OMB: Spending bills exceed budget caps, could trigger cuts

Tuesday - 8/21/2012, 5:57pm EDT

Spending levels appropriated by Congress, so far, for fiscal 2013 fail to live within the limits set by last year's Budget Control Act (BCA), the Office of Management and Budget said in a report issued Monday.

If Congress fails to adhere to the annual limits, OMB is required to enact automatic cuts to bring them back into balance, Acting OMB Director Jeffrey Zients wrote in a letter to President Barack Obama that preceded OMB's report.

The BCA, which ended the standoff between Congress and the White House over raising the government's borrowing limit, contained two budget-cutting methods, known as sequestration. More well-known are the $1.2 trillion over 10 years in automatic, across-the-board cuts set to take effect in January — a result of Congress' failure to strike a deficit-reduction deal.

Both House, Senate exceed caps

However, the law also capped the amount of discretionary spending Congress could appropriate through the annual spending bills that set agency funding. The law capped discretionary spending in fiscal 2012 at $1.043 trillion and slightly higher in 2013. Between 2014 and 2021, the caps will expand only about 2 percent each year.

Based on OMB's analysis of the 12 appropriations bills, which are in various stages of completion, both the House and the Senate have overshot the caps in different categories, OMB said.

The BCA's budget caps delineate between security and nonsecurity discretionary spending. For fiscal 2013, the law caps security spending at $686 billion and nonsecurity spending at $361 billion.

OMB estimates that House appropriations exceed the caps for the security category by about $6.6 billion and that Senate appropriations exceed the caps for nonsecurity spending by $400 million.

House nonsecurity spending and Senate security spending both fall within BCA limits, OMB reported.

OMB to work with Congress on stopgap measure

The report notes that no 2013 appropriations bills have yet been enacted into law. In fact, shortly before leaving for the August recess, Congressional leaders announced a deal to forgo the traditional appropriations process in favor of a stopgap spending bill that would extend funding at 2012 levels into the first six months of fiscal 2013. That bill has not yet been written. Zients said OMB would work with lawmakers "to ensure that an unintended discretionary sequester does not occur as a result of the continuing resolution."

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