In the event that annual appropriation acts are not enacted by October 1 of each fiscal year, S. 1877 would provide mandatory appropriations to continue federal government operations at the same rate as in the previous fiscal year. For this estimate, CBO assumes that under S. 1877 each agency would automatically receive an appropriation of the same amount as in the previous fiscal year.
In addition, official travel by certain individuals in the executive and legislative branch would be prohibited while automatic appropriations are in effect, except for travel to return to Washington, DC; the bill also would direct that salaries of Members of Congress not be paid (placed in escrow) until all annual appropriation acts are enacted.
S. 1877 would appropriate funds, and thus would increase direct spending. For fiscal year 2019, the Congress appropriated about $1.4 trillion for federal agency operations and activities; the Congress has also appropriated about $0.1 trillion for fiscal year 2020 for those purposes. Thus, to maintain the same spending level as in 2019, S. 1877 would provide appropriations totaling $1.3 trillion in 2020 and $1.4 trillion in each subsequent year, CBO estimates. Based on historical spending patterns, CBO estimates that new direct spending from those appropriations would total $0.7 trillion in 2020 and $12.2 trillion over the 2020-2029 period.
S. 1877 also would increase spending from contract authority (a mandatory form of budget authority provided to certain transportation programs). Outlays from that contact authority are generally considered discretionary because they are controlled by obligation limitations set in annual appropriation acts. In addition, pursuant to provisions of law that govern CBO’s baseline projections, funding for certain expiring programs—such as contract authority for transportation grants—is assumed to continue beyond the scheduled expiration date for purposes of budget projections. Consistent with that practice, CBO’s baseline incorporates the assumption that contract authority in 2020 and later years will continue beyond 2020. CBO estimates that the spending of this contract authority would total $0.4 trillion over the 2020 through 2029 period.
Whether the authority provided under S. 1877 were triggered in the future, and the timing and magnitude of the resulting direct spending, would depend on future decisions of the Congress. As a result, CBO’s estimate of direct spending under S. 1877 is uncertain. If the Congress were to provide some or all of the normal discretionary appropriations in future years, total direct spending under S. 1877 would be less than indicated in this estimate. Historically, lapses in discretionary appropriations have been relatively infrequent and short-lived. However, CBO has no basis for predicting the timing or duration of future lapses in discretionary funding.
CBO estimates that enacting S. 1877 would increase on-budget deficits by more than $5 billion in all of the four consecutive 10-year periods beginning in 2030.
