Sometimes, during the course of a fiscal year, the Congress considers “supplemental appropriations” aimed at meeting needs that were not anticipated when agencies’ regular appropriations were provided earlier in the year. That is the case now with regard to proposed funding to deal with the significant influx of unaccompanied children at the Southwest border.
When such legislation is being considered, CBO provides the Congress with an estimate of how much of the funds would be spent in the current year and in each of the following 10 years. For example, CBO has estimated that the bill currently under consideration in the House of Representatives, the Secure the Southwest Border Supplemental Appropriations Act, 2014 (H.R. 5230), would provide $659 million in additional funding and would increase outlays by $25 million in fiscal year 2014; most of the rest would be spent in fiscal year 2015. (The bill would also rescind $659 million that had previously been provided for other purposes.) The corresponding Senate bill (S. 2648) would provide $3.6 billion for border activities and some other purposes; outlays from that bill in fiscal year 2014 would also be about $25 million, CBO estimates. The funds in both bills would be available for use through the end of fiscal year 2015 or, in some cases, later.
Why would so little of the money be spent in fiscal year 2014? One reason is that the fiscal year, which ends on September 30, is almost over. Even if the bill was signed into law within the next few days, less than two months would be left in the fiscal year. If the bill was enacted in September (as assumed in CBO’s estimate), just a few weeks would be left in the fiscal year.
Moreover, some time elapses between when the government uses the spending authority provided in the bill—that is, when it obligates the money—and when it actually issues the checks to pay for those obligations, which is when the outlays are recorded. For example, some of the funds that would be provided by H.R. 5230 would be used to rent facilities appropriate for housing children and to transport children to such facilities. The Department of Homeland Security would probably contract with private companies to provide such housing and transportation, which would take at least a little time. Those companies would provide the services, some of which would be provided in August or September (depending on when the legislation was enacted); they would then bill the government (after the services are provided), and probably receive payment within a few weeks of the billing. Thus, even if a significant amount of goods or services are purchased in August or September, most of the cash outlays to pay for such services are likely to occur in the following fiscal year. Such an outcome is not unique to the legislation being considered now; rather, it is quite common for CBO to estimate a relatively small amount of outlays from funding provided late in a fiscal year even if obligations of those funds were to occur fairly quickly.
Bob Sunshine is CBO’s Deputy Director.