On February 12, 2010, President Barack Obama signed H.J.Res. 45 into law, as P.L. 111-139 . In addition to an increase in the statutory limit on the public debt to $14.294 trillion, the act contains two titles dealing with budgetary matters. Title I, referred to as the Statutory Pay-As-You-Go Act of 2010, establishes a new budget enforcement mechanism generally requiring that direct spending and revenue legislation enacted into law not increase the deficit. Title II, which contains only a single section, pertains to routine investigations by the Comptroller General aimed at eliminating duplicative and wasteful spending. This report provides a summary and legislative history of the P.L. 111-139 , focusing on the features of the Statutory Pay-As-You-Go Act of 2010. The congressional budget process was established by the enactment of the Congressional Budget and Impoundment Control Act of 1974 ( P.L. 93-344 ), which created the House and Senate Budget Committees and the Congressional Budget Office, and required the annual adoption by Congress of a concurrent resolution on the budget. After a decade's experience with the budget resolution process, Congress and the President enacted the Balanced Budget and Emergency Deficit Control Act (BBEDCA) of 1985 (Title II of P.L. 99-177 ), in large part to establish the goal of achieving a balanced budget in the near term and to bolster budget enforcement. The central feature of the 1985 act, in Part C, was a series of declining deficit targets, expected to lead to a balanced budget by FY1991. The deficit targets were enforced by sequestration, a process involving largely across-the-board spending cuts triggered automatically if a deficit target was not met. Congress and the President were not successful in meeting the deficit targets and, after five years, they established a "pay-as-you-go" (PAYGO) process and limits on discretionary spending under the Budget Enforcement Act of 1990 (Title XIII of P.L. 101-508 ). These changes took the form of amendments to Part C of BBEDCA of 1985. The two new mechanisms effectively superseded the deficit targets, but sequestration was retained as the means of enforcing them. The statutory PAYGO process applied to direct spending and revenue legislation, while the discretionary spending limits applied to annual appropriations acts. Direct spending, also referred to as mandatory spending, is provided for the most part in substantive laws under the jurisdiction of the House and Senate legislative committees. Direct spending principally funds entitlement programs, such as Social Security, Medicare, federal employee retirement, and unemployment compensation, but it also funds programs of a mandatory nature that are not entitlements. Discretionary spending, on the other hand, is provided in annual appropriations acts under the jurisdiction of the House and Senate Appropriations Committees. Discretionary spending for the most part funds the routine operations of federal departments and agencies. In some instances, such as for Medicaid, a direct spending program lacks its own funding mechanism and relies on funding provided in an annual appropriations act (but funding for such "appropriated entitlements" is not regarded as discretionary spending). The statutory PAYGO process and discretionary spending limits were extended by the Omnibus Budget Reconciliation Act of 1993 ( P.L. 103-66 ) and by the Budget Enforcement Act of 1997 (Title X of P.L. 105-33 ); in all, they operated from calendar years 1991 through late 2002. The discretionary spending limits expired on September 30, 2002, and the statutory PAYGO process effectively was terminated on December 2, 2002, with the enactment of P.L. 107-312 , which fixed the balances for the remaining years on the PAYGO scorecard (FY2003-FY2006) at zero. The remaining provisions of Part C of BBEDCA of 1985 expired on September 30, 2006; Part C was not repealed, however, so it has remained in the U.S. Code for several years as obsolete law. Beginning in 2003, proposals were made from time to time to restore the statutory PAYGO process, but disagreements centered on whether it should apply to both direct spending and revenue legislation (as originally framed and generally favored by Democrats) or only to direct spending legislation (as generally favored by Republicans). In the 108 th Congress, President George W. Bush submitted draft legislation to Congress, the Spending Control Act of 2004, that would have restored the PAYGO process for direct spending legislation but not for revenue legislation; in addition, the proposal would have restored the discretionary spending limits. The House Budget Committee reported a bill, H.R. 3973 ( H.Rept. 108-442 ; March 19, 2004), reflecting the President's proposal; a comparable measure, H.R. 4663 , was considered in the House on June 25, 2004, but failed to pass, by a vote of 146-268. In the 110 th Congress, interest was renewed in restoring a comprehensive PAYGO requirement. Section 508 (Sense of Congress Regarding Extension of the Statutory Pay-As-You-Go Rule) of the FY2008 budget resolution, S.Con.Res. 21 , stated: "It is the sense of Congress that in order to reduce the deficit Congress should extend PAYGO consistent with provisions of the Budget Enforcement Act of 1990." A similar provision was included, as Section 515, in the FY2009 budget resolution ( S.Con.Res. 70 ). In addition to the statutory PAYGO process, the House and Senate have relied upon their own, internal PAYGO rules. The Senate established its PAYGO rule in 1993 and revised it several times over the years. The House adopted a PAYGO rule in 2007 and revised it in 2009. The Senate revised its PAYGO rule in 2007 so that the rules of the two chambers would operate in a similar manner; both rules currently are in effect. The Senate, but not the House, also has established aggregate limits on discretionary spending, subject to a point of order, as part of the annual budget resolution. Proposals have been offered in each chamber, as well, to restore the statutory discretionary spending limits. On June 9, 2009, President Obama announced that he would submit a PAYGO proposal to Congress, the Statutory Pay-As-You-Go Act of 2009, that would restore a process applying to both direct spending and revenue legislation. The House responded to the President's proposal first, passing a bill the following month and incorporating it into several other measures toward the end of the session. In January 2010, the Senate added a statutory PAYGO proposal to a measure increasing the debt limit; the House concluded action on the measure in early February, and President Obama signed it into law shortly thereafter. House Majority Leader Steny Hoyer introduced President Obama's proposal on June 17 as H.R. 2920 , the Statutory Pay-As-You-Go Act of 2009. On June 25, the House Budget Committee held a hearing on the proposal, receiving testimony from OMB Director Peter Orszag, among others. On July 22, the House considered and passed H.R. 2920 , the Statutory Pay-As-You-Go Act of 2009. The bill differed in significant respects from the proposal submitted by President Obama. Prior to action on the bill, the House, by a vote of 243-182, considered and agreed to a special rule, H.Res. 665 , providing for the bill's consideration. A modified substitute amendment was incorporated into the bill automatically under a "self-executing" provision in the rule, and a substitute amendment offered by Representative Paul Ryan, the ranking minority member of the House Budget Committee, was defeated, by a vote of 196-234. Following the defeat of a motion to recommit with instructions offered by Representative Ryan, by a vote of 196-234, the House passed the bill, by a vote of 265-166. Section 421 of the budget resolution for FY2010 ( S.Con.Res. 13 ) set forth a procedure, applicable only in the House, effectively exempting from the House PAYGO rule and other budget enforcement procedures the costs of legislation in four policy areas: (1) payments to physicians under Medicare ("Doc Fix"), (2) middle class tax reform; (3) reform of the alternative minimum tax (AMT), and (4) reform of the estate and gift tax. In each case, a limitation on the amount of costs subject to exemption was specified in Section 421. In response to concerns regarding the need for strengthened fiscal discipline, the House leadership agreed to incorporate the House-passed text of H.R. 2920 into other measures dealing with the four policy areas identified in Section 421 of the FY2010 budget resolution or further economic stimulus initiatives. During the last two months of the 2009 session, the text of H.R. 2920 , as passed by the House, was incorporated into three different measures. In the first instance, the House considered a "Doc Fix" measure, H.R. 3961 (the Medicare Physician Payment Reform Act of 2009), on November 19, 2009, passing it by a vote of 243-183. Under the terms of the special rule governing consideration of the bill, H.Res. 903 , the text of the Statutory Pay-As-You-Go Act of 2009, as passed earlier by the House, was added to the engrossed version of H.R. 3961 , as Division B. In the second instance, the House considered a measure dealing with the estate tax, H.R. 4154 (the Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009), on December 3, 2009, passing it by a vote of 225-200. Under the terms of the special rule governing consideration of the bill, H.Res.