Cyclopedia of Congressional Budget Law

Sequestration Preview Report

Summary

Sequestration refers to automatic spending cuts that occur through the withdrawal of funding for certain (but not all) government programs. The Office of Management and Budget administers the sequestration process and determines when one is legally required, and the amounts of budgetary resources to be cancelled. A sequestration order is issued as outlined in the Sequestration Preview Report that is transmitted by OMB to Congress and provides information 

In addition to sequestration information, section 251A (BBEDCA), as added by the Budget Control Act of 2011, requires OMB to dow the following:

Section 251A(5) (BBEDCA): OMB must revise the discretionary spending limits set forth in section 251(c) by a certain amount, calculated pursuant to that section.

Section 251A (3) and (6) (BBEDCA): OMB must order a sequestration of nonexempt direct spending programs as calculated pursuant to paragraphs (3) and (4) of that section.

See also Sequestration Update Report and Final Sequestration Report.


Statutory Requirements

Under section 254 (BBEDCA), the requirements for sequestration reports are set forth.

(c) Sequestration Preview Reports.—

(1) Reporting requirement.—On the dates specified in subsection (a), OMB and CBO shall issue a preview report regarding discretionary, pay-as-you-go, and deficit sequestration based on laws enacted through those dates.

(2) Discretionary sequestration report.—The preview reports shall set forth estimates for the current year and each subsequent year through 2021 of the applicable discretionary spending limits for each category and an explanation of any adjustments in such limits under section 251.

(3) Pay-as-you-go sequestration.—The preview reports shall set forth, for the current year and the budget year, estimates for each of the following:

(A) The amount of net deficit increase or decrease, if any, calculated under subsection 252(b).

(B) A list identifying each law enacted and sequestration implemented after the date of enactment of this section included in the calculation of the amount of deficit increase or decrease and specifying the budgetary effect of each such law.

(C) The sequestration percentage or (if the required sequestration percentage is greater than the maximum allowable percentage for medicare) percentages necessary to eliminate a deficit increase under section 252(c).

(4) Deficit sequestration reports.—The preview reports shall set forth for the budget year estimates for each of the following:

(A) The maximum deficit amount, the estimated deficit calculated under section 253(b), the excess deficit, and the margin.

(B) The amount of reductions required under section 252, the excess deficit remaining after those reductions have been made, and the amount of reductions required from defense accounts and the reductions required from non-defense accounts.

(C) The sequestration percentage necessary to achieve the required reduction in defense accounts under section 253(d).

(D) The reductions required under sections 253(e)(1) and 253(e)(2).

(E) The sequestration percentage necessary to achieve the required reduction in non-defense accounts under section 253(e)(3).

The CBO report need not set forth the items other than the maximum deficit amount for fiscal year 1992, 1993, or any fiscal year for which the President notifies the House of Representatives and the Senate that he will adjust the maximum deficit amount under the option under section 253(g)(1)(B).

(5) Explanation of differences.—The OMB reports shall explain the differences between OMB and CBO estimates for each item set forth in this subsection.

(d) Notification Regarding Military Personnel.—On or before the date specified in subsection (a), the President shall notify the Congress of the manner in which he intends to exercise flexibility with respect to military personnel accounts under section 255(f).

(e) Sequestration Update Reports.—On the dates specified in subsection (a), OMB and CBO shall issue a sequestration update report, reflecting laws enacted through those dates, containing all of the information required in the sequestration preview reports. This report shall also contain a preview estimate of the adjustment for disaster funding for the upcoming fiscal year.

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Note: Subsection (a), referred to above in paragraph (1), includes a table indicating that Sequestration Update Reports must be issued pursuant to the following dates:

5 days before the President’s budget submission………………………………. CBO sequestration preview report.
The President’s budget submission… OMB sequestration preview report.

References

Congressional Budget Office Sequestration Page
Sequestration Reports from the Office of Management and Budget (Obama Administration: 2011-2017)


Public Laws

Balanced Budget and Emergency Deficit Control Act of 1985 (Public Law 99-177,  99 Stat. 1037, Dec. 12, 1985)

Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1985 (Public Law 100-119,  101 Stat. 754, Sept. 29, 1987)

Budget Enforcement Act of 1990 (Public Law 101-508, 104 Stat. 1388, Nov. 5, 1990)

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