Note
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.
Once the 12 annual appropriation acts for a fiscal year are enacted, section 254 of the Balanced Budget and Emergency Deficit Control Act of 1985 (Public Law 99-177, as amended) requires the Congressional Budget Office to report estimates of the limits (often called caps) on discretionary budget authority that are in effect for that year.1 CBO also must 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 Administration’s Office of Management and Budget (OMB).2 Those determinations are based on OMB’s own estimates of federal spending.
Limits on Discretionary Budget Authority for 2024
The Fiscal Responsibility Act of 2023 (FRA; P.L. 118-5) reinstituted for 2024 and 2025 caps on discretionary funding as they were defined in the Budget Control Act of 2011 (P.L. 112-25). That law established caps on funding for defense and nondefense programs (referred to in the law as revised security and revised nonsecurity, respectively); those caps extended through fiscal year 2021.3 Because the Consolidated Appropriations Act, 2024 (P.L. 118-42), and the Further Consolidated Appropriations Act, 2024 (P.L. 118-47), provided full-year appropriations for 2024, the limits on discretionary funding for 2024 as specified by section 101(a) of the FRA are in effect. Those limits total $1,590 billion—$886.3 billion for defense and $703.7 billion for nondefense (see Table 1).
Table 1.
Limits on Discretionary Budget Authority for Fiscal Year 2024
Millions of Dollars
Source: Congressional Budget Office.
FRA = Fiscal Responsibility Act of 2023.
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) funding.
b. Funding designated for emergency requirements in keeping with section 251(b)(2)(A)(i) of the Balanced Budget and Emergency Deficit Control Act of 1985.
c. Funding designated under section 251(b)(2)(D) of the Deficit Control Act for activities carried out in keeping with section 102(2) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, as amended. Such activities may result from a natural disaster that causes damage of sufficient severity to warrant federal assistance.
d. Funding designated under section 251(b)(2)(F) of the Deficit Control Act for activities related to wildland fire suppression.
e. Funding designated under sections 251(b)(2)(B), 251(b)(2)(C), and 251(b)(2)(E) of the Deficit Control Act for program integrity initiatives that seek to identify and reduce overpayments in certain benefit programs, such as Disability Insurance, Supplemental Security Income, Medicare, Medicaid, unemployment compensation, and the Children’s Health Insurance Program.
f. In keeping with section 103 of the FRA, certain appropriations for fiscal year 2024 that were enacted before the FRA are excluded from calculations of caps governed by section 251 of the Deficit Control Act. 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.
g. 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.
h. 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.
As specified in law, the caps are adjusted to accommodate certain types of spending.4 On the basis of the appropriations and authorities provided in P.L. 118-42 and P.L. 118-47, CBO estimates that the adjustments to the caps for 2024 amount to $54 billion. All of the estimated adjustments are for nondefense funding, including $28.5 billion for emergency requirements, $20.4 billion for disaster relief, $2.7 billion for wildfire suppression, and $2.4 billion for program integrity initiatives.5
After those adjustments are made, the caps on budget authority for 2024 will total $886.3 billion for defense programs and $757.7 billion for nondefense programs—$1,644 billion in all. According to CBO’s estimates, the two appropriation acts provided funding of $1,644 billion that is subject to the caps, so sequestration will not be required.
The caps still could be breached if lawmakers provided additional appropriations for 2024 before the end of the fiscal year 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.
Cap Adjustment for Disaster Relief
The total increase in caps to accommodate funding for disaster relief is statutorily limited and cannot exceed the sum of the following components:
- The average funding provided for disaster relief over the previous 10 years (adjusted to exclude the highest and lowest annual amounts);
- Five percent of amounts designated for emergency requirements and appropriated over the previous 10 years under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (P.L. 93-288), as amended; and
- The cumulative amount by which the maximum funding for disaster relief has exceeded the amounts appropriated for each year after 2018.
For 2024, CBO estimates, the maximum cap adjustment for disaster relief will be $20.4 billion. Of that amount, $11.9 billion is the average annual funding over the 2014–2023 period, excluding the highest and lowest annual amounts. An additional $8.5 billion is 5 percent of the funding provided for emergency requirements under the Stafford Act over the same period. Finally, the cumulative amount by which the maximum funding for disaster relief has exceeded the amounts appropriated for each year after 2018 is zero.
Limits on Discretionary Budget Authority for 2025
The caps on discretionary budget authority in 2025 are unchanged from the amounts specified in section 101(a) of the FRA. Those limits total $1,605.9 billion—$895.2 billion for defense and $710.7 billion for nondefense. Those amounts do not account for adjustments to accommodate funding for future emergency requirements, disaster relief, wildfire suppression, or program integrity initiatives.
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 2024 include discretionary funding provided in appropriation acts for that year and other discretionary spending authority, for example from 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. For more information on the FRA’s caps, see Congressional Budget Office, letter to the Honorable Jodey Arrington and the Honorable Brendan F. Boyle concerning an update about implementing the statutory limits on discretionary funding for fiscal year 2024 (March 13, 2024), www.cbo.gov/publication/60081, and letter to the Honorable Jodey Arrington and the Honorable Brendan F. Boyle regarding implementing the statutory limits on discretionary funding for fiscal year 2024 (January 4, 2024), www.cbo.gov/publication/59861.
4. Section 103 of the FRA excludes from the statutory caps nearly $71 billion in advance appropriations provided for 2024 that were enacted before the FRA became law. Those amounts, which the Congress designated as emergency requirements for the purposes of the Congressional Budget Act of 1974 (P.L. 93-344), will not result in adjustments to the 2024 caps.
5. Program integrity initiatives seek to identify and reduce overpayments in certain benefit programs, such as Disability Insurance, Supplemental Security Income, Medicare, Medicaid, unemployment compensation, and the Children’s Health Insurance Program.
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://go.usa.gov/xQCKb. In keeping with CBO’s mandate to provide objective, impartial analysis, the report makes no recommendations.
Amy McConnel and Mark Sanford prepared the report with guidance from Megan Carroll. The report was edited by Kate Kelly, fact-checked by Olivia Yang, and reviewed by Christina Hawley Anthony, Chad Chirico, Mark Hadley, and Robert Sunshine. Casey Labrack prepared the text for publication. An electronic version is available at www.cbo.gov/publication/59876. CBO seeks feedback to make its work as useful as possible. Please send comments to communications@cbo.gov.
Phillip L. Swagel
Director
April 2024