget Reform, 29 Harv. J. on Legis. 429, 432 (1992) (The CBO was “intended to be a source of non-partisan analysis and information relating to the budget and the economy. Indeed, perhaps the most important early role for the CBO was providing alternative economic forecasts to Congress.”).
45 Joyce & Reischauer, supra note 44, at 431–32. In part, the Act was a direct response to President Nixon’s impoundments of billions of congressionally-appropriated funds. For a discussion of the Nixon impoundments in 1972 and 1973, see Allen Schick, Congress and Money: Budgeting, Spending and Taxing 45–49 (1980); see also Wildavsky & Caiden, supra note 3, at 75–77.
46 2 U.S.C. � 631.
47 For explanations as to why budget resolutions are rarely on schedule, see Schick, supra note 1, at 123–25.
48 Schick, supra note 1, at 32–33.
49 Naomi Caiden, The New Rules of the Federal Budget Game, 44 Pub. Admin. Rev. 109, 112–14 (Mar.-Apr. 1984); see also Garrett, supra note 31, at 388–89 (discussing the possible advantages of changing from our current bifurcated budget “packaging” to a budget that would use a more systematic functional approach, dividing the budget into packages based upon missions or objectives of the federal government).
50 For example, I.R.C. � 127 grants a limited exclusion for certain educational assistance programs provided by an employer. The exclusion was set to expire as of December 31, 2001. I.R.C. � 127(d) (2000). Congress recently eliminated the sunset provision, however, making the education assistance exclusion permanent. Economic Growth and Tax Relief Reconciliation Act of 2001, Pub. L. No. 107–16, � 411, 2001 U.S.C.C.A.N. (115 Stat.) 38, 63.
51 2 U.S.C. � 632(a) (2000).
52 See, e.g., Concurrent Resolution on the Budget for Fiscal Year 2000, H.R. Con. Res. 68, 106th Cong. (1999) (enacted). The report accompanying the 2000 budget noted that “[b]udget resolutions have traditionally included 5-year allocations . . . . This budget resolution provides for 10-year allocations . . . . The flexibility to provide 10-year allocations is found in section 302 of the Budget Act . . . .” H.R. Rep. No. 106–73, at 73 (1999).
53 The increases in revenue are measured from an economic baseline established by the CBO.
54 “Budget authority” is “the permission granted to an agency or department to make commitments to spend money . . . [whereas] outlays . . . are the actual dollars that either have been or will be spent on a particular activity.” Stanley E. Collender, The Guide to the Federal Budget Fiscal 2000, at 2 (1999).
55 Stanley S. Surrey, Pathways to Tax Reform: The Concept of Tax Expenditures 6 (1973).
56 Id.
57 Victor Thuronyi, Tax Expenditures: A Reassessment, 1988 Duke L.J. 1155, 1155.
58 2 U.S.C. � 632(e)(2)(E) (2000).
59 See, e.g., Garrett, supra note 6, at 517. Later in her article, Garrett suggests that this may not necessarily be a bad thing. She says that careful analysis of existing tax expenditures by lobbyists, albeit for self-serving reasons, may provide more information and may serve to institutionalize tax expenditure analysis in ways that Congress otherwise could not. Id. at 561–66.
60 2 U.S.C. � 632.
61 This is commonly known in the budget world as the “section 302 allocation” process, referring to � 632 of the CBA. See Congressional Budget Act of 1974, Pub. L. No. 93–344, � 302(a), 88 Stat. 297, 308 (codified at 2 U.S.C. � 633(a)).
62 This is usually done through a “section 302(b) report,” as provided in the CBA. � 302(b), 88 Stat. at 308–09 (codified at 2 U.S.C. � 633(b)).
63 See, e.g., H.R. Rep. No. 105–555, at 54 (1998).
64 � 301(b), 88 Stat. at 306–07 (codified at 2 U.S.C. � 633(b) (2000)).
65 See Garrett, supra note 20, at 718 (“Surprisingly, the framers of the 1974 Act did not foresee the rise of reconciliation acts; only in the early 1980s did party leaders and other congressional actors realize the importance of this legislative vehicle.”).
66 Schick, supra note 1, at 108; see also Collender, supra note 54, at 56 (“It [reconciliation] is used only if Congress wants to make changes in mandatory spending and revenues. But because such changes are not required each year, it is up to Congress to decide whether it wants to proceed.”).
67 Concurrent Resolution on the Budget for Fiscal Year 2000, H.R. Con. Res. 68, 106th Cong. � 104 (1999) (enacted).
68 Id. � 105. By contrast, the prior year’s budget resolution included reconciliation instructions to nine different authorizing committees “to submit to the Budget Committee changes in law necessary to achieve the specified levels of direct spending and/or revenue.” H.R. Rep. No. 105–555, at 61 (1998).
69 Sheldon D. Pollack, PAYGO and the Politics of the Surplus, 82 Tax Notes 1035, 1049 (1999) (emphasis added).
70 See, e.g., Krutz, supra note 9, at 45 (“The term omnibus can be used arbitrarily. At the introduction stage of the process, members of Congress may call a bill whatever they choose. Members may simply label a bill ‘omnibus’ to make it sound more important.”).
71 Sinclair, supra note 9, at 71.
72 Id. Krutz attempts a more systematic definition, including an element of scope and size. He defines an omnibus bill as one that “(1) spans three or more major topic policy areas or 10 or more subtopic policy areas and (2) is greater than the mean plus one standard deviation of major bills in words.” See Krutz, supra note 9, at 46.
73 2 U.S.C. � 641(d)(1) (House of Representatives), (2) (Senate) (2000).
74 Id. � 633(f)(1) (House of Representatives), (2) (Senate).
75 Id. � 641(d)(1) (House of Representatives), (2) (Senate).
76 Senate Comm. on the Budget, The Congressional Budget Process: An Explanation, S. Rep. No. 105–67, at 13, 57 (1998). In the past, reserve funds have been used primarily in the Senate. Somewhat similar flexibility is provided in the House through statutory exceptions to certain points of order. See, e.g., 2 U.S.C. � 633(g)(1). In its most recent budget resolution, however, the House also used the reserve fund technique. See H.R. Con. Res. 353, 107th Cong., tit. II, Reserve and Contingency Funds (2002). Because the House and Senate did not agree on a concurrent budget resolution for FY 2003, this resolution serves as the budget only for purposes of the House of Representatives.
77 H.R. Con. Res. 68, 106th Cong. � 202 (1999) (enacted) (Tax Reduction Reserve Fund in the Senate). Other examples of reserve funds tie changes in Budget Committee authority to changes in budget and economic outlook. See, e.g., H.R. Con. Res. 83, 107th Cong. � 214 (2001) (Reserve Fund for Additional Tax Cuts and Debt Reduction). Still other reserve funds are tied to the passage of specific legislation. See id. � 211 (Reserve Fund for Medicare) (“If the Committee on Finance of the Senate or the Committee on Ways and Means of the House of Representatives . . . reports on a bill . . . which reforms the Medicare program . . . and improves the access of beneficiaries under that program to prescription drugs, the appropriate chairman . . . may revise committee allocations . . . .”).
78 For a general discussion of special Rules Committee rules that preemptively waive points of order, see Walter J. Oleszek, Congressional Procedures and the Policy Process 126–27 (5th ed. 2001).
79 Constitution, Jefferson’s Manual, and Rules of the House of Representatives of the United States One Hundred and Seventh Congress, H.R. Doc. No. 106–320, House Rule XXVII, cl. 1 (2001) (providing that the voice of the majority decides as to general matters, compare with � 509); see also Oleszek, supra note 78.
80 James V. Saturno, Points of Order in the Congressional Budget Process, CRS Report for Congress, No. 97–865 GOV (Apr. 15, 1999).
81 2 U.S.C. � 636(b)(1) (2000).
82 Id. � 641(e)(2).
83 Id. � 636(b)(2) (as applied to concurrent budget resolutions); id. � 641(e)(1) (as applied to reconciliation bills).
84 Schick, supra note 1, at 128; see also Tobin, supra note 33, at 132 (“Some Senators recognized the potential for abuse of the reconciliation process and were concerned that individuals would attempt to use the reconciliation process as a way to circumvent the filibuster requirement in the Senate. . . . In order to stop the abuse of the reconciliation process, the Senate passed the ‘Byrd Rule,’ which was designed to stop the Senate from considering extraneous matters on the reconciliation bill.”) (footnotes omitted).
85 2 U.S.C. � 644(b)(1); see Senate Comm. on the Budget, The Congressional Budget Process: An Explanation, S. Rep. No. 105–67, at 22 (1998).
86 Pub. L. No. 99–177, tit. II, Part C, 99 Stat. 1037, 1063–93 (1985).
87 Bowsher v. Synar, 478 U.S. 714 (1986).
88 Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987, Pub. L. No. 100–119, 101 Stat. 754. For a comprehensive discussion of developments leading to Gramm-Rudman-Hollings and a discussion of its provisions and impact, see Kate Stith, Rewriting the Fiscal Constitution: The Case of Gramm-Rudman-Hollings, 76 Cal. L. Rev. 595 (1988).
89 Wildavsky & Caiden, supra note 3, at 127.
90 Id. at 133–34.
91 Because the tax-writing committees also have jurisdiction over several entitlement programs, such as Medicare, they could technically raid those entitlement programs to pay for tax cuts under PAYGO rules. Nevertheless, the tax-writing committees generally have operated under a rule whereby every tax reduction must be matched with an equivalent revenue raiser within the same bill. Sheldon D. Pollack, The Failure of U.S. Tax Policy: Revenue and Politics 188 (1996) (“The PAYGO rule for annual offsets of revenue was translated by Chairman Rostenkowski and Bensten into a practice within both tax committees whereby any legislative proposal that costs revenue must be coupled with an offsetting revenue raiser in the same bill. This procedure is still followed in the 104th Congress, even though both Rostenkowski and Bensten are no longer members.”). The procedure apparently continues to the present.
92 Bill Heniff, Jr., Pay-As-You-Go Rules in the Federal Budget Process, Congressional Research Service Report, RS20006, at 1 (Mar. 5, 2001); Garrett, supra note 6, at 510.
93 Although sequestration sounds rather harsh, the sting is diminished through numerous exemptions. Social Security is exempt from PAYGO sequestration. In addition, 2 U.S.C. � 905 includes an extensive list of other programs also exempt from mandatory sequestration. 2 U.S.C. � 905 (2000).
94 See, e.g., H.R. Con. Res. 68, 106th Cong. � 207 (1999) (enacted) (Pay-As-You-Go Point of Order in the Senate). The Senate PAYGO point-of-order rules sunset in 2002 along with the statutory PAYGO rules, id. � 207(g), but they have been temporarily extended until April 15, 2003. S. Res. 304, � 2(b), 107th Cong. (2002) (enacted).
95 See Senate Comm. on the Budget, The Congressional Budget Process: An Explanation, S. Rep. No. 105–67, at 19 (1998). Unless otherwise indicated, references in this Article to “PAYGO” are to the statutory rules leading to sequestration, rather than to the Senate internal point of order rules.
96 Pub. L. No. 101–508, tit. XIII, 104 Stat. 1388–573 (codified as amended at 2 U.S.C. � 902 (2000)).
97 PAYGO enforcement provisions are codified in 2 U.S.C. � 902(b). The OMB is required to calculate any net increase to the deficit caused by direct spending and revenue bills at the close of each legislative session. Within fifteen days after the close of the session, the President is required to issue a sequestration order reducing non-exempt spending by a uniform percentage in order to eliminate the net deficit increase. Although the sequestration rules sound harsh, “[m]ost direct spending is either exempt from a sequestration order or operates under special rules that minimize the reduction that can be made in direct spending. Social Security is exempt from pay-as-you-go sequester and Medicare cannot be reduced by more than 4 percent.” Senate Comm. on the Budget, The Congressional Budget Process: An Explanation, S. Rep. No. 105–67, at 57 (1998).
98 2002 GAO Budget Report, supra note 21, at 11. As the 2002 GAO Report notes, “[e]ffective on its enactment, [the 1997 PAYGO extension, see infra note 100], set the scorecard balance to zero for the then-current year and for each subsequent year through fiscal year 2002. This prevented any net savings achieved by legislation enacted prior to enactment of [the 1997 PAYGO extension] from being used to offset deficit-increasing legislation enacted through 2002.” Id. The CBO also provides a PAYGO “scorecard” and there are often disparities in the way specific pieces of legislation are scored by CBO and OMB for PAYGO purposes. See, for example, the discussion of scoring differences for 2001–02 legislation. Id. at 14–31. In the event of discrepancies, however, OMB figures are controlling for purposes of sequestration orders. 2 U.S.C. � 902(b).
99 Pub. L. No. 103–66, tit. XIV, 107 Stat. 312, 683–85.
100 Pub. L. No. 105–33, tit. X, 111 Stat. 251, 677–712. Because Congress is now considering the budget for fiscal year 2003, the PAYGO rules are not applicable unless Congress chooses to extend them as part of its current budget activity. The Senate has extended its PAYGO point-of-order rule until April 15, 2003. See supra note 22 and accompanying text.
101 For example, Rep. Kasich proposed a repeal of PAYGO. See discussion in Pollack, supra note 69, at 1040–41.
102 See enacted and proposed legislation, supra note 22.
103 Biennial Budgeting: Hearing Before the House Comm. on Rules, 106th Cong. (Jul. 25, 2001) (statement of Mitchell E. Daniels, Jr., Director of OMB) (“the President . . . supports . . . the extension of . . . the PAYGO requirement”). In other testimony the OMB Director made clear, however, the administration’s position that the rules “should be modernized in order to guide budget decisions in an era of surplus.” Proposed Budget Process Revisions: Hearing Before the House Budget Comm., 106th Cong. (June 27, 2001) (statement of Mitchell E. Daniels, Jr., Director of OMB) [hereinafter Federal Budget Process Hearings].
104 2003 Analytical Perspectives, supra note 23, at 283.
105 For a description of the period of presidential dominance that led to the CBA in 1974, see Schick, supra note 1, at 14–18.
106 Schick, supra note 45, at 17. For a brief discussion of the Nixon impoundments in 1972 and 1973, see id. at 45–49.
107 Id. at 51.
108 2003 Analytical Perspectives, supra note 23, at 284. Budget documents also notified Congress that “[t]he Administration will work with the Congress during the next session to develop budget enforcement mechanisms, including . . . a PAYGO requirement for entitlement spending and tax legislation that are consistent with the needs of the country.” Id. at 283.
109 Federal Budget Process Structure: Hearing Before the House Comm. on the Budget, 106th Cong. (July 19, 2001) (statement of Barry B. Anderson, Deputy Dir. of the CBO) [hereinafter Federal Budget Process Structure Hearing].
110 Id. (statement of Rep. Bill Frenzel) (“PAYGO discipline should be maintained. . . . Legislation that would commit surpluses in excess of the amounts contained in the budget should be subject to PAYGO rules and, if enacted, trigger sequestration.”).
111 2 U.S.C. � 902(a) (2000) (emphasis added).
112 H.R. Rep. No. 106–73, at 87 (1999) (“The law is somewhat unclear whether PAYGO lapses when there is an on-budget surplus.”); see also 2002 GAO Budget Report, supra note 21, at 43 (“During the nation’s few years of surpluses, questions were raised about whether the prohibition on increasing the deficit also applied to reducing the surplus.”).
113 See, e.g., Collender, supra note 54, at 38 n.14 (“There is some controversy about whether PAYGO continues if there is a surplus. A literal reading of the statutory language seems to indicate that it can only be used if there is a deficit. However, the Congressional Budget Office and House and Senate Budget Committees have all stated that they will continue to apply PAYGO if the deficit would be increased or surplus reduced.”); Heniff, supra note 92, at 1 (“Even with a budget surplus, the PAYGO process is applicable.”); Schick, supra note 1, at 153–54 (“PAYGO does not distinguish between a surplus and a deficit; in both situations revenue losses must be offset.”).
114 Letter from OMB Director Jacob Lew to Honorable John Spratt, ranking minority member of the House Budget Committee (Apr. 6, 1999), cited in Robert Keith, Pay-as-You-Go Requirement for FY 2002: A Procedural Assessment, CRS Report for Congress, No. RL 31194 (Nov. 23, 2001).
115 2002 GAO Budget Report, supra note 21, at 43.
116 See infra notes 247–253 and accompanying text.
117 See, e.g., Dep’t of Treas., General Explanation of the Administration’s Revenue Proposals (Feb. 1999).
118 Unless otherwise stated, all references to the Internal Revenue Code are to the Internal Revenue Code of 1986, codified at I.R.C. �� 1–9833 (2000).
119 I.R.C. � 1001(c). Subtitle A of the Internal Revenue Code refers to I.R.C. �� 1–1563, which govern federal income taxes.
120 Id. � 1001(a).
121 Under this method, “the income recognized for any taxable year . . . is that proportion of the payments received in that year which the gross profit (realized or to be realized when payment is completed) bears to the total contract price.” Id. � 453(c).
122 Treas. Reg. � 1.446–1(c)(1)(i) (as amended in 2001).
123 The Internal Revenue Code defines gross income as “all income from whatever source derived.” I.R.C. � 61(a). The courts have clarified the definition of income somewhat more usefully. See, e.g., Comm’r v. Glenshaw Glass Co., 348 U.S. 426, 431 (1955) (“undeniable accessions to wealth, clearly realized, and over which the taxpayers have complete dominion”); United States v. Drescher, 179 F.2d 863, 866 (2d Cir. 1950) (“present economic benefit”).
124 I.R.C. � 448(a) (2000). Certain exceptions are provided for farming businesses, qualified personal service corporations, and entities with gross receipts of not more than $5 million. Id. � 448(b).
125 Treas. Reg. � 1.446–1(c)(1)(ii) (as amended in 2001).
126 See, e.g., Cash v. Accrual Methods of Accounting: Hearing Before the House Comm. on Small Business, 106th Cong. (Apr. 5, 2000) (statement of Joseph Mikrut, Treasury Tax Legislative Counsel) [hereinafter Mikrut testimony] (“The installment method is inconsistent with an accrual method of accounting, which generally requires a taxpayer to pay tax on a realized gain, regardless of whether the taxpayer has received the related cash.”).
127 Office of Mgmt. & Budget, Exec. Office of the Pres., Budget of the United States Government, Fiscal Year 2000: Analytical Perspectives 77 (1999) [hereinafter 2000 Analytical Perspectives]; see also Dep’t of Treas., General Explanations of the Administration’s Revenue Proposals 146 (Feb. 1999). In addition, the President’s budget included proposed changes to pledging rules, which require the holder of an installment note to recognize income upon pledging the note as collateral for a loan. The proposed rules were designed to correct perceived inadequacies in existing laws. See Dep’t of Treas., General Explanations of the Administration’s Revenue Proposals 14. This Article focuses only on the repeal of installment sale reporting for accrual basis taxpayers.
128 2000 Analytical Perspectives, supra note 127, at 77.
129 The President’s Fiscal Year 2000 Budget: Hearing Before the Senate Comm. on Finance, 106th Cong. (Apr. 27, 1999) (statement of Donald Lubick, Ass’t Treas. Sec. (Tax Policy)) [hereinafter Lubick testimony].
130 Interestingly, in the first round of fiscal year 2000 tax legislation, the Senate included the repeal of the installment reporting for accrual method taxpayers in a category labeled “loophole closers.” See S. Rep. No. 106–120, at 200–01 (1999).
131 According to the President’s budget estimates, repeal of installment reporting for accrual method taxpayers would increase total federal revenues by approximately $2 billion for years 2000–2004. 2000 Analytical Perspectives, supra note 127, at 88 tbl.3–3.
132 The text of the installment sale repeal clause from Senate Bill 1429, The Taxpayer Refund and Relief Act of 1999 (106th Cong. � 1313 (1999)), was inserted into House Bill 2488 (106th Cong. (1999)), and sent to the President for his signature.
133 H.R. 2488, 106th Cong. (1999). Congressman Archer reports that he reluctantly agreed to include the measure in the first bill only after assurances from the White House and Treasury Department that the provision was non-controversial. Telephone interview with Bill Archer, former Chair, House Ways and Means Comm. (Mar. 26, 2002) (notes on file with the author).
134 H.R. 2488, at tit. XV (“Revenue Offset Provisions”).
135 Ryan J. Donmoyer & Heidi Glenn, After Veto, White House Dismisses GOP Extenders Bill, Tax Notes Today (Sept. 24, 1999) (“At a Rose Garden veto ceremony attended by key economic advisers and cabinet members as well as the brass band, Clinton complained the GOP tax bill was ‘too big, too bloated, [and] places too great a burden on America’s economy.”).
136 Message from the President of the U.S. transmitting His Veto of H.R. 2488, The Taxpayer Refund and Relief Act of 1999, H.R. Doc. No. 106–130.
137 Id.
138 Heidi Glenn, Politics on Display in Tax Bill Votes, Tax Notes Today (Oct. 20, 1999).
139 Id.
140 These were tax deductions or credits that were otherwise due to sunset. Among the largest of the “extender” provisions pushed by Republicans was the research credit. See H.R. 2923, 106th Cong. (1999) (“Extension of Expiring Provisions”); see also discussion in Ryan J. Donmoyer & Heidi Glenn, Roth, Moynihan Pare Extenders to 18 Months, Aides Say, Tax Notes Today (Oct. 13, 1999).
141 Ryan J. Donmoyer, Finance Prepares to Mark Up Extended Extenders Bill, Tax Notes Today (Oct. 20, 1999). Archer reports that by the second time around, his staff began to get concerned about the impact of the proposed repeal of the installment method for accrual method taxpayers. Telephone interview with Bill Archer, supra note 133.
142 S. 1792, 106th Cong. � 210 (1999).
143 Extension of Expiring Provisions, H.R. 2923, 106th Cong. (1999); The Ticket to Work and Work Incentives Improvement Act of 1999, H.R. 1180, 106th Cong. (1999).
144 The last-minute negotiations with the Treasury Department and the White House were informal negotiations over the telephone. Congressman Archer recalls speaking with Treasury Secretary Lawrence Summers from the cloakroom off the House floor about adding the installment sale repeal provision from the Senate bill to the House bill as part of the conference agreement. Telephone interview with Bill Archer, supra note 133.
145 Telephone interview with Rachel Sage, House Ways and Mean Committee tax staff (Mar. 7, 2001) (notes on file with the author); Telephone interview with Paul Potete, Tax Legislative Assistant to Congressman Wally Herger (Mar. 7, 2001) (confirming that he heard that Treasury people were really pushing the original installment provision at conference) (notes on file with the author).
146 H.R. 1180; H.R. Rep. No. 106–478 (1999).
147 Included among these groups were the National Federation of Independent Businesses (NFIB), NFIB Release Endorsing Installment Correction Act, Tax Notes Today (Feb. 10, 2000); the National Association of Manufacturers (NAM), NAM Release Praising Archer Action on Installment Sales Method, Tax Notes Today (Jan. 31, 2000) [hereinafter NAM Release]; the American Institute of Certified Public Accountants (AICPA), AICPA Release Urging Repeal of Installment Sales Tax Rule, Tax Notes Today (Mar. 1, 2000); and broker associations, Brokers Oppose Repeal of Installment Method for Accrual Taxpayers, Tax Notes Today (Feb. 10, 2000).
148 Hearings on H.R. 3594 Before the House Comm on Small Business, 106th Cong. (Apr. 5, 2000) (testimony of Pamela F. Olson on behalf of the American Bar Association Tax Section); id. (testimony of John S. Satagaj on behalf of the Small Business Legislative Council). U.S. Chamber of Commerce representatives also testified in favor of repealing the recent installment sale provision. Repeal of the Installment Method of Accounting for Accrual Basis Taxpayers: Hearing Before the Subcomm. on Oversight, House Comm. on Ways and Means, 106th Cong. (Feb. 29, 2000) (statement of Darryl A. Hill, U.S. Chamber of Commerce).
149 NAM Release, supra note 147.
150 Mikrut testimony, supra note 126.
151 Rev. Proc. 2000–22, 2000–1 C.B. 1008.
152 Pub. L. No. 106–573, 2000 U.S.C.C.A.N. (114 Stat.) 3061.
153 Staff of Joint Comm. on Tax., 107th Cong., General Explanation of Tax Legislation Enacted in the 106th Congress, JCS-2–01, at 176 n.196 (Comm. Print 2001) [hereinafter Joint Comm. Gen. Explanation].
154 Stanley Bach, The Legislative Process on the House Floor: An Introduction, CRS Rep. 95–563, at 3 (July 30, 1996). A motion to suspend the rules permits a bill to bypass the general calendar rules and be brought directly to the floor of the House of Representatives for a vote. The Speaker of the House may entertain such motions only on Mondays and Tuesdays during the last six days of a session of Congress. The motion requires a two-thirds vote for passage. Rules of the House of Representatives R. XV, cl. 1(a). It may not be amended from the floor and is debatable for only forty minutes. Id. at cl. 1(c).
155 Rules of the Republican Conference, U.S. House of Representatives, 107th Cong., R. 28 (Guidelines on Suspensions of House Rules) (on file with the author). The Democratic Caucus uses a similar rule under which the Democratic Leadership will not consent to consideration of a measure under suspension of the Rules that was “opposed by more than one-third of any committee reporting it,” Rules of the Democratic Caucus, U.S. House of Representatives, 107th Congress, R. 38(A)(4), or “contains a cost estimate in excess of $100,000,000 in any fiscal year,” id. at R. 38(C). Similar party rules were in effect for the 106th Congress.
156 See supra note 146.
157 Joint Comm. on Tax., General Explanation of Tax Legislation Enacted by the 106th Congress (JCS-2–01) app. 191 (Apr. 19, 2001) (Appendix: Estimated Budget Effects of Tax Legislation Enacted in the 106th Congress). There is some discrepancy in the budget numbers here, since the figures reported earlier were the President’s budget numbers reported by OMB over a five-year period, see supra note 131, while the revenue estimates quoted here are Joint Committee on Taxation estimates over a ten-year period.
158 See supra notes 91–110 and accompanying text.
159 2 U.S.C. � 904(f)(3) (2000).
160 Office of Mgmt. & Budget, Exec. Off. of the Pres., OMB Cost Estimate for Pay-As-You-Go Calculations, OMB Rep. No. 550 (Jan. 1, 2001) [hereinafter OMB Rep. No. 550].
161 Consolidated Appropriations Act, 2001, Pub. L. No. 106–554, � 2(b), 2000 U.S.C.C.A.N. (114 Stat.) 2763, 2763–64. The Consolidated Appropriations Act, 2001, H.R. 4577, 106th Cong., was first enacted by the House and Senate in June 2000 and ultimately signed into law by the President on December 21, 2000, thus pre-dating the installment sale repeal provision by seven days. The only cry of foul came from Senator Kerry in the Senate, who objected that
[a]ll the way through the 1990s when we had this PAYGO provision in there, we were able to maintain our fiscal discipline in spite of great pressure to do the contrary. Whether it was tax cuts or spending increases that were being proposed, we could maintain that discipline because every time we brought an amendment down to the floor that spent more money or cut somebody’s taxes, we had to have an offset. That is the PAYGO provision. And we are going to throw it out the window, it seems to me, and we are going to abandon a principle that has enabled us not just to balance our budget but to help produce the growth in our economy . . . .
146 Cong. Rec. S11279 (2000) (statement of Sen. Kerry).
162 In fact, the directed scorekeeping here was not limited to the Installment Sale Correction Act, but was part of a larger bill setting the entire PAYGO scorecard for all direct spending and receipts legislation for FY 2001 to zero. For further discussion, see infra note 235–236 and accompanying text.
163 OMB Rep. No. 550, supra note 160.
164 See John W. Kingdon, Agendas, Alternatives, and Public Policies 106 (2d ed. 1995).
165 U.S. Const. art. I, � 7, cl. 1 (“All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.”).
166 Gordon S. Wood, The Creation of the American Republic, 1776–1787, at 553 (1969).
167 The Federalist No. 58 (James Madison).
168 See 2002 GAO Budget Report, supra note 21, at 37; 2001 GAO Budget Report, supra note 27, at 34.
169 See Schick, supra note 1, at 15, box 2-1.
170 President’s Commission on Budget Concepts, Report of the President’s Commission on Budget Concepts 11–18 (1967) [hereinafter 1967 Commission Report].
171 Id. at 11.
172 This will be especially relevant with respect to the goal of transparency. See infra notes 177–184 and accompanying text.
173 U.S. Gen. Accounting Office, Budget Process: Evolution and Challenges, GAO/T–AIMD–96–129, at 12 (1996) [hereinafter 1996 GAO Budget Process Report].
174 See supra notes 64–116 and accompanying text.
175 1996 GAO Budget Process Report, supra note 173, at 12.
176 Elizabeth Garrett, Accountability and Restraint, The Federal Budget Process and the Line Item Veto Act, 20 Cardozo L. Rev. 871, 923 (1999).
177 1996 GAO Budget Process Report, supra note 173, at 12.
178 U.S. Gen. Accounting Office, Budget Process: Comments on H.R. 853, GAO/T–AIMD–99–188, at 8 (1999).
179 See 1996 GAO Budget Process Report, supra note 173, at 14–15.
180 See supra note 168 and accompanying text.
181 The 1967 President’s Commission on Budget Concepts made a similar observation: “Not only does the public need more up-to-date information about how the budget is shaping up but it needs a further look ahead on the way Government expenditures and tax receipts are likely to develop in future years.” 1967 Commission Report, supra note 170, at 76.
182 1996 GAO Budget Process Report, supra note 173, at 9. Although the current budget already provides for a ten-year projection, see discussion supra notes 52–54 and accompanying text, the GAO suggests looking at implications of budget decisions for as long as thirty years. See id. at 9.
183 Id. at 10; see supra note 168 and accompanying text (discussing GAO goals).
184 Garrett, supra note 176, at 924.
185 Although the measure did, in fact, pass the Senate with a greater than three-fifths vote, my concern here is with the precedent established by this maneuver around the budget rules. In fact, the motion on the bill passed by a voice vote in the House, 146 Cong. Rec. H12097 (2000), and by unanimous consent in the Senate, 146 Cong. Rec. S11940 (2000).
186 See infra notes 239–246 and accompanying text.
187 See supra notes 161–163 and accompanying text.
188 For tax purposes, the principle of horizontal equity generally demands that similarly situated taxpayers should pay the same tax. Put slightly differently, those with equal incomes should pay equal tax. See David F. Bradford, Untangling the Income Tax 151 (1986).
189 Telephone interview with Paul Potete, supra note 145.
190 In fact, the inspiration for this Article began as I was working on a new edition for a book on corporate taxation. My editorial changes for the book got caught in the middle of the budgetary process. I had changed all of the problems in my book to reflect the repeal of the installment method for accrual method taxpayers, only to discover that the repeal had been repealed. We were too late in the editorial process to do anything but place a notice in the front of the book. Cheryl D. Block, Corporate Taxation: Examples & Explanations viii (2d ed. 2001).
191 See GAO language quoted supra in text accompanying note 179.
192 For a useful description of the disagreements in methodology and the problems these disagreements can create, see, for example, Graetz, supra note 3.
193 See supra notes 143–146 and accompanying text.
194 See supra notes 147–157 and accompanying text.
195 Oleszek, supra note 78, at 56.
196 Joyce & Reischauer, supra note 44, at 430.
197 See, e.g., 1967 Commission Report, supra note 170.
198 See, e.g., Burdett Loomis, The Contemporary Congress 128–29 (1996).
199 See discussion in Oleszek, supra note 78, at 301.
200 See Sinclair, supra note 9, at 94.
201 Garrett, supra note 20, at 707.
202 Id.
203 Id.
204 See supra notes 82–85 and accompanying text.
205 Garrett, supra note 20, at 723.
206 Caiden, supra note 49, at 113.
207 But see Michael A. Fitts, Can Ignorance Be Bliss? Imperfect Information as a Positive Influence in Political Institutions, 88 Mich. L. Rev. 917 (1990) [hereinafter Can Ignorance Be Bliss?]; Michael A. Fitts, The Vices of Virtue: A Political Party Perspective on Civic Virtue Reforms of the Legislative Process, 136 U. Pa. L. Rev. 1567 (1988).
208 See, e.g., Office of the Sec., Dep’t of the Treas., Tax Reform for Fairness, Simplicity, and Economic Growth: The Treasury Department Report to the President (1984). This major report on tax reform ultimately led to the Tax Reform Act of 1986.
209 See supra note 188 and accompanying text.
210 See supra notes 128–130 and accompanying text.
211 See supra note 129 and accompanying text.
212 See supra note 131 and accompanying text.
213 Graetz, supra note 3, at 763.
214 Gene Steuerle, Fair Budget Policy, Bad Tax Policy, 44 Tax Notes 455, 455 (1989) (emphasis added).
215 One lobbyist explained that they were not even aware that the installment sale provision had been incorporated into the bill until after the President had signed it. It was only then that they “got busy.” Telephone interview with Dan Blankenberg, lobbyist for the National Federation of Independent Businesses (Mar. 7, 2001) (notes on file with the author).
216 Letter to Lawrence H. Summers, Secretary of the Treasury, from D. Scot Bowers, Live Oak Capital Advisors, Inc., reprinted in Brokers Oppose Repeal of Installment Method for Accrual Taxpayers, Tax Notes Today (Feb. 10, 2000) (letter written on behalf of a long list of business lobbying organizations, including National Federation of Independent Businesses, Small Business Legislative Council, National Association of Manufacturers, National Association of Realtors, Small Business Council of America, et. al).
217 Telephone interview with Bill Archer, supra note 133; see also supra notes 141–143 and accompanying text.
218 Mikrut testimony, supra note 126.
219 See Schlozman & Tierney, supra note 19, at 314–15. Moreover, as a general rule, groups generally work harder to preserve what they have than to gain a new benefit. See, e.g., Cass R. Sunstein, Behavioral Analysis of Law, 64 U. Chi. L. Rev. 1175, 1179–81 (1997). Here, however, the group “benefiting” from the installment sale repeal in the first place was arguably the broad general public. The subsequent retroactive repeal of the repeal was advocated by a small, concentrated group of small business lobbyists with little or no opposition from the general public, which would have to overcome massive collective action problems to mount a serious campaign to block the effort. For a wonderful book on the difficulties of large, diffuse groups overcoming collective action problems, see Mancur Olson, Jr., The Logic of Collective Action: Public Goods and the Theory of Groups (1965).
220 See, e.g., Amy Gutmann & Dennis Thompson, Democracy and Disagreement (1996) (discussing the moral dimensions of deliberative democracy); Symposium on Republicanism, 97 Yale L.J. 1539, 1493–1723 (1988); Cass R. Sunstein, Interest Groups in American Public Law, 38 Stan. L. Rev. 29 (1985).
221 Although many claim to have known nothing about the provision at the time, there were apparently hearings on the overall budget, at which the installment sale provision was briefly discussed. See, e.g., Hearings on the FY 2000 Budget: House Ways and Means Comm., 106th Cong. (Mar. 10, 1999) (testimony of William T. Sinclaire, Senior Tax Counsel & Dir. of Tax Policy, U.S. Chamber of Commerce) [hereinafter Sinclaire testimony].
222 Sinclair, supra note 9, at 76.
223 In any event, the presence of the installment sale repeal proposal for accrual method taxpayers in the President’s budget was not completely lost on all interest groups. Although very little attention was paid to the provision in initial consideration of the President’s budget, the U.S. Chamber of Commerce did devote two sentences of its early testimony on the budget to this provision, calling it one of the administration’s “objectionable” revenue raisers. Sinclaire testimony, supra note 221 (before the House Ways and Means Committee). Moreover, Bill Archer, then-Chair of the House Ways and Means Committee, was sufficiently concerned to leave the repeal measure out of the House version of the second bill before it went to conference. Telephone interview with Bill Archer, supra note 133.
224 See, for example, reports that “Roth proposed more than 20 revenue-raisers, all of which have been seen before. The biggest, raising $2 billion over 10 years, would repeal the installment method for most accrual-basis taxpayers . . . .” Ryan J. Donmoyer, Finance Prepares to Mark Up Extended Extenders Bill, Tax Notes Today (Oct. 20, 1999). Another article looking at available offsets to pay for tax cuts specifically referred to the installment sale repeal as already “eaten up.” Ryan J. Donmoyer & Heidi Glenn, Revenue Offset Leftovers May Give K Street Indigestion, Tax Notes Today (Nov. 24, 1999).
225 One lobbyist reported that interest groups never took the threat of the installment sale repeal for accrual basis taxpayers proposal seriously because they believed the Republicans would never pass it. They believed that “Congress would take care of it.” Telephone interview with Dan Blankenberg, supra note 215.
226 See, e.g., Garrett, supra note 6, at 515–21.
227 Id. at 515.
228 Timothy J. Conlan, et al., Taxing Choices: The Politics of Tax Reform 101 (1990).
229 Lubick testimony, supra note 129.
230 For example, an official testifying in favor of a continued payment of monthly educational assistance benefits to veterans commented that as to costs subject to PAYGO, “we would need to work with you to identify necessary offsets for proposals we were to support.” Hearing Before the Subcomm. on Benefits, House Comm. on Veterans’ Affairs, 106th Cong. (1999) (statement of Celia P. Dollarhide, Director, Education Service, Veterans’ Benefits Administration, Dep’t of Veterans’ Affairs).
231 See, e.g., Schick, supra note 1, at 69 (“PAYGO contributed to the liquidation of budget deficits by hampering enactment of new direct spending legislation and making it easier for the government to hold onto its revenue dividend.”); Pollack, supra note 69, at 1050 (“PAYGO checks the natural instincts of Democrats to over-spend and Republicans to slash taxes for their constituents. The result has been a dose of fiscal constraint for the budget process; budget surpluses, and consequently, paying down some portion of the national debt, are now a real possibility.”).
232 One early observation was that “[t]he PAYGO process seems to have discouraged major efforts to increase entitlement spending or cut taxes or both.” Joyce & Reischauer, supra note 44, at 438. Richard May observed that “PAYGO has provided some sense of fiscal discipline and has worked ninety to ninety-five percent of the time.” Telephone interview with Richard May, Staff Director of the House Budget Comm., 1993–1997 (Mar. 26, 2002) (notes on file with the author).
233 Garrett, supra note 6, at 556–60.
234 Id. at 564–69.
235 2 U.S.C. � 902(d), (e) (2000).
236 Dep’t of Defense and Emergency Supplemental Appropriations for Recovery from and Response to Terrorist Attacks on the U.S. Act, 2002, Pub. L. No. 107–117, div. C, � 102, 2001 U.S.C.C.A.N. (115 Stat.) 2330, 2342 (setting PAYGO sequester to zero for 2001 and 2002); Consolidated Appropriations Act, 2001, Pub. L. No. 106–554, � 2(b), 2000 U.S.C.C.A.N. (114 Stat.) 2763 (setting PAYGO sequester to zero for 2001); Consolidated Appropriations Act, 2000, Pub. L. No. 106–113, div. B, � 1001(c), 113 Stat. 1501, 1537 (setting PAYGO sequester to zero for FY 2000).
237 For a discussion of the notion of government precommitment and its analogy to government contracts in the tax setting, see Kyle D. Logue, Tax Transitions, Opportunistic Retroactivity, and the Benefits of Government Precommitment, 94 Mich. L. Rev. 1129 (1996).
238 Among the first, basic approaches along these lines was Robert E. McCormick & Robert D. Tollison, Politicians, Legislation, and the Economy: An Inquiry into the Interest-Group Theory of Government (1981); see also Michael T. Hayes, Lobbyists and Legislators: A Theory of Political Markets (1981).
239 Perhaps the best definition of “public choice” is simply the “economic study of nonmarket decision making.” Dennis Mueller, Public Choice II, at 1 (1989). In the legislative context, quite simply, public choice is the application of economic principles to the legislative process.
240 Frank H. Easterbrook, The Court and the Economic System, 98 Harv. L. Rev. 4, 18 (1984); Daniel A. Farber, Legislative Deals and Statutory Bequests, 75 Minn. L. Rev. 667 (1991). An extensive article advocating the strong analogy between legislation and contracts and specifying positive canons of statutory construction based upon the contract analogy is McNollgast, Positive Canons: The Role of Legislative Bargains in Statutory Interpretation, 80 Geo. L.J. 705 (1992) (the author “McNollgast” is actually short for Matthew McCubbins, Roger Noll, and Barry Weingast). But see Mark L. Movsesian, Are Statutes Really ‘Legislative Bargains’? The Failure of the Contract Analogy in Statutory Interpretation, 76 N.C. L. Rev. 1145 (1998). For application of the “statute as contract” model particularly in the tax context, see Richard L. Doernberg & Fred S. McChesney, On the Accelerating Rate and Decreasing Durability of Tax Reform, 71 Minn. L. Rev. 913 (1987). But see Shaviro, supra note 29, at 63–80 (critiquing the statute-as-contract model).
241 The statutory language is quoted at supra note 152 and accompanying text.
242 Ticket to Work and Work Incentives Improvement Act of 1999, Pub. L. No. 106-170, � 536, 113 Stat. 1860, 1936.
243 Farber, supra note 240, at 678.
244 Id.
245 I would not be the first to analogize a statute to breach of contract in the legislative setting. In a different context, Professor Logue has argued that repeal of a tax subsidy is analogous to a breach of contract for which the affected taxpayer is entitled to relief. He argues that taxpayers who engage in certain investment behavior relying upon, for example, a tax deduction designed as an incentive to engage in that activity have something akin to a contractual right to that deduction. See Logue, supra note 237, at 1143–49. To be sure, I am extending Professor Logue’s analogy well beyond the case of reliance interests of particular taxpayers. At the same time, unlike Professor Logue, I am not arguing for any particularized relief to taxpayers.
246 In any event, even in cases where Congress has formally violated its own rules, courts have been reluctant to intervene, generally upholding congressional action against challenges to the legitimacy of statutes enacted in violation of statutory or internal House or Senate rules. See, e.g., Metzenbaum v. Fed. Energy Regulatory Comm., 675 F.2d 1282 (D.C. Cir. 1982). For a good general discussion of the issues, see Michael B. Miller, The Justiciability of Legislative Rules and the ‘Political’ Political Question Doctrine, 78 Cal. L. Rev. 1341 (1990).
247 Framing the Budget Debate for the Future: Hearing Before the Senate Comm. on the Budget, 107th Cong. (Jan. 24, 2002) (statement of Robert D. Reischauer, Urban Institute). Richard May, former Staff Director of the House Budget Committee and observer of the budget process, also reports that Congress violated PAYGO rules much more frequently in times of surplus than in times of deficit. Telephone interview with Richard May, supra note 232.
248 Federal Budget Process Structure Hearing, supra note 109.
249 Id. (statement of Rep. Bill Frenzel) (“PAYGO discipline should be maintained. . . . Legislation that would commit surpluses in excess of the amounts contained in the budget should be subject to PAYGO rules and, if enacted, trigger sequestration.”).
250 H.R. 853, 106th Cong. (1999).
251 Improving Efficiency of the Budget Process, Hearings on H.R. 853: Hearing Before the House Budget Comm., 106th Cong. (May 20, 1999) (statement of Dan L. Crippen, Dir., CBO).
252 Federal Budget Process Hearings, supra note 103 (statement of Robert D. Reischauer, Pres., Urban Institute).
253 For the suggestion of applying a “veil of ignorance” type approach in budgeting matters, see Can Ignorance Be Bliss?, supra note 207, at 971–72.
254 1996 GAO Budget Process Report, supra note 173, at 14.
255 Id. at 13–14.
256 Joint Econ. Comm., 107th Cong., Extending the Budget Enforcement Act: Revision of PAYGO Rules Necessary for Better Tax Policy 2 (2002).
257 Id. at 4, 14.
258 Id. at 11–13.
259 Id. at 13.
260 See, e.g., Collender, supra note 54, at 202, 214; Schick, supra note 45, at 597; Schick, supra note 1, at 302; Wildavsky & Caiden, supra note 3.
261 Schick, supra note 1, at 63 (“In some cases, Congress picks and chooses between OMB and CBO assumptions, taking from each those that score its appropriations as less costly.”).
262 Letter from Congressional Budget Office Director Dan L. Crippen, to Hon. John M. Spratt, Jr., Ranking Dem. Member, House Budget Comm. (Aug. 26, 1999), reprinted in Tax Notes Today (Sept. 14, 1999).
263 See supra note 236.
264 As long ago as 1991, OMB Director Richard Darman complained that bills containing directed scorekeeping provisions violate the Budget Enforcement Act, which designates “OMB as the ‘scorekeeper’ of the budget effect of legislation for purposes of calculating whether a spending limit has been exceeded or the pay-as-you-go requirement has been violated.” Mid-Session Review of the Budget: Hearing Before the House Comm. on the Budget, 102d Cong. (1991) (introductory statement of Richard G. Darman, Director, OMB).
265 H.R. Con. Res. 290, 106th Cong. � 203 (2000) (enacted).
266 Pub. L. No. 106-170, � 536, 113 Stat. 1860, 1936.
267 Telephone interview with Bill Archer, supra note 133.
268 Id.
269 Stith, supra note 88, at 667 (footnotes omitted).