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1 Sequestration Update Report: August 2018 1 (August 2018)

handle is hein.congrec/cbosqsu0001 and id is 1 raw text is: AUGU ST 2018 Sequestration Update Report: August 2018 By August 15 of each year, the Congressional Budget Office is required to issue a report that provides estimates of the limits (often called caps) on discretionary budget authority that are in effect for each fiscal year through 2021.1 CBO also must report whether, according to its estimates, enacted legislation for the current fiscal year has exceeded those caps. If so, a sequestration (that is, a cancellation of budgetary resources) would be required. In CBO's estimation, a sequestration will not be required for 2018. However, the authority to make such a determination-and, if so, exactly how to cut budget authority-rests with the Administration's Office of Management and Budget (OMB). That agency reported in April that appropriations for 2018 had not exceeded the caps.2 No appropriations have been enacted since then. Limits on Discretionary Budget Authority for 2018 The Bipartisan Budget Act of 2018 (Public Law 115-123) modified the caps on defense and nondefense funding for fiscal year 2018 that were established by the Budget Control Act of 2011 (P.L. 112-25). The 2018 legislation reset those limits to total $1,208 billion-$629 billion for defense programs and $579 billion for nondefense programs. 1. Budget authority is the authority provided by law to incur financial obligations that will result in immediate or future outlays of federal funds. Discretionary budget authority is provided and controlled by annual appropriation acts. 2. See Office of Management and Budget, OMB Final Sequestration Report to the President and Congress for Fiscal Year 2018 (April 2018), https://go.usa.gov/xUwaB. By law, however, the caps are adjusted upward when appropriations are provided for certain purposes. Budget authority designated as an emergency requirement or provided for overseas contingency operations, such as military activities in Afghanistan, leads to an increase in the caps, as does that provided for certain types of disaster relief (as explained below) or program integrity initiatives.3 Such adjustments to the caps for 2018 have totaled $197.6 billion (see Table 1). Most of that, $103.8 billion, is an increase to the nondefense cap to account for emer- gency requirements.' Additional adjustments to the non- defense cap total $12.0 billion for overseas contingency operations, $7.4 billion for disaster relief, and $1.9 billion for program integrity initiatives related to Medicare and 3. Program integrity initiatives seek to identify and reduce overpayments in benefit programs, such as Disability Insurance, Supplemental Security Income, Medicare, Medicaid, and the Children's Health Insurance Program. 4. CBO currently estimates that total emergency funding for nondefense programs in fiscal year 2018 is $120 billion. In its April 2018 sequestration report, OMB estimated that $104 billion of emergency funding had been provided. Almost all of the disparity arises from the agencies' different budgetary treatment of the Additional Supplemental Appropriations for Disaster Relief Requirements Act, 2017 (P.L. 115-72), which canceled a portion of the National Flood Insurance Program's debt to the Treasury. CBO estimated a $16 billion increase in emergency budget authority to account for the cancellation, whereas OMB recorded no budget authority for the provision. Because the difference involves emergency funding, it does not affect sequestration. See Office of Management and Budget, Budget Enforcement Act Report (Seven-Day-After), Additional Supplemental Appropriationsfor Disaster Relief Requirements Act, 2017 (November 2017), https://go.usa.gov/xUAvk. Note: All years referred to are federal fiscal years, which run from October 1 to September 30 and are designated by the calendar year in which they end. Numbers may not sum to totals because of rounding.

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