S 45119th CongressIn Committee

Balanced Budget Accountability Act

Introduced: Jan 9, 2025

Standard Summary

Comprehensive overview in 1-2 paragraphs

The Balanced Budget Accountability Act would tie Members of Congress’ pay to whether a balanced-budget concurrent resolution is adopted. It defines a balanced budget as a budget resolution for fiscal years 2035 and beyond that (1) has outlays not exceeding receipts, and (2) keeps outlays at or below 18% of the projected US GDP. If a House fails to adopt a budget that meets this standard, the bill assigns a certification role to the Director of the Office of Management and Budget (OMB) and creates an escrow system that withholds Members’ pay for specified periods (FY2026 and FY2027), releasing funds only if and when a balanced-budget resolution is certified. For fiscal year 2028 and later, if certification has not occurred by an April deadline, Members’ pay would be dramatically reduced to $1 per year. Separately, the bill imposes a supermajority requirement (3/5 votes) for any measure that increases revenue. The overall aim is to create accountability and incentivize passage of a balanced budget by tying congressional compensation and the difficulty of passing tax/fee increases to compliance with budget targets.

Key Points

1Balanced budget standard and certification: Defines a balanced budget as a budget resolution that, for 2035 onward, has total outlays not exceeding receipts and outlays not exceeding 18% of projected GDP. The Director of the OMB must certify, after a budget resolution is adopted, whether the House has adopted a balanced budget.
2Escrow/pay withholding for FY2026 and FY2027: If the Director has not certified a balanced-budget for the respective year by the deadline, the payroll administrator in each House must escrow (hold) all salary payments due to Members for the relevant period and release them only once certification occurs (or at the end of the Congress, to preserve constitutional pay protections).
3Release mechanics and 27th Amendment considerations: Amounts held in escrow are to be remitted in a way that avoids altering Members’ compensation within a single Congress, in line with the 27th Amendment. Treasury support is authorized to help payroll offices carry out these duties, and escrowed funds are released on the last day of the 119th Congress if needed to comply with constitutional limits.
4FY2028 and onward pay rule: If the Director has not certified a balanced-budget adoption before the deadline, beginning with pay periods in the calendar year before the fiscal year, Members’ pay shall be set at $1 per year (essentially a token payment).
5Supermajority requirement for increasing revenue: Any bill, joint resolution, amendment, conference report, or similar action that increases revenue must receive an affirmative vote of three-fifths (60%) of Members in the relevant House (Senate or House). This rule is embedded as part of the House/Senate procedures, superseding other rules only to the extent inconsistent with them.

Impact Areas

Primary group/area affected: Members of Congress (Senators, Representatives, and Delegates/Resident Commissioners) whose pay would be withheld or reduced if a balanced budget is not adopted, creating a direct financial incentive to reach an agreement on a balanced-budget resolution.Secondary group/area affected: The federal budget process and fiscal policy, including the Office of Management and Budget (OMB), the Secretary of the Treasury, and payroll administrators in the House and Senate who would implement escrow and withholding.Additional impacts:- Budgeting and revenue policy: The 3/5 supermajority requirement for revenue increases could slow or constrain tax/fee increases, potentially affecting deficit reduction strategies and fiscal policy.- Constitutional and legal considerations: The design attempts to navigate the 27th Amendment (pay changes cannot take effect within the same Congress). The proposal uses escrow and end-of-Congress release to align with constitutional constraints, but implementation could raise constitutional questions or court challenges.- Economic signals: By tying compensation to budget performance, the bill aims to change how Congress negotiates fiscal policy, potentially affecting long-term economic confidence, debt dynamics, and legislative behavior.Concurrent resolution on the budget: A non-binding framework approved by both chambers that outlines spending and revenue targets; it is not a law and does not legally constrain spending by itself.Outlays vs. receipts: Outlays are government spending; receipts are tax and other revenues collected.GDP threshold (18% of GDP): A cap tied to the size of the economy as measured by gross domestic product, used here as part of the balanced-budget standard.Escrow: Money set aside (not paid to Members) until conditions are met, then released or paid out later. This is designed to maintain constitutional pay protections while enforcing the incentive.27th Amendment: Prohibits changing the compensation of Senators and Representatives from taking effect until after the next election, intended to prevent pay changes from influencing current Congress members’ decisions.

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