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.)

Sens. Max Baucus (D-MT) and Chuck Grassley (R-IA), Chairman and Ranking Member of the Senate Committee on Finance, sent letters to IRS officials March 15 questioning an Internal Revenue Service (IRS) pilot program allowing outside experts to draft guidance documents for the IRS. The letters follow the controversy raised by a March 9 New York Times story [subscription] detailing the project, which allows tax lawyers and accountants to draft the documents rather than IRS officials.

On Feb. 27, a three-judge panel of the U.S. Circuit Court for the District of Columbia overturned a lower court ruling that voided a USAID requirement that grantees under an HIV/AIDS program adopt certain policies on prostitution. The ruling in DKT International v. USAID is the first decision in two cases in separate federal appeals courts that involve the same issue. DKT expects to seek a re-hearing before the entire Circuit Court. An appeal from another lower court ruling that overturned the same requirement is pending in the U.S. Court of Appeals for the Second Circuit in New York.