[Analytical Perspectives]
[Budget Enforcement Act Preview Report]
[13. Preview Report]
[From the U.S. Government Publishing Office, www.gpo.gov]
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BUDGET ENFORCEMENT ACT
PREVIEW REPORT
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13. PREVIEW REPORT
The Budget Enforcement Act of 1990 (BEA) was enacted as part of the
Omnibus Budget Reconciliation Act of 1990. The BEA established, through
1995, annual limits, or ``caps,'' on discretionary spending, and a pay-
as-you-go (PAYGO) requirement that legislation affecting direct spending
or receipts not result in a net cost. An across-the-board reduction of
non-exempt spending, known as ``sequestration,'' enforces compliance
with these constraints. The BEA has been extended several times, most
recently by the Balanced Budget Act of 1997 (BBA), which extended the
caps and PAYGO requirements through 2002.
The BEA requires that OMB issue a report on the impact of each piece
of enacted legislation. It requires three additional reports throughout
the year on the overall status of discretionary and PAYGO legislation.
This Preview Report, the first of the three required overall status
reports, provides the status of discretionary appropriations and PAYGO
legislation based on laws enacted as of the end of the first session of
the 106th Congress. In addition, it explains the differences between the
OMB and CBO estimates of the discretionary caps. The Consolidated
Appropriations Act, 2000, eliminated the PAYGO balances for all years as
of January 3, 2000.
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.
The President's Budget Proposals and the Budget Process
Changes to the Budget Enforcement Act
Since 1993 when President Clinton took office, one of the
Administration's highest priorities has been to reverse record budget
deficits as part of a plan to build the economy and restore prosperity.
The passage of the Omnibus Budget and Reconciliation Act of 1993
established a deficit reduction plan and a framework for budget
discipline--relying on the BEA--intended to cut the deficit in half in
five years. The BBA finished the job and returned the budget to surplus
ahead of schedule in 1998.
Budget deficits have been eliminated, but the Administration's
emphasis on BEA budget restraint and discipline will continue, through
an extension of caps and PAYGO. The return to budget surplus means that
we must consider how the surplus should be allocated to complement BEA
restraints. The Administration's 2001 Budget proposes that the following
new framework be the basis for consideration of 2001 and future budgets.
The budget proposes that Social Security be protected and the solvency
of the Social Security and Medicare trust funds extended. With enactment
of these reforms, as well as the strengthening of Medicare, additional
resources would be made available for national needs, including health
care initiatives and a tax cut.
Social Security. The Administration proposes a Social Security
Solvency Lockbox to ensure that Social Security surpluses are not used
for other purposes. The President's plan will ensure that the off-budget
surplus is locked away for Social Security. In addition, the solvency of
Social Security would be extended by allocating, beginning in 2011,
general funds to Social Security from the on-budget surplus to reflect
savings in interest costs resulting from reduction in Federal debt held
by the public, and by investing a limited share of the general funds
transferred to Social Security in corporate equities to earn a higher
return.
Medicare. The framework would provide additional resources to extend
the solvency of the Hospital Insurance trust fund by ten years, from
2015 to 2025. In addition, the budget would allocate a portion of the
on-budget surplus to a new reserve for catastrophic prescription drug
coverage. These reserves would make up a new budget category parallel to
the existing on-budget and off-budget categories, the Medicare Solvency
debt reduction reserve. Amounts in this category would not be available
for spending under the budget resolution or on the PAYGO scorecard. This
reserve would be available only for debt reduction, pending its use for
Medicare or a catastrophic prescription drug program.
The framework would provide a new prescription drug benefit that would
modernize Medicare, increase the efficiency of the overall health care
system, and relieve a significant out-of-pocket burden on much of the
senior population.
Debt reduction. The Administration's budget framework reserves the
off-budget surplus for Social Security through a lockbox mechanism that
ensures that the off-budget surplus is used to reduce publicly-held
debt. Transfers of a part of the on-budget surplus for Medicare solvency
and the reserve for catastrophic prescription drug coverage will
contribute to further reduction in the public debt, as will the
remainder of the on-budget surplus. Reducing publicly-held debt reduces
future interest costs on that debt. Reducing interest payments creates
on-budget resources that can be transferred to Social Security to extend
its solvency.
Other Uses of the On-budget Surplus. Once Social Security and Medicare
are strengthened and protected, the budget allocates the on-budget
surpluses to other
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high priority national needs: an expansion of health coverage, the farm
safety net, and a tax cut.
Discretionary Caps. Beginning in 2001, the Administration proposes to
revise the discretionary caps to reflect the cost of maintaining the
operation of the Federal Government at currently enacted levels into the
future. The framework provides for raising and extending the
discretionary spending caps through 2010, to maintain their viability as
a tool for fiscal discipline. The existing highway and transit caps
would expire as provided in current law, but there would be a new
separate cap for the Lands Legacy initiative. The proposed changes would
increase discretionary spending at about the same pace as inflation. The
proposals would also reinstate the adjustment included in the original
BEA of 1990 for changes in inflation estimates, so that higher-than-
expected inflation cannot be used as a reason to abandon the caps in the
future. In addition, the Administration proposes a new technical cap
adjustment for section 8 housing contract renewals, consistent with the
existing BEA adjustment to the discretionary baseline.
Table 1 shows the expansion of discretionary spending enacted over the
past three years and the Administration's proposals for discretionary
spending caps through 2010 necessary to maintain the existing operations
of government.
Table 13-1. PROPOSED DISCRETIONARY SPENDING LIMITS
(In millions of dollars)
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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
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Original Balanced Budget Act Limits:
BA.......................................................... 526,857 532,999 537,193 542,032 551,074 ........ ........ ........ ........ ........ ........ ........ ........
OL.......................................................... 553,268 559,321 564,265 564,396 560,799 ........ ........ ........ ........ ........ ........ ........ ........
Spending Funded by Alternative Mechanisms:
BA.......................................................... 8,455 37,014 49,290 ........ ........ ........ ........ ........ ........ ........ ........ ........ ........
OL.......................................................... 3,611 19,186 29,750 ........ ........ ........ ........ ........ ........ ........ ........ ........ ........
Adjustments for Changes in Concepts and Definitions: \1\
BA.......................................................... -1,110 1,456 5,060 ........ ........ ........ ........ ........ ........ ........ ........ ........ ........
OL.......................................................... -2,188 -3,407 23,554 ........ ........ ........ ........ ........ ........ ........ ........ ........ ........
Current Services: \2\
BA.......................................................... 534,202 571,469 591,543 606,983 625,040 640,939 657,091 673,692 690,397 709,171 727,167 745,249 763,777
OL.......................................................... 554,691 575,100 617,569 635,491 648,414 665,380 682,750 698,846 712,234 729,896 748,053 765,833 784,582
Proposed Discretionary Limits By Category:
Other Discretionary:
BA........................................................ ........ ........ 584,843 612,942 624,080 634,118 648,636 663,936 681,614 699,638 718,146 737,046 756,026
OL........................................................ ........ ........ 573,113 593,863 614,222 628,126 677,292 697,697 707,567 721,455 741,629 759,922 778,493
Lands Legacy: \3\
BA........................................................ ........ ........ [727] 1,400 1,400 1,416 1,451 1,484 1,522 1,560 1,599 1,641 1,684
OL........................................................ ........ ........ [603] 1,004 1,227 1,375 1,410 1,457 1,493 1,533 1,569 1,609 1,652
Violent Crime Reduction:
BA........................................................ ........ ........ 4,500 ........ ........ ........ ........ ........ ........ ........ ........ ........ ........
OL........................................................ ........ ........ 6,344 ........ ........ ........ ........ ........ ........ ........ ........ ........ ........
Highway Category:
BA........................................................ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........
OL........................................................ ........ ........ 24,574 26,956 27,994 27,817 ........ ........ ........ ........ ........ ........ ........
Mass Transit Category:
BA........................................................ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........
OL........................................................ ........ ........ 4,117 4,595 5,431 5,933 ........ ........ ........ ........ ........ ........ ........
Total Discretionary:
BA........................................................ ........ ........ 589,343 614,342 625,480 635,534 650,087 665,420 683,136 701,198 719,745 738,687 757,710
OL........................................................ ........ ........ 608,148 626,418 648,874 663,251 678,702 699,154 709,060 722,988 743,198 761,531 780,145
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\1\ This line includes reestimates, the second and third year effects of emergency appropriations, and changes in concepts and definitions that are not included in the original BBA limits, or
in the alternative funding mechanisms.
\2\ Enacted program levels are shown for 1998, 1999, and 2000; current services for 2001-2010.
\3\ This category is proposed for 2001. Amounts shown in 2000 are for comparability purposes only.
Restoring Budgetary Conventions. The Administration proposes to
replace 2001 advance appropriations, where such appropriations departed
from budgetary conventions, with full, up-front funding in 2000. This
proposal would not affect advance appropriations that were enacted for
programmatic reasons, such as the advance appropriations for the
Corporation for Public Broadcasting or those funding multi-year
construction programs. The Administration is also proposing to reverse a
number of obligation delays and timing shifts and thereby restore
traditional budgetary treatment of these items.
PAYGO Enforcement. The budget also proposes to extend the PAYGO
enforcement system to 2010.
Other Budget Process Tools
The Administration anticipates that Congress will continue its efforts
to reform the budget process during the coming months and urges Congress
to consider two budget process changes in particular--biennial budg
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eting and expedited rescission authority--for the reasons given below.
Biennial budgeting. Reaching agreement on budget priorities for two
years would provide greater predictability and planning certainty to
program administrators and beneficiaries. Making appropriations that
cover two fiscal years would also permit congressional committees to
perform their oversight functions in the off-year with less
distraction.
Expedited rescission authority. The Supreme Court has ruled the Line
Item Veto Act unconstitutional, thereby eliminating the President's
authority to cancel wasteful items in spending bills. However, under
the Impoundment Control Act, the President continues to have
authority to propose rescissions of spending to the Congress. Some
members of Congress have proposed to strengthen this rescission
process, requiring the Congress to vote on all rescission items
proposed by the President. Such ``expedited rescission'' authority
would be a useful tool for the President and Congress in their
efforts to ensure the effective use of taxpayer dollars.
Budgeting for insurance. The Congress has drafted legislation that
would reform the way the Government budgets for insurance. Part of this
proposal involves budgeting for insurance programs on an accrual basis.
The Administration supports the objective, but more time is needed to
develop a satisfactory framework for moving to budgeting for insurance
on an accrual basis.
Discretionary Sequestration Report
Discretionary programs are funded annually through the appropriations
process. The scorekeeping guidelines accompanying the BEA identify
accounts with discretionary resources. The BEA limits budget authority
and outlays available for discretionary programs each year through 2002.
For 2000, the BEA divided discretionary spending into two categories:
violent crime reduction spending and all other discretionary spending.
For 2001 and 2002, the BEA specified a single category for all
discretionary spending. The Transportation Act for the 21st Century
(TEA-21) established two additional categories for highway and mass
transit outlays for 1999 through 2003.
OMB monitors compliance with the discretionary spending caps
throughout the year. Appropriations that cause a breach in the budget
authority or outlay caps trigger an across-the-board reduction
(sequester) in discretionary spending to eliminate that breach. The BEA,
however, does not require that Congress appropriate the full amount
available under the discretionary caps.
Adjustments to discretionary caps.--The BEA permits certain
adjustments to the discretionary caps. On January 25, 2000, OMB
submitted the Final Sequestration Report for 2000. The report describes
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 adjustments for changes
in concepts and definitions, estimates of emergency spending, and
adjustments to the highway and mass transit categories. Table 2
summarizes changes to the caps since 1990. Table 3 shows the adjustments
made in this Preview Report.
Table 13-2. 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 BA 491.7 503.4 511.5 510.8 517.7 519.1 528.1 530.6 ....... ....... ....... .......
1990 and OBRA 1993..............
OL 514.4 524.9 534.0 534.8 540.8 547.3 547.3 547.9 ....... ....... ....... .......
Adjustments for changes in BA ...... 7.7 8.2 8.2 8.8 -0.6 -0.4 3.1 ....... ....... ....... .......
concepts and definitions......
OL ...... 1.0 2.4 2.3 3.0 -0.5 -2.6 -2.8 ....... ....... ....... .......
Adjustments for changes in BA ...... -0.5 -5.1 -9.5 -11.8 3.0 2.6 ....... ....... ....... ....... .......
inflation.....................
OL ...... -0.3 -2.5 -5.8 -8.8 1.8 2.3 0.9 ....... ....... ....... .......
Adjustments for credit BA 0.2 0.2 13.0 0.6 0.7 0.1 0.2 0.1 ....... ....... ....... .......
reestimates, IRS funding, debt
forgiveness, IMF, and CDRs....
OL 0.3 0.3 0.8 0.8 0.9 0.1 0.3 0.1 ....... ....... ....... .......
Adjustments for emergency BA 0.9 8.3 4.6 12.2 7.7 5.1 1.6 ....... ....... ....... ....... .......
requirements..................
OL 1.1 1.8 5.4 9.0 10.1 6.4 5.4 1.7 ....... ....... ....... .......
Adjustment pursuant to Sec. BA ...... ....... ....... ....... -15.0 -0.1 -0.1 ....... ....... ....... ....... .......
2003 of P.L. 104-19 \1\.......
OL ...... ....... ....... ....... -1.1 -3.5 -2.4 -1.5 ....... ....... ....... .......
Adjustments for special
allowances:
Discretionary new budget BA ...... 3.5 2.9 2.9 2.9 ....... ....... ....... ....... ....... ....... .......
authority.
OL ...... 1.4 2.2 2.6 2.7 1.1 0.5 0.1 ....... ....... ....... .......
Outlay allowance............ BA ...... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... .......
OL 2.6 1.7 0.5 1.0 ....... ....... ....... ....... ....... ....... ....... .......
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Subtotal, adjustments BA 1.1 19.2 23.6 14.3 -6.7 7.5 4.0 3.1 ....... ....... ....... .......
excluding Desert Shield/
Desert Storm..............
OL 3.9 5.9 8.8 10.0 6.8 5.5 3.7 -1.5 ....... ....... ....... .......
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Adjustments for Operation Desert BA 44.2 14.0 0.6 * * ....... ....... ....... ....... ....... ....... .......
Shield/Desert Storm.............
OL 33.3 14.9 7.6 2.8 1.1 ....... ....... ....... ....... ....... ....... .......
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Total adjustments........... BA 45.4 33.2 24.2 14.3 -6.7 7.5 4.0 3.1 ....... ....... ....... .......
OL 37.2 20.8 16.4 12.8 7.8 5.5 3.7 -1.5 ....... ....... ....... .......
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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 ....... ....... ....... .......
OL 551.6 545.7 550.4 547.6 548.6 552.7 551.0 546.4 ....... ....... ....... .......
Adjustment to reach BA ...... ....... ....... ....... ....... ....... ....... -6.9 ....... ....... ....... .......
discretionary spending limits
included in the 1997
Bipartisan Budget Agreement...
OL ...... ....... ....... ....... ....... ....... ....... 6.9 ....... ....... ....... .......
Statutory Caps as set in 1997 BA ...... ....... ....... ....... ....... ....... ....... 526.9 533.0 537.2 542.0 551.1
Bipartisan Budget Agreement \3\.
OL ...... ....... ....... ....... ....... ....... ....... 553.3 559.3 564.3 564.4 560.8
Adjustments for changes in BA ...... ....... ....... ....... ....... ....... ....... ....... -0.2 2.8 -0.1 0.1
concepts and definitions......
OL ...... ....... ....... ....... ....... ....... ....... ....... -0.3 0.1 -0.4 -0.3
Adjustments for emergency BA ...... ....... ....... ....... ....... ....... 7.7 5.7 31.9 29.8 ....... .......
requirements.
OL ...... ....... ....... ....... ....... ....... 2.7 5.2 22.9 31.5 9.0 3.2
Adjustments for CDRs, BA ...... ....... ....... ....... ....... ....... ....... 0.9 19.4 1.0 ....... .......
Arrearages, EITC.
OL ...... ....... ....... ....... ....... ....... ....... 0.5 1.1 0.7 0.6 0.2
Adjustments for special
allowances:
Adjustment for rounding..... BA ...... ....... ....... ....... ....... ....... ....... ....... ....... 1.1 ....... .......
OL ...... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... .......
Outlay adjustment........... BA ...... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... .......
OL ...... ....... ....... ....... ....... ....... ....... 1.2 ....... 0.8 ....... .......
TEA-21 Adjustment (Net)....... BA ...... ....... ....... ....... ....... ....... ....... ....... -0.9 -0.9 -0.9 -0.9
OL ...... ....... ....... ....... ....... ....... ....... ....... 1.1 2.6 5.2 6.7
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Final Sequestration Report BA 537.1 536.6 535.7 525.1 511.0 526.7 539.7 533.5 583.2 571.0 541.0 550.3
spending limits \3\.
OL 551.6 545.7 550.4 547.6 548.6 552.7 553.7 560.2 584.1 599.9 578.8 570.6
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* Less than $50 million.
** Sec. 8101(a) of P.L. 105-178, the Transportation Equity Act for the 21st Century (TEA-21), which was signed by the President on June 6, 1998,
established two new discretionary spending categories: Highway and Mass Transit. Sec. 8101(b) of TEA-21 provided for an offsetting adjustment in the
existing discretionary spending limits.
\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 estimate by the amount
of reductions in new budget authority and outlays for discretionary programs resulting from the provisions of the bill, other than emergencies
appropriations.
\2\ Reflects combined General Purpose Discretionary and Violent Crime Reduction Discretionary spending limits.
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Table 13-3. PREVIEW REPORT ADJUSTMENTS TO DISCRETIONARY SPENDING LIMITS
(In millions of dollars)
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2000 2001 2002
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VIOLENT CRIME REDUCTION SPENDING
Final Sequestration Report Spending Limits..................................................... BA 4,500 .......... ..........
OL 6,344 .......... ..........
Adjustments for the Preview Report:
No Adjustments............................................................................... BA .......... .......... ..........
OL .......... .......... ..........
Preview Report Spending Limits................................................................. BA 4,500 .......... ..........
OL 6,344 .......... ..........
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HIGHWAY CATEGORY
Final Sequestration Report Spending Limits..................................................... BA .......... .......... ..........
OL 24,574 26,219 26,663
Adjustments for the Preview Report:
Technical Outlay Adjustment.................................................................. BA .......... .......... ..........
OL .......... -125 8
Adjustment for Revenue Alligned Budget Authority............................................. BA .......... .......... ..........
OL .......... 826 1,254
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Subtotal, Adjustments for the Preview Report............................................... BA .......... .......... ..........
OL .......... 701 1,262
Preview Report Spending Limits................................................................. BA .......... .......... ..........
OL 24,574 26,920 27,925
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MASS TRANSIT CATEGORY
Final Sequestration Report Spending Limits..................................................... BA .......... .......... ..........
OL 4,117 4,888 5,384
Adjustments for the Preview Report:
Technical Outlay Adjustment.................................................................. BA .......... .......... ..........
OL .......... -249 35
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Subtotal, Adjustments for the Preview Report............................................... BA .......... .......... ..........
OL .......... -249 35
Preview Report Spending Limits................................................................. BA .......... .......... ..........
OL 4,117 4,639 5,419
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OTHER DISCRETIONARY SPENDING
Final Sequestration Report Spending Limits..................................................... BA 563,603 541,324 550,382
OL 564,870 547,522 537,279
Adjustments for the Preview Report:
Changes in Concepts and Definitions.......................................................... BA 2,859 -59 -59
OL .......... -59 -59
Discretionary Changes in Mandatory Programs.................................................. BA .......... -180 ..........
OL .......... -206 1
Contingent Emergency Appropriations Released................................................. BA 10 10 10
OL 43 22 10
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Subtotal, Adjustments for the Preview Report............................................... BA 2,869 -229 -49
OL 43 -243 -48
--------------------------------------------------------
Preview Report Spending Limits................................................................. BA 566,472 541,095 550,333
OL 564,913 547,279 537,231
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Anticipated Other Adjustments:
Adjustment for Repealing FY 2000 Pay Delay................................................... BA .......... .......... ..........
OL 4,297 .......... ..........
Adjustment for Repealing FY 2000 Obligation Delays........................................... BA .......... .......... ..........
OL 1,749 .......... ..........
Adjustment for Repealing Certain Advance Appropriations...................................... BA 14,385 .......... ..........
OL .......... .......... ..........
Kosovo, Plan Colombia, and Other Emergency Supplemental Requests............................. BA 3,986 .......... ..........
OL 2,154 979 309
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Subtotal, Anticipated Other Adjustments.................................................... BA 18,371 .......... ..........
OL 8,200 979 309
--------------------------------------------------------
Preview Report Spending Limits, Including Anticipated Adjustments.............................. BA 584,843 541,095 550,333
OL 573,113 548,258 537,540
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TOTAL DISCRETIONARY SPENDING
Update Report Total Discretionary Spending Limits.............................................. BA 536,271 541,324 550,382
OL 570,945 571,047 567,019
Final Sequestration Report Spending Limits..................................................... BA 568,103 541,324 550,382
OL 599,905 578,629 569,326
Preview Report Spending Limits................................................................. BA 570,972 541,095 550,333
OL 599,948 578,838 570,575
Preview Report Including Anticipated Adjustments.............................................. BA 589,343 541,095 550,333
OL 608,148 579,817 570,884
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After consultation with the Congressional Budget Committees and the
Congressional Budget Office, OMB has agreed to make two changes to
budget scoring and to adjust the discretionary caps accordingly. First,
receipts from purchase power and wheeling activities associated with the
Department of Energy's Power Marketing Administrations have been
reclassified as discretionary. Since these receipts reduce net
discretionary budget authority and outlays, the caps are reduced by
approximately $60 million in 2001 and 2002. Second, OMB has changed its
scoring of budget authority for contingent emergency appropriations
(funding for amounts that the President and the Congress designate as
``emergency requirements''), to be consistent with congressional scoring
practice. In prior years, OMB waited to score contingent emergency
appropriations until the President designated them as ``emergency
requirements,'' and then increased the discretionary caps by the budget
authority made available and the estimated outlays. Beginning with 2000,
OMB will score emergency budget authority in its seven-day cost estimate
of the bill. OMB will estimate outlays when the funds are actually
released by the President, and will reflect the estimates in the
subsequent sequestration report. Table 4 shows the effect of this change
on OMB's scoring of the 2000 appropriations acts.
Table 13-4. ADJUSTMENTS TO SCORING OF FY 2000 APPROPRIATIONS ACTION FOR CHANGES IN SCORING CONVENTIONS
(In millions of dollars)
----------------------------------------------------------------------------------------------------------------
BA Outlays
----------------------------------------------------------------------------------------------------------------
OTHER DISCRETIONARY
Total Enacted........................................................................... 562,045 561,407
Change in Treatment of Contingent Emergency Spending \1\................................ 2,870 ..........
-----------------------
Total Enacted, Adjusted for Changes in Treatment of Contingent Emergency Spending....... 564,915 561,407
Final Sequestration Report Other Discretionary Limits \1\............................... 566,461 563,602
-----------------------
CONGRESSIONAL ACTION OVER/UNDER(-) LIMITS............................................... -1,546 -2,195
----------------------------------------------------------------------------------------------------------------
VIOLENT CRIME REDUCTION
Total Enacted........................................................................... 4,500 6,344
Final Sequestration Report Violent Crime Reduction Limits............................... 4,500 6,344
-----------------------
CONGRESSIONAL ACTION OVER/UNDER(-) LIMITS............................................... .......... ..........
----------------------------------------------------------------------------------------------------------------
HIGHWAY CATEGORY
Total Enacted........................................................................... .......... 24,574
Final Sequestration Report Highway Category Limits...................................... .......... 24,574
-----------------------
CONGRESSIONAL ACTION OVER/UNDER(-) LIMITS............................................... .......... ..........
----------------------------------------------------------------------------------------------------------------
MASS TRANSIT CATEGORY
Total Enacted........................................................................... .......... 4,117
Final Sequestration Report Mass Transit Category Limits................................. .......... 4,117
-----------------------
CONGRESSIONAL ACTION OVER/UNDER(-) LIMITS............................................... .......... ..........
----------------------------------------------------------------------------------------------------------------
TOTAL DISCRETIONARY SPENDING--ALL CATEGORIES
Total Enacted Discretionary Spending.................................................... 569,415 596,442
Final Sequestration Report Discretionary Limits......................................... 570,961 598,637
-----------------------
CONGRESSIONAL ACTION OVER/UNDER(-) LIMITS............................................... -1,546 -2,195
----------------------------------------------------------------------------------------------------------------
\1\ Beginning with FY 2000 Appropriations Acts, OMB will change its scoring of contingent emergency
appropriations. When appropriations acts include contingent emergency funds, OMB will score budget authrority
with that act. Outlays will be estimated when the funds are actually released by the President, and will be
reflected in the next sequestration report. This table shows the effect of scoring, as emergency
appropriations, the remaining unreleased FY 2000 contingent emergency appropriations.
Included in the adjustment for changes in concepts and definitions is
a reduction of $180 million in budget authority and $206 million in
outlays in 2001, for the second year effect of provisions in the 2000
appropriations bills that modified mandatory programs. Under the BEA,
the discretionary caps are adjusted by the amount of the savings or
costs of these modifications.
The outlay caps have also been increased for contingent emergency
appropriations that have been released since the transmittal of the
Final Sequestration Report. This adjustment includes funds for the Low
Income Home Energy Assistance Program, which will help address the needs
of Alaska and 10 New England and Mid-Atlantic States experiencing recent
increases in home heating fuel costs.
In addition, TEA-21 requires two adjustments to the discretionary
outlay caps for the highway and transit categories. The outlay cap for
highways has been increased by $826 million in 2001 because of higher
than anticipated receipts in 1999 and higher estimated receipts in 2001.
A downward adjustment of $125 million has also been made to reflect
changes in technical assumptions since last year's Preview Report.
Adjustments for the same reasons have been made in 2002 and 2003. The
mass transit outlay caps have been decreased due to revised technical
assumptions. Table 5 shows how the adjustments to the highway and
transit categories have been calculated.
In addition to the adjustments outlined above, the Administration has
included several proposals in the budget that would result in cap
adjustments upon their enactment. They are described below.
Adjustments Included in Proposed Limits That Would be Made Under
Existing Authority:
Earned Income Tax Credit (EITC) Compliance Initiative.--The
budget contains funding for EITC compliance initiatives,
including the detection and enforcement of EITC eligibility
rules in order to reduce the number of erroneous EITC claims.
Adjustments are limited to the budget authority and outlay
estimates authorized in P.L. 105-33. The 2000 Treasury and
General Government Appropriations Act provided $144 million
for EITC compliance. Funding for these payments in 2001
through 2010 is included in the proposed caps in Table 1.
Continuing Disability Reviews.--The budget includes funding
for additional continuing disability reviews (CDRs) under the
heading, ``Limitation on Administrative Expenses'' for the
Social Security
[[Page 291]]
Administration. The law limits adjustments to the budget
authority and outlay estimates authorized in the BBA of 1997.
CDRs are conducted to verify that recipients of Social
Security disability insurance benefits and Supplemental
Security Income benefits for persons with disabilities are
still disabled. The Labor, Health and Human Services,
Education, and Related Agencies Appropriations Act for 2000
provided $405 million for CDRs. Funding for these payments in
2001 through 2010 is included in the proposed caps in Table 1.
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 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. Funding
for these payments in 2001 through 2010 is included in the
proposed caps in Table 1.
Contingent Emergency Appropriations.--The budget requests
over $3 billion in emergency appropriations for several
programs that provide assistance to the victims of natural
disasters, manage wildland fires, and provide assistance to
States with low-income populations who are adversely affected
by large increases in home heating/cooling costs. In addition,
the budget includes $4 billion in emergency supplemental
requests to support peacekeeping activities in Kosovo, anti-
drug activities in Colombia, and for disaster relief. These
amounts are included in the proposed caps in Table 1.
[[Page 292]]
Comparison of OMB and CBO discretionary caps.--Section 254(d)(5) of
the BEA requires this report to explain the differences between the OMB
and CBO estimates of the discretionary spending caps. CBO uses the
discretionary caps included in OMB's Final Sequestration Report as the
starting point for the adjustments it publishes in its Preview Report.
OMB submitted its Final Sequestration Report on January 25th, and CBO
did not have time to make its adjustments before OMB's Preview Report
went to print.
Table 13-5. ADJUSTMENTS TO THE HIGHWAY AND MASS TRANSIT CATEGORIES FOR CHANGES IN RECEIPTS AND TECHNICAL ASSUMPTIONS
(In millions of dollars)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2001 2002 2003
--------------------------------------------------------------------------------------------------------------------------------------------------------
HIGHWAY CATEGORY
Obligation Limitations Assumed in FY 2000 Preview Report............................................................ 27,158 27,767 28,233
Adjustments:
Difference Between Current and Previous Estimate of FY 2001 Highway Tax Receipts............................... 1,196 .......... ..........
Difference Between FY 1999 Actual and Estimated Highway Tax Receipts........................................... 1,862 .......... ..........
-----------------------------------
Subtotal, Obligation Limitation Adjustment................................................................... 3,058 .......... ..........
FY 2001 Preview Report Obligation Limitation........................................................................ 30,216 27,767 28,233
Outlay Limits in FY 2000 Preview Report............................................................................. 26,219 26,663 27,043
Adjustments:
Increase in FY 2001 Obligation Limitation...................................................................... 826 1,254 489
Change in Technical Assumptions:
Reestimate of Outlays from Obligation Limitation, Using Current Technical Assumptions........................ 26,920 27,925 27,621
FY 2000 Preview Report Outlays from Obligation Level, Adjusted to Include Outlays from change in Obligation 27,045 27,917 27,532
Limitation...................................................................................................
-----------------------------------
Adjustment for Changes in Technical Assumptions................................................................ -125 8 89
Total Adjustments.................................................................................................. 701 1,262 578
Outlay Limits in FY 2001 Preview Report............................................................................. 26,920 27,925 27,621
--------------------------------------------------------------------------------------------------------------------------------------------------------
MASS TRANSIT CATEGORY
Outlay Limits in FY 2000 Preview Report............................................................................. 4,888 5,384 6,124
Adjustment:
Change in Technical Assumptions:
Reestimate of Outlays from Obligation Limitation, Using Current Technical Assumptions........................ 4,639 5,419 5,910
FY 2000 Preview Report Outlays............................................................................... 4,888 5,384 6,124
-----------------------------------
Adjustment for Changes in Technical Assumptions................................................................ -249 35 -214
Total Adjustment................................................................................................... -249 35 -214
Outlay Limits in FY 2001 Preview Report............................................................................. 4,639 5,419 5,910
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 293]]
Table 13-6. COMPARISON OF OMB AND CBO DISCRETIONARY SPENDING LIMITS
(In millions of dollars)
----------------------------------------------------------------------------------------------------------------
1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
Non-Defense Discretionary
CBO Final Sequestration Report limits:
BA..................................................... 256,148 290,562 N/A N/A N/A
OL..................................................... 286,325 277,097 N/A N/A N/A
OMB Final Sequestration Report limits:
BA..................................................... 256,148 290,562 N/A N/A N/A
OL..................................................... 286,325 277,097 N/A N/A N/A
Difference:
BA..................................................... ......... ......... N/A N/A N/A
OL..................................................... ......... ......... N/A N/A N/A
----------------------------------------------------------------------------------------------------------------
Defense Discretionary
CBO Final Sequestration Report limits:
BA..................................................... 271,832 286,850 N/A N/A N/A
OL..................................................... 269,079 275,732 N/A N/A N/A
OMB Final Sequestration Report limits:
BA..................................................... 271,832 286,850 N/A N/A N/A
OL..................................................... 269,079 275,732 N/A N/A N/A
Difference:
BA..................................................... ......... ......... N/A N/A N/A
OL..................................................... ......... ......... N/A N/A N/A
----------------------------------------------------------------------------------------------------------------
Violent Crime Reduction
CBO Final Sequestration Report limits:
BA..................................................... 5,500 5,800 4,500 N/A N/A
OL..................................................... 4,833 4,953 6,344 N/A N/A
OMB Final Sequestration Report limits:
BA..................................................... 5,500 5,800 4,500 N/A N/A
OL..................................................... 4,833 4,953 6,344 N/A N/A
Difference:
BA..................................................... ......... ......... ......... N/A N/A
OL..................................................... ......... ......... ......... N/A N/A
----------------------------------------------------------------------------------------------------------------
Highway Category
CBO Final Sequestration Report limits:
BA..................................................... N/A ......... ......... ......... .........
OL..................................................... N/A 21,991 24,574 26,219 26,663
OMB Final Sequestration Report limits:
BA..................................................... N/A ......... ......... ......... .........
OL..................................................... N/A 21,991 24,574 26,920 27,925
Difference:
BA..................................................... N/A ......... ......... ......... .........
OL..................................................... N/A ......... ......... 701 1,262
----------------------------------------------------------------------------------------------------------------
Mass Transit Category
CBO Final Sequestration Report limits:
BA..................................................... N/A ......... ......... ......... .........
OL..................................................... N/A 4,401 4,117 4,888 5,384
OMB Final Sequestration Report limits:
BA..................................................... N/A ......... ......... ......... .........
OL..................................................... N/A 4,401 4,117 4,639 5,419
Difference:
BA..................................................... N/A ......... ......... ......... .........
OL..................................................... N/A ......... ......... -249 35
----------------------------------------------------------------------------------------------------------------
Other Discretionary
CBO Final Sequestration Report limits:
BA..................................................... N/A N/A 563,602 541,324 550,382
OL..................................................... N/A N/A 564,870 547,522 537,279
OMB Final Sequestration Report limits:
BA..................................................... N/A N/A 566,472 541,095 550,333
OL..................................................... N/A N/A 564,913 547,279 537,231
[[Page 294]]
Difference:
BA..................................................... N/A N/A 2,870 -229 -49
OL..................................................... N/A N/A 43 -243 -48
----------------------------------------------------------------------------------------------------------------
Total Discretionary Spending Limits
CBO Final Sequestration Report limits:
BA..................................................... 533,480 583,212 568,102 541,324 550,382
OL..................................................... 560,237 584,174 599,905 578,629 569,326
OMB Final Sequestration Report limits:
BA..................................................... 533,480 583,212 570,972 541,095 550,333
OL..................................................... 560,237 584,174 599,948 578,838 570,575
Difference:
BA..................................................... ......... ......... 2,870 -229 -49
OL..................................................... ......... ......... 43 209 1,249
----------------------------------------------------------------------------------------------------------------
PAYGO 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 entitlement authority, the food stamp program, and
budget authority provided by law other than in appropriations acts. The
following are exempt from PAYGO enforcement: Social Security, the Postal
Service, legislation specifically designated as an emergency
requirement, and legislation fully funding the Federal Government's
commitment to protect insured deposits.
The BEA requires that any legislation enacted before October 1, 2002,
affecting direct spending or receipts that results in a net cost will
trigger an offsetting sequestration.
Sequester determinations. The BEA requires OMB to submit a report to
Congress estimating the change in outlays or receipts for the current
year, the budget year, and the following four fiscal years resulting
from enactment of PAYGO legislation. The estimates, which must rely on
the economic and technical assumptions underlying the most recent
President's budget, determine whether the PAYGO requirement is met. The
PAYGO process requires OMB to maintain a ``scorecard'' that shows the
cumulative deficit impact of such legislation. This Report shows how
these past actions affect the upcoming fiscal year.
Table 7 shows the OMB PAYGO scorecard as of January 4, 2000. The
Consolidated Appropriations Act set the scorecard to zero for all years
as of January 3, 2000.
Table 13-7. PAY-AS-YOU-GO SCORECARD
(In millions of dollars)
----------------------------------------------------------------------------------------------------------------
Total
2000 2001 2002 2003 2004 2001-2004
----------------------------------------------------------------------------------------------------------------
Pay-as-you-go scorecard as of January 4, 2000: \1\
Revenue impact of enacted legislation................. 0 0 0 0 0 0
Outlay impact of enacted legislation.................. 0 0 0 0 0 0
-------------------------------------------------------
Total deficit impact of enacted legislaiton........... 0 0 0 0 0 0
----------------------------------------------------------------------------------------------------------------
\1\ The Consolidated Appropriations Act set the scorecard to zero for all years on January 3, 2000.