sec. 11. EXEMPT PROGRAMS AND ACTIVITIES.

(a) Designations.—Section 255 of BBEDCA is amended by redesignating subsection (i) as (j) and striking “1998” and inserting in lieu thereof “2010”.

(b) Social Security, Veterans Programs, Net Interest, and Tax Credits.—Subsections (a) through (d) of section 255 of BBEDCA are amended to read as follows:

[…]

(c) Other Programs and Activities, Low-Income Programs, and Economic Recovery Programs.—Subsections (g) and (h) of section 255 of BBEDCA are amended to read as follows:

[…]

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COUNSEL NOTES

Codification

This section is not classified to the U.S. Code as a section because it amended previously codified law. See section 255 of the Balanced Budget and Emergency Deficit Control Act of 1985 for the most recent list of programs exempt from the PAYGO deficit enforcement measures. 

S-PAYGO Section-by-Section (Congressional Record)

The Statutory Pay-As-You-Go Act of 2010 (Pub. L. 111-139) does not have a formal report for it. Senator Kent Conrad (D-ND) inserted a section-by-section in the Congressional Record, which summarized this section:   

Section 11. Exempt Programs and Activities: Section 11 lists mandatory programs and activities that are exempt from sequestration. Exemptions under this Act are consistent with the exemption list that was first created in 1990.That said, the exemption list has been updated to address accounts that have had their account names or numbers changed since 1990, or have been merged or divided. Further, new accounts (since 1990) have been treated the same way that analogous accounts were treated. For example, in the 1990 law the major low-income programs such as Medicaid were exempted from sequestration. The Children’s Health Insurance Program (CHIP), new since 1990, is in the same category as Medicaid and also exempt.

The list has been expanded to clarify the treatment of certain transportation programs, notably federal-aid highways and grants-in-aid for airports. The budgetary treatment of these programs is split. They receive mandatory contract authority through authorization bills, but are treated as discretionary programs because their annual spending is controlled by obligation limitations in appropriations bills. These programs are exempt from sequestration to the extent they are controlled by obligation limitations. Remaining mandatory resources in these programs are subject to sequestration.

Finally, as noted in Section 6, non-exempt accounts are subject to a single, uniform percentage cut if a sequestration is required (except Medicare, where the cut is limited to four percent). Under the 1990 law, if a small sequestration was needed, four programs would have been the first ones sequestered: special milk, vocational rehabilitation state grants, student loans, and foster care / adoption assistance. Because this PAYGO statute eliminated this rule, the first three of those programs are treated as any non-exempt account would be treated. But the foster care account is included in the exempt list on the grounds that it is like other low-income programs that were exempted from sequestration in the 1990 law.

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LEGISLATIVE HISTORY NOTES

PUBLIC LAWS

Pub. L. 111–139, title I, §11, Feb. 12, 2010, 124 Stat. 8, 23  (Statutory Pay-As-You-Go Act of 2010).

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[BCR § 291]