Notes
All years referred to in this report are federal fiscal years, which run from October 1 to September 30 and are designated by the calendar year in which they end. Numbers in the text and table may not add up to totals because of rounding.
The Fiscal Responsibility Act of 2023 (FRA, Public Law 118-5) established limits (often called caps) on discretionary budget authority for fiscal years 2024 and 2025.1 The Congressional Budget Office is required to report whether, according to its estimates, enacted legislation for the current fiscal year has exceeded those caps and thus would trigger a cancellation of budgetary resources, called a sequestration.2
CBO estimates that discretionary funding for 2025 does not exceed the caps and that no sequestration will be required this year. For this report, CBO’s calculations are based on the estimates it provided to the Congress when appropriation legislation was considered.
In March, CBO reported that appropriations had not exceeded the caps and therefore that no sequestration would be required.3 In April, the Office of Management and Budget (OMB)—which has sole authority to determine both the final amounts of the caps and whether enacted appropriations exceed them—published its estimates of the final caps for 2025 and determined that appropriations for 2025 had not exceeded those limits.4
The Rescissions Act of 2025 (P.L. 119-28), enacted in July, reduced discretionary budget authority for 2025 by $7.9 billion. That law was enacted following a request submitted by the President in keeping with title X of the Congressional Budget and Impoundment Control Act of 1974 (P.L. 93-344). On August 1, 2025, OMB determined that the rescissions contained in P.L. 119-28 do not affect either OMB’s estimates of the statutory caps for 2025 or its assessment that a sequestration will not be required.5 CBO also currently estimates that budget authority for discretionary funding for 2025, after accounting for the rescissions enacted in P.L. 119-28, will not exceed the caps as determined by OMB and that no sequestration will be required this year (see Table 1).
Table 1.
Limits on Discretionary Budget Authority for Fiscal Year 2025
Millions of dollars
Notes
Source: Congressional Budget Office. See www.cbo.gov/publication/61618#data.
FRA = Fiscal Responsibility Act of 2023; OMB = Office of Management and Budget.
a. Defense funding (in the law, revised security) consists of appropriations designated for budget function 050; all other discretionary appropriations are for nondefense (revised nonsecurity) activities.
b. Office of Management and Budget, OMB Final Sequestration Report to the President and Congress for Fiscal Year 2025 (April 2025), Table 3, https://tinyurl.com/5n8psx39.
c. Includes discretionary budget authority enacted for 2025 under the Full-Year Continuing Appropriations and Extensions Act, 2025, and reductions stemming from the Rescissions Act of 2025.
d. In keeping with section 103 of the FRA, certain appropriations for fiscal year 2025 that were enacted before the FRA are excluded from calculations of caps governed by section 251 of the Balanced Budget and Emergency Deficit Control Act of 1985. Those appropriations stem from division J of the Infrastructure Investment and Jobs Act, division B of the Bipartisan Safer Communities Act, section 443 of division G of the Consolidated Appropriations Act, 2023, and section 122 of division A of the Continuing Appropriations and Ukraine Supplemental Appropriations Act, 2023.
e. In keeping with the 21st Century Cures Act, certain funding for the Department of Health and Human Services is excluded from estimates for the purposes of the Deficit Control Act.
f. In keeping with section 14003 of the Coronavirus Aid, Relief, and Economic Security Act, as modified by section 101 of division AA of the Consolidated Appropriations Act, 2021, certain funding provided to the Army Corps of Engineers is excluded from estimates for the purposes of the Deficit Control Act.
No additional appropriations for 2025 have been enacted since March. However, the caps still could be breached if lawmakers provided additional appropriations for 2025 before the end of the fiscal year without increasing the limits—unless those appropriations either fell into a category that triggered a cap adjustment or were offset by reductions in funding for other programs.
Because the caps established by the FRA expire at the end of this fiscal year, CBO cannot project caps for 2026.
1. Budget authority is the authority provided by law to incur financial obligations that will result in immediate or future outlays of federal funds. Discretionary budget authority is provided and controlled by appropriation acts.
2. Budgetary resources for 2025 include discretionary funding provided in appropriation acts for that year and other discretionary spending authority, such as offsetting collections and balances of unobligated funding from prior fiscal years. For more information, see Congressional Budget Office, Glossary (July 2016), www.cbo.gov/publication/42904.
3. Congressional Budget Office, Final Sequestration Report for Fiscal Year 2025 (March 2025), www.cbo.gov/publication/61152.
4. Office of Management and Budget, OMB Final Sequestration Report to the President and Congress for Fiscal Year 2025 (April 2025), https://tinyurl.com/5n8psx39.
5. Russell T. Vought, Office of Management and Budget, letter to the Honorable Mike Johnson, providing a report on discretionary appropriations legislation within seven calendar days of enactment (August 1, 2025), https://tinyurl.com/yc7p4vtu.
This Congressional Budget Office report was prepared in response to the requirements of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended. Previous editions are available at https://tinyurl.com/44vz2jkm. In keeping with CBO’s mandate to provide objective, impartial analysis, the report makes no recommendations.
Youstiena Shafeek prepared the report with guidance from Megan Carroll and Mark Sanford and with assistance from Avi Lerner.
Christina Hawley Anthony, Mark Hadley, Jeffrey Kling, and Robert Sunshine (a consultant to CBO) reviewed the report; Rae Keefe was the editor; and R. L. Rebach prepared the text for publication. The report is available at www.cbo.gov/publication/61618. CBO seeks feedback to make its work as useful as possible. Please send comments to communications@cbo.gov.
Phillip L. Swagel
Director