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Sequestration Update Report: August 2016 1 (August 2016)

handle is hein.congrec/cbo3077 and id is 1 raw text is: Sequestration Update Report: August 2016 he Congressional Budget Office is required by law 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 2021.1 CBO has slightly revised its estimates of the caps for 2016 since it issued its previous report on the topic in December 2015.2 In that earlier report, CBO estimated that the appropriations for 2016 did not exceed the caps; CBO's assessment remains unchanged-the discretionary appro- priations provided to date for 2016 do not exceed the caps, and thus, by CBO's estimates, a further sequestra- tion (or cancellation of budgetary resources) will not be required as a result of appropriation actions this year. However, the authority to determine whether a seques- tration 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). That agency, in its sequestration report issued in January 2016, also found that, at that time, appropriations for 2016 were at or below the caps. 1. 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 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 Reportfor Fiscal Year 2016 (December 2015), www.cbo.gov/publication/51038. 3. See Office of Management and Budget, OMB Final Sequestration Report to the President and Congressfor Fiscal Year 2016 (January 2016), http://go.usa.gov/xgazm. 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 Control Act of 2011 (P.L. 112-25). Public Law 114-74 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. Specifi- cally, 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.4 To date, such adjustments to the caps on discretionary budget authority for 2016 have totaled $83.3 billion (see Table 1). Most of that amount, $58.8 billion, is an increase in the defense cap to account for budget author- ity provided for overseas contingency operations. Adjust- ments to the nondefense cap include $14.9 billion for overseas contingency operations, $7.1 billion for disaster relief, and $1.5 billion for program integrity initiatives related to Medicare and to the Disability Insurance and Supplemental Security Income programs. 4. 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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