Sequestration Update for August 2021

Posted by
Phill Swagel
August 12, 2021

By August 15 of each year, the Congressional Budget Office is required to publish its estimates of the limits (often called caps) on discretionary budget authority that were established under the Budget Control Act of 2011, as modified, and to provide projections of those limits for the following fiscal year. CBO also must estimate whether enacted legislation for the current fiscal year has exceeded the caps and thus would trigger a cancellation of budgetary resources, which is known as a sequestration.

Because the statutory caps expire at the end of this fiscal year, there can be no projection of those caps for next year, so a full report would not be informative. Instead, CBO is publishing this short blog post.

In CBO’s Final Sequestration Report for Fiscal Year 2021, the agency found that appropriations had not exceeded the caps and that no sequestration would be required. Since the publication of that report in January, an additional $2.1 billion has been appropriated, bringing the total to $1,592 billion; however, all of that additional funding was designated as an emergency requirement and therefore caused the caps to be adjusted upward rather than breached. Hence, as of now, no sequestration will be required, in CBO’s assessment.

The caps could still be breached if lawmakers provided additional appropriations before the end of the fiscal year in September without increasing the limits—unless those appropriations either fell into a category that caused a cap adjustment or were offset by reductions in funding for other programs. The authority to make the determination of whether the caps are breached rests with the Office of Management and Budget.

Phillip L. Swagel is CBO’s Director.