Discretionary spending was eventually allowed to exceed the spending caps but only after budget surpluses appeared in the late 1990s. The PAYGO rule was also effective in the later half of the 1990s when legislative changes to taxes and entitlement spending were relatively small and were essentially neutral in their estimated effects on future budget balance.
The federal budget also benefited significantly from economic developments that occurred outside of policy actions. In particular, federal tax revenues increased substantially more rapidly than expected and at a rate greater than the robust pace of economic growth seen in the late 1990s.