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1 Final Sequestration Report for Fiscal Year 2021 1 (January 13, 2021)

handle is hein.congrec/flsnrtf0001 and id is 1 raw text is: Congressional Budget Office Nonpartisan Analysis for the US. Congress 1 Final Sequestration Report for Fiscal Year 2021 JANUARY 12021 After a session of Congress ends, the Congressional Budget Office is required to issue a report that provides estimates of the limits (often called caps) on discretion- ary budget authority that are in effect through fiscal year 2021.1 (No caps have been established for subsequent years.) CBO also must report whether, according to its estimates, enacted legislation for the current fiscal year has exceeded the caps and thus would trigger a cancella- tion of budgetary resources, known as a sequestration. In CBO's estimation, a sequestration will not be required for 2021. However, the authority to make that determination-and, if so, how to cut budget authority-rests with the Administration's Office of Management and Budget (OMB). Those determinations are based on OMB's own estimates of federal spending. Limits on Discretionary Budget Authority The Budget Control Act of 2011 (Public Law 112-25) has been modified several times to increase the caps on funding for defense (called security in the law) and for nondefense (nonsecurity) programs. Most recently, the Bipartisan Budget Act of 2019 (P.L. 116-37) set the limits for 2021 at $1,298 billion-$671.5 billion for defense and $626.5 billion for nondefense (see Table 1). 1. Budget authority is the authority provided by law to incur financial obligations that will result in immediate or future outlays of federal funds. Discretionary budget authority is provided and controlled by annual appropriation acts. As specified in law, those caps are adjusted each year to accommodate certain types of spending. On the basis of the appropriations provided in the Consolidated Appropriations Act, 2021 (PL. 116-260), CBO esti- mates that the adjustments to the caps for 2021 amount to $293 billion. Most of the estimated adjustments are for nondefense funding, including $194 billion for emergency requirements, largely designated for the Departments of Education, Health and Human Services, and Transportation. Other estimated adjustments to the nondefense cap include the following: $8 billion for overseas contingency operations (such as military activi- ties in Afghanistan), $17 billion for disaster relief, $2 bil- lion for wildfire suppression, and $2 billion for program integrity initiatives.2 Combined, those changes bring the total adjustment to the nondefense cap to $223 billion. Adjustments to the defense cap are expected to total $69 billion, nearly all of which is for overseas contin- gency operations. After those adjustments are made, the caps on budget authority for 2021 will total $741 billion for defense programs and $850 billion for nondefense programs, CBO estimates-nearly $1.6 trillion in all. According to 2. Program integrity initiatives seek to identify and reduce overpayments in certain benefit programs, such as Disability Insurance, Supplemental Security Income, Medicare, Medicaid, unemployment compensation, and the Children's Health Insurance Program. All years referred to in this report are federal fiscal years, which run from October 1 to September 30 and are designated by the calendar year in which they end. Numbers in the text and table may not add up to totals because of rounding.

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