Cyclopedia of Congressional Budget Law

Cap Adjustment

Summary

The term cap adjustment is a colloquial expression, not defined in law and its specifications may vary in places, but it is a commonly used expression to indicate a separate stream of discretionary spending for particular purpose.

Program Integrity Adjustments

Program integrity adjustments are cap adjustment, included in section 251(b) of the Balanced Budget and Emergency Deficit Control Act of 1985. The two adjustments currently in law are forContinuing Disability Reviews and Redeterminations (sec. 251(b)(2)(B)) and  “Health Care Fraud and Abuse Control” (sec. 251(b)(2)(C)). These are termed for the purpose of “program integrity” because the they are intended to keep reduce direct spending elsewhere in the

Interaction with the CBA

Discretionary spending is controlled through both statutory enforcement procedures and Congressional rules enforcement. The first is administered by the Office of Management and Budget (OMB) through sequestration enforcing the discretionary spending limits that are in force through fiscal year 2021. The second is through the annual budget resolution that sets allocations under section 302(a) (CBA) to the Congressional Appropriations Committees.

The term “cap adjustment” applies to changes to both the statutory limits and the Congressional allocations. The two can work independently: If the allocation is lower than the discretionary limits and observed, the total amount appropriated by Congress will simply be less than the limit and sequestration is avoided. In theory the spending limits are precisely that and any amount lower is acceptable. In practice, the “cap” has been seen as a floor, insofar as that amount will surely be spent, and the question becomes whether and by how much that limit will be exceeded. 

Under section 314(a) (CBA), the Budget Committees may adjust the allocations to the Appropriations Committees for any adjustment contained in section 251(b)(BBEDCA). Though it says “may” it is something they always do, but  does require the filing of paperwork to submit for the Congressional Record.

Cap Adjustments in Section 251 (BBEDCA)

The following are to the discretionary spending limits found in statute under section 251(b) of the Balanced Budget and Emergency Deficit Control Act of 1985. Generally under section 314(a) the Congressional budget allocations set forth in the annual (if actually adopted) budget resolution are similarly adjusted. However, an exception occurs for emergency designated functions where an allocation adjustment is not made, but rather not counted in the first place.

1. Concepts and Definitions (sec. 251(b)(1));
2. Emergency appropriations (sec. 251(b)(2)(A));
3. Overseas contingency operations/global war on terrorism (sec. 251(b)(2)(A));
4. Continuing disability reviews and redeterminations (sec. 251(b)(2)(B));
5. Health care fraud and abuse control (sec. 251(b)(2)(C)); and
6. Disaster funding (sec. 251(b)(2)(D)).


Budget Concepts from Analytical Perspectives

OMB Definition of Cap Adjustment

Cap adjustment means either an increase or a decrease that is permitted to the statutory cap limits for each fiscal year under BBEDCA on the budget authority and outlays (only if applicable) provided by discretionary appropriations only if certain conditions are met. These conditions may include providing for a base level of funding, a designation of the increase or decrease by the Congress, (and in some circumstances, the President) pursuant to a section of the BBEDCA, or a change in concepts and definitions of funding under the cap. Changes in concepts and definitions require consultation with the Congressional Appropriations and Budget Committees. See the OMB Glossary of Budget Terms.

 

Office of Management and Budget, Budget of the U.S. Government, Fiscal Year 2018: Analytical Perspectives (May 23, 2017), pp. 88-91.

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