§222. Section 13101 – Sequestration

Budget Enforcement Act of 1990

Section 13101

Subtitle A—Amendments to the Balanced Budget and Emergency Deficit Control Act of 1985 and Related Amendments

PART I—AMENDMENTS TO THE BALANCED BUDGET AND EMERGENCY
DEFICIT CONTROL ACT OF 1985

SEC. 13101. SEQUESTRATION.

(a) Sections 250 Through 254.—Sections 251 (except for subsection (a)(6)(1)) through 254 of part C of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 901 et seq.) are amended to read as follows:

[See subsection (a), as enacted]^[1]

(b) Sections 250: Definitions.—Paragraph (12) of section 257 of such Act (as in effect immediately before the date of enactment of this Act) is redesignated as a new paragraph (21) of section 250(c).

[See subsection (b), as enacted]^[2]

(c) Sections 255: Exempt Programs and Activities.—

(1) Section 255(a) of such Act is amended to read as follows:

“(a) Social Security Benefits and Tier I Railroad Retirement Benefits.—Benefits payable under the old-age, survivors, and disability insurance program established under title H of the Social Security Act, and benefits payable under section 3(a), 3(f)(3), 4(a), or 4(f) of the Railroad Retirement Act of 1974, shall be exempt from reduction under any order issued under this part.”.

(2) Section 255(e) of such Act is amended to read as follows:

“(e) Non-Defense Unobligated Balances.—Unobligated balances of budget authority carried over from prior fiscal years, except balances in the defense category, shall be exempt from reduction under any order issued under this part.”.

(3) Section 255(g)(1)(B) of such Act is amended by inserting after the item relating to Railroad retirement tier II the following:

“Railroad supplemental annuity pension fund (60-8012-0-7-602);”

(4) Section 255 of such Act is amended by inserting at the end the following:

“(h) Optional Exemption of Military Personnel.—

“(1) The President may, with respect to any military personnel account, exempt that account from sequestration or provide for a lower uniform percentage reduction than would otherwise apply.

“(2) The President may not use the authority provided by paragraph (1) unless he notifies the Congress of the manner in which such authority will be exercised on or before the initial snapshot date for the budget year.”.

(d) Sections 256: Exemptions, Limitations, and Special Rules.—

(1) Section 256(a) of such Act is amended to read, as follows:

“(a) Automatic Spending Increases.—Automatic spending increases are increases in outlays due to changes in indexes in the following programs:

“(1) National Wool Act;

“(2) Special milk program; and

“(3) Vocational rehabilitation basic State grants.

In those programs all amounts other than the automatic spending increases shall be exempt from reduction under any order issued under this part.”.

(2) Section 256 of such Act is amended by redesignating subsection (b) as subsection (h), subsection (c) as subsection (b), subsection (e) as subsection (f), subsection (f) as subsection (c), subsection (h) as subsection (i), and subsection (k) as subsection (e), by repealing subsections (i) and (l), and by inserting at the end the following:

[See subsection (d), as enacted].^[3]

(3) Section 256 of such Act Is amended by striking “section 252” each place it appears and by inserting “section 254”.

(4) Section 256(c) (as redesignated) of such Act is amended by inserting after the first sentence the following: “No State’s matching payments from the Federal Government for foster care maintenance payments or for adoption assistance maintenance payments may be reduced by a percentage exceeding the applicable domestic sequestration percentage.”.

(5) Section 256(d)(1) of such Act is amended to read as follows:

“(1) Calculations of reduction in individual payment amounts.—To achieve the total percentage reduction in those pro. grams required by sections 252 and 253, and notwithstanding section 710 of the Social Security Act, OMB shall determine, and the applicable Presidential order under section 254 shall implement, the percentage reduction that shall apply to payments under the health insurance programs under title XVIII of the Social Security Act for services furnished after the order is issued, such that the reduction made in payments under that order shall achieve the required total percentage reduction in those payments for that fiscal year as determined on a 12-month basis.”.

(6) Section 256(d)(2)(C) of such Act is repealed.

(e) The Baseline.—(1) Section 257 of such Act is amended to read as follows:

[See subsection (e), as enacted.]^[4]

(2) Section 251(a)(6) (I) of such Act (as in effect immediately before the date of enactment of this Act) is redesignated as section 257(e) of such Act. Section 257(e) is amended by striking “assuming, for purposes of this paragraph and subparagraph (A)(i) of paragraph (3), that the” and inserting “The”.

(f) Such Act is amended by inserting after section 257 the following:

[See subsection (f), as enacted.].^[5]

(g) Such Act is amended by inserting after section 258A the following:

[See subsection (g), as enacted.]^[6]

[1] Subsection (a) of section 13101 of the Budget Enforcement Act of 1990 (BEA 1990) replaced the then current law sections 251 through 254 by setting out a newly created section 250 and amended sections 251 through 254:

Section 250. Definitions: The new section 250 defines terms used in the BBBEDCA budget process, though these definitions have wider application as well. Before the BEA 1990, definitions were located in section 257. Section 13101 (BEA 1990) transferred, and amended in part, those definitions to this new section 250: The section retained or revised the definitions of “outlays,” “budget authority,” “maximum deficit amount,” “real economic growth,” “sequester,” “sequestration,” “account,” and “prepayment of a loan.” It added new definitions for “breach,” “category,” “baseline,” “budgetary resources,” “discretionary appropriations,” “direct spending,” “current,” “budget year,” “current year,” “outyear,” “OMB,” and “CBO,” but struck definitions for “automatic spending increase,” “concurrent resolution on the budget,” “deficit,” sequesterable resources,” “outlay rate,” and “combined outlay rate.”

See the Counsel Notes of section 250 of BBEDCA for additional information about the definitions and the interactions between these sections 250 and 257.

Section 251. Enforcing Discretionary Spending Limits: Section 13101(a) amended section 251 BBEDCA by establishing limits on discretionary spending provided in the annual appropriations process for each of fiscal years 1991 through 1995, and enforced these through a mechanism to require across-the-board cuts within any category to make up for any overages (“sequestration”).

See the Counsel Notes of section 250 of BBEDCA and pages 1151-1160 of the Joint Explanatory Statement of Managers of the Conference Report on title X of the Omnibus Budget Reconciliation Act of 1990 for additional information.

Section 252. Enforcing Pay-As-You-Go: Section 13101(a) also amended section 252 of BBEDCA by adding a pay-as-you-go mechanism to ensure that any new entitlement or receipt legislation would not increase the deficit.

See the Counsel Notes of section 252 of BBEDCA and pages 1151-1160 of the Joint Explanatory Statement of Managers of the Conference Report on title X of the Omnibus Budget Reconciliation Act of 1990 for additional information.

Section 253. Enforcing Maximum Deficit Amounts: Section 13101(a) also amended section 253 of BBEDCA which sets out the enforcement mechanism of “maximum deficit amounts”. The BEA 1990 extended the then existing mechanism through fiscal year 1995, but with new procedures to allow adjustment for revised economic and technical estimates, in 1994 and 1995 at the President’s option.

See the Counsel Notes of Section 253 of BBEDCA and pages 1151-1160 of the Joint Explanatory Statement of Managers of the Conference Report on title X of the Omnibus Budget Reconciliation Act of 1990 for additional information.

Section 254. Sequestration Reports: This section of BBEDCA was revised by section 13101 by modifying the sequestration order process. As it states in the Joint Explanatory Statement of Managers on the conference report on the enacted bill (H. Rept. 101-954):

As soon as possible after Congress completes action on a discretionary spending, direct spending, or revenue bill, and after consultation with the budget committees, the Congressional Budget Office (CBO) is to provide the Office of Management and Budget (OMB) with an estimate of the bill’s effect on spending and revenues. Within 5 days after the bill’s enactment, OMB transmits to the Congress its own estimate of the bill’s budgetary impact. OMB is required to explain differences between its estimates and those of CBO. OMB is also required to use its bill estimates in subsequent sequestration reports.

It also added a process for “within-session sequestration” so that if after the final sequestration report for a session of Congress, but before July 1, Congress enacts an appropriation bill causing a discretionary spending breach, additional sequestration reports and a Presidential sequestration order to cure the breach is required.

See the Counsel Notes of section 254 of BBEDCA and pages 1151-1160 of the Joint Explanatory Statement of Managers of the Conference Report on title X of the Omnibus Budget Reconciliation Act of 1990 for additional information.

[2] Subsection (b) of section 13101 specifically transfers paragraph (12) of section 257 (BBEDCA) to the newly created paragraph (12) of section 250 (BBEDCA), as it was then in effect. This paragraph defines the sale of an asset and the term “prepayment of a loan”. See Note #1196 on page 448 of the Budget Process Law Annotated (1993), which states:

Section 13101(b) of the Budget Enforcement Act [of 1990] transferred this definition without change from section 257(12) of [the Balanced Budget and Emergency Deficit Control Act of 1985] as it existed immediately before enactment of the Budget Enforcement Act. This drafters of the Budget Enforcement Act [of 1990] used this circuitous route so as to assure certain Senators that the Act made no change in the treatment of asset sales; indeed, the Act doe’s not use the term “asset sale.”

[3] Subsection (d)(2) of section 13101 inserted a new subsection (k) into section 256 of BBEDCA, which related to special rules for the”Job Opportunity and Basic Skills” Training Program (JOBS) portion of AFDC, providing that any sequestration order accomplish full amount of any required sequestration of job opportunities and basic skills training program, and setting forth a new allotment formula. Pub. L. 104–193 later struck out this new subsection (k).

See also Note #1606 for section 256 (BBEDCA) on page 595 of the Budget Process Law Annotated (1993), which explains how the drafting of the new subsection (k) was intended to work:

Section 13101(d)(2) of the Budget Enforcement Act added what is now subsection (k) (and, so as to put the subsections of section 255 in the order that they take would effect [sic], moved what used to be subsection (k) to be what is now subsection (e)).

[4] Subsection (e) of section 13101 set forth section 257 of BBEDCA, which defines the terms by which the “baseline” is constructed by both the Office of Management and Budget and the Congressional Budget Office. See the Counsel Notes and Legislative History of section 257 for more information.

[5] Subsection (f) of section 13101 added section 258 and section 258A to follow the amended section 257. The existing section 258, (modification of presidential order) was clearly intended to be repealed but was not. This resulted in the creation of two sections numbered “258” along with Sections 258A, 258B, and 258C. This error was indicated in the Compilation of the Budget Laws and Rules from 1996, with the effected sections are found on pages 119 through 131 of that compilation.

See the Counsel Notes and Legislative History of section 258 and section 258A or more information.

[6] Subsection (g) of section 13101 added section 258B and section 258C to follow the new established section 258A. See the Counsel Notes and Legislative History of section 258B and section 258C for more information.

LEGISLATIVE HISTORY NOTES

Public Laws

Pub. L. 99–177, Dec. 12, 1985, 99 Stat. 1063 (BBEDCA). Section 13101 amended the Balanced Budget and Emergency Deficit Control Act of 1985, adding new sections 250, 258A, 258B, and 258C, and revising existing sections 251 through 258.

Pub. L. 101–508, title XIII, §13101, Nov. 5, 1990, 104 Stat. 1388–574. (Budget Enforcement Act of 1990).

Codification

This section was not classified itself to the U.S. Code since it amended existing title II Code sections.

Section 13001 (BEA 1990)

Section 13111 (BEA 1990)

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