BPLA (Contents)

Budget Process Law Annotated (1993)

Balanced Budget and Emergency Deficit Control Act of 1985

[PAGES 475-508]
SEC. 251.1199 ENFORCING DISCRETIONARY Spending Limits.1200

(a) Fiscal Years 1991-19981201 Enforcement.—

(1) Sequestration.1202—Within 15 calendar days after Congress adjourns1203 to end a session and on the same day as a sequestration (if any) under section 252 and section 253, there shall be a sequestration to eliminate a budget-year breach,1204 any, within any category.1205

[P. 476]

(2) Eliminating a breach.1206—Each non-exempt account1207 within a category1208 shall be reduced by a dollar amount calculated by multiplying the baseline1209 level of sequestrable budgetary resource1210 in that account at that time by the uniform percentage necessary to eliminate a breach within that category; except that the health programs set forth in section 256(e) shall not be reduced by more than 2 percent and the uniform percent applicable to all other programs under this paragraph shall be increased (if necessary) to a level sufficient to eliminate that breach. If, within a category, the discretionary spending limits1211 for both new budget authority1212 and outlays1213 are breached, [p. 477] the uniform percentage shall be calculated by—

(A) first, calculating the uniform percentage necessary to eliminate the breach1214 in new budget authority,1215 and

(B) second, if any breach1216 in outlays1217 remains, increasing the uniform percentage to a level sufficient to eliminate that breach.

(3) Military personnel.—If the President uses the authority to exempt any military personnel from sequestration1218 under section 255(h),1219 each account1220 within subfunctional category 051 (other than [p. 478] those military personnel accounts for which the authority provided under section 255(h)1221 has been exercised) shall be further reduced by a dollar amount calculated by multiplying the enacted level of non-exempt budgetary resources1222 in that account at that time by the uniform percentage necessary to offset the total dollar amount by which outlays1223 are not reduced in military personnel accounts by reason of the use of such authority.

(4) Part-year appropriations.—If, on the date specified in paragraph (1), there is in effect an Act making or continuing appropriations for part of a fiscal year for any budget account,1224 then the dollar sequestration1225 and calculated for that account under paragraphs (2) and (3) shall be subtracted from—

(A) the annualized amount otherwise available by law in that account under that or a subsequent part-year appropriation; and

(B) when a full-year appropriation for that account is enacted, from the amount otherwise provided by the full-year appropriation.

(5) Look-back.—If, after June 30, an appropriation for the fiscal year in progress is enacted that causes a [p. 479] breach1226 within a category1227 for that year (after taking into account any sequestration1228 of amounts within that category), the discretionary spending limlts1229 for that category for the next fiscal year shall be reduced by the amount or amounts of that breach.

(6) Within-Session Sequestration.1230—If an appropriation for a fiscal year in progress is enacted (after Congress adjourns1231 to end the session for that budget year1232 and before July 1 of that fiscal year) that causes a breach1233 within a category1234 for that year (after taking into account any prior sequestration of amounts within that category), 15 days later there shall be a sequestration to eliminate that breach within that category following the procedures set forth in paragraphs (2) [p. 480] through (4).1235

(7) OMB1236 Estimates.—As soon as practicable after Congress completes action on any discretionary appropriation,1237 CBO,1238 after consultation with the Committees of the Budget of the House of Representatives [p. 481] and the Senate, shall provide OMB with an estimate of the amount of discretionary new budget authority1239 and outlays1240 for the current year1241 (if any) and the budget year1242 provided by that legislation. Within 5 calendar days after the enactment of any discretionary appropriation, OMB shall transmit a report to the House of Representatives and to the Senate containing the CBO estimate or that legislation, an OMB estimate of the amount of discretionary new budget authority and outlays for the current year (if any) and the budget year provided by that legislation, and an explanation of any difference between the two estimates. For purposes of this paragraph, amounts provided by annual appropriations shall include any new budget authority and outlays for those years in accounts1243 for which funding is provided in that legislation that result from previously enacted legislation. Those OMB estimates shall be made using current1244 economic and technical assumptions. OMB shall use the OMB estimates transmitted to the Congress under this paragraph for the purposes of this subsection. OMO and CBO shall prepare estimates under this paragraph in conformance with scorekeeping guidelines determined after consultation among the House and Senate Committees on [p. 482] the Budget, CBO, and OMB.1245

[PAGES 482-493 include text for Note 1245.]

1199. Section 251 as codified as amended at 2 U.S.C. § 901 (Supp. IV 1992), amended by the Omnibus Budget Reconciliation Act of 1993, Pub. L. 103-66, §14002(c), 107 Stat. 312 (1993). Section 13101(a) of the Budget Enforcement Act of 1990 amended section 251 to read substantially as it does now. See infra p. 701. For excerpts from the statement of managers accompanying the conference report on the Budget Enforcement Act of 1990 explaining section 251, see infra note 1302 (at the end of this section).

1200. Section 250(c)(1) of Balanced Budget and Emergency Deficit Control Act of 1985 (see supra 10 p. 440) defines “discretionary spending limit” by adopting the definition or section 601(a)(2) or the Congressional Budget Act of 1974 (see supra pp. 301-303) as adjusted under sections 251 and 253 of Balanced Budget and Emergency Deficit Control Act of 1985. See infra pp. 475-502, 523-533.

1201. Section 14002(c)(1)(A) of the Omnibus Budget Reconciliation Act of 1993, Pub. L 103-66, § 14002(c)(1)(A), 107 Stat. 312 (1993), changed this reference to “1998” from “1995”. Section 14001 of that Act states that “[t]he Congress declares that it is essential to … extend the system of discretionary spending limits for the single discretionary category …” Id. § 14001. For legislative history of the extension, see supra notes 870 and 936 and infra note 1807.

1202. Section 250(c)(2) defines “sequestration”. See supra p. 440.

1203. What happens if the Congress recesses to end the first session of a Congress? Congress plainly intended to require annual review of legislation. This language should be read as “adjourns or recesses to end a session”.

1204. Section 250(c)(3) defines “breach”. See supra p. 441.

1205. Section 250(c)(4) defines “category”. See supra p. 441.

For an example of an end-of-year sequester under this paragraph, see, e.g., Office Of Management, Final OMB Sequestration Report to the President and Congress For Fiscal Year 1991, H. Doc. 102-11, 102d Cong., 1st Sess. (Nov. 9, 1990) ($395 million, 1.9% sequester in international discretionary budget authority as a result of a drafting error in H.R. 5114, the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1991, Pub. L. 101-513, 104 Stat. 1979); President’s U.S., Final Sequester Order, Fiscal Year 1991, H. Doc. 102-10, 102d Cong., 1st Sess. (Nov. 9, 1990) (same).

1206. Section 250(c)(3) defines “breach”. See supra p. 440.

1207. Section 250(c)(11) defines “account”. See supra p. 445.

1208. Section 250(c)(4) defines “category”. See supra p. 441.

1209. Section 250(c) (see supra p. 442) defines “baseline” in substantial part by reference to section 257. See infra pp. 600-617.

1210. Section 250(c)(6) defines “budgetary resources”. See supra p. 443.

1211. Section 250(c)(1) of Balanced Budget and Emergency Deficit Control Act of 1985 (see supra p. 440) defines “discretionary spending limit” by adopting the definition of section 601(a)(2) of the Congressional Budget Act of 1974 (see supra pp. 301-303) as adjusted under sections 251 and 253 of Balanced Budget and Emergency Deficit Control Act of 1985. See pp. 475-502, 523-533.

1212. Section 250(c)(1) (see supra p. 440) defines “budget authority” and “new budget authority” at least in part by reference to the definitions of section 3(2) of the Congressional Budget Act of 1974. See supra pp. 11-13.

1213. Section 250(c)(1) (see supra p. 440) defines “outlays” at least in part by reference to the definition of section 3(1) of the Congressional Budget Act of 1974. See supra p. 11.

1214. Section 250(c)(3) defines “breach”. See supra p. 440.

1215. Section 250(c)(1) (see supra p. 440) defines “budget authority” and “new budget authority” at least in part by reference to the definitions of section 3(2) of the Congressional Budget Act of 1974. See supra pp. 11-13.

1210. Section 250(c)(3) defines “breach”. See supra p. 440.

1217. Section 250(c)(1) (see supra p. 440) defines “outlays” at least in part by reference to the definition of section 3(1) of the Congressional Budget Act of 1974. See supra p. 11.

1218. Section 250(c)(2) defines “sequestration”. See supra p. 440.

1219. See infra p. 576. This reference refers to the section 255(h) at the end of section 255, dealing with “Optional Exemption of Military Personnel”, not the section 255(h) that preexisted the Budget Enforcement Act of 1990 dealing with “Low-Income Programs”. See infra p. 576. Section 13101(c)(4) of the Budget Enforcement Act added the subsection (h) dealing with “Optional Exemption of Military Personnel” at the end of section 255. See infra p. 703. As section 13101(c)(4) of the Budget Enforcement Act of 1990 simply added the new subsection (h) at the end of section 255 and did not amend the existing subsection (h) to read as the new subsection (h), Congress evidently wanted to add another subsection and not to repeal the existing subsection (h). As subsections (h) and (i) already existed, however, the Budget Enforcement Act of 1990 should haw added a new subsection (j) at the end of section 255, or perhaps have inserted the new subsection (h) in place of the existing subsection (f), which at least some drafters of the Budget Enforcement Act of 1990 intended to repeal. The reference here then should haw been to subsection (O) or subsection (Q), as the case may have been.[1]

1220. Section 250(c)(11) defines “account”. See supra P. 445.

1221. See infra p. 576. This reference refers e to the section 255(h) at the end of Section 255, dealing with “Optional Exemption of Military Personnel”, not the section 255(h) that preexisted the Budget Enforcement Act of 1990, dealing with “Low Income Programs.” See infra p. 576. See the discussion supra note 1219.

1222. Section 250(c)(6) defines “budgetary resources”. See supra p. 443.

1223. Section 250(c)(1) (see supra p. 440) defines “outlays” at least in part by reference to the definition of Section 3(1) of the Congressional Budget Act of 1974. See supra p. 11.

1224. Section 250(c)(11) defines “account”. See supra p. 445.

1225. Section 250(c)(2) defines “sequestration”. See supra p. 440.

1226. Section 250(c)(3) defines “breach”. See supra p. 440.

1227. Section 250(c)(4) defines “category”. See supra p. 441.

1228. Section 250(c)(2) defines “sequestration”. See supra p. 440.

1229. Section 250(c)(1) or Balanced Budget and Emergency Deficit Control Act of 1985 (see supra p. 440) defines “discretionary spending limit” by adopting the definition of section 601(a)(2) of the Congressional Budget Act (see supra pp. 301-303) as adjusted under sections 251 and 253 of Balanced Budget and Emergency Deficit Control Act of 1985. See pp. 475-502, 523-533.

1230. Section 250(c)(2) defines “sequestration”. See supra p. 440.

1231. What happens if the Congress recesses to end the first session of a Congress? Congress plainly intended to require annual review of legislation. (For example, the language later in this sentence refers to “that budget year”.) This language should be read as “adjourns or recesses to end a session”.

1232. Section 250(c)(12) defines “budget year”. See supra p. 446.

1233. Section 250(c)(3) defines “breach”. See supra p. 440.

1234. Section 250(c)(4) defines “category”. See supra p. 441.


[p. 493]

(b) Adjustments to Discretionary Spending Limits.1246—(1) When the President submits the budget under section 1105(a) of title 31, United States Code, for budget year1247 1992, 1993, 1994, 1995, 1996, 1997, or 19981248 (except as otherwise indicated), OMB1249 shall calculate (in the order set forth below), and the budget shall include, adjustments to discretionary spending limits (and those limits as cumulatively adjusted) for the budget year and each outyear1250 through 19981251 to reflect the following:

(A) Changes in concepts and definitions.—The adjustments produced by the amendments made by title [p. 494] XIII of the Omnibus Budget Reconciliation Act of 1990 or by any other changes in concepts and definitions shall equal the baseline1252 levels of new budget authority1253 and outlays1254 using up-to-date concepts and definitions minus those levels using the concepts and definitions in effect before such changes. Such other changes in concepts and definitions may only be made in consultation with the Committees on Appropriations, the Budget, Government Operations, and Governmental Affairs of the House of Representatives and Senate.

(B) Changes in inflation.—(i) For a budget submitted for budget year1255 1992, 1993, 1994, or 1995, the adjustments produced by changes in inf1ation shall equal the levels of discretionary new budget authority1256 and outlays1257 in the baseline1258 (calculated using current1259 estimates) subtracted from those levels in that baseline recalculated with the baseline inflators for the [p. 495] budget year only, multiplied by the inflation adjustment factor computed under clause (ii).

(ii) For a budget year only1260 the inflation adjustment factor shall equal the ratio between the level of year-over-year inflation measured for the fiscal year most recently completed and the applicable estimated level for that year set forth below:

For 1990, 1.041

For 1991, 1.052

For 1992, 1.041

For 1993, 1.033

Inflation shall be measured by the average of the estimated gross national product implicit price deflator index for a fiscal year divided by the average index for the prior fiscal year.

(iii) For a budget submitted for budget year 1996, 1997, or 1998, the adjustments shall be those necessary to reflect changes in inflation estimates since those of March 31, 1993, set forth on page 46 of House Conference Report 103-48.1261

(C) Credit reestimates.—For a budget submitted for fiscal year 1993 or 1994, the adjustments produced by [p. 496] reestimates to costs of Federal credit programs shall be, for any such program, a current1262 estimate of new budget authority1263 and outlays1264 associated with a baseline1265 projection of the prior year’s gross loan level for that program minus the baseline projection of the prior year’s new budget authority and associated outlays for that program.

(2) When OMB1266 submits a sequestration1267 report under section 254(g) or (h) for fiscal year 1991, 1992, 1993, 1994, 1995, 1996, 1997, or 19981268 (except as otherwise indicated), OMB shall calculate in the order set forth below), and the sequestration report, and subsequent budgets submitted by the President under section 1105(a) of title 31, United States Code, shall include, adjustments to discretionary spending limits1269 (and those limits as adjusted) for the fiscal year [p. 497] and each succeeding year through 1998,1270 as follows:

(A) IRS funding.—To the extent that appropriations are enacted that provide additional new budget authorlty1271 or result in additional outlays1272 (as compared with the CBO1273 baseline1274 constructed in June 1990) for the Internal Revenue Service compliance initiative in any fiscal year, the adjustments for that year shall be those amounts, but shall not exceed the amounts set forth below—

(i) for fiscal year 1991, $191,000,000 in new budget authority and $183,000,000 in outlays;

(ii) for fiscal year 1992, $172,000,000 in new budget authority and $169,000,000 in outlays;

(iii) for fiscal year 1993, $183,000,000 in new budget authority and $179,000,000 in outlays;

(iv) for fiscal year 1994, $187,000,000 in new budget authority and $183,000,000 in outlays; and

[p. 498]

(v) for fiscal year 1995, $188,000,000 in new budget authority and $184,000,000 in outlays; and the prior-year outlays resulting from these appropriations of budget authority.

(B) Debt forgiveness.—If, in calendar year 1990 or 1991, an appropriation is enacted that forgives the Arab Republic of Egypt’s foreign military sales indebted ness to the United States and any part of the Government of Poland’s indebtedness to the United States, the adjustment shall be the estimated costs (in new budget authority1275 and outlays,1276 in all years) of that forgiveness.1277

(C) IMF funding.—If, in fiscal year 1991, 1992, 1993, 1994, or 1995 an appropriation is enacted to provide to the International Monetary Fund the dollar equivalent, in terms of Special Drawing Rights, of the increase in the United States quota as part of the International Monetary Fund Ninth General Review of Quotas, the. adjustment shall be the amount provided by that appropriation.

(D) Emergency appropriations.—(i) If, for any fiscal year,1278 appropriations for discretionary accounts1279 [p. 499] are enacted that the President designates as emergency requirements and that the Congress so designates in statute, the adjustment shall be the total of such appropriations in discretionary accounts designated as emergency requirements and the outlays1280 flowing in all years from such appropriations.1281

(ii) The costs for operation Desert Shield are to be treated emergency funding requirements not subject to the defense spending limits. Funding for Desert Shield will be provided through the normal legislative process. Desert Shield costs should be accommodated through Allied burden-sharing, subsequent appropriation Acts, and if the President so chooses, through offsets within other defense accounts.1282 Emergency Desert Shield costs mean those incremental costs associated with the increase in operations in the Middle East and do not include costs that would be experienced by the Department of Defense as part of its normal operations absent Operation Desert Shield.

(E) Special allowance for discretionary new budget authority.1283(i) For each of fiscal years [p. 500] 1992 and 1993, the adjustment for the domestic category, for each year shall be an amount equal to 0.1 percent of the sum of the adjusted discretionary spending limit on new budget authority for all categories for fiscal year 1991, 1992, and 1993 (cumulatively), together with outlays1286 associated therewith (calculated at the composite outlay rate1287 for the domestic category);

(ii) for each of fiscal years 1992 and 1993, the adjustment for the international category1288 in each year shall be an amount equal to 0.079 percent or the sum of the adjusted discretionary spending limits1289 on new budget authority1290 for all categories for fiscal years 1991, 1992, and 1993 (cumulatively), together with outlays1291 associated therewith (calculated at the composite outlay [p. 501] rate1292 for the international category);

(iii) if, for fiscal years 1992 and 1993, the amount of new budget authority1293 provided in appropriation Acts exceeds the discretionary spending limit1294 on new budget authority for any category1295 due to technical estimates made by the Director of the Office of Management and Budget, the adjustment is the amount of the excess; but not to exceed an amount (for 1992 and 1993 together) equal to 0.042 percent of the sum of the adjusted discretionary limits on new budget authority for all categories for fiscal years 1991, 1992, and 1993 (cumulatively); and

(iv) if, for fiscal years 1994, 1995, 1996, 1997, and 1998, the amount of new budget authority provided in appropriation Acts exceeds the discretionary spending limit on new budget authority due to technical estimates made by the director of the Office of Management and Budget, the adjustment is the amount of the excess, but not to exceed an amount (for any one fiscal year) equal to 0.1 percent of the adjusted discretionary spending limit on new budget authority for that fiscal year.1296

[p. 502]

(F) Special outlay allowance.—If in any fiscal year outlays1297 for a category1291 exceed the discretionary spending limit1299 for that category but new budget authority1300 does not exceed its limit’ for that category (after application of the first step of a sequestration1301 described in subsection (a)(2), if necessary), the adjustment in outlays is the amount of the excess, but not to exceed $2,500,000,000 in the defense category, $1,500,000,000 in the international category, or $2,500,000,000 in the domestic category (as applicable) in fiscal year 1991, 1992, or 1993, and not to exceed $6,500,000,000 in fiscal year 1994 or 1995 less any of the outlay adjustments made under subparagraph (E) for a category for a fiscal year, and not to exceed 0.5 percent of the adjusted discretionary spending limit on outlays for the fiscal year in fiscal year 1996, 1997, or 1998.1302

[PAGES 503-508 includes only the text of Note 1302. Notes 1297 through 1301 are set out on p. 502.]

1235. Office of Management and Budget, Within-Session OMB Sequestration Report to the President and Congress for Fiscal Year 1991. H.R. Doc. No, 102-10, 102d Cong. 1st Sess. (Apr. 25, 1991) ($1.4 million, 0.0013 sequester in domestic discretionary budget authority after enactment of H.R. 1281, the Dire Emergency Supplemental Appropriation for fiscal year 1991, Pub. L. No. 102-27 (Apr. 10, 1991)). In the case of this mid-session sequestration, the General Accounting Office found that the Office of Management and Budget had called for the sequester erroneously. Commenting on the rescission request that the President sent up to remedy the supposed overage, the Special Assistant to the Comptroller General, writing for the Comptroller General, wrote as follows:

As you know, the President’s justification for the proposed rescission is that its approval would eliminate the need for a sequester of domestic discretionary budgetary resources in fiscal year 1991 (calculated by OMB to be .0013 percent of sequesterable domestic budget authority). In the Administration’s opinion, the sequester action was necessary because the Dire Emergency Supplemental Appropriation for fiscal year 1991, Pub. L. No. 102-27, ___ Stat. ____ (1991), exceeded by $2.4 million the domestic discretionary spending cap established by the 1991 Budget Reconciliation Act. On April 25, 1991, OMB issued a within-session sequester report and the President ordered a sequester of budgetary resources in domestic discretionary accounts of .0013 percent. See OMB Bulletin No. 91-11, April 25, 1991.

In our view, OMB’s scoring of two provisions in the Dire Emergency Supplemental as new budget authority was erroneous. B-243744, Apr. 24, 1991. Since, in our opinion, the language of the two provisions did not create any new budget authority, the discretionary spending cap was not breached. Accordingly, no mid-session sequester was necessary, and the proposed rescission was not needed.

Letter from Milton J. Socolar[3] to-the President of the Sena1e and the Speaker of the House of Representatives (June 11, 1991) (GAO file no. B-241514.8)

1236. Section 250(c)(15) defines “OMB” to mean “the Director of the Office of Management and Budget”. See supra p. 446.

1237. Section 250(c)(7) defines “discretionary appropriations”. See supra p. 444.

1238. Section 250(c)(16) defines “CBO” to mean “the Director of the Congressional Budget Office”. See supra p. 446.

1239. Section 250(c)(1) (see supra p. 440) defines “budget authority and “new budget authority at least in part by reference to the definitions of section 3(2) of the Congressional Budget Act of 1974. See supra pp. 11-13.

1240. Section 250(c)(1) (see supra p. 440) defines “outlays” at least in part by reference to the definition of section 3(1) of the Congressional Budget Act of 1974. See supra p. 11.

1241. Section 250(c)(13) defines “current year”. See supra p. 446.

1242. Section 250(c)(12) defines “budget year”. See supra p. 446.

1243. Section 250(c)(11) defines “account”. See supra p. 445.

1244. Section 250(c)(9) defines “current”. See supra p. 445.

[Pagination in the BPLA is indicated for Note #1245]
[p. 482]

1245. The statement of managers accompanying the conference report on the Budget Enforcement Act of 1990 expressed concern regarding the powers conferred by this paragraph and set forth the scorekeeping guidelines to which this paragraph refers:

XII. SCOREKEEPING

The conferees recognize that, because of the constraints imposed by the Supreme Court’s decision in Bowsher v. Synar, the conference agreement vests substantial power to estimate the costs of legislation with the Office of Management and Budget. The conferees are concerned that the Office of management and Budget has not always shown complete objectivity in its estimates. The conferees urge the Congress to scrutinize the scorekeeping of the Office of Management and Budget as that Office implements the procedures under this conference agreement. The conferees considered procedures under which Congress would enact into law Congressional Budget Office cost estimates as part of any spending legislation. Should the Office of Management and Budget abuse its scorekeeping power, the conferees believe that the Congress should adopt such procedures at that time.

Section 251(a)(7) and 252(d) of the Balanced Budget and Emergency Deficit Control Act of 1985 (also known as Gramm-Rudman-Hollings) as amended by this conference agreement provide that the Office of Management and Budget must make its estimates in conformance with scorekeeping guidelines determined for consultation among the Senate and House Committees on the Budget, the Congressional Budget Office, and the Office of Management and Budget. These provisions carry on and codify the existing consultative process that has led to these parties developing the following scorekeeping guidelines:

scorekeeping guidelines for [fiscal year]1991

The guideline listed below reflect general budget scorekeeping conventions that will be used by the House and Senate Budget Committees and the Office of Management and Budget in measuring compliance with Congressional budget targets and the Budget Summit Agreement.

To the extent possible under the Budget Enforcement Act of 1990, the Balanced Budget and Emergency Deficit Control Act of 1985, the Congressional Budget Office and the Office of Management and Budget will follow these guidelines in calculating deficit estimates and making projections for the Balanced Budget and Emergency Deficit Control Act of 1985 (Gramm-Rudman-Hollings) and the Budget Enforcement Act 1990.

For both budget scorekeeping and Gramm-Rudman-Hollings, final scoring will necessarily depend on the review of legislation by the scorekeepers, as provided in the Budget Enforcement Act of 1990, the Congressional [p. 483] Budget Act and Gramm-Rudman-Hollings. These rules will be reviewed on an annual basis.

Mandatory spending

The list of accounts that are considered mandatory for purposes of scoring appropriations bills follows.

Outlays prior

Outlays from prior-year appropriations will be classified consistent with the discretionary/mandatory classification of the account from which the outlays occur.

Direct spending programs

Entitlements and other mandatory programs (including offsetting receipts) will be scored at current law levels, unless congressional action modifies the authorizing legislation. Substantive changes to or restrictions on entitlement law or other mandatory spending law in appropriations bills will be scored against the Appropriations Committee section 302(b) allocations in the House and the Senate except for those savings provisions that are to be enacted by an authorizing committee pursuant to the Budget Summit Agreement.

Transfer of budget authority from a mandatory account to a discretionary account

The transfer of budget authority to a discretionary account will be scored as an increase in discretionary budget authority and outlays in the gaining account. The losing account will not show an offsetting reduction if the account is an entitlement or mandatory.

Permissive transfer authority

Permissive transfers will be assumed to occur (in full or in part) unless sufficient evidence exists to the contrary. Outlays from such transfers will be estimated based on the best information available, primarily historical experience and, where applicable, indications of Executive or Congressional intent.

[P. 484]

This guideline will apply to specific transfers (transfers where the gaining and losing accounts and the amounts subject to transfer can be ascertained) for FY 1991 and to both specific and general transfer authority thereafter.

Reappropriations

Reappropriations of expiring balances of budget authority will be scored as new budget authority in the fiscal year in which the balances become newly available.

Advance appropriations

Advance appropriations of budget authority will be scored as new budget authority in the fiscal year in which the funds become newly available for obligation, not when the appropriations are enacted.

Advance appropriations will be classified as mandatory or discretionary consistent with the mandatory list below.

Rescissions and transfers of unobligated balances

Rescissions of unobligated balances will be scored as reductions in current budget authority and outlays in the year the money is rescinded.

Transfers of unobligated balances will be scored as reductions in current budget authority and outlays in the amount from which the funds are being transferred, and as increases in budget authority and outlays in the account to which these funds are being transferred.

In certain instances, these transactions will result in a net negative budget authority amounts in the source accounts. Such amounts of budget authority will be projected at zero. Outlay estimates for both the transferring and receiving accounts will be based on the spending patterns appropriate to the respective accounts.

Delay of obligations

Appropriations bills specify a date when funds will become available for obligation. It is this date that determines the year for which new budget authority is scored. In the absence of such a date, the bill is assumed to be effective upon enactment.

If a new appropriation provides that a portion of the budget authority shall not be available for obligation until a future fiscal year, that portion shall be treated as an advance appropriation of budget authority. If a law defers existing budget authority (or unobligated balances) from a year in which it was available for obligation to a year in which it was not available for obligation, that law shall be scored as a rescission in the current year and a reappropriation in the year in which obligational authority is extended. If the authority to obligate is contingent upon the enactment of a subsequent appropriation, [p. 485] new budget authority and outlays will be scored with the subsequent appropriation. If an appropriation is contingent on enactment of a subsequent authorization, new budget authority and outlays will be scored with the appropriation. If an appropriation is contingent on the fulfillment of some action by the Executive branch or some other event normally estimated, new budget authority will be scored with the appropriation and outlays will be estimated based on the best information about when (or if) the contingency will be met. Non-lawmaking contingencies within the control of the Congress are not scoreable events.

Absorption

Appropriations bills or reports should contain language that clearly specifies the extent to which funds for pay raises are either provided or absorbed within the levels appropriated in the bill, or remain to be provided.

Scoring purchases, lease-purchases and leases

General Rule.—When a bill provides the authority for an agency to enter into a contract for the purchase, lease-purchase, or lease of a capital asset, budget authority will be scored in the year in which the budget authority is first made available in the amount of the government\’s total estimated legal obligations.

Outlays for a purchase or for a lease-purchase in which the Federal government assumes substantial risk-for example, through an explicit government guarantee of third-party financing-will be spread across the period during which the contractor constructs, manufactures, or purchases the asset. Outlays for a lease, or for a lease-purchase in which the private sector retains substantial risk, will be spread across the lease period. In all cases, the total amount of outlays scored over time against a bill will equal the amount of budget authority scored against that bill.

Implementation of the Rule.—Contracts under existing authority will not be rescored. Purchases and lease-purchases will be scored on the basis of this rule starting in FY 1991. Multi-year leases will be scored consistent with current practice, rather than this rule, in FY 1991.

Further details.—See “Addendum: Details on scoring purchases, lease-purchases, and leases”.

Write-offs of uncashed checks, unredeemed food stamps, and similar instruments

Exceptional write-offs of uncashed checks, unredeemed food stamps, and similar instruments (i.e., write-offs of cumulative balances that have built [p. 486]  up over several years or have been on the books for several years) shall be scored as an adjustment to the means of financing the deficit rather than as an offset. An estimate of write-offs or similar adjustments that are part of a continuing routine process shall be netted against outlays in the year in which the write-off will occur. Such write-offs shall be recorded in the account in which the outlay was originally recorded.

Reclassification after an agreement

Except to the extent assumed in a budget agreement, a law that has the effect of altering the classification of spending and revenues (e.g. from discretionary to mandatory, special fund to revolving fund, on-budget to off-budget, revenue to offsetting receipt), will not be scored as reclassified for the purpose of enforcing a budget agreement. 

Addendum: Details on Scoring Purchases, Lease-purchase, and Leases

Budget Authority.—Budget authority scored against a bill will include all costs of the project except for imputed interest costs calculated at Treasury rates. Imputed interest costs will not be scored against a bill or for current level but will count for other purposes.

Criteria for Defining a Lease.—Under a lease arrangement, ownership of the asset remains with the lessor during the term of the lease and is not transferred to the Government at or shortly after the end of the lease period. In addition, the Government should enter into the contract for limited use of an asset and not consume a substantial portion (75 percent) of its economic value. All risks of ownership of the asset (e.g. financial responsibility for destruction or loss of the asset) should remain with the lessor.

Illustrative Criteria Determining Private Risk.—Legislation and lease-purchase contracts will be considered against the following type of illustrative criteria to evaluate the level of private-sector risk in a project.

There should be no explicit government guarantee of third party financing.

All risks to ownership of the asset (e.g. financial responsibility for destruction or loss of the asset, etc.) should remain with the lessor unless the Government was at fault for such losses.

The asset should be a general purpose asset rather than for a special purpose of the Government and should not be built to unique specification for the Government as lessee. There should be a private-sector market for the asset.

[P. 487]

The project should not be constructed on Government land.

Directed Scorekeeping.—Language that attempts to waive the Anti-Deficiency Act, or to limit the amount of timing of obligations recorded, does not change the government’s obligations or obligation authority, and so will not affect the scoring of budget authority or outlays.

Authority to Obligate.—Unless bill language that authorizes a project clearly states that no obligations are allowed unless budget authority is provided specifically for that project in an Appropriations bill in advance of the obligation, the bill will be interpreted as providing obligation authority, in an amount to be estimated by the Congressional Budget Office (for the Congress) and the Office of Management and Budget (for the Executive).

Appropriated Entitlements and Mandatories

For Fiscal Year 1991

Commerce-Justice-State

Payment to the Foreign Service retirement and disability fund

19-0540-0-1-153

Fishermen’s guaranty fund

19-5121-0-2-376

Salaries of judges:

Supreme Court, S&E1

10-0100-0-1-752

U.S. Court of International Trade1

10-0400-0-1-752

U.S. Court of Appeals1

10-0510-0-1-752

Courts of Appeals, District Courts, etc.1

10-0920-0-1-752

Payment to judicial officers’ retirement fund

10-0941-0-1-752

Fees and expenses of witnesses

15-0311-0-1-752

Independent counsel

15-0327-0-1-752

Public Safety Officers benefits

15-0403-0-1-754

Civil liberties public education fund

15-0329-0-1-808

[p. 488]

Defense

Payment to the Central Intelligence Agency retirement fund

56-3400-0-1-054

District of Columbia

No mandatory accounts.

Energy-Water

No mandatory accounts.

Foreign Operations

Housing and other credit guaranty programs

72-4340-0-3-151

Guarantee reserve fund

11-4121-0-3-152

Payment to the Foreign Service retirement and disability fund

11-1036-0-1-153

Interior

Miscellaneous trust funds

14-9971-0-7-302

Range improvements

14-5132-0-2-302

Administration of territories2

14-0412-0-1-808

Compact of free association3

14-0415-0-1-808

Labor-HHS-Education

Guaranteed student loans

91-0230-0-1-502

Higher education facilities loans

91-0240-0-1-502

College housing and academic facilities loans4

91-0242-0-1-502

Federal unemployment benefits and allowances (FUBA)

16-0326-0-1-504

16-0326-0-1-603

Social services block grant

75-1634-0-1-506

[p. 489]

Payments to States for foster care and adoption assistance

75-1645-0-1-506

Rehabilitation services and handicapped research

91-0301-0-1-506

Vaccine improvement program trust fund

20-8175-0-7-5515

Retirement pay and medical benefits for commissioned officers

75-0379-0-1-551

Medicaid

75-0512-0-1-551

Medical facilities guarantee and loan fund

75-4430-0-3-551

HMO loan and loan guarantee fund

75-4420-0-3-551

Health professions graduate student loan insurance fund

75-4305-0-3-553

Payments to health care trust funds

75-0580-0-1-571

Advances to the unemployment trust fund

16-0327-0-1-601

Special benefits

16-1521-0-1-601

16-1521-0-1-602

Black lung disability trust fund

20-8144-0-7-601

Federal payments to the railroad retirement accounts

60-0113-0-1-601

Special benefits for disabled coal miners

75-0409-0-1-601

Supplemental security income program6

75-0406-0-1-609

Family support payments to States

75-1501-0-1-609

Payments to States for family support activities

75-1509-0-1-609

Payments to social security trust funds

75-0404-0-1-651

Legislative Branch

Compensation of members, Senate

00-0100-0-1-801

Compensation of members, House

00-0200-0-1-801

Payments to windows and heirs of deceased members of Congress

00-0215-0-1-801

[p. 490]

Payments to windows and heirs of deceased members of Congress-Senate

00-0115-0-1-801

Military Construction

No mandatory accounts.

Rural Development-Agriculture

Reimbursement to the rural electrification and telephone fund

12-3101-0-1-271

Conservation reserve program7

12-3319-0-1-302

Dairy indemnity program

12-3314-0-1-351

Temporary emergency food assistance program (TEFAP)8

12-3635-0-1-351

Federal Crop Insurance Corporation fund

12-4085-0-1-351

Agricultural credit insurance fund9

12-4140-0-3-351 N

Commodity Credit Corporation fund

12-4336-0-3-351

Payments to the farm credit system financial assistance corp.

20-1850-0-1-351

Rural housing insurance fund9

12-4141-0-3-371

Rural communication development fund

12-4142-0-3-452

Rural development insurance fund9

12-4155-0-3-452

Special milk program

12-3502-0-1-605

Food donations programs for selected groups10

12-3503-0-1-605 N

Food stamp program

12-3505-0-1-605

Child nutrition programs

12-3539-0-1-605

Nutrition assistance for Puerto Rico

12-3550-0-1-605

Funds for strengthening markets (section 32)11

12-5209-0-2-605

[p. 491]

Transportation

WMATA, interest payments

46-0300-0-1-401

FAA, aircraft purchase loan guarantee program

69-1399-0-1-402

Coast Guard, retired pay

69-0241-0-1-403

Treasury-Postal Service

Payment to the Postal Service fund for non-funded liabilities

18-1004-0-1-372

Government payment for annuitants, employees health benefits

24-0206-0-1-551

Government payment for annuitants, employees life insurance

24-0500-0-1-602

Compensation of the President

11-0001-0-1-802

Payment of government losses in shipment

20-1710-0-1-803

Payment to civil service retirement and disability fund

24-0200-0-1-805

Veterans-HUD

FSLIC resolution fund

51-4065-0-3-371

Federal Housing Administration fund12

86-4070-0-3-371

Veterans Benefits Administration

Insurance and indemnities

36-0120-0-1-701

Compensation

36-0153-0-1-701

Pensions

36-0154-0-1-701

Burial benefits

36-0155-0-1-701

Readjustment benefits

36-0137-0-1-702

Guaranty and indemnity fund

36-4023-0-3-704

Loan guaranty revolving fund

36-4025-0-3-704

[p. 492]

(Notes for the list “appropriated entitlements and mandatories for fiscal year 1991” that appears in this note 1245, pp. 487-493:)

1. Account split — Only salaries of judges are mandatory.

2. Account split — The interest rate differential related to the Guam Power Authority refinancing and the Northern Marianas covenant will be scored as mandatory.

3. Account split — The account shall be split between mandatory payments (required by treaty) and discretionary costs.

4. Account split — P1yment of interest to Treasury shall be scored as mandatory. Loan levels shall be scored as discretionary loan limitations and borrowing authority.

5. The administrative expenses associated with this account arc discretionary within the jurisdiction of the Commerce, Justice, State subcommittee.

6. Account split — Administrative expenses shall be scored as discretionary BA and outlays.

7. Appropriations to fund an agreed-upon level of 40 million are minimum specified in authorizing legislation shall be scored as mandatory. Appropriations above this level shall be scored as discretionary.

8. Account split — Only purchases or commodities for Hunger Prevention Ad arc mandatory.

9. Account split — Appropriations for losses will be scored as mandatory. Changes to loan levels allocated to authorizing committees will be scored as discretionary.

10. Account split — Only purchases or commodities for Hunger Prevention Ad arc mandatory.

11. The entire account shall be scored as mandatory except to the extent that discretionary set asides arc specified in appropriations language.

12. Account split — Payments for interest, net realized losses, and temporary mortgage assistance payments are mandatory. Administrative expenses transferred to Management and Administration and Inspector General accounts will be classified as a discretionary obligation limitation and outlays.

[p. 493]

H. Rep. 101-964 (Conference Report pp. 1172-80, 101st Cong., 2d Sess. reprinted in 1990 U.S.C.C.A.N. 2374, 2877-85.

[End of pagination for Note #1245.]

For additional legislative history on the accounting for lease-purchases, see 136 Cong. Rec. S8019-20 (daily ed. June 14, 1990) (statements of Sen. DeConcini and Chairman Sasser).

1246. Section 250(c)(1) of the Balanced Budget and Emergency Deficit Control Act of 1985 (see supra p. 440) defines “discretionary spending limit” by adopting the definition of section 601(a)(2) of the Congressional Budget Act of 1974 (see supra pp. 301”303) as adjusted under sections 251 and 253 of Balanced Budget and Emergency Deficit Control Act of 1985. See pp. 475-502. 523-533.

1247. Section 250(c)(12) defines “budget year”. See supra p. 446.

1248. Section 14002(c)(1)(B)(i)(I) of the Omnibus Budget Reconciliation Act of 1993, Pub. L. 103-66, § 14002(c)(1)(B)(i)(1), 107 Stat. 312 (1993), extended this reference to fiscal years 1996, 1997, and 1998. For legislative history of the extension, see supra notes 870 and 936 and infra note 1807.

1249. Section 250(c)(15) defines “OMB” to mean “the Director of the Office of Management and Budget: See supra p. 446.

1250. Section 250(c)(14) defines “outyear”. See supra p. 446.

1251. Section 14002(c)(1)(B)(i)(II) of the Omnibus Budget Reconciliation Act of 1993, Pub. L. No. 103-66, § 14002(c)(1)(B)(i)(II), 107 Stat. 312 (1993), changed this reference from “1995 to “1998”. For legislative history of the extension, see supra notes 870 and 936 and infra note 1807.

1252. Section 250(c) (see supra p. 442) defines “baseline” in substantial part by reference to section 257. See infra pp. 600-617.

1253. Section 250(c)(1) (see supra p. 440) defines “budget authority” and “new budget authority” at least in part by reference to the definitions of section 3(2) of the Congressional Budget Act 1974. See supra pp. 11-13.

1254. Section 250(c)(1) (see supra p. 440) defines “outlays” at least in part by reference to the definition of section 3(1) or the Congressional Budget Act of 1974. See supra p. 11.

1255. Section 250(c)(12) defines “budget year”. See supra p. 446.

1256. Section 250(c)(1) (see supra p. 440) defines “budget authority” and “new budget authority” at least in part by reference to the definitions of section 3(2) of the Congressional Budget Act of 1974. See supra pp. 11-13.

1257. Section 250(c)(1) (see supra p.440) defines “outlays” at least in part by reference to the definition of section 3(1) of the Congressional Budget Act of 1974. See supra p. 11.

1258. Section 250(c) (see supra p. 442) defines “baseline” in substantial part by reference to section 257. See infra pp. 600-617.

1259. Section 250(c)(9) defines “current”. See supra p. 445.

1260. Section 250(c)(12) defines “‘budget year”. See supra p. 446.

1261. Section 14002(c)(1)(B)(ii) of the Omnibus Budget Reconciliation Act of 1993, Pub. L 103-66, § 14002(c)(1)(B)(ii), 107 Stat. 312 (1993), added this clause, providing for fiscal year 1996 through 1998. For legislative history or the extension, see supra notes 810 and 936 and infra note 1807. For the inflation assumptions to which the clause refers, see: H. Rep. 103-48, 103d Cong., 1st Sess. (1993), reprinted in 139 Cong. Rec. H1747, H1760 (daily ed. Mar. 31, 1993).

1262. Section 250(c)(9) defines “current”. See supra p. 445.

1263. Section 250(c)(1) (see supra p. 440) defines “budget authority” and “new budget authority” at least in part by reference to the definitions of section 3(2) of the Congressional Budget Act of 1974. See supra pp. 11-13.

1264. Section 250(c)(I) (see supra p. 440) defines “outlays” at least in part by reference to the definition of section 3(1) of the Congressional Budget Act of 1974. See supra p. 11.

1265. Section 250(c) (see supra p. 442) defines “baseline” in substantial part by reference to section 257. See infra pp. 600-617.

1266. Section 250(e)(15) defines “OMB” to mean “the Director or the Office of Management and Budget”. See supra p. 446.

1267. Section 250(c)(2) defines “sequestration”. See supra p. 440.

1268. Section 14002(c)(1)(B)(iii)(I) of the Omnibus Budget Reconciliation Act of 1993, Pub. L. 103-66, § 14002(c)(1)(B)(iii)(I), 107 Stat. 312 (1993), extended this reference to fiscal years 1996, 1997, and 1998. For legislative history or the extension, see supra notes 870 and 936 and infra note 1807.

1269. Section 250(c)(1) of Balanced Budget and Emergency Deficit Control Act of 1985 (see supra p. 440) defines “discretionary spending limit” by adopting the definition of section 601(a)(2) of the Congressional Budget Act (see supra pp. 301-303) as adjusted under sections 251 and 253 of Balanced Budget and Emergency Deficit Control Act of 1985. See pp. 475-502, 523-533.

1270. Section 14002(c)(1)(B)(iii)(II) of the Omnibus Budget Reconciliation Act of 1993, Pub. L 103-66, § 14002(c)(1)(B)(iii)(II), 107 Stat. 312 (1993), changed this reference from “1995” to “1998”. For legislative history of the extension, see supra notes 870 and 936 and infra note 1807.

1271. Section 250(c)(1) (see supra p. 440) defines “budget authority” and “new budget authority” at least in part by reference to the definitions or section 3(2) of the Congressional Budget Act of 1974. See supra pp. 11 13.

1272. Section 250(c)(1) (see supra p. 440) defines “outlays” at least in part by reference to the definition of section 3(1) of the Congressional Budget Act of 1974. See supra p. 11.

1273. Section 250(c)(16) defines “CBO” to mean “the Director of the Congressional Budget Office”. See supra p. 446.

1274. Section 250(c)(see supra p. 442) defines “baseline” in substantial part by reference to section 257. See infra pp. 600-617.

1275. Section 250(c)(1) (see supra p. 440) defines “budget authority” and “new budget authority” at least in part by reference to the definitions of section 3(2) of the Congressional Budget Act of 1974. See supra pp. 11-13.

1276. Section 250(c)(1) (see supra p. 440) defines “outlays” at least in part by reference to the definition of section 3(1) of the Congressional Budget Act of 1974. See supra p. 11.

1277. For a discussion of the motivation for forgiving Egypt’s debt, see, e.g., Clyde H. Farnsworth, Egypt’s Reward: Forgiven Debt, N.Y. Times, Apr. 10, 1991.

1278. Section 14002(c)(1)(B)(iv) of the Omnibus Budget Reconciliation Act of 1993; Pub. L 103-66, § 14002(c)(1)(B)(iv), 107 Stat. 312 (1993), changed this reference from “fiscal year 1991, 1992, 1993, 1994, or 1995” to “any fiscal year”. For legislative history of the extension, see supra notes 870 and 936 and infra note 1807.

1279. Section 250(c)(11) defines “account”. See supra p. 445.

1280. Section 250(c)(1) (see supra p. 440) defines “outlays” at least in part by reference to the definition or section 3(1) or the Congressional Budget Act of 1974. See supra p. 11.

1281. Compare the parallel provisions for emergencies for direct spending in section 252(e). See infra p. 517. For discussions of these emergency provisions, see William G. Dauster, Budget Emergencies, 18 J. Legis, 249 (1992); Robert Keith, Emergency Legislation Under the Gramm-Rudman-Hollings Act: 101st 102nd Congresses (Dec. 8, 1992) (Congressional Research Service Rep. No. 92-917 GOV).

1282. Section 250(c)(11) defines “account”. See supra p. 445.

1283. Section 250(c)(1) (see supra p. 440) defines “budget authority and “new budget authority” at least in part by reference to the definitions or section 3(2) or the Congressional Budget Act of 1974. See supra pp. 11-13.

1284. Section 250(c)(4) defines “category”. See supra p. 441.

1285. Section 250(c)(1) of Balanced Budget and Emergency Deficit Control Act of 1985 (see supra p. 440) defines “discretionary spending limit” by adopting the definition of section 601(a)(2) of the Congressional Budget Act of 1974 (see supra pp. 30130:) as adjusted under sections 251 and 253 of Balanced Budget and Emergency Deficit Control Act of 1985. See pp. 475-502, 523-533.

1286. Section 250(c)(1) (see supra p. 440) defines “outlays” at least in part by reference to the definition of section 3(1) of the Congressional Budget Act of 1974. See supra p. 11.

1287. Section 250(c)(20) defines “composite outlay rate”. See supra p. 447.

1288. Section 250(c)(4) defines “category”. See supra p. 441.

1289. Section 250(c)(I) of Balanced Budget and Emergency Deficit Control Act of 1985 (see supra p. 440) defines “discretionary spending limit” by adopting the definition of section 601(a)(2) or the Congressional Budget Act of 1974 (see supra pp. 301-303) as adjusted under sections 251 and 253 of Balanced Budget and Emergency Deficit Control Act of 1985. See pp. 475-502, 523-533.

1290. Section 250(c)(1) (see supra p. 440) defines “budget authority” and “new budget authority” at least in part by reference to the definitions of section 3(2) of the Congressional Budget Act of 1974. See supra pp. 11-13.

1291. Section 250(c)(1) (see supra p. 440) defines “outlays” at least in part by reference to the definition of section 3(1) of the Congressional Budget Act of 1974. See supra p. 11.

1292. Section 250(c)(20) defines “composite outlay rate”. See supra p. 447.

1293. Section 250(c)(1) (see supra p. 440) defines “budget authority” and “new budget authority” at least in part by reference to the definitions or section 3(2) or the Congressional Budget Ad. See supra pp. 11-13.

1294. Section 250(c)(1) of Balanced Budget and Emergency Deficit Control Act of 1985 (see supra p. 440) defines “discretionary spending limit” by adopting the definition of section 601(a)(2) or the Congrc6Sional Budget Act (see supra pp. 301-303) as adjusted under sections 251 and 253 of Balanced Budget and Emergency Deficit Control Act of 1985. See pp. 475-502, 523-533.

1295. Section 250(c)(4) defines “category.’ See supra p. 441.

1296. Section 14002(c)(1)(B)(v)(O) of the Omnibus Budget Reconciliation Act of 1993, Pub. L. 103-66, § 14002(c)(1)(B)(v)(II), 107 Stat. 312 (1993), added this clause, providing for fiscal years 1996 through 1998. For legislative history or the extension, see supra notes 870 and 936 and infra note 1807. The drafters of this clause relied on historical experience or technical differences to formulate the adjustment percentage.

1297. Section 250(c)(1) (see supra p. 440) defines “outlays” at least in part by reference to the definition of section 3(1) of the Congressional Budget Act of 1974. See supra p. 11.

1298. Section 250(c)(4) defines “category”. See supra p. 441.

1299. Section 250(c)(1) of Balanced Budget and Emergency Deficit Control Act of 1985 (see supra p. 440) defines “discretionary spending limit” by adopting the definition of section 601(a)(2) of the Congressional Budget Act of 1974 (see supra pp. 301-303) as adjusted under sections 251 and 253 of Balanced Budget and Emergency Deficit Control Act of 1985. See pp. 475-502, 523-533.

1300. Section 250(c)(1) (see supra p. 440) defines “budget authority” and “new budget authority” at least in part by reference to the definitions of section 3(2) of the Congressional Budget Act of 1974. See supra pp. 11-13.

1301. Section 250(c)(2) defines “sequestration”. See supra p. 440.

1302. Section 14002(c)(1)(B)(vi) of the Omnibus Budget Reconciliation Act of 1993, Pub. L. 103-66, § 14002(c)(1)(B)(vi), 107 Stat. 312 (1993), added “, and not to exceed 0.5 percent of the adjusted discretionary spending limit on outlays for the fiscal year in fiscal year 1996, 1997, or 1998” at this point, providing for fiscal years 1996 through 1998. For legislative history of the extension, see supra notes 870 and 936 and infra note 1807. The drafters of this clause relied on historical experience of technical differences to formulate the adjustment percentage.

The drafters of the Budget Enforcement Act of 1990 added this subparagraph to protect [p. 503] against estimating differences between the Congressional Budget Office and the Office of Management and Budget. Even so, the acting general counsel of the Office of Manage­ment and Budget bas issued an opinion that the President may take advantage of this outlay allowance in requests for supplemental appropriations, notwithstanding its original purpose:

MEMORANDUM FOR THE DIRECTOR

FROM: Robert G. Damus, Acting General Counsel

SUBJECT:  Scoring Supplementals Under the Special Outlay Allowance

This addresses the issue of whether the Administration’s proposed 1991 supplementals are consistent with application or the “special outlay allowance” provision of the Budget Enforcement Act of 1990 (BEA).

Background

At the conclusion of appropriations action on the 13 regular appropriations bills for fiscal year 1991, OMB and CBO issued their reports scoring the bills and making their sequester calculations as required by section 254 of the Balanced Budget and Emergency Deficit Control Act of 1985 Act (GRH), as amended by the BEA. Within the domestic discretionary category defined by the BEA, OMB scored budget authority (BA) of $182,381 million, and outlays of $199,863 million; CBO scored BA of $182,192 million and outlays of $197,814 million. The domestic discretionary limit under the BEA for 1991 is BA of $182,891 million and outlays of $198,283 million.

The BEA provides for a number of adjustments to the cap. One adjustment is provided by section 251(b)(2)(F), which states:

“.…”

This adjustment is explained in the Joint Explanatory Statement of Managers accompanying the conference report on the BEA (as enacted in Title XII of the Omnibus Budget Reconciliation Act of 1990): “Outlay limits for categories of discretionary spending also shall be increased by specified dollar amounts so long as the budget authority limits for the applicable categories are not breached; this special outlay allowance insulates the legislative process from estimating differences”. (H. Rep. No. 101-964 p. 1153).

As stated by the conferees, the purpose of the provision is to allow an adjustment for outlays estimating differences between CBO and OMB. Under the rule, CBO can score appropriations as meeting the BA and outlay [p. 504] caps, and OMB can score appropriation as just meeting the BA cap by up to $2.5 billion without triggering a sequester of the OMS-scored outlay excess. If this rule did not exist, and OMB scored outlays as just meeting the cap, the full amount of the cap could not be used by Congress, which must use lower CBO scoring. The maximum adjustment for these CBO-OMB scorekeeping differences is equal to $2.5 billion plus the amount by which CBO-scored outlays fall abort of the cap.

Discussion

The adjustment allowed under section 251(b)(2)(F) has been applied in 1991. OMB scored outlays as exceeding the cap (unadjusted for this item) by $1,580 million, with BA under the cap by $510 million. CBO scored BA $699 million under the cap and outlays as $469 million under the cap. Due to the adjustment provision, no sequester was triggered despite the unadjusted cap having been exceeded on OMB scoring.

The President’s budget for a fiscal year must be “prepared in a manner consistent with the requirements” of GRH “that apply to that and subsequent fiscal years”. 31 U.S.C. 1105(1) (as amended by the BEA). The budget will propose 1991 supplementals (and rescissions) with net BA of $304 million and net outlays of $247 million within the domestic discretionary category.

The supplementals are consistent with the caps on domestic discretionary spending. The supplementals fit with in the room left under the caps as scored by CBO and so will not trigger any point of order during Congressional consideration. The BA will fit within the cap as scored by OMB when OMB prepares its sequester report. The outlays will also fit within the unadjusted cap, not counting the estimating differences for which the adjustment is provided, and fit within the adjusted cap counting such differences. Thus, no sequester will be triggered.

This analysis is consistent with the purpose of the adjustment: to ensure that estimating differences perm ii the cap to be met by Congress under CBO scoring without triggering a sequester under OMB scoring. Despite the estimating difference, the cap is met under CBO scoring (without the adjustment), and under OMB scoring (with the adjustment). The amount of the estimating difference is the adjustment to the cap (less the amount by which CBO-scared outlays fall below the cap). Not counting the amount provided by the adjustment the estimating difference between CBO and OMB on 1991 appropriations the Administration proposal and are below the unadjusted 1991 caps.

Conclusion

[p. 505]

Supplementals are consistent with the BEA, and trigger no enforcement procedure applied in Congress or sequester applied by the Executive as long as the resulting BA and outlays are under the BA and outlay caps as scored by CBO, and under the BA cap scored by OMB, and the CBO-OMB outlay estimating difference of at least than $2.5 billion plus the amount of the CBO-scored shortfall below the outlay cap. These conditions apply to the proposed supplementals for both domestic and international spending, given 1991 appropriations action to date. The proposed supplementals are therefore consistent with the BEA.

Memorandum from Robert G. Damus to Director Richard G. Darman (Jan. 17, 1991).

Section 13101(a) of the Budget Enforcement Act of 1990 amended section 251 to read substantially as it does now.[2] See infra p. 701. The statement of managers accompanying the conference report on the Budget Enforcement Act explains and section 251generally:

i. enforcing discretionary spending limits

Current Law

Under the Congressional Budget Act of 1974, the Senate and the House of Representatives limit discretionary spending primarily through overall allocations to their respective Appropriations Committees in the joint statement of the managers accompanying the concurrent resolution on the budget. These allocations, made pursuant to section 302(a) of the Congressional Budget Act of 1974, are sometimes called “302(a)s” or “crosswalks”. All committees must then divide these allocations among their subcommittees or programs. The Committees on Appropriations-which have jurisdiction over discretionary spending-must divide the allocations among their 13 subcommittees (including their Subcommittees on Defense and on Foreign Operations) under section 302(b) of the Congressional Budget Act. A point of order (requiring 60 votes to waive in the Senate and a simple majority to waive in the House) lies against any legislation that would cause spending to exceed these subdivided limits.

House Bill

The House bill sets forth, in a new section of the Congressional Budget Act, limits for discretionary spending in three categories—defense, international, and domestic-for fiscal years 1991 through 1993, and in one category-discretionary spending-for fiscal years 1994 and 1995. The House bill creates a new mechanism for across-the-board cuts-called “sequestration”-within a category if discretionary spending for a fiscal year exceeds spending in that category. The President orders these cuts for that fiscal year within 15 days after the end of a session. Under a “look-back” procedure, if legislation is enacted for that fiscal year in the next session that causes [p. 506] spending to exceed a category’s limit, then the applicable spending limits for the next fiscal year are reduced accordingly, and a further sequestration occurs unless appropriations legislation adjusts spending downward.

The initial limits proposed by the House include separate amounts of new budget authority and outlays by category (for fiscal years 1991 through 1993) and by total (for fiscal years 1994 and 1995).

The House bill provides that the President shall adjust the spending limits in the annual budget submission for changes in concepts and definitions, inflation, credit reestimates, Internal Revenue Service compliance funding, debt forgiveness, International Monetary Fund funding, Presidentially-determined emergencies, and for limited defined special allowances.

Senate Amendment

The Senate amendment sets forth as a freestanding part of the Omnibus Budget Reconciliation Act of 1990 limits for discretionary spending in the same categories and for the same years as in the House bill. The Senate amendment also creates a new mechanism for across-the-board cuts-called “sequestration”-within a category if discretionary spending exceeds spending for that category. In the Senate amendment, however, the President orders these cuts on November 15 for appropriations bills enacted before November 1 or after June 30 of a fiscal year, or 15 days after enactment for bills enacted between October 31 and July 1.

The initial limits on discretionary spending proposed by the Senate are the same as those proposed by the House. As does the House bill, the Senate amendment provides that the President may adjust the spending limits in the annual budget submission for changes in inflation, credit reestimates, Internal Revenue Service compliance funding, International Monetary Fund funding, Presidentially-determined emergencies, and for limited defined special allowances.

The Senate amendment allows for changes in the definition of “budget authority” (which it changes elsewhere)-but not changes in other concepts and definitions, and allows for adjustment for debt forgiveness for the Arab Republic of Egypt and the Polish government-but not other debts.

Conference Agreement

The conference agreement establishes the limits on discretionary spending by category, as proposed by the House and Senate, as a new title VI of the Congressional Budget Act of 1974.

The initial limits on discretionary spending are as follows (in billions [p. 507] of dollars):

 

 

Fiscal year

1991

1992

1993

1994

1995

Defense:

 

 

 

 

Budget authority

288.918

291.643

291.785

 

 

Outlays

297.660

295.744

292.686

 

 

International:

 

 

 

 

 

Budget authority

20.100

20.500

21.400

 

 

Outlays

18.600

19.100

19.600

 

 

Domestic:

 

 

 

 

 

Budget authority

182.700

191.300

198.300

 

 

Outlays

198.100

210.100

221.700

 

 

Total discretionary:

 

 

 

 

 

Budget authority

 

 

 

510.800

517.700

Outlays

 

 

 

534.800

540.800

 The President shall adjust the spending limits according to the method proposed by the House, except with regard to limited defined special allowances. The conference agreement accepts the Senate approach for adjustments for the International Monetary Fund and debt forgiveness. The special allowances authorize the President to adjust the spending limits for new budget authority and associated outlays by specified percentages, depending on the spending category and the fiscal year. Outlay limits for categories of discretionary spending also shall be increased by specified dollar amounts so long as the budget authority limits for the applicable categories are not breached; this special outlay allowance insulates the legislative process from estimating differences.

The conference agreement accepts a compromise mechanism for initiating across-the-board spending cuts if discretionary spending limits are breached. During the session in which the fiscal year begins, the enactment of legislation causing a breach in the spending limits of any category would trigger a presidential sequestration order that would impose across-the-board cuts in that category bringing spending down to the established limits. This presidential sequestration order would be issued within 15 days after the end of a session of Congress. During the following session, the enactment of legislation causing a breach in the spending limits would trigger sequestration 15 days after enactment if the legislation were enacted before July 1, or would reduce the applicable spending limits for the next fiscal year by the amount of the breach if the legislation were enacted on or after July 1.

[p. 508]

H Rept.101-964 (Conference Report, p. 1151-53), 1st Cong., 2d Sess. (1990), reprinted in 1990 U.S.C.C.A.N.[[4]] 2374, 2856-58.

COUNSEL NOTES

[1] Section 255 of the Balanced Budget and Emergency Deficit Control Act of 1985, listing programs exempt from sequestration procedures, has been significantly amended, most notably entirely rewritten, including largely the same programs though with additions, by the Statutory Pay-As-You-Go Act of 2010.

[2] That is, as it read in 1993 when the BPLA was printed.

[3] Michael F. Socolar was the special assistant to the Comptroller General who signed the letter quoted.

[4] U.S. Code Congressional and Administrative News.

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