At the beginning of the 112th Congress, the House adopted changes in the rules of the House concerning budget enforcement, specifically clause 10 of rule XXI. Previously, clause 10 of rule XXI was known as Pay-As-You-Go (PAYGO) and required mandatory spending increases to be offset with either an equal decrease in mandatory spending or increase in revenue. The new Cut-As-You-Go (CUTGO) rule requires that increases in mandatory spending be offset with equal or greater decreases in mandatory spending. Like the PAYGO rule, CUTGO requires provisions be compliant in the current year, the budget year, and over the 5- and 10-year budget windows.
The rule is intended to stop growth in the size and scope of the Federal Government and prioritize spending cuts over revenue increases.