The Corner

BCA Spending Caps Don’t Cap Much

Back in August, I was very skeptical of the ability of the debt ceiling deal to reduce the debt to GDP ratio–as S&P had suggested Congress should do–or its ability to reduce spending. Last week, many of my fears were confirmed when the Congressional Budget Office released the final sequestration report for fiscal year 2012 as they are required to do by the Budget Control Act of 2011. The report provides estimates of the caps on discretionary budget authority for the current year and for each year through 2021.

Contrary to common beliefs, the caps set in the BCA are not truly set in stone. They can be increased for certain purposes, CBO explains:

Under that law [BCA2011], however, those limits are adjusted when appropriations are provided for certain purposes. Thus, budget authority designated as an emergency requirement or provided for overseas contingency operations (Such as the wars in Afghanistan and Iraq) would lead to an increase in the caps, as would budget authority provided for certain specified “program integrity” initiatives or for certain types of disaster relief.

Here are some key facts from CBO report:

  • CBO estimates that the adjustments to the caps on discretionary budget authority for 2012 will total about $137 billion.

  • Most of that amount – $126.5 billion- results from an increase in the cap for security programs to account for budget authority provided for overseas contingency operations.

  • Other adjustments (disaster relief and program integrity initiatives) to the caps will total $10.9 billion

    This takes us down the precautionary path of budget gimmicks.

However is the worrisome aspect of the law. Congress and the president can jointly decide to designate unlimited amount emergency spending outside of disaster limitations. can be used to increase the spending cap by about $137 billion; roughly 10 percent of total discretionary spending.

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