[Analytical Perspectives]
[Budget Enforcement Act Preview Report]
[14. Review of Direct Spending and Receipts]
[From the U.S. Government Publishing Office, www.gpo.gov]
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BUDGET ENFORCEMENT ACT
PREVIEW REPORT
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14. PREVIEW REPORT
The Budget Enforcement Act (BEA) of 1997, which was enacted as part of
the Balanced Budget Act (BBA) of 1997, extended and modified the
enforcement requirements of the Budget Enforcement Act of 1990. The BEA
of 1997 established new limits, or ``caps,'' for discretionary spending
through 2002. It also eliminated existing pay-as-you-go balances and
extended the requirement that legislation affecting direct spending or
receipts not increase the deficit. An across-the-board reduction of non-
exempt spending, known as ``sequestration,'' enforces compliance with
these constraints. The BEA requires that OMB issue a report on the
impact of each piece of legislation seven days after enactment of a
bill. Three additional reports throughout the year are required on the
overall status of discretionary and pay-as-you-go legislation.
This Preview Report, the first of the three required overall status
reports, provides the status of discretionary appropriations and pay-as-
you-go legislation based on laws enacted as of the end of the first
session of the 105th Congress. In addition, it explains the differences
between the OMB and CBO estimates of the discretionary caps.
The OMB estimates use the economic and technical assumptions
underlying the President's budget submission, as required by the BEA.
The OMB Update Report that will be issued in August, and the Final
Report that will be issued after the end of the Congressional session,
must also use these economic and technical assumptions. Estimates in the
Update Report and the Final Report will only be revised to reflect laws
enacted after the Preview Report.
Discretionary Sequestration Report
Discretionary programs are funded annually through the appropriations
process. The scorekeeping guidelines accompanying the Budget Enforcement
Act of 1990, as amended by the Omnibus Budget and Reconciliation Act of
1993, and by the Budget Enforcement Act of 1997, identify accounts with
discretionary resources. The BEA of 1997 limits budget authority and
outlays available for discretionary programs each year through 2002. For
1998 and 1999, the BEA of 1997 establishes three separate categories of
discretionary spending: defense, non-defense (excluding violent crime
reduction spending), and violent crime reduction spending. For 2000, the
law divides discretionary spending into two categories: violent crime
reduction spending and all other discretionary spending. For 2001 and
2002, there is a single category for all discretionary spending. OMB
monitors compliance with the discretionary spending limits throughout
the fiscal year. Appropriations that cause a breach in the budget
authority or outlay caps trigger a sequester to eliminate that breach.
The Administration is proposing that the Congress include in the 1999
Budget Resolution a total of $75.5 billion in 1999 for three deficit
neutral ``Reserve Fund'' mechanisms for the: Research Fund for America,
Environmental Resources Fund for America, and Transportation Fund for
America. This proposal is discussed in the ``Funds for America'' section
of this report.
Adjustments to discretionary limits.--The BEA permits certain
adjustments to the discretionary limits--also known as caps. On November
24, 1997, the Office of Management and Budget submitted the Final
Sequestration Report for 1998 required by the BEA. This report described
adjustments permitted by the BEA as of the time the report was issued.
The caps resulting from these adjustments are the starting points for
this Preview Report. Included in this report are cap adjustments for
changes in concepts and definitions and estimates of emergency spending,
which the BEA permits to be made at this time. Before enactment of the
BEA of 1997, section 251(b)(1) authorized adjustments for changes in
inflation estimates from those in the House Conference Report on the
1994 Budget Resolution. The BEA of 1997 no longer provides for such an
adjustment. Table 14-1 summarizes changes to the caps since 1990.
Several cap adjustments represent changes in concepts and definitions
resulting from legislative action that reclassified certain programs.
These actions shifted programs between the mandatory (i.e., direct
spending) category and the discretionary category. For instance, several
1998 appropriations bills included provisions that modified mandatory
programs. Since funding controlled by appropriations action is
considered discretionary, the effects of these provisions are recorded
as adjustments to the caps.
After consultation with the Congress and the Congressional Budget
Office, OMB has also reclassified the Corps of Engineers' Formerly
Utilized Sites Remedial Action Program (FUSRAP) from the energy function
to the national defense function. The non-defense discretionary spending
limits have been adjusted downward, and the defense discretionary
spending limits have been adjusted upward to accommodate this
classification change.
Another cap adjustment for changes in concepts and definitions is for
the redefinition of obligation limitations for certain transportation
programs as discretionary budget authority. This conceptual change is
explained in the ``Transportation Obligation Limitations Defined as
Discretionary Budget Authority'' section of this report.
Table 14-2 shows the impact on the discretionary spending limits of
the adjustments being made in this Preview Report.
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Table 14-1. HISTORICAL SUMMARY OF CHANGES TO DISCRETIONARY SPENDING LIMITS
(In billions of dollars)
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1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
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TOTAL DISCRETIONARY
Statutory Caps as set in OBRA 1990 BA 491.7 503.4 511.5 510.8 517.7 519.1 528.1 530.6 N/A N/A N/A N/A
and OBRA 1993.
OL 514.4 524.9 534.0 534.8 540.8 547.3 547.3 547.9 N/A N/A N/A N/A
Adjustments for changes in concepts BA ...... 7.7 8.2 8.2 8.8 -0.6 -0.4 3.1 N/A N/A N/A N/A
and definiitions.
OL ...... 1.0 2.4 2.3 3.0 -0.5 -2.6 -2.8 N/A N/A N/A N/A
Adjustments for changes in inflation BA ...... -0.5 -5.1 -9.5 -11.8 3.0 2.6 * N/A N/A N/A N/A
OL ...... -0.3 -2.5 -5.8 -8.8 1.8 2.3 0.9 N/A N/A N/A N/A
Adjustments for credit reestimates,
IRS funding, debt forgiveness, IMF,
and CDRs........................... BA 0.2 0.2 13.0 0.6 0.7 0.1 0.2 0.1 N/A N/A N/A N/A
OL 0.3 0.3 0.8 0.8 0.9 0.1 0.3 0.1 N/A N/A N/A N/A
Adjustments for emergency BA 0.9 8.3 4.6 12.2 7.7 5.1 1.6 ...... N/A N/A N/A N/A
requirements.
OL 1.1 1.8 5.4 9.0 10.1 6.4 5.4 1.7 N/A N/A N/A N/A
Adjustment pursuant to Sec. 2003 of BA ...... ...... ...... ...... -15.0 -0.1 -0.1 ...... N/A N/A N/A N/A
P.L. 104-19 \1\.
OL ...... ...... ...... ...... -1.1 -3.5 -2.4 -1.5 N/A N/A N/A N/A
Adjustments for special allowances:
Discretionary new budget authority BA ...... 3.5 2.9 2.9 2.9 ...... ...... ...... N/A N/A N/A N/A
OL ...... 1.4 2.2 2.6 2.7 1.1 0.5 0.1 N/A N/A N/A N/A
Outlay allowance.................. BA ...... ...... ...... ...... ...... ...... ...... ...... N/A N/A N/A N/A
OL 2.6 1.7 0.5 1.0 ...... ...... ...... ...... N/A N/A N/A N/A
-------------------------------------------------------------------------------------------------
Subtotal, adjustments excluding
Desert Shield/Desert Storm..... BA 1.1 19.2 23.6 14.3 -6.7 7.5 4.0 3.1 N/A N/A N/A N/A
OL 3.9 5.9 8.8 10.0 6.8 5.5 3.7 -1.5 N/A N/A N/A N/A
Adjustments for Operation Desert BA 44.2 14.0 0.6 * * ...... ...... ...... N/A N/A N/A N/A
Shield/Desert Storm.
OL 33.3 14.9 7.6 2.8 1.1 ...... ...... ...... N/A N/A N/A N/A
-------------------------------------------------------------------------------------------------
Total adjustments................... BA 45.4 33.2 24.2 14.3 -6.7 7.5 4.0 3.1 N/A N/A N/A N/A
OL 37.2 20.8 16.4 12.8 7.8 5.5 3.7 -1.5 N/A N/A N/A N/A
-------------------------------------------------------------------------------------------------
Spending limits as of 2/6/97 \2\.... BA 537.1 536.6 535.7 525.1 511.0 526.7 532.0 533.8 N/A N/A N/A N/A
OL 551.6 545.7 550.4 547.6 548.6 552.7 551.0 546.4 N/A N/A N/A N/A
Adjustment to reach discretionary
spending limits included in the
1997 Bipartisan Budget Agreement... BA N/A N/A N/A N/A N/A N/A N/A -6.9 N/A N/A N/A N/A
OL N/A N/A N/A N/A N/A N/A N/A 6.9 N/A N/A N/A N/A
Statutory Caps as set in 1997 BA N/A N/A N/A N/A N/A N/A N/A 526.9 533.0 537.2 542.0 551.1
Bipartisan Budget Agreement \3\.
OL N/A N/A N/A N/A N/A N/A N/A 553.3 559.3 564.3 564.4 560.8
Adjustments for changes in BA N/A N/A N/A N/A N/A N/A N/A ...... 28.1 28.7 29.3 29.9
concepts and definitions.
OL N/A N/A N/A N/A N/A N/A N/A ...... -0.3 -0.4 -0.5 -0.5
Adjustments for emergency BA N/A N/A N/A N/A N/A N/A 7.7 0.3 ...... ...... ...... ........
requirements.
OL N/A N/A N/A N/A N/A N/A 2.7 2.6 1.8 0.8 0.1 *
Adjustments for CDRs, Arrearages, BA N/A N/A N/A N/A N/A N/A ...... 0.9 ...... ...... ...... ........
EITC.
OL N/A N/A N/A N/A N/A N/A ...... 0.5 0.1 0.1 0.1 0.1
Adjustments for special
allowances:
Outlays......................... BA N/A N/A N/A N/A N/A N/A ...... ...... ...... ...... ...... ........
OL N/A N/A N/A N/A N/A N/A ...... 1.2 ...... ...... ...... ........
-------------------------------------------------------------------------------------------------
Preview Report spending limits \3\.. BA 537.1 536.6 535.7 525.1 511.0 526.7 539.7 528.0 561.1 565.9 571.3 581.0
OL 551.6 545.7 550.4 547.6 548.6 552.7 553.7 557.6 560.9 564.7 564.1 560.3
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* Less than $50 million.
\1\P.L. 104-19, Emergency Supplemental Appropriations for Additional Disaster Assistance, for Anti-Terrorism Initiatives, for Assistance in the Recovery
from the Tragedy that Occurred at Oklahoma City, and Rescissions Act, 1995, was signed into law on July 27, 1995. Section 2003 of that bill directed
the Director of OMB to make a downward adjustment in the discretionary spending limits for 1995-1998 by the aggregate amount of the estimated
reductions in new budget authority and outlays for discretionary programs resulting from the provisions of the bill, other than emergency
appropriations.
\2\ Reflects combined General Purpose Discretionary and Violent Crime Reduction spending limits.
\3\ Reflects combined Defense Discretionary, Non-defense Discretionary (Excluding Crime), and Violent Crime Reduction spending limits.
[[Page 261]]
Table 14-2. DISCRETIONARY SPENDING LIMITS
(In millions of dollars)
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1998 1999 2000 2001 2002
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NON-DEFENSE DISCRETIONARY SPENDING, EXCLUDING VIOLENT CRIME REDUCTION SPENDING \1\
End-of Session Sequestration Report Non-Defense Discretionary
Spending Limits (Excluding Violent Crime Reduction).................................................. BA 253,500 255,699 257,326 255,785 256,964
OL 285,680 289,678 290,527 287,914 283,249
Adjustments:
Changes in Concepts and Definitions:
Statutory and Other Shifts Between Categories...................................................... BA .......... -249 -270 -283 -293
OL .......... -333 -470 -552 -591
Conversion of Discretionary Transportation Department Obligation
Limitations to Discretionary Budget Authority \2\................................................. BA (27,732) 28,287 28,881 29,516 30,165
OL .......... .......... .......... .......... ..........
Contingent Emergency Appropriations Released........................................................ BA 6 .......... .......... .......... ..........
OL 6 .......... .......... .......... ..........
Reestimate of Multilateral Development Bank (MDB) Arrears........................................... BA .......... .......... .......... .......... ..........
OL .......... -48 .......... .......... ..........
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Subtotal, Adjustments for the Preview Report....................................................... BA 6 28,038 28,611 29,233 29,872
OL 6 -381 -470 -552 -591
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Preview Report Non-Defense Discretionary Spending Limits (Excluding Violent Crime Reduction)........... BA 253,506 283,737 285,937 285,018 286,836
OL 285,686 289,297 290,057 287,362 282,658
================================================================================================================================================================================================
Anticipated Other Adjustments:
Line Item Veto Cancellations........................................................................ BA -49 -1 -1 -1 ..........
OL -19 -22 -5 -4 -2
Budget Proposals:
Repeal of Sec. 642 of the 1998 Treasury and General Government Appropriations bill (CSRS/FERS ``Open
Season'')........................................................................................... BA .......... 110 125 133 140
OL .......... 110 125 133 140
Contingent Emergency Spending Contained in the 1999 Budget.......................................... BA .......... (2,660) .......... .......... ..........
OL .......... .......... .......... .......... ..........
EITC Tax Compliance Initiative....................................................................... BA .......... 143 144 145 146
OL .......... 143 144 145 146
Continuing Disability Reviews (CDRs)................................................................ BA .......... 355 405 405 405
OL .......... 327 401 405 405
MDB Arrearage Payments............................................................................... BA .......... 502 .......... .......... ..........
OL .......... 35 51 70 86
Adoption Incentive Payments......................................................................... BA .......... 20 20 20 20
OL .......... 2 15 20 20
Supplemental Security Income (SSI) Non-disability Redeterminations of Eligibility................... BA .......... 50 .......... .......... ..........
OL .......... 46 4 .......... ..........
Transfer within NDD to Funds for America:
Research Fund for America \2\..................................................................... BA (-27,907) -27,054 -26,026 -26,335 -23,080
OL (-26,439) -23,780 -24,554 -25,099 -21,586
Environmental Resources Fund for America \2\...................................................... BA (-6,647) -5,897 -5,608 -5,644 -5,582
OL (-5,301) -4,725 -5,735 -5,807 -5,671
Transportation Fund for America \2\............................................................... BA (-36,140) -36,739 -35,620 -36,139 -36,671
OL (-33,499) -34,819 -34,290 -35,093 -35,940
Emergency Discretionary Funding from Designated Offsets.............................................. BA .......... 2,424 .......... .......... ..........
OL .......... 2,424 .......... .......... ..........
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Subtotal, Budget Proposals...................................................................... BA -49 -66,087 -66,561 -67,416 -64,622
OL -19 -60,259 -63,844 -65,230 -62,402
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Preview Report Non-defense Discretionary Spending (Excluding Violent Crime Reduction), Including
Further Adjustments................................................................................... BA 253,457 217,650 219,376 217,602 222,214
OL 285,667 229,038 226,213 222,132 220,256
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VIOLENT CRIME REDUCTION SPENDING \1\
End-of Session Sequestration Report Violent Crime Reduction Spending Limits............................ BA 5,500 5,800 4,500 4,400 4,500
OL 4,833 4,953 5,554 5,981 4,530
Adjustments:
No Adjustments....................................................................................... BA .......... .......... .......... .......... ..........
OL .......... .......... .......... .......... ..........
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Preview Report Violent Crime Reduction Spending Limits................................................. BA 5,500 5,800 4,500 4,400 4,500
OL 4,833 4,953 5,554 5,981 4,530
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DEFENSE DISCRETIONARY SPENDING \1\
End-of Session Defense Discretionary Spending Limits................................................... BA 269,000 271,500 275,367 281,847 289,610
OL 267,124 266,566 269,011 270,670 273,100
Adjustments:
Changes in Concepts and Definitions:
Statutory and Other Shifts Between Categories...................................................... BA .......... 70 62 61 59
OL .......... 69 61 60 58
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Subtotal, Adjustments for the Preview Report..................................................... BA .......... 70 62 61 59
OL .......... 69 61 60 58
-----------------------------------------------------------
Preview Report Defense Discretionary Spending Limits................................................... BA 269,000 271,570 275,429 281,908 289,669
OL 267,124 266,635 269,072 270,730 273,158
================================================================================================================================================================================================
Anticipated Other Adjustments:
Line Item Veto Cancellations......................................................................... BA -431 .......... .......... .......... ..........
OL -95 -153 -94 -51 -18
Budget Proposals:
Repeal of Sec. 642 of the 1998 Treasury and General Government Appropriations bill (CSRS/FERS ``Open
Season'')........................................................................................... BA .......... 73 84 88 93
OL .......... 73 84 88 93
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Subtotal, Anticipated Other Adjustments and Adjustments for 1999 Budget Proposals.................. BA -431 73 84 88 93
OL -95 -80 -10 37 75
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Preview Report Defense Discretionary Spending Limits, Including Further Adjustments............ BA 268,569 271,643 275,513 281,996 289,762
OL 267,029 266,555 269,062 270,767 273,233
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RESEARCH FUND FOR AMERICA
Research Fund for America Spending \2\................................................................. BA (27,907) 31,102 32,222 33,715 35,523
OL (26,439) 27,828 30,750 32,479 34,029
Designated Offsets..................................................................................... BA .......... -4,048 -6,196 -7,380 -12,443
OL .......... -4,048 -6,196 -7,380 -12,443
Transfer within NDD to Research Fund for America (non-add, included above)............................. BA (-27,907) (-27,054) (-26,026) (-26,335) (-23,080)
OL (-26,439) (-23,780) (-24,554) (-25,099) (-21,586)
Net Impact on Deficit/Surplus.......................................................................... BA .......... .......... .......... .......... ..........
OL .......... .......... .......... .......... ..........
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ENVIRONMENTAL RESOURCES FUND FOR AMERICA
Environmental Resources Fund for America Spending \2\.................................................. BA (6,722) 7,672 7,015 7,054 7,003
OL (5,376) 6,500 7,142 7,217 7,092
Designated Offsets..................................................................................... BA (-75) -1,775 -1,407 -1,410 -1,421
OL (-75) -1,775 -1,407 -1,410 -1,421
Transfer within NDD to Environmental Resources Fund for America (non-add, included above).............. BA (-6,647) (-5,897) (-5,608) (-5,644) (-5,582)
OL (-5,301) (-4,725) (-5,735) (-5,807) (-5,671)
Net Impact on Deficit/Surplus.......................................................................... BA .......... .......... .......... .......... ..........
OL .......... .......... .......... .......... ..........
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TRANSPORTATION FUND FOR AMERICA
Transportation Fund for America Spending \2\........................................................... BA (36,140) 36,739 37,320 37,839 38,371
OL (33,499) 34,819 35,990 36,793 37,640
Designated Offsets..................................................................................... BA .......... .......... -1,700 -1,700 -1,700
OL .......... .......... -1,700 -1,700 -1,700
Transfer within NDD to Transportation Fund for America (non-add, included above)....................... BA (-36,140) (-36,739) (-35,620) (-36,139) (-36,671)
OL (-33,499) (-34,819) (-34,290) (-35,093) (-35,940)
Net Impact on Deficit/Surplus.......................................................................... BA .......... .......... .......... .......... ..........
OL .......... .......... .......... .......... ..........
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TOTAL DISCRETIONARY SPENDING \1\
Preview Report Total Discretionary Spending, Including Funds for America............................... BA 527,526 570,606 575,946 582,606 597,373
OL 557,529 569,693 574,711 575,369 576,780
Designated Offsets for:
Funds for America.................................................................................... BA .......... -5,823 -9,303 -10,490 -15,564
OL .......... -5,823 -9,303 -10,490 -15,564
Emergency Discretionary.............................................................................. BA .......... -2,424 .......... .......... ..........
OL .......... -2,424 .......... .......... ..........
Proposed Adjustments................................................................................... BA 480 -1,252 -777 -790 -804
OL 114 -561 -725 -806 -870
Preview Report Total Discretionary Spending Limits..................................................... BA 528,006 561,107 565,866 571,326 581,005
OL 557,643 560,885 564,683 564,073 560,346
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NOTE: Detail may not add to total due to rounding
\1\ Amounts in Table 14-2 are split by spending category for comparability purposes. The Balanced Budget Agreement of 1997 included: separate spending limits for Non-Defense Discretionary
(Excluding Violent Crime Reduction) Spending, Violent Crime Reduction spending limits for Discretionary (Excluding Violent Crime Reduction) Spending, Violent Crime Reduction Spending, and
Defense Discretionary Spending for 1998 and 1999; separate spending limits for Discretionary (Excluding Violent Crime Reduction) Spending and Violent Crime Reduction Spending for 2000; and,
a single spending limit for Total Discretionary Spending for 2001 and 2002.
\2\ 1998 adjustment displayed for comparability purposes (non-add).
Adjustments to the Limits That Would be Made Under Existing Adjustment
Authority:
Line Item Veto Cancellations.--Pursuant to Section 1024(b)
of the Line Item Veto Act, P.L. 104-130, the discretionary
spending caps must be reduced by the amount of any
cancellation of discretionary budget authority and outlays
that is not disapproved by the Congress. The caps must be
adjusted in the sequester report following ten calendar days
(excluding Sundays) after the expiration of the time period
(30 days when the Congress is in session) for expedited
congressional consideration of a bill to overturn a veto. The
estimates in Table 14-2 represents line item veto cancellation
of items in the 1998 appropriations bills, assuming that no
disapproval bills are enacted into law.
Repeal of Sec. 642 of the 1998 Treasury and General
Government Appropriations Act.--Section 642 provided for an
``Open Season'' in which Federal employees could switch from
the Civil Service Retirement System (CSRS) to the Federal
Employees Retirement System (FERS). The budget proposes to
repeal the provision. (The provision was canceled under the
Line Item Veto Act, but reinstated by Court Order.) OMB
estimates the provision would result in reductions in receipts
from employee contributions to the Civil Service Retirement
and Disability Fund (CSRDF). Because this requirement was
enacted in an appropriations act, the provision results in a
change to the discretionary caps to reflect the loss of
receipts. The proposed repeal of the provision would eliminate
the reduction in the cap.
Contingent Emergency Appropriations.--The budget contains
requests for appropriations for the Federal Emergency
Management Agency's Disaster relief program, Health and Human
Services' Low-Income Home Energy Assistance Program, and the
Agriculture Department's Wildland firefighting program.
Language is included in the budget requesting that the
Congress designate these appropriations as ``emergency
requirements.'' The funds could only be obligated if the
President were to submit a subsequent formal budget request
that included the President's ``emergency designation;''
hence, the name ``contingent emergency appropriation.''
Earned Income Tax Credit (EITC) Compliance Initiative.--The
budget contains funding for EITC compliance initiatives,
including the detection and enforcement of EITC eligibility in
order to reduce EITC overpayments. The 1998 Treasury and
General Government bill provided $138 million for this
initiative.
Continuing Disability Reviews.--The budget includes funding
for additional continuing disability reviews (CDRs) under the
heading ``Limitation on Administrative Expenses'' for the
Social Security Administration. CDRs are conducted to verify
that recipients of Social Security disability insurance
benefits and Supplemental Security Income benefits for persons
with disabilities continue to meet the definition of
disability. The 1998 Labor, Health and Human Services,
Education and Related Agencies appropriations bill provided
$290 million for CDRs.
Allowance for Multilateral Development Bank International
Arrearages funding.--The BBA limited the amount of the cap
adjustment for funding for arrearages for international
organizations, international peacekeeping, and multilateral
development banks to $1.884 billion for 1998 through 2000. A
total of $460 million was provided for international arrearage
payments in the 1998 appropriations bills.
Adoption Incentive Payments.--The Adoption and Safe Families
Act of 1997 authorizes bonus payments to States that increase
the number of adoptions from the foster care system. It
provides for
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a discretionary cap adjustment for appropriations up to $20
million annually in each of the years 1999 through 2003. It is
assumed that the cost of adoption bonuses will be offset by
reductions in mandatory foster care costs.
Other Adjustments:
Supplemental Security Income (SSI) Non-disability
Redeterminations of Eligibility.--The budget proposes a cap
adjustment of $50 million in 1999 only to conduct
approximately 268,000 additional non-disability
redeterminations of eligibility in the Supplemental Security
Income program. This effort would result in estimated program
savings of $97 million in 1999 and $216 million from 1999 to
2003.
Funds for America Proposals.--The budget includes funding
for three new funds - the Research Fund for America, the
Environmental Resources Fund for America and the
Transportation Fund for America. This proposal is discussed in
more detail in the ``Budget Policy Reforms'' section of this
report.
The actual adjustments to the discretionary spending caps to be
included in subsequent sequester reports cannot be determined until all
appropriations have been enacted. Table 14-3 compares the President's
discretionary proposals to the proposed caps for 1998 through 2002. The
estimates for 1998 are based on BEA scoring of enacted appropriations
bills and have been adjusted for a subsequent emergency release.
Table 14-3. BUDGET PROPOSALS
(in millions of dollars)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1998 1999 2000 2001 2002
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Defense Discretionary Spending \1\
Estimated Limits....................................................................................... BA 269,000 271,643 N/A N/A N/A
OL 267,124 266,555 N/A N/A N/A
President's Proposals \2\.............................................................................. BA 268,491 271,643 N/A N/A N/A
OL 262,391 266,555 N/A N/A N/A
President's Proposals Compared to the Limits........................................................... BA -509 .......... N/A N/A N/A
OL -4,733 .......... N/A N/A N/A
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Non-defense Discretionary Spending, Excluding Violent Crime Reduction Spending \1\
Estimated Limits....................................................................................... BA 253,506 217,650 N/A N/A N/A
OL 285,686 229,038 N/A N/A N/A
President's Proposals \2\.............................................................................. BA 252,124 217,650 N/A N/A N/A
OL 284,833 225,582 N/A N/A N/A
President's Proposals Compared to the Limits........................................................... BA -1,382 .......... N/A N/A N/A
OL -853 -3,456 N/A N/A N/A
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Research Fund for America
Research Fund for America Spending \3\................................................................. BA (27,907) 31,102 32,222 33,715 35,523
OL (26,439) 27,828 30,750 32,479 34,029
Designated Offsets (non-add)........................................................................... BA .......... (-4,048) (-6,196) (-7,380) (-12,443)
OL .......... (-4,048) (-6,196) (-7,380) (-12,443)
Transfer within NDD to Research Fund for America (non-add)............................................. BA (-27,907) (-27,054 (-26,026) (-26,335) (-23,080)
OL (-26,439) (-23,780) (-24,554) (-25,099) (-21,586)
Net Impact on Deficit/Surplus.......................................................................... BA .......... .......... .......... .......... ..........
OL .......... .......... .......... .......... ..........
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Environmental Resources Fund for America
Environmental Resources Fund for America Spending \3\.................................................. BA (6,722) 7,672 7,015 7,054 7,003
OL (5,376) 6,500 7,142 7,217 7,092
Designated Offsets (non-add)........................................................................... BA (-75) (-1,775) (-1,407) (-1,410) (-1,421)
OL (-75) (-1,775) (-1,407) (-1,410) (-1,421)
Transfer within NDD to Environmental Resources Fund for America (non-add).............................. BA (-6,647) (-5,897) (-5,608) (-5,644) (-5,582)
OL (-5,301) (-4,725) (-5,735) (-5,807) (-5,671)
Net Impact on Deficit/Surplus.......................................................................... BA .......... .......... .......... .......... ..........
OL .......... .......... .......... .......... ..........
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Transportation Fund for America
Transportation Fund for America Spending \3\........................................................... BA (36,140) 36,739 37,320 37,839 38,371
OL (33,499) 34,819 35,990 36,793 37,640
Designated Offsets (non-add)........................................................................... BA .......... .......... (-1,700) (-1,700) (-1,700)
OL .......... .......... (-1,700) (-1,700) (-1,700)
Transfer within NDD to Transportation Fund for America (non-add)....................................... BA (-36,140) (-36,739) (-35,620) (-36,139) (-36,671)
OL (-33,499) (-34,819) (-34,290) (-35,093) (-35,940)
Net Impact on Deficit/Surplus.......................................................................... BA .......... .......... .......... .......... ..........
OL .......... .......... .......... .......... ..........
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 265]]
Violent Crime Reduction Spending \1\
Estimated Limits....................................................................................... BA 5,500 5,800 4,500 N/A N/A
OL 4,833 4,953 5,554 N/A N/A
President's Proposals.................................................................................. BA 5,500 5,800 4,500 N/A N/A
OL 4,833 4,953 4,895 N/A N/A
President's Proposals Compared to the Limits........................................................... BA .......... .......... .......... N/A N/A
OL .......... .......... -659 N/A N/A
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Discretionary Spending, Excluding Violent Crime Reduction Spending \1\
Estimated Limits....................................................................................... BA N/A N/A 494,889 N/A N/A
OL N/A N/A 495,275 N/A N/A
President's Proposals.................................................................................. BA N/A N/A 493,981 N/A N/A
OL N/A N/A 495,062 N/A N/A
President's Proposals Compared to the Limits........................................................... BA N/A N/A -908 N/A N/A
OL N/A N/A -213 N/A N/A
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Discretionary Spending, Excluding Funds for America \1\
Estimated Limits....................................................................................... BA N/A N/A N/A 503,998 516,476
OL N/A N/A N/A 498,880 498,019
President's Proposals.................................................................................. BA N/A N/A N/A 503,878 507,683
OL N/A N/A N/A 498,658 498,019
President's Proposals Compared to the Limits........................................................... BA N/A N/A N/A -120 -8,793
OL N/A N/A N/A -222 ..........
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Discretionary Spending--All Categories
Estimated Limits Plus Funds for America Spending....................................................... BA 528,006 570,606 575,946 582,606 597,373
OL 557,643 569,693 574,711 575,369 576,780
President's Proposals \4\.............................................................................. BA 526,115 570,606 575,038 582,486 588,580
OL 552,057 566,237 573,839 575,147 576,780
President's Proposals Compared to the Limits Plus Funds for America Spending........................... BA -1,891 .......... -908 -120 -8,793
OL -5,586 -3,456 -872 -222 ..........
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
MEMORANDUM:
Total Non-defense Discretionary Spending
Estimated Limits Plus Funds for America Spending....................................................... BA 259,006 298,963 298,989 297,820 309,283
OL 290,519 303,138 305,008 304,599 303,646
President's Proposals.................................................................................. BA 257,624 298,963 298,081 297,700 300,490
OL 289,666 299,682 304,136 304,377 303,646
President's Proposals Compared to the Limits Plus Funds for America Spending........................... BA -1,382 .......... -908 -120 -8,793
OL -853 -3,456 -872 -222 ..........
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ The Balanced Budget Agreement of 1997 included: Separate spending limits for Non-defense Discretionary (Excluding Violent Crime Reduction) Spending, Violent Crime Reduction Spending, and
Defense Discretionary Spending for 1998 and 1999; separate spending limits for Discretionary (Excluding Violent Crime Reduction) Spending, Violent Crime Reduction Spending, and Defense
Discretionary Spending for 1998 and 1999; separate spending limits for Discretionary (Excluding Violent Crime Reduction) Spending and Violent Crime Reduction spending for 2000; and a single
spending limit for total discretionary spending in 2001 and 2002.
\2\ Includes $3,250 million in budget authority and outlays as an allowance for emergencies, including unforeseen defense and non-defense costs, natural disasters, and unanticipated non-
emergency expenses of the year 2000 computer conversion.
\3\ 1998 adjustment displayed for comparability purposes (non-add).
\4\ 1999 budget authority and outlays exclude mandatory offsets of $2,424 thousand.
Sequester determinations.--Seven days after enactment of an
appropriations act, OMB must submit a report to Congress estimating the
budget authority and outlays provided by the legislation for the current
year and the budget year. These estimates must be based on the economic
and technical assumptions used in the most recent President's budget. In
addition, the report must include CBO estimates and explain the
differences between the OMB and CBO estimates. The OMB estimates are
used in all subsequent calculations to determine whether a breach of any
of the budget authority or outlay caps has occurred and whether a
sequester is required.
Compliance with the discretionary caps is monitored throughout the
year. The first determination of whether a sequester is necessary for a
given fiscal year occurs when OMB issues its Final Sequestration Report
after Congress adjourns to end a session--near the beginning of the
fiscal year. The monitoring process continues when Congress reconvenes
for a new session. Appropriations for the fiscal year in progress that
cause a breach in the caps would, if enacted before July 1st, trigger a
sequester. If such a breach is estimated, a ``within-session''
sequestration report and Presidential sequestration order would be
issued. For a breach that results from appropriations enacted on or
after July
[[Page 266]]
1st, reductions necessary to eliminate the breach are not applied to the
budgetary resources available in the current year. Instead, the
corresponding caps for the following fiscal year are reduced by the
amount of the breach. A within-session sequester can only be caused by
newly enacted appropriations. Reestimates of budget authority and
outlays for already enacted funds cannot trigger a sequester.
OMB reported in its Final Sequestration Report to the President and
the Congress that discretionary appropriations enacted for 1998 were
within the prescribed spending limits.
Sequester calculations.--If either the discretionary budget authority
or outlay caps are exceeded, an across-the-board reduction of
sequestrable budgetary resources is required to eliminate the breach.
The percentage reduction for certain special-rule programs is limited to
two percent. Once this limit is reached, the uniform percentage
reduction for all other discretionary sequestrable resources is
increased to a level sufficient to achieve the required reduction. If
both the budget authority and outlay caps are exceeded, a sequester
would first be calculated to eliminate the budget authority breach. If
estimated outlays remain above the cap, after applying the available
outlay allowance, further reductions in budgetary resources to eliminate
the outlay breach would be required.
Comparison between OMB and CBO discretionary limits.--Section
254(d)(5) of the BEA requires an explanation of differences between OMB
and CBO estimates for the discretionary spending limits. Table 14-4
compares OMB and CBO limits for 1998 through 2002. This table excludes
Presidential proposals.
CBO and OMB also differed in their estimates of the effect of
discretionary changes made to mandatory accounts in 1998 appropriations
bills, and thus, the effect of those changes in the 1999 discretionary
spending caps. The largest difference in this category is due to the
difference between OMB and CBO scoring for the CSRS/FERS ``open season''
provision that was contained in the 1998 Treasury and General Government
appropriations bill.
In addition, CBO did not include the functional reclassification of
the FUSRAP program in their report. CBO has indicated that it will make
this adjustment at a later date. Finally, CBO did not make an adjustment
for the conversion of Transportation Department obligation limitations
to discretionary budget authority. OMB adjusted the 1999 through 2002
caps upward for this conceptual change.
Pay-As-You-Go Sequestration Report
This section of the Preview Report discusses the enforcement
procedures that apply to direct spending and receipts. The BEA defines
direct spending as budget authority provided by law other than
appropriations acts, entitlement authority, and the food stamp program.
Social Security and the Postal Service are not subject to pay-as-you-go
enforcement. Legislation specifically designated as an emergency
requirement and legislation fully funding the Government's commitment to
protect insured deposits are also exempt from pay-as-you-go enforcement.
The BEA of 1997 requires that direct spending and receipts legislation
should not increase the deficit in the current year, the budget year,
and the following four fiscal years. If legislation does increase the
deficit for the budget year, and if it is not fully offset by other
legislative savings, the increase must be offset by sequestration of
non-exempt direct spending programs. For this Preview Report, the pay-
as-you-go calculation to determine if a sequester is required for FY
1999 also includes the FY 1998 deficit impacts of legislation for which
the pay-as-you-go report was issued after OMB's Final Sequester Report
was issued in November.
Sequester determinations.--Within seven days after enactment of direct
spending or receipts legislation, OMB is required to submit a report to
Congress estimating the change in outlays or receipts for each fiscal
year through 2003 resulting from that legislation. The estimates must
use the economic and technical assumptions underlying the most recent
President's budget. These OMB estimates are used to determine whether
the pay-as-you-go requirements have been met.
The cumulative nature of the pay-as-you-go process requires
maintaining a ``scorecard'' that shows, beginning with the 102nd
Congress, the deficit impact of enacted direct spending and receipts
legislation and required pay-as-you-go sequesters, if any. This Report
shows how these past actions affect the upcoming fiscal year.
As of December 31, 1997, OMB had issued 437 reports on legislation
affecting direct spending and receipts. Most of these (82 percent)
either had no effect on the deficit or changed it by less than $10
million in each year. Less than ten percent of the pay-as-you-go
legislation had a deficit impact greater than $50 million in any one
year.
Table 14-5 shows OMB and CBO estimates for legislation enacted through
December 16, 1997. The sum of the 1998 impact of pay-as-you-go
legislation scored after OMB's Final Sequester Report and the 1999
impact of all legislation enacted since the balances were eliminated is
savings of $142 million. Therefore, no sequester is projected at this
time.
[[Page 267]]
Table 14-4. COMPARISON OF OMB AND CBO DISCRETIONARY SPENDING LIMITS
(In millions of dollars)
----------------------------------------------------------------------------------------------------------------
1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
Non-defense Discretionary, Excluding Violent Crime
CBO Preview Report limits:
BA..................................................... 253,506 255,704 N/A N/A N/A
OL..................................................... 285,686 289,594 N/A N/A N/A
OMB Preview Report limits:
BA..................................................... 253,506 283,737 N/A N/A N/A
OL..................................................... 285,686 289,297 N/A N/A N/A
Difference:
BA..................................................... ......... 28,033 N/A N/A N/A
OL..................................................... ......... -297 N/A N/A N/A
Violent Crime Reduction
CBO Preview Report limits:
BA..................................................... 5,500 5,800 4,500 N/A N/A
OL..................................................... 4,833 4,953 5,554 N/A N/A
OMB Preview Report limits:
BA..................................................... 5,500 5,800 4,500 N/A N/A
OL..................................................... 4,833 4,953 5,554 N/A N/A
Difference:
BA..................................................... ......... ......... ......... N/A N/A
OL..................................................... ......... ......... ......... N/A N/A
Defense Discretionary
CBO Preview Report limits:
BA..................................................... 269,000 271,502 N/A N/A N/A
OL..................................................... 267,124 266,568 N/A N/A N/A
OMB Preview Report limits:
BA..................................................... 269,000 271,570 N/A N/A N/A
OL..................................................... 267,124 266,635 N/A N/A N/A
Difference:
BA..................................................... ......... 68 N/A N/A N/A
OL..................................................... ......... 67 N/A N/A N/A
Discretionary Spending, Excluding Violent Crime Reduction
Spending
CBO Preview Report limits:
BA..................................................... N/A N/A 532,656 N/A N/A
OL..................................................... N/A N/A 559,240 N/A N/A
OMB Preview Report limits:
BA..................................................... N/A N/A 561,366 N/A N/A
OL..................................................... N/A N/A 559,129 N/A N/A
Difference:
BA..................................................... N/A N/A 28,710 N/A N/A
OL..................................................... N/A N/A -111 N/A N/A
Total Discretionary Spending
CBO Preview Report limits:
BA..................................................... 528,006 533,006 537,156 541,989 551,023
OL..................................................... 557,643 561,115 564,794 564,198 560,479
OMB Preview Report limits:
BA..................................................... 528,006 561,107 565,866 571,326 581,005
OL..................................................... 557,643 560,885 564,683 564,073 560,346
Difference:
BA..................................................... ......... 28,101 28,710 29,337 29,982
OL..................................................... ......... -230 -111 -125 -133
----------------------------------------------------------------------------------------------------------------
[[Page 268]]
Table 14-5. DEFICIT IMPACT OF PAY-AS-YOU-GO LEGISLATION ENACTED AS OF DECEMBER 16, 1997
(In millions of dollars)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Report Number Act Number Act Title 1998 1999 2000 2001 2002 2003
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Legislation enacted in the 1st session--105th Congress (reflected in Final Sequester Report):
Enacted after the BBA and included in Final Sequester Report:
........................ OMB estimate.............................................................................. (-11) 6 6 3 1 NA
CBO estimate.............................................................................. (-7) 41 43 40 39 NA
Legislation enacted in the 1st session--Reports issued after 11/21/97 (not reflected in Final Report):
417 P.L. 105-85 National Defense Authorization Act for Fiscal Year 1998:
H.R. 1119 OMB estimate.............................................................................. -156 3 10 15 -4 -24
........................ CBO estimate.............................................................................. -159 9 17 19 -13 -35
418 P.L. 105-89 Adoption and Safe Families Act of 1997:
H.R. 867 OMB estimate.............................................................................. -1 ....... 3 11 40 76
........................ CBO estimate.............................................................................. -1 ....... ....... ....... ....... 7
419 P.L. 105-92 Savings are Vital to Everyone's Retirement (SAVER) Act of 1997:
H.R. 1377 OMB estimate.............................................................................. ....... ....... ....... ....... ....... .......
........................ CBO estimate.............................................................................. ....... ....... ....... ....... ....... .......
420 P.L. 105-96 Asian Elephant Conservation Act of 1997:
H.R. 1787 OMB estimate.............................................................................. ....... * * * * *
........................ CBO estimate.............................................................................. ....... ....... ....... ....... ....... .......
421 P.L. 105-98 Veterans' Compensation Rate Amendments of 1997:
H.R. 2367 OMB estimate.............................................................................. ....... ....... ....... ....... ....... .......
........................ CBO estimate.............................................................................. ....... ....... ....... ....... ....... .......
422 P.L. 105-101 Veterans' Cemetery Protection Act of 1997:
S. 813 OMB estimate.............................................................................. * * * * * *
........................ CBO estimate.............................................................................. ....... ....... ....... ....... ....... .......
423 P.L. 105-103 Congressional Medal of Honor to Robert R. Ingram:
H.R. 2813 OMB estimate.............................................................................. * * * * * *
........................ CBO estimate.............................................................................. ....... ....... ....... ....... ....... .......
424 P.L. 105-104 Apalachicola-Chattahoochee-Flint River Basin Compact:
H.J.R. 91 OMB estimate.............................................................................. ....... ....... ....... ....... ....... .......
........................ CBO estimate.............................................................................. ....... ....... ....... ....... ....... .......
425 P.L. 105-105 Alabama-Coosa-Tallapoosa River Basin Compact:
H.J.R. 92 OMB estimate.............................................................................. ....... ....... ....... ....... ....... .......
........................ CBO estimate.............................................................................. ....... ....... ....... ....... ....... .......
426 P.L. 105-111 Revisions of Veterans Benefits Decisions Based on Clear and Unmistakable Error:
H.R. 1090 OMB estimate.............................................................................. * * * * * *
........................ CBO estimate.............................................................................. ....... ....... ....... ....... ....... .......
427 P.L. 105-114 Veterans' Benefits Act of 1997:
S. 714 OMB estimate.............................................................................. ....... ....... ....... ....... ....... .......
........................ CBO estimate.............................................................................. 1 1 1 ....... ....... .......
NA P.L. 105-115 Food and Drug Administration Modernization Act of 1997:
S. 830 OMB estimate..............................................................................
(5)OMB does not
consider this
bill to be
subject to pay-as-
you-go.
........................ CBO estimate.............................................................................. ....... 12 33 54 28 7
428 P.L. 105-116 To Prohibit Interment or Memorial in Certain Veterans Cemeteries:
S. 923 OMB estimate.............................................................................. -* -* -* -* -* -*
........................ CBO estimate.............................................................................. ....... ....... ....... ....... ....... .......
429 P.L. 105-124 50 States Commemorative Coin Program Act:
S. 1228 OMB estimate.............................................................................. 1 -3 -1 -3 -4 -4
........................ CBO estimate.............................................................................. 1 -5 -2 -4 -5 -5
NA P.L. 105-127 Hispanic Cultural Center Act of 1997:
S. 1417 OMB estimate..............................................................................
(5)OMB does not
consider this
bill to be
subject to pay-as-
you-go.
........................ CBO estimate.............................................................................. ....... 6 6 1 ....... .......
430 P.L. 105-130 Surface Transportation Extension Act of 1997:
S. 1519 OMB estimate.............................................................................. ....... -1 -7 -18 -30 -45
........................ CBO estimate.............................................................................. ....... -2 -8 -19 -33 -47
431 P.L. 105-132 Lower Brule Sioux Tribe Infrastructure Development Trust Fund Act of 1997:
S. 156 OMB estimate.............................................................................. ....... ....... 1 2 3 3
........................ CBO estimate.............................................................................. ....... ....... 1 2 3 3
432 P.L. 105-135 Small Business Reauthorization Act of 1997:
S. 1139 OMB estimate.............................................................................. 3 4 4 4 4 3
........................ CBO estimate.............................................................................. 2 4 4 3 3 2
433 P.L. 105-136 Aviation Insurance Reauthorization Act:
S. 1193 OMB estimate.............................................................................. ....... * * * * *
........................ CBO estimate.............................................................................. ....... ....... ....... ....... ....... .......
[[Page 269]]
434 P.L. 105-144 Acquisition of Property for the Library of Congress:
H.R. 2979 OMB estimate.............................................................................. -2 2 ....... ....... ....... .......
........................ CBO estimate.............................................................................. -2 2 ....... ....... ....... .......
435 P.L. 105-146 Atlantic Striped Bass Conservation Act:
H.R. 1658 OMB estimate.............................................................................. * * * * * *
........................ CBO estimate.............................................................................. ....... ....... ....... ....... ....... .......
436 P.L. 105-147 No Electronic Theft (NET) Act:
H.R. 2265 OMB estimate.............................................................................. * * * * * *
........................ CBO estimate.............................................................................. ....... ....... ....... ....... ....... .......
437 P.L. 105-150 Authorization to Use Customs User Fees to Provide Inspectors in Florida:
H.R. 3034 OMB estimate.............................................................................. 2 ....... ....... ....... ....... .......
........................ CBO estimate.............................................................................. 2 ....... ....... ....... ....... .......
........................ Subtotal, reports issued after 11/21/97:....................................................
........................ OMB estimate.............................................................................. -153 5 10 11 9 9
........................ CBO estimate.............................................................................. -156 27 52 56 -17 -68
........................ Total, new balances (excluding Final Sequester Report FY 1998 amount):
........................ OMB estimate.............................................................................. -153 11 16 14 10 9
........................ CBO estimate.............................................................................. -156 68 95 96 22 -68
........................ MEMORANDUM
........................ OMB estimate of balances available for 1999............................................... ....... -142 ....... ....... ....... .......
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
NA = Not available.
* Less than $500,000.
Funds for America
The budget proposes three deficit neutral Funds for America--the
Research Fund for America, the Environmental Resources Fund for America,
and the Transportation Fund for America--designed to ensure adequate
funding for the high priority programs covered by the Funds. The Funds
accommodate a total of $75.5 billion in budget authority and $69.7
billion in outlays in 1999. Similar amounts are proposed for each of the
outyears through 2002. The Funds include both base levels of funding
that are currently included in the nondefense discretionary spending
category and increases to be offset by reductions in mandatory spending
and increases in revenue. The increase and the accompanying offset in
1999 is $5.8 billion. Sections II and V of the Budget volume discuss the
Funds and the programs covered by them in detail.
Under the Administration's proposal, the increase in spending is paid
for by the enactment of sufficient savings in the form of mandatory
spending reductions and revenue increases. The Administration is
proposing legislative measures--such as increased revenues from tobacco
legislation, reduced tobacco-related spending by the Department of
Veterans Affairs, and renewed Superfund taxes--to produce the necessary
savings.
These mandatory savings would offset additions to base discretionary
spending from the Funds, consistent with the deficit neutrality
principles underlying the Budget Enforcement Act. The use of mandatory
offsets for discretionary spending is permissible under current
scorekeeping rules and precedents, or could be specifically authorized
for purposes of the Funds for America. The Administration intends to
work with the appropriate congressional committees to determine the best
approach.
Transportation Obligation Limitations Defined as Discretionary Budget
Authority
The Budget Enforcement Act provides that, in the preview report, OMB
may adjust the discretionary spending limits for changes in concepts and
definitions after consultation with the Committees on Appropriations and
the Budget of the House of Representatives and the Senate. The budget
includes a redefinition of obligation limitations as budget authority
for transportation programs. The change in concepts and definitions with
respect to transportation obligation limitations would take effect only
upon completion of the statutorily-required consultations.
This change in concepts would be made only for the purposes of the
Budget Enforcement Act. The question of whether the concept change
should be adopted for purposes of the Congressional Budget Act would be
a matter solely within the purview of the Congress.
This change would not affect the legal status of the contract
authority authorized for these programs or the obligation limitation.
Contract authority would continue to be allocated to States as usual.
The appropriation language limiting obligations would not be affected.
Absent a limitation on obligations, the contract authority would be
fully available for obligation, as it would be now. The contract
authority that is not subject to limitation would continue to be scored
as direct spending.
Budget authority for highway, transit, highway safety, and airport
improvement programs usually has been defined as the contract authority
provided in authorizing legislation. However, the levels of contract
authority have been, for the most part, controlled by obligation
[[Page 270]]
limitations in appropriations acts. Outlays from the obligation
limitations have always been scored as discretionary, but in the past
the obligation limitations were not scored as discretionary budget
authority. As a result, there has been a large ($28 billion in 1998
growing to $30 billion in 2002) gap between the discretionary budget
authority cap and the discretionary outlay cap.
A number of non-transportation, discretionary programs are also
controlled by obligation limitations in appropriations acts. These
programs include the administrative expenses for the Social Security,
Medicare, unemployment, civil service, and railroad retirement trust
funds. Over the years, OMB, in consultation with the Budget Committees
and CBO, has redefined the obligation limitations as budget authority
for all of these non-transportation programs. In fact, in the 1998
Budget last year, OMB redefined $3.7 billion of obligation limitation as
budget authority.
The Administration did not propose to redefine obligation limitations
as budget authority for the transportation funds in the 1998 Budget
because it would have required a large budget authority cap adjustment
in the midst of the balanced budget negotiations that were to take place
that year. This left obligation limitations for the transportation trust
funds as the only obligation limitations not redefined as discretionary
budget authority.
This is a conceptual change. As indicated above, OMB adjusts the
discretionary spending caps for conceptual changes. For 1998, the budget
authority cap would be increased by approximately $28 billion. Similar
budget authority cap adjustments, increasing to $30 billion in 2002
would be made for each outyear. These adjustments are reflected in Table
14-2. The change would not affect outlays or the deficit or surplus.