Expiration of the Discretionary Spending Limits: Frequently Asked Questions

Expiration of the Discretionary Spending Limits: Frequently Asked Questions

Expiration of the Discretionary Spending
November 18, 2022
Limits: Frequently Asked Questions
Megan S. Lynch
In 2011, during a period in which many Members of Congress expressed concern over rising
Specialist on Congress and
budget deficits, the Budget Control Act of 2011 (BCA , P.L. 112-25) established legal limits on
the Legislative Process
the amount of discretionary spending that could be provided each fiscal year. Under the BCA, for

each fiscal year, two separate spending limits were in effect: one for defense discretionary
Grant A. Driessen
spending and one for nondefense discretionary spending.
Specialist in Public Finance

To enforce the spending limits, the law required that if discretionary appropriations were enacted
that exceeded a statutory limit for a fiscal year, an automatic process, referred to as sequestration,

would be triggered to eliminate the excess spending.
The discretionary spending limits were in effect from FY2012 through FY2021. Such statutory limits could be reestablished
through the enactment of legislation.
This report addresses several frequently asked questions related to the expiration of the discretionary spending limits .
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Contents
What were the discretionary spending limits? ...................................................................... 1
Why were the discretionary spending limits created? ............................................................ 2
Did Congress and the President ever amend the discretionary spending limits? ......................... 2
Can Congress reestablish the discretionary spending limits? .................................................. 3
How did spending change during the time period in which the discretionary spending
limits were in place? ..................................................................................................... 4
How did the expiration of the discretionary spending limits affect baseline projections for
discretionary spending? ................................................................................................. 4
What other mechanisms can Congress use to set or limit spending levels in appropriations
bil s? .......................................................................................................................... 5
Budget Resolution ..................................................................................................... 5
Deeming Resolutions ................................................................................................. 6
Other Procedural Enforcement..................................................................................... 7

Tables

Table A-1. Discretionary Budget Authority Limits Under the BCA as Amended, 2011-
2021........................................................................................................................... 8

Appendixes
Appendix. Discretionary Budget Authority Limits Under the BCA as Amended, 2011-
2021........................................................................................................................... 8

Contacts
Author Information ......................................................................................................... 9

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What were the discretionary spending limits?
The Budget Control Act of 2011 (BCA, P.L. 112-25) established legal limits on the amount of
discretionary spending that could be provided each fiscal year.1 Similar limits on discretionary
spending had previously been in effect between FY1991 and FY2002,2 and the BCA reinstituted
limits for FY2012-FY2021.3 Under the BCA, for each fiscal year, two separate spending limits
were in effect: one for defense discretionary spending and one for nondefense discretionary
spending.4 (See the Appendix for the amounts of these separate spending limits for each year.)
To enforce the spending limits, the law required that if discretionary appropriations were enacted
that exceeded a statutory limit for a fiscal year, an automatic process would be triggered to
eliminate the excess spending. This process, referred to as sequestration, required across-the-
board reductions of nonexempt budgetary resources within the applicable category (defense or
nondefense).
When the BCA was enacted, Congress and the President ensured that certain types of spending
would be effectively exempt from the limits. Specifical y, the BCA stipulated that the enactment
of certain spending—such as appropriations designated as emergency requirements or for
overseas contingency operations—al owed for an upward adjustment of the discretionary limits,
meaning that such spending was effectively exempt from the limits.5
A second component of the BCA required annual reductions to the initial discretionary spending
limits. (These reductions were triggered by the absence of agreement on deficit reduction
legislation from the Joint Select Committee on Deficit Reduction.)6 The BCA required these

1 Discretionary spending is controlled through the appropriations process and is generally provided annually. T he
appropriations committees have jurisdiction over the funding for discretionary spending programs, while authorizing
committees have jurisdiction over the funding for mandatory (or direct) spending programs. For more information, see
CRS Report R42388, The Congressional Appropriations Process: An Introduction , coordinated by James V. Saturno.
2 T he spending limits were part of the Budget Enforcement Act of 1990 (BEA; P.L. 101-508). For more information,
see CRS Report R41901, Statutory Budget Controls in Effect Between 1985 and 2002 , by Megan S. Lynch. During the
period of FY1991-FY2002, separate caps existed and varied by year. T he concept of capping defense and nondefense
spending separately was discussed as early as 1984 and is often cited as “ the rose garden proposal.” Senator Howard
Baker, Senate debate, Congressional Record, April 24, 1984, p. 9681.
3 For more information on the BCA, see CRS Report R44874, The Budget Control Act: Frequently Asked Questions, by
Grant A. Driessen and Megan S. Lynch; or CRS Video WVB00305, Budget Control Act: Overview, by Megan S.
Lynch and Grant A. Driessen.
4 T he statutory limits included in the BCA are described in statute as security and nonsecurity. Currently, the security
category is defined to include discretionary appropriations classified as budget function 050 (national defense) only,
and the nonsecurity category is defined to include all other discretionary appropriations. Originally, however, the BCA
caps defined the security category to include discretionary spending for the Departments of Defense, Homeland
Security, and Veterans Affairs; the National Nuclear Security Administration; the intelligence community management
account; and all accounts in the international affairs budget function (budget function 150) and defined the nonsecurity
category to include discretionary spending in all other budget accounts. T his change in category definitions occurred as
part of the automatic spending reduction process that resulted from the lack of enactment of a bill reported by the Joint
Committee on Deficit Reduction.
5 For more information, see CRS Report R45778, Exceptions to the Budget Control Act’s Discretionary Spending
Lim its, by Megan S. Lynch.
6 T he BCA established the Joint Select Committee on Deficit Reduction to develop a proposal that would reduce the
deficit by at least $1.5 trillion over FY2012-FY2021. T he BCA also established an automatic process to produce
savings, beginning in 2013, in the event that a bill reported by the Joint Select Committee on Deficit Reduction
reducing the deficit by at least $1.2 trillion was not enacted by January 15, 2012. (No recommendation was made and
such a bill was not enacted.) T his automatic process required annual downward adjustments of the discretionary
spending limits, as well as a sequester of nonexempt mandatory spending programs. For more information on the Joint
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reductions to the statutory limits on both defense and nondefense discretionary spending for each
year through FY2021. These reductions were often referred to as a sequester, although they were
not a sequester per se because they did not make automatic, across-the-board cuts to programs.
Instead, they lowered the spending limits, al owing Congress the discretion to develop
appropriations legislation within the reduced limits.
During the 10 years in which the spending limits were in effect, Congress and the President
typical y enacted legislation increasing the spending limits, thereby counteracting some or al of
the annual reductions. For more information, see “Did Congress and the President ever amend the
discretionary spending limits?”
Why were the discretionary spending limits created?
The BCA was developed in 2011, during a period in which many Members of Congress
expressed concern over rising budget deficits. While the federal budget recorded surpluses during
the years of FY1998-FY2001, budget deficits returned in FY2002 and slowly increased over the
next several years due to reduced revenues and increased spending. Net deficits peaked, however,
during the Great Recession from FY2009 to FY2011,7 with deficits averaging 9.0% of gross
domestic product (GDP), which was higher than any other year since World War II. The deficits
during the Great Recession were attributed to negative and low economic growth coupled with
increased spending provided by the American Recovery and Reinvestment Act of 2009
(P.L. 111-5).
Concern with deficit levels has sometimes led Congress and the President to enact new budget
rules or enforcement mechanisms that mandate specific budgetary policies or fiscal outcomes. In
2011, congressional leaders and President Barack Obama participated in extended budget policy
negotiations in conjunction with the government’s borrowing authority approaching the statutory
debt limit. The legislative result of those negotiations was the BCA, which paired an increase in
the debt limit with several new budget enforcement mechanisms, including the discretionary
spending limits.
Did Congress and the President ever amend the
discretionary spending limits?
After enactment of the BCA, Congress and the President enacted legislation altering the
discretionary spending limits for almost every fiscal year in which they were effect (for each year
from FY2013 through FY2021).8 Some of the most significant of these changes included the
following:
 The American Taxpayer Relief Act of 2012 (ATRA, P.L. 112-240) postponed the
start of the FY2013 sequester from January 2 to March 3 and increased the
defense and nondefense caps by $24 bil ion each (to $518 bil ion and $484
bil ion, respectively).

Select Committee on Deficit Reduction, see CRS Report R44874, The Budget Control Act: Frequently Asked
Questions, by Grant A. Driessen and Megan S. Lynch , or CRS Video WVB00305, Budget Control Act: Overview, by
Megan S. Lynch and Grant A. Driessen.
7 The Great Recession describes the contractionary period (which lasted from December 2007 to June 2009) and
subsequent recovery of the U.S. economy.
8 See Appendix.
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 The Bipartisan Budget Act of 2013 (BBA 2013, P.L. 113-67, also referred to as
the Murray-Ryan agreement) increased discretionary spending limits for both
defense and nondefense for FY2014, each by about $22 bil ion (to $520 bil ion
and $492 bil ion, respectively). In addition, it increased discretionary spending
limits for both defense and nondefense for FY2015, each by about $9 bil ion (to
$521 bil ion and $492 bil ion, respectively). It also extended the mandatory
spending sequester by two years through FY2023. Soon after the enactment of
BBA 2013, a bil was enacted to “ensure that the reduced annual cost-of-living
adjustment to the retired pay of members and former members of the armed
forces under the age of 62 required by the Bipartisan Budget Act of 2013 wil not
apply to members or former members who first became members prior to
January 1, 2014, and for other purposes (P.L. 113-82).” This legislation extended
the mandatory spending sequester by one year through FY2024.
 The Bipartisan Budget Act of 2015 (BBA 2015, P.L. 114-74) increased
discretionary spending limits for both defense and nondefense for FY2016, each
by $25 bil ion (to $548 bil ion and $518 bil ion, respectively). In addition, it
increased discretionary spending limits for both defense and nondefense for
FY2017, each by $15 bil ion (to $551 bil ion and $519 bil ion, respectively). It
also extended the direct spending sequester by one year through FY2025. In
addition, it established nonbinding spending targets for Overseas Contingency
Operations/Global War on Terrorism levels for FY2016 and FY2017 and
amended the limits of adjustments al owed under the discretionary spending
limits for Program Integrity Initiatives.
 The Bipartisan Budget Act of 2018 (BBA 2018, P.L. 115-123) increased
nondefense and defense discretionary limits in FY2018 and FY2019. In FY2018,
BBA 2018 increased the defense limit by $80 bil ion (to $629 bil ion) and
increased the nondefense limit by $63 bil ion (to $579 bil ion). In FY2019, it
increased the defense limit by $85 bil ion (to $647 bil ion) and increased the
nondefense limit by $68 bil ion (to $597 bil ion). BBA 2018 also extended the
mandatory spending sequester by two years through FY2027.
 The Bipartisan Budget Act of 2019 (BBA 2019, P.L. 116-37) increased
discretionary spending limits for FY2020 and FY2021. In FY2020, it increased
the discretionary defense cap by $90 bil ion (to $667 bil ion) and increased the
nondefense cap by $78 bil ion (to $622 bil ion). In FY2021, it increased the
discretionary defense cap by $81 bil ion (to $672 bil ion) and increased the
nondefense cap by $72 bil ion (to $627 bil ion). BBA 2019 also extended the
mandatory spending sequester by two years through FY2029.
Can Congress reestablish the discretionary
spending limits?
Congress may reestablish, or otherwise modify, the discretionary spending limits, but such
changes would require the enactment of legislation.
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How did spending change during the time period in
which the discretionary spending limits were
in place?
Prior to the establishment of the BCA caps, real spending (i.e., adjusted for inflation) during the
Great Recession (from FY2009 to FY2011) reached their highest levels since World War II.
Negative and low economic growth coupled with increased spending commitments provided for
by the American Recovery and Reinvestment Act of 2009 (P.L. 111-5) contributed to real outlays
(spending) averaging 23.7% of GDP in those years.9
Real spending declined over the FY2012-FY2019 period relative to FY2009-FY2011 levels
largely due to both the modifications made by the BCA (which reduced discretionary spending)
and the winding down of stimulus programs (which reduced mandatory and discretionary
spending). However, the average of real outlays between FY2012 and FY2019 (20.7% of GDP)
remained higher than average outlays from FY1969 through FY2019 (20.3% of GDP).
Outlays increased significantly in FY2020 and FY2021 (to 31.3% of GDP and 30.5% of GDP,
respectively) due to the federal response to the COVID-19 pandemic. The Congressional Budget
Office (CBO) May 2022 baseline projected a drop in real outlays over the subsequent few years,
to 23.8% of GDP in FY2022 and 21.9% of GDP in FY2024. The CBO baseline then projected a
slow increase in outlays for the remainder of the 10-year forecast, with outlays reaching 24.3% of
GDP in FY2032.10 Those increases are mostly attributable to continued increases in mandatory
spending and increases in net interest payments on the federal debt.
How did the expiration of the discretionary
spending limits affect baseline projections for
discretionary spending?
As Congress considers budgetary policy, it relies on baseline projections of spending, revenue,
and deficits. These baseline projections help Congress understand the implications of existing
budget policy and also provide a point of reference for measuring the budgetary effects of
proposed legislation. The Congressional Budget Act (P.L. 93-344) requires CBO to provide
Congress with such baseline projections, which are included in a document referred to as The
Budget and Economic Outlook.11 In calculating the baseline, CBO makes its own technical and
economic assumptions but must assume that spending and revenue policies continue or expire
based on what is currently slated to occur in statute, with some exceptions.12

9 All of the budget data in this question draws from Congressional Budget Office, Historical Budget Data, February
2021, https://www.cbo.gov/data.
10 CBO, The Budget and Economic Outlook: 2022 to 2032, May 2022, https://www.cbo.gov/publication/57950.
11 T he requirement that CBO submit annual baseline projections is in Section 202(e)(1) of the Congressional Budget
Act.
12 CBO is required to calculate baseline projections using the statutory requirements included in Section 257 of the
Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA, T itle II of P.L. 99-177), commonly known as
the Gramm-Rudman-Hollings Act. T hese statutory requirements assume that spending and revenue policies continue or
expire based on what is currently slated to occur in statute, with important exceptions for many direct spending
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For the fiscal years in which the discretionary spending limits were in place, CBO’s baseline
projections for discretionary spending were calculated by (1) assuming levels of discretionary
funding consistent with the spending levels permitted under the statutory limits; and (2) for types
of spending that are essential y exempt from the limits (such as spending designated as an
emergency or overseas contingency operations), assuming a continuation of the amounts provided
in the previous fiscal year, adjusted for inflation.13
For the years since FY2021, CBO’s baseline projections for discretionary spending are calculated
using the methodology required by law.14 General y, the projections assume that discretionary
funding increases with inflation.15
What other mechanisms can Congress use to set or
limit spending levels in appropriations bills?
Budget Resolution
In the absence of the discretionary spending limits, Congress has other tools that it can employ to
set levels of discretionary spending or to limit the amount of spending that can be provided in
appropriations bil s. One option, created before the existence of discretionary spending limits, is a
budget resolution. A budget resolution reflects an annual agreement between the House and
Senate on budgetary levels for the upcoming fiscal year and at least four additional years. Once
agreed to by both chambers in the exact same form, certain levels in the budget resolution may be
enforced by points of order.
The budget resolution is required to include a level of total spending for the upcoming fiscal year
and then to al ocate that spending among committees.16 Under this process, the House and Senate
Appropriations Committees receive a spending al ocation (referred to as a 302(a) allocation) that
acts as a limit on how much total discretionary spending can be provided in al of the
appropriations bil s for the fiscal year. The Congressional Budget Act also requires that the House
and Senate Appropriations Committees then subdivide their 302(a) al ocation among their 12
subcommittees and report these sub-al ocations—referred to as 302(b) sub-al ocations—to their
respective chambers.17 These sub-al ocations act as a procedural limit on the level of funding that
can be provided in each individual appropriations bil .
The al ocations are then enforceable by points of order, meaning that if legislation is being
considered on the House or Senate floor that would violate these levels, a Member may raise a

programs. In particular, any program with estimated current year outlays greater than $50 million is assumed to
continue to operate under the terms of the law at the time of its expiration.
13 See CBO, The Budget and Economic Outlook: 2020 to 2030, January 2020, pp. 20-21, https://www.cbo.gov/
publication/56073.
14 BBEDCA, §257.
15 According to CBO, “Laws governing the construction of the budget baseline require CBO to assume that
discretionary appropriations in future years will match current funding, with adjustments for inflation. ” Discretionary
spending related to federal personnel is adjusted using the employment cost index for wages and salaries of workers in
private industry. Other discretionary funding is adjusted using the GDP price index. CBO, Additional Inform ation
About the Budget Outlook: 2021 to 2031 , March 2021, p. 6, https://www.cbo.gov/publication/56996.
16 Congressional Budget Act, §301(a). T hese committee spending allocations are required to be included in the joint
explanatory statement accompanying the conference report on the budget resolution.
17 Congressional Budget Act, §301(b).
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point of order against the consideration of that legislation. Points of order are not self-enforcing,
however, meaning that if no Member raises a point of order, a chamber may consider and pass
legislation regardless of whether it would violate levels established in the budget resolution. In
addition, either chamber may waive the point of order. The process for waiving points of order,
and the number of Members required to waive points of order, varies by chamber. General y, such
points of order can be waived in the House by a simple majority of Members and in the Senate by
three-fifths of al Senators.18
Deeming Resolutions
Often, the House and Senate do not reach agreement on a budget resolution. This means that there
is no al ocation of spending made to the Appropriations Committees. This absence means that
there is no procedural limit to the amount that can be included in appropriations measures and no
formal basis for the Appropriations Committees to make the required spending sub-al ocations.
Without such enforceable budgetary levels, the development and consideration of individual
appropriations measures may encounter difficulties.
In the absence of agreement on a budget resolution, however, Congress often employs alternative
legislative tools to substitute for a budget resolution. These substitutes are typical y referred to as
“deeming resolutions” because they are deemed to serve in place of a budget resolution for the
purposes of establishing enforceable budget levels for the upcoming fiscal year.19 Employing a
deeming resolution, however, does not preclude Congress from subsequently agreeing to a budget
resolution.
Such mechanisms are not formal y defined and have no specifical y prescribed form or content.
The mechanisms vary in form and function, but they always (1) include or reference certain
budgetary levels (e.g., aggregate spending limits and committee spending al ocations) and (2)
contain language stipulating that such levels are to be enforceable by points of order as if they
had been included in a budget resolution.
In the past, such deeming resolutions have given 302(a) al ocations to the Appropriations
Committee to act as overal limits on discretionary spending. For example, to establish
discretionary spending levels for FY2023, on June 8, 2022, the House passed a deeming
resolution, H.Res. 1153. It gave the House Appropriations Committee a 302(a) al ocation of $1.6
tril ion.20

18 In the House, most measures are considered in one of two ways, both of which routinely waive points of order. First,
a measure may be considered under terms specified in a resolution (referred to as a special rule) reported from the
House Rules Committee. Such resolutions often include language waiving points of order against the underlying
legislation as well as certain specified amendments. A special rule requires for adoption a simple majority of those
voting, assuming a quorum is present. T he second common way that measures are considered in the House is under the
suspension of the rules procedure. When measures are considered under this procedure, such points of order are
automatically waived. Measures considered under this procedure require for passage a two -thirds vote of those voting,
assuming a quorum is present. In the Senate, such points of order can be waived with the support of three-fifths of
Senators duly chosen and sworn. In such a situation, a Senator may make a motion to waive the point of order either
after one has been raised or before it has been raised (in anticipation of the point of order). T he waiver motion may
apply to one or more points of order as specified by the Senator making the motion.
19 For more information on deeming resolutions, see CRS Report R44296, Deeming Resolutions: Budget Enforcement
in the Absence of a Budget Resolution, by Megan S. Lynch.
20 Specifically, the deeming resolution allocated new discretionary budget authority of $1,602,901,000,000. For more
information, see CRS Report R47175, Setting Budgetary Levels: The House’s FY2023 Deem ing Resolution , by Megan
S. Lynch.
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Other Procedural Enforcement
In the absence of a budget resolution or deeming resolution, Congress might adopt other
procedural mechanisms for setting or limiting discretionary spending levels. This may include
employing informal mechanisms or other formal procedural devices. For example, for FY2017,
the House moved forward with appropriations in the absence of a budget resolution or deeming
resolution. First, the House Appropriations Committee adopted “interim 302(b) sub-al ocations”
for some individual appropriations bil s.21 While such levels did not act as an enforceable cap on
appropriations measures when they were considered on the floor, the House adopted a separate
order as a part of H.Res. 5 (114th Congress) that prohibited floor amendments from increasing
spending in a general appropriations bil .22 This effectively created a limit on individual
appropriations bil s when they were considered by the House.

21 Such levels were made available on the House Appropriations Committee websit e.
22 Specifically, H.Res. 5, Section 3(d)(3), stated, “It shall not be in order to consider an amendment to a general
appropriation bill proposing a net increase in budget authority in the bill (unless considered en bloc with another
amendment or amendments proposing an equal or greater decrease in such budget authority pursuant to clause 2(f) of
rule XXI).” T his standing order—which was in effect as a separate order in the 112th, 113th, and 114th Congresses and
was incorporated into House Rule XXI by H.Res. 5 (115th Congress)—is no longer in effect.
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Appendix. Discretionary Budget Authority Limits
Under the BCA as Amended, 2011-2021
Table A-1. Discretionary Budget Authority Limits Under the BCA as Amended,
2011-2021
(in bil ions of nominal dol ars)

2012
2013 2014
2015 2016 2017
2018 2019
2020 2021
BCA
Aug.
Defense
555
546
556
566
577
590
603
616
630
644
2011 Non-
507
501
510
520
530
541
553
566
578
590
defense
Auto-
Jan.
Defense
555
492
501
511
522
535
548
561
575
589
enforce
2012
ment
Non-
507
458
472
483
493
505
517
531
545
557
defense
ATRA
Jan.
Defense
555
518
497
511
522
535
548
561
575
589
2013 Non-
507
484
469
483
494
505
518
532
545
558
defense
BBA
Dec.
Defense
555
518
520
521
523
536
549
562
576
590
2013
2013 Non-
507
484
492
492
493
504
516
530
543
556
defense
BBA
Nov.
Defense
555
518
520
521
548
551
549
562
576
590
2015
2015 Non-
507
484
492
492
518
519
516
530
543
555
defense
BBA
Feb.
Defense
555
518
520
521
548
551
629
647
576
590
2018
2018 Non-
507
484
492
492
518
519
579
597
543
555
defense
BBA
Aug.
Defense
555
518
520
521
548
551
629
647
667
672
2019
2019 Non-
507
484
492
492
518
519
579
597
622
627
defense
Sources: CBO, Letter to the Honorable John A. Boehner and Honorable Harry Reid estimating the impact on the deficit
of the Budget Control Act of 2011, August 2011; CBO, Final Sequestration Report for Fiscal Year 2012, January 2012;
CBO, Final Sequestration Report for Fiscal Year 2013, March 2013; CBO, Final Sequestration Report for Fiscal Year
2014, January 2014; CBO, Final Sequestration Report for Fiscal Year 2016, December 2015; CBO, Sequestration
Update Report: August 2017, August 2017; CBO, Updated Budget and Economic Projections: 2019 to 2029, May
2019; CBO, Final Sequestration Report for Fiscal Year 2021, January 2021.
Notes: Spending limits apply to fiscal years. Bold figures indicate statutory changes. The BCA as amended
provided for “Security” and “Nonsecurity” categories in FY2012 and FY2013: Italicized figures denote CRS
estimates of budget authority for defense and nondefense categories in those years. Smal changes in FY2016 -
FY2021 budget authority shown in ATRA, BBA 2013, and BBA 2015 rows are caused by adjustments in the
annual proportional al ocations of automatic enforcement measures as calculated by OMB: For more information
on these adjustments, see CBO, Estimated Impact of Automatic Budget Enforcement Procedures Specified in the
Budget Control Act, September 2011.
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Author Information

Megan S. Lynch
Grant A. Driessen
Specialist on Congress and the Legislative Process
Specialist in Public Finance

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