But unfortunately, even when surpluses emerged, the PAYGO rules continued to require deficit neutrality in mandatory spending and revenue programs and adherence to the discretionary caps. Unfortunately, because such strict fiscal discipline was no longer viewed as necessary, the budget rules ceased to be effective: Congress enacted measures that reduced or eliminated their bite until they were finally allowed to expire in 2002.
As a consequence of this aftertaste, it may be harder to bring back PAYGO rules now, when they are really needed. 4  BIS Review 42/2004  A sensible strategy for the future The main lesson to be learned from this examination of past budget rules is that, within limits, budget institutions do matter.