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Final Sequestration Report for Fiscal Year 2002 [i] (January 2002)

handle is hein.congrec/cbo0697 and id is 1 raw text is: FINAL SEQUESTRATION REPORT FOR FISCAL YEAR 2002 January 15, 2002 A Report to the Congress and the Office of Management and I BudgetI At the end of each session of Congress, the Congressional Budget Office (CBO) issues a final sequestration report, as required by the Balanced Budget and Emergency Deficit Control Act of 1985. This report reflects all legislation enacted through the end of the first session of the 107th Congress. For fiscal year 2001, discretionary budget authority and outlays (as estimated by CBO for purposes of the Deficit Control Act) fell below the caps for the category of overall discretionary spending.(l) Outlays for both the highway and mass transit categories exceeded their respective limits. The Deficit Control Act requires that the excess outlays for those transportation categories be assigned to the overall discretionary category. Because that excess can be accommodated under the cap on overall discretionary outlays, there is no breach of that cap for 2001. Estimated spending for 2002 resulting from legislative action to date is within the adjusted caps. In the overall discretionary category, enacted budget authority remains at its limit, and projected outlays are below their ceiling. Estimated outlays for highways and mass transit are equal to their caps, and budget authority and outlays for the new conservation category are slightly below their limits. Legislation enacted through the end of the first session of the 107th Congress that affects mandatory spending or revenues reduced the surplus in 2001 by an estimated $76.4 billion and the projected surplus in 2002 by $52.7 billion. Those reductions will not trigger a pay-as-you-go (PAYGO) sequestration, however, because the Department of Defense and Emergency Supplemental Appropriations for Recovery from and Response to Terrorist Attacks on the United States Act, 2002 (Public Law 107-117) instructed the Office of Management and Budget (OMB) to change the PAYGO balances for 2001 and 2002 to zero. Overview of Sequestration Procedures The Deficit Control Act created two mechanisms to govern federal spending, both enforced through sequestration (a cancellation of budgetary resources). Section 251 established limits on the spending provided through the annual appropriation process. If estimated discretionary spending exceeds those limits, the act prescribes a sequestration to eliminate the excess. Section 252 established a PAYGO scorecard to record the projected five-year budgetary effects of each piece of legislation that affects mandatory spending or revenues. If such legislation is estimated to result in a net reduction in the surplus (or increase in the deficit), the act calls for mandatory programs (other than those specifically

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