By August 15 each year, the Congressional Budget Office is required to report estimates of the limits (often called caps) on discretionary budget authority for the current and upcoming fiscal year. The current caps were established by the Fiscal Responsibility Act of 2023 (FRA; Public Law 118-5). The requirement to publish this report originates in section 254 of the Balanced Budget and Emergency Deficit Control Act of 1985 (P.L. 99-177), which also requires CBO 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.
In CBO’s estimation, a sequestration will not be required for 2024. However, the authority to make that determination—and, if so, how to cut budgetary resources—rests with the Office of Management and Budget (OMB), which reported in April that appropriations for 2024 had not exceeded the caps.
Although additional appropriations totaling an estimated $95.3 billion have been made since April, they were designated as emergency requirements, one of the categories of funding that cannot breach a cap. By law, the caps are adjusted upward when an appropriation is provided as an emergency requirement. The caps also can be raised to accommodate budget authority provided for some types of disaster relief, wildfire suppression, or certain program integrity initiatives. Originally published at https://www.cbo.gov/publication/60382
