USA Debt Ceiling Law Discretionary Spending Caps Reviewed

August 13th, 2011
in econ_news

Econintersect: The Congressional Budget Office (CBO) will publish yearly on 15 August a report on discretionary spending under the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA), as amended by the Budget Control Act of 2011 (Public Law 112-25).

The Budget Control Act imposes caps on appropriations of new discretionary budget authority that start at $1,043 billion in 2012 and reach $1,234 billion in 2021. For 2012 and 2013, separate caps for “security” and “nonsecurity” budget authority are in effect; from 2014 to 2021, only one cap applies to total discretionary funding (see Table 1).1 If those caps are exceeded, across-the-board cuts (that is, a sequestration) will be applied to discretionary accounts in an amount sufficient to eliminate the excess.

Follow up:

The law has built in loopholes to increase spending for:

  • Funding for the wars in Afghanistan and Iraq or similar activities, as well as other funding designated as an emergency requirement.
  • “Program integrity” initiatives aimed at reducing improper benefit payments in the Disability Insurance and Supplemental Security Income programs, Medicare, Medicaid, and the Children’s Health Insurance Program.
  • Certain types of disaster relief.



Because the Budget Control Act was just enacted on August 2, no actions that would trigger adjustments to the limits specified in that law have yet taken place.


source: CBO


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