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Final Sequestration Report for Fiscal Year 2016 1 (December 2015)

handle is hein.congrec/cbo2693 and id is 1 raw text is: Final Sequestration Report for Fiscal Year 2016 Within 10 days of the end of a session of Congress, the Congressional Budget Office is required by law to issue a report that provides estimates of the limits (often called caps) on discretionary budget authority in effect for each fiscal year through 2021.' CBO is also required to report whether, according to its estimates, enacted legisla- tion for the current fiscal year has exceeded those caps; if the caps were exceeded, a sequestration (that is, a cancel- lation of budgetary resources) would be required. In CBO's estimation, such a sequestration will not be required for 2016. However, the authority to determine whether a sequestration is required and, if so, exactly how to make the necessary cuts in 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 for 2016 The Bipartisan Budget Act of 2015 (Public Law 114-74) modified the caps on defense and nondefense funding for fiscal year 2016 that were established by the Budget Con- trol Act of 2011 (P.L. 112-25). The Bipartisan Budget Act reset those limits to total $1,066.6 billion- $548.1 billion for defense programs and $518.5 billion for nondefense programs. By law, however, the caps are adjusted upward when appropriations are provided for certain purposes. 1. Budget authority is the authority provided by law to incur finan- cial obligations that will result in immediate or future outlays of federal 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. Specifically, budget authority designated as an emergency requirement or provided for overseas contingency opera- tions, such as military activities in Afghanistan, leads to an increase in the caps, as does budget authority provided for some types of disaster relief (as this report explains below) or for certain program integrity initiatives.2 To date, CBO estimates, such adjustments to the caps on discretionary budget authority for 2016 have totaled $83.1 billion (see Table 1). Most of that amount, $58.8 billion, is an increase in the defense cap to account for budget authority provided for overseas contingency operations. Estimated adjustments to the nondefense cap include $14.9 billion for overseas contingency opera- tions, $7.1 billion for disaster relief, $1.5 billion for pro- gram integrity initiatives related to Medicare and to the Disability Insurance and Supplemental Security Income programs, and $0.7 billion for emergency funding for managing forest fires. After those adjustments are made, the caps on budget authority for 2016 total an estimated $606.9 billion for defense programs and $542.8 billion for nondefense programs-about $1.15 trillion in all. According to CBO's estimates, appropriations for defense and non- defense programs in 2016 are equal to those caps; there- fore, no sequestration will be required. The caps could be breached, however, if lawmakers were to provide additional appropriations before the end of September 2016-unless those appropriations fell into one of the categories that cause an adjustment to the caps or were offset by reductions in funding for other 2. Such initiatives may be 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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