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Sequestration Update Report for Fiscal Year 2000 [i] (August 1999)

handle is hein.congrec/cbo06552 and id is 1 raw text is: SEQUESTRATION UPDATE REPORT FOR FISCAL YEAR 2000 August 15, 1999 A Congressional Budget Office Report to the Congress and the Office of Management and Budget Pursuant to Section 254 of the Balanced I Budget and Emergency Deficit Control Act The Balanced Budget and Emergency Deficit Control Act of 1985 (the Deficit Control Act) requires the Congressional Budget Office (CBO) to issue a sequestration update report each year on August 15 reflecting laws enacted since the sequestration preview report published in January. This CBO update report reflects activity affecting the discretionary spending caps and the pay-as-you-go (PAYGO) scorecard through August 12, 1999. Because only two appropriation bills had cleared the Congress by the time this report was completed, it is too early to predict the likelihood of a discretionary sequestration in fiscal year 2000. So far, newly enacted laws that affect mandatory spending and revenues should not trigger a pay-as-you-go sequestration. However, CBO estimates that a sequestration could be required if the Taxpayer Refund and Relief Act of 1999 becomes law and its PAYGO effects are not offset before the end of this Congressional session. Discretionary Sequestration Report The Deficit Control Act sets limits on discretionary spending and provides for across-the-board cuts--known as sequestration--if annual appropriations exceed those limits. The caps are in effect through 2002. By law, they are adjusted each year to account for such things as the enactment of emergency appropriations and changes in budgetary concepts and definitions. For 1999, the Deficit Control Act splits discretionary spending into five categories: defense, nondefense, violent crime reduction, highway, and mass transit. Separate limits apply to budget authority and outlays in the first three categories. The caps for the highway and mass transit categories apply only to outlays. For 2000, the act combines defense and nondefense 7pending into an overall discretionary category while retaining separate categories for violent crime reduction, highway, and mass transit spending. For 2001 and 2002, it folds violent crime reduction spending into the overall discretionary category, so the limits for those years apply to highway spending, mass transit spending, and all other discretionary spending. Differences Between the Limits in CBO's and OMB's Preview Reports The Office of Management and Budget (OMB) is responsible for determining whether a sequestration is required to eliminate a breach of the discretionary spending caps. CBO's estimates are merely advisory. To prepare its reports, CBO starts by adjusting the estimated caps in its most recent sequestration report (in this case, the January preview report) for differences from the equivalent OMB report. CBO then updates the OMB amounts for enacted legislation

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