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Additional Information on How CBO Allocated the Automatic Spending Reductions under the Budget Control Act of 2011 in Its Most Recent Baseline Projections 1 (March 13, 2013)

handle is hein.congrec/cbo11010 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE Douglas W. Elmendorf, Director U.S. Congress Washington, DC 20515 March 13, 2013 Honorable Paul Ryan Chairman Committee on the Budget U.S. House of Representatives Washington DC 20515 Dear Mr. Chairman: As you requested, the Congressional Budget Office (CBO) is providing additional information on how, in its most recent budget projections, the agency allocated the automatic spending reductions that were put in place by the Budget Control Act of 2011 and later modified by the American Taxpayer Relief Act of 2012. In particular, you asked us to explain the amounts included in budget function 920 (known as allowances) in those projections.1 The Budget Control Act specified procedures to reduce both discretionary spending and mandatory spending between 2013 and 2021 if lawmakers did not enact legislation originating from the Joint Select Committee on Deficit Reduction that would lower projected budget deficits by at least $1.2 trillion. Because no such legislation was enacted, those procedures went into effect on March 1, 2013 (a later date than was specified in the Budget Control Act because of changes enacted in the American Taxpayer Relief Act). For the current year, the reductions will be accomplished through across-the-board spending cuts (known as sequestration) totaling about $85 billion, with half of those reductions coming from defense programs and the other half from nondefense programs. For the years beyond 2013, the reductions will be achieved by lowering the caps on discretionary budget authority and through additional sequestrations for mandatory spending. For fiscal years 2014 through 2021, the total of such additional reductions will be about $109 billion per year. 1. Budget functions are the broad programmatic categories used to classify federal programs and activities by their purpose or mission; they include, for example, agriculture, energy, and transportation. CBO's reports on its baseline projections do not generally show spending by budget function; however, the agency provides that additional detail to the House and Senate Committees on the Budget for use in preparing their budget resolutions.

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