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Sequestration Update Report: August 2014 1 (August 2014)

handle is hein.congrec/cbo1850 and id is 1 raw text is: AUGUST 2014 Sequestration Update Report: August 2014 By law, the Congressional Budget Office (CBO) is required to issue a report by August 15 of each year that provides estimates of the caps on discretionary budget authority in effect for each fiscal year through 2021.' Minor adjustments to the caps for 2014 have been made since CBO's previous report on the topic, which was published in January 2014.2 In that earlier report, CBO estimated that the appropriations for 2014 did not exceed the caps. CBO's assessment remains unchanged-the dis- cretionary appropriations provided for 2014 do not exceed the caps, and thus, by CBO's estimates, a further sequestration (or cancellation of budgetary resources) will not be required as a result of appropriation actions this year. The Administration's Office of Management and Budget (OMB) has sole authority to determine whether a further sequestration is required; its sequestration report issued in February 2014 also found that appropriations for 2014 were at or below the caps, and the only subse- quent appropriation was designated an emergency requirement and thus could not cause a breach of the caps.3 1. The Budget Control Act of 2011 (Public Law 112-25) amended the Balanced Budget and Emergency Deficit Control Act of 1985 to reinstate caps on discretionary budget authority through fiscal year 2021. Budget authority is the authority provided by law to incur financial obligations that will result in immediate or future outlays of federal government funds. Discretionary budget authority is provided and controlled by appropriation acts. All of the years referred to in this report are federal fiscal years, which run from October 1 to September 30. 2. See Congressional Budget Office, Final Sequestration Report for Fiscal Year 2014 (January 2014), www.cbo.gov/publication/ 45013. 3. See Office of Management and Budget, OMB Final Sequestration Report to the President and Congress for Fiscal Year 2014 (February 2014), http://go.usa.gov/PhN3. Limits on Discretionary Budget Authority for 2014 The Bipartisan Budget Act of 2013 (Public Law 113-67) modified the caps on defense and nondefense funding for fiscal year 2014 that were established by the Budget Control Act of 2011; P.L. 113-67 reset those caps to total $1,012 billion-$520 billion for defense programs and $492 billion for nondefense programs. The annual limits on funding are adjusted when appro- priations are provided for certain purposes. Specifically, budget authority designated as an emergency require- ment or provided for overseas contingency operations, such as military activities in Afghanistan, leads to an increase in the caps, as does budget authority provided for some types of disaster relief (up to an amount based on historical spending for that purpose) or for certain program integrity initiatives.' Also, section 7 of the Consolidated Appropriations Act, 2014 (PL. 113-76) authorized OMB to increase the caps for 2014 to reflect estimating differences between that agency and CBO. To date, such adjustments to the caps on discretionary budget authority for 2014 have totaled $98.9 billion, CBO estimates (see Table 1). Most of that amount, $85.4 billion, is an increase in the defense cap to account for budget authority provided for overseas contingency operations. An additional $0.2 billion of funding- provided in P.L. 113-145 for Israel's Iron Dome defense system-was designated as an emergency requirement, and OMB has increased the defense cap by another 4. Such initiatives are aimed at reducing improper benefit payments in the Disability Insurance and Supplemental Security Income programs, Medicare, Medicaid, and the Children's Health Insurance Program.

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