{ "id": "R43411", "type": "CRS Report", "typeId": "REPORTS", "number": "R43411", "active": false, "source": "EveryCRSReport.com, University of North Texas Libraries Government Documents Department", "versions": [ { "source": "EveryCRSReport.com", "id": 444345, "date": "2015-03-25", "retrieved": "2016-04-06T22:47:15.417194", "title": "The Budget Control Act of 2011: Legislative Changes to the Law and Their Budgetary Effects", "summary": "Congressional Research Service\n7-5700\nwww.crs.gov\nR43411\nSummary\nFollowing a lengthy debate over raising the debt limit, the Budget Control Act of 2011 (BCA; P.L. 112-25) was signed into law by President Obama on August 2, 2011. In addition to including a mechanism to increase the debt limit, the BCA contained provisions intended to reduce the budget deficit through spending limits and reductions. The savings in the BCA are achieved mainly through two mechanisms: (1) statutory discretionary spending caps covering 10 years that came into effect in 2012 and (2) a requirement for an additional $1.2 trillion in savings to be achieved through legislation or an automatic spending reduction process (sometimes referred to as the \u201csequester\u201d) covering nine years. Combined, these provisions were projected to reduce the deficit by roughly $2 trillion between FY2012-FY2021. \nTwo subsequent pieces of legislation have modified the BCA since it was enacted. First, the American Taxpayer Relief Act of 2012 (ATRA; P.L. 112-240) postponed the start of the FY2013 spending reductions until March 1, 2013. ATRA also reduced the FY2013 spending reductions implemented via this automatic process by $24 billion (i.e., two months\u2019 worth of reductions), to roughly $85 billion equally divided between defense and non-defense. These provisions were offset by other changes in spending or revenue. Subsequently, the Bipartisan Budget Act of 2013 (BBA; P.L. 113-67) replaced a portion of the automatic spending process reductions for FY2014 ($45 billion) and FY2015 ($18 billion) with other deficit reduction provisions. These changes allow for more discretionary spending than was provided under the BCA for FY2014 and FY2015. Various deficit reduction measures were included to offset the cost of the increased discretionary spending.\nThough changes to the BCA implemented through ATRA and the BBA were offset by other savings, they were mostly paid for outside of the parameters of the BCA itself. These changes were paid for largely by making other cuts to mandatory spending and by increasing non-tax receipts. Therefore, the savings originally provided in the BCA were reduced by approximately $12 billion in FY2013, $45 billion in FY2014, and $18 billion in FY2015 as a result of ATRA and the BBA.\nA goal of the BCA was to achieve deficit reduction through a specified amount of savings. Individual policy changes cannot be taken in isolation, however, so that the level of savings contained in the BCA does not mean that the resulting deficit will reach a specified level. Since the law has been enacted, both ATRA and BBA have changed the amount of savings contained in the BCA itself. Since the BCA was enacted, other legislation has cumulatively increased the deficit by nearly $1.6 trillion over the FY2012-FY2021 period. If the deficit reduction contained in the BCA is not included, the deficit over the FY2012-FY2021 period would be projected to be $3.5 trillion higher as a result of legislative action taken since August 2011.\nThe BCA was intended to achieve its deficit reduction over a specified 10-year period (FY2012-FY2021). The changes made to the BCA by ATRA and BBA still achieve the same amount of deficit reduction over the 10-year period from the time each law was enacted. However, the deficit reduction contained in ATRA and BBA \u201cpays for\u201d the increases in spending during the FY2013 to FY2015 period. In other words, the legislative changes to the original provisions of the BCA over the most recent fiscal years have been replaced by spending cuts in future years, thereby achieving less deficit reduction in any given year compared to what was contained in the BCA originally for the FY2013 to FY2015 period. If further changes are made to the BCA, the deficit reduction originally provided by the law may be revised further.\nContents\nBackground on the Budget Control Act of 2011\t1\nDiscretionary Spending Caps\t2\nAutomatic Spending Reduction Process\t3\nLegislative Changes to the BCA\t5\nThe American Taxpayer Relief Act of 2012\t6\nThe Bipartisan Budget Act of 2013\t6\nEffects of the BCA on the Federal Budget\t6\nBCA and Discretionary Spending, FY2012-FY2015\t7\nBCA and the Budget Deficit\t9\n\nTables\nTable 1. Discretionary Spending Caps Under the BCA\t5\nTable 2. Discretionary Budget Authority, FY2012-FY2015\t8\nTable 3. Legislative Changes Affecting the Current Law Baseline Deficit Since August 2011\t10\n\nContacts\nAuthor Contact Information\t13\n\nF\nollowing a lengthy debate over raising the debt limit, the Budget Control Act of 2011 (BCA; P.L. 112-25) was signed into law by President Obama on August 2, 2011. In addition to including a mechanism to increase the debt limit, the BCA contained provisions intended to reduce the budget deficit. Combined, these provisions were projected to reduce the deficit by roughly $2 trillion over the fiscal year (FY)2012-FY2021 period. \nThe savings in the BCA are achieved mainly through two mechanisms: (1) statutory discretionary spending caps covering 10 years that came into effect in 2012 and (2) a requirement for an additional $1.2 trillion in savings to be achieved through legislation or an automatic spending reduction process (sometimes referred to as the \u201csequester\u201d) covering nine years that was initially scheduled to come into effect on January 2, 2013. These mechanisms are discussed in more detail below. Since the enactment of the BCA, two subsequent pieces of legislation have modified it. First, the American Taxpayer Relief Act of 2012 (ATRA; P.L. 112-240) postponed the start of the FY2013 spending reductions, until March 1, 2013, and canceled the first two months of spending cuts. Subsequently, the Bipartisan Budget Act of 2013 (BBA; P.L. 113-67) increased discretionary spending levels for FY2014 and FY2015 relative to what they would have been under the BCA. Both pieces of legislation contained provisions that offset these changes.\nThis report discusses the legislative changes affecting the Budget Control Act and focuses on how these changes have altered spending levels and deficit projections. Other CRS reports provide additional analysis of the BCA.\nBackground on the Budget Control Act of 2011\nThe BCA was enacted in response to congressional concern about unsustainable growth in the federal debt and deficit. The federal budget has been in deficit (spending exceeding revenue) since FY2002, but deficits became significantly larger between FY2009 and FY2012. That year, the deficit topped $1 trillion for the first time ever, and remained above $1 trillion through FY2012. This growth in the budget deficit was the result of spending reaching its highest level as a share of GDP since FY1945 and revenues reaching their lowest level as a share of GDP since FY1950. Spending peaked at over 24% of GDP in FY2009 and revenues bottomed out at 15% of GDP in FY2009 and FY2010. These trends are largely due to the budgetary effects of the recent recession and policies implemented in response to it, including increased outlays and tax cuts. As the effects of the recession wane, higher tax revenue and lower levels of spending as a percentage of GDP relative to those fiscal years have resulted in more sustainable budget deficits. In FY2014, the deficit totaled 2.8% of GDP, or 7 percentage points below its peak in FY2009 (9.8% of GDP). The FY2015 deficit is estimated at a similar level.\nThe BCA reduces spending through two primary mechanisms, discretionary spending caps that began in FY2012 and an automatic spending reduction process that began in FY2013. \nDiscretionary Spending Caps\nThe BCA placed statutory caps on most discretionary spending from FY2012 through FY2021. The caps place limits on the amount of discretionary budget authority provided through the annual appropriations process for those years, with adjustments permitted for certain purposes. The limits can be adjusted to accommodate (1) changes in concepts and definitions; (2) appropriations designated as emergency requirements; (3) appropriations for Overseas Contingency Operations/Global War on Terrorism (OCO; e.g., for military activities in Afghanistan); (4) appropriations for continuing disability reviews and redeterminations; (5) appropriations for controlling health care fraud and abuse; and (6) appropriations for disaster relief. The last five of the listed adjustments effectively exempt those types of discretionary spending from the statutory caps. The BCA limits adjustments for spending on disability reviews and controlling health care fraud abuse to relatively small amounts and limits adjustments for disaster relief by a formula based on historical levels. By contrast, funds designated as such by Congress and the President as OCO and emergency spending are not limited. \nBudget Authority and Outlays\nBudget authority is what federal agencies are legally permitted to spend, and it is granted by Congress through appropriation acts in the case of discretionary spending or through other acts in the case of mandatory spending. Budget authority gives federal officials the ability to spend. Outlays are disbursed federal funds. Until the federal government disburses funds to make payments, no outlays occur. Therefore, there is generally a lag between when Congress grants budget authority and outlays occur. The budget deficit is measured as the difference between outlays and revenues.\n\nCap levels are enforced through a sequestration process (spending cuts that are automatically triggered if cap levels are breached). The caps do not limit specific accounts or appropriations bills; instead, they are broad caps on discretionary spending. In FY2012 and FY2013, separate caps existed on security and non-security spending. Security spending is defined by the BCA as discretionary appropriations associated with agency budgets for the Departments of Defense, Homeland Security, Veterans Affairs, the National Nuclear Security Administration, the intelligence community management account, and all budget accounts in the budget function for international affairs (function 150). The largest amounts of spending in the non-security category are tied to the Departments of Health and Human Services, Education, and Housing and Urban Development. For FY2014 to FY2021, there are separate caps for defense (function 050) and non-defense spending. Decisions about how these caps will affect specific agencies or programs will be made by Congress and the President through the regular appropriations process.\nAutomatic Spending Reduction Process\nTitle IV of the Budget Control Act established a Joint Select Committee on Deficit Reduction (hereinafter Joint Committee) composed of an equal number of Senators and Representatives instructed to develop a proposal that would reduce the deficit by at least $1.5 trillion over FY2012 to FY2021. To ensure this level of savings was achieved even if a Joint Committee bill was not enacted, Section 302 of the Budget Control Act of 2011 established an automatic process to reduce spending. On November 21, 2011, the co-chairs of the Joint Committee announced that they were unable to reach a deficit-reduction agreement before the committee\u2019s deadline. As a result, a $1.2 trillion automatic spending reduction process was triggered, scheduled to begin in January 2013. \nOf the $1.2 trillion in savings, the BCA specifies that 18% of the total ($216 billion) be credited to debt service savings that would result from the spending reduction. Therefore, the amount of the reduction in budget authority would equal the remaining 82% of the required total savings. The amount of the automatic spending reduction under the BCA is spread evenly over the nine years from FY2013 to FY2021 and split evenly between defense (defined as budget function 050) and non-defense spending categories and applied proportionally to non-exempt discretionary and mandatory programs within each of these categories. The automatic spending reduction would amount to a reduction in budget authority of $109.3 billion each year for nine years, with $54.7 billion of the reduction to be applied to defense and $54.7 billion applied to non-defense programs.\nWithin the defense and non-defense categories, some programs are exempted from an automatic spending reduction and the cuts to other programs are limited by statute. For example, the automatic spending reduction to Medicare is limited to 2% of program spending. Although the calculation of the annual amount of the automatic spending reduction ($109.3 billion) would not be revised in subsequent years under the BCA\u2019s framework described above, the amount applied to any given budget account could be recalculated if the relative size of budget accounts changes or the exempt/non-exempt status of an account changes. \nFor purposes of the automatic reductions, the BCA reorganizes the discretionary spending caps in terms of defense (defined as budget category 050) and non-defense for the 10-year budget window. The amount of the automatic reduction is then subtracted from the new defense/non-defense cap levels. In FY2013, the automatic spending reduction was carried out through an across-the-board sequester of previously enacted budgetary resources. After the first year (FY2013), the automatic spending reduction will be carried out through a sequester for mandatory spending and through reductions in the discretionary caps, rather than a sequester, for discretionary spending. The sequester is applied proportionately to all non-exempt accounts, while it is left to future Congresses to determine how to apply the reductions to discretionary accounts within the caps. Cuts to discretionary programs as a result of the automatic spending reduction process would be in addition to the savings already projected to result from the initial discretionary caps in the BCA.\nThe automatic spending reduction process is not meant to ensure that a specific deficit or spending level is realized in the future nor would it prevent deficit savings accomplished by the automatic spending reduction from being undone by future legislation. The amount of automatic spending reduction does not change if future budget deficits turn out to be larger or smaller than projected at the time the automatic spending reduction is determined. Future budget deficits could turn out to be larger or smaller than projected because of subsequent legislative changes or because of forecasting errors, which have historically been large.\nThe FY2013 sequester reduced non-exempt defense discretionary spending by 7.8% relative to the cap levels, non-defense discretionary spending by 5.0% relative to the cap levels, Medicare by 2% relative to baseline levels (per the statutory limit), and other mandatory spending by 5.1% relative to the baseline levels. For FY2014, a sequester order was issued which reduced defense mandatory spending by 9.8% and non-defense mandatory spending by 7.2%. For FY2015, these figures stood at 9.5% and 7.3%, respectively. Reductions to Medicare remained capped at 2% per the statutory limit in each year.\nTable 1 displays BCA discretionary cap levels, before and after the automatic spending reductions, as amended by the American Taxpayer Relief Act of 2012 (ATRA) and the Bipartisan Budget Act of 2013 (BBA). These changes are discussed in the next section.\nTable 1. Discretionary Spending Caps Under the BCA\n(billions of $)\n\n2013\n2014\n2015\n2016\n2017\n2018\n2019\n2020\n2021\n\n\nBCA Cap Levels\n\nDefense\n546\n556\n566\n577\n590\n603\n616\n630\n644\n\nNon-Defense\n501\n510\n520\n530\n541\n553\n566\n578\n590\n\nTotal\n1,047\n1,066\n1,086\n1,107\n1,131\n1,156\n1,182\n1,208\n1,234\n\n\nChanges Made by ATRAa\n\nDefense\n552\n552\nn/a\nn/a\nn/a\nn/a\nn/a\nn/a\nn/a\n\nNon-Defense\n491\n506\nn/a\nn/a\nn/a\nn/a\nn/a\nn/a\nn/a\n\nTotal\n1,043\n1,058\nn/a\nn/a\nn/a\nn/a\nn/a\nn/a\nn/a\n\n\nAutomatic Spending Reductions\n\nDefense\n-34\n-54\n-54\n-54\n-54\n-54\n-54\n-54\n-54\n\nNon-Defense\n-21\n-37\n-37\n-37\n-37\n-36\n-35\n-34\n-33\n\nTotal\n-55\n-91\n-91\n-91\n-91\n-90\n-89\n-88\n-87\n\n\nRevised Cap Levels\n\nDefense\n518\n498\n512\n523\n536\n549\n562\n576\n590\n\nNon-Defense\n470\n469\n483\n493\n504\n515\n529\n543\n555\n\nTotal\n988\n967\n995\n1,017\n1,040\n1,064\n1,091\n1,119\n1,145\n\n\nCap Levels As Revised by the Bipartisan Budget Act of 2013\n\nDefense\nn/a\n520\n521\nn/a\nn/a\nn/a\nn/a\nn/a\nn/a\n\nNon-Defense\nn/a\n492\n492\nn/a\nn/a\nn/a\nn/a\nn/a\nn/a\n\nTotal\nn/a\n1,012\n1,014\nn/a\nn/a\nn/a\nn/a\nn/a\nn/a\n\nSource: CRS Report R42949, The American Taxpayer Relief Act of 2012: Modifications to the Budget Enforcement Procedures in the Budget Control Act, by Bill Heniff Jr., Congressional Budget Office, Updated Budget Projections: 2015 to 2025, Table 3 and CBO\u2019s Estimate of Discretionary Budget Authority for Fiscal Year 2013 Showing Amounts for Defense and Non-Defense Programs, September 2013.\nNotes: See Table 2 for more information on discretionary spending levels in 2012, 2013, and 2014. Totals may not sum due to rounding.\nFor FY2013, discretionary cap levels were in terms of security and non-security following the enactment of ATRA ($684 billion for security and $359 billion for non-security). For the purposes of calculating the automatic spending reductions, the caps were reset to defense ($544 billion) and non-defense ($499 billion). Budget enforcement of the caps for FY2013 was evaluated on the security and non-security breakdown. \nLegislative Changes to the BCA\nSince the enactment of the BCA, its spending reductions have been modified by two pieces of legislation, the American Taxpayer Relief Act of 2012 (ATRA) and the Bipartisan Budget Act of 2013 (BBA). Neither of these actions modified the provisions of the BCA that affect discretionary spending beyond FY2015. However, the BBA extended the BCA\u2019s mandatory spending sequester for two years, through FY2023. Subsequent legislation (P.L. 113-82) extended the mandatory spending sequester through FY2024 but did not modify other provisions of the BCA.\nThe American Taxpayer Relief Act of 2012\nThe enactment of ATRA postponed the start of the FY2013 spending reductions until March 1, 2013. ATRA also reduced the FY2013 spending reductions implemented via this process by $24 billion (i.e., two months\u2019 worth of reductions), to roughly $85 billion equally divided between defense and non-defense ($42.7 billion for each category). Several other minor modifications were also made to the process by which these spending cuts would be calculated. Although ATRA reduced the total spending cuts achieved by the automatic process, these provisions were offset by other spending reductions and revenue increases. On the spending side, the BCA\u2019s discretionary spending caps were reduced by $4 billion in FY2013 and $8 billion in FY2014, which was intended to offset roughly half of the cost. In addition, ATRA contained a provision which raised revenue during the budget window by permitting certain retirement accounts to be transferred to designated Roth accounts without distribution. This was used to offset the other half of the cost.\nThe Bipartisan Budget Act of 2013\nThe Bipartisan Budget Act of 2013 (BBA) replaced a portion of the automatic spending process reductions for FY2014 ($45 billion) and FY2015 ($18 billion) with other savings. These changes allow for more discretionary spending than was provided under the BCA for FY2014 and FY2015. The BBA increased discretionary spending levels relative to the levels allowed under the BCA caps after the caps had been adjusted downward to account for the prior automatic spending reductions. The savings to offset this additional spending included various provisions affecting civilian and military retirement, higher education, and transportation. In addition, the measure also contained a provision which extended the BCA\u2019s sequester of mandatory spending by two years, though FY2023.\nEffects of the BCA on the Federal Budget\nAs discussed above, the BCA as enacted contained over $2 trillion in deficit reduction over 10 years, affecting primarily the discretionary side of the budget. As of the time of this report, appropriations for three fiscal years have been provided under the constraints of the BCA. The effects of the BCA and the subsequent revisions from ATRA and the BBA on spending and the budget deficit are discussed below.\nBCA and Discretionary Spending, FY2012-FY2015\nTable 2 illustrates how discretionary budget authority was provided within categories subject to the caps for FY2012 through FY2015 (estimated) as well as for those categories not limited by the caps. ATRA reduced the effect of the FY2013 sequester on discretionary spending, meaning discretionary spending would have been lower in the absence of ATRA. The BBA increased the level of spending subject to the BCA caps in FY2014 and FY2015 to a level that is higher than would have been allowed subsequent to the BCA\u2019s automatic spending reductions, but lower than the BCA\u2019s original spending caps.\nDiscretionary budget authority subject to the caps equaled $1,043 billion in FY2012 and FY2013. Total discretionary budget authority has exceeded the level of the caps in both years because, as the BCA permitted, some discretionary BA is in categories not subject to the caps ($138 billion in FY2012 and $152 billion in FY2013). In FY2013, the BCA\u2019s automatic spending reductions were implemented through a sequester, reducing discretionary BA by $64 billion, from $1,195 billion to $1,131 billion. Of the $64 billion of discretionary spending reductions from sequestration, $55 billion was from discretionary spending subject to the caps and $9 billion was from OCO, emergency, and disaster spending. \nIn FY2014, the BCA\u2019s automatic spending reduction process reduced discretionary spending subject to the cap by $91 billion, from $1,058 billion to $967 billion. With the enactment of the Bipartisan Budget Act of 2013, the level of the caps was increased by $45 billion to $1,012 billion. Additional discretionary spending not subject to the caps also increased the overall level of discretionary spending for FY2014 to $1,111 billion. In FY2015, the BCA\u2019s automatic spending reduction process reduced discretionary spending subject to the cap by $91 billion, from $1,086 billion to $995 billion. Like FY2014, the BBA increased the cap level. This increase amounted to $45 billion for a spending level subject to the caps of $1,014 billion. Additional discretionary spending not subject to the caps also increased the overall level of discretionary spending for FY2015 to $1,100 billion. (If future legislation, such as a supplemental appropriations bill, provides additional discretionary funding in the categories not subject to the caps\u2014i.e., for an emergency\u2014the final discretionary spending levels for FY2015 would be higher.) As a result, total discretionary BA was $1,181 billion in FY2012, $1,131 billion in FY2013, $1,111 billion in FY2014, and $1,100 billion in FY2015.\nAs shown in Table 2, total discretionary spending has declined each year between FY2012 and FY2015. Between FY2012 and FY2013, spending declined by $50 billion, largely due to the size of the BCA sequester and a reduction in OCO spending. Those reductions were partially offset by a sizable increase in emergency spending primarily due to relief provided for those affected by Hurricane Sandy. Spending not subject to the caps was $14 billion higher in FY2013 ($152 billion) than it was in FY2012 ($138 billion). Absent the sequester, spending in FY2013 ($1,195 billion) would have exceeded FY2012 levels ($1,181 billion). Spending in FY2014 ($1,111 billion) was $20 billion below the FY2013 level ($1,131 billion). However, spending subject to the caps, as modified, is $24 billion higher in FY2014 ($1,012 billion) than it was in FY2013 ($988 billion). Relative to FY2014, spending subject to the caps increased by $2 billion in FY2015 ($1,014 billion). Overall discretionary spending in FY2015 ($1,100 billion) also declined relative to FY2014 spending by $11 billion due to lower amounts of OCO spending.\nTable 2. Discretionary Budget Authority, FY2012-FY2015\n(billions of $)\n\n\nFY2012\nFY2013\nFY2014\nFY2015 (est)\n\nSpending Subject to the BCA Caps, as modified by ATRA (FY2013, FY2014)\n1,043\n1,043\n1,058\n1,086\n\n- Automatic Spending Reductions\n\nn/a\nn/a\n91\n91\n\n= Revised Caps\n\n1,043\n1,043\n967\n995\n\nTotal Spending Subject to the Caps, as modified by the BBA\nn/a\nn/a\n1,012\n1,014\n\n+ Adjustments for\nOCO\n127\n99\n92\n74\n\n\nEmergency\n0\n41\n*\n5\n\n\nDisaster Relief\n11\n12\n6\n6\n\n\nProgram Integrity\n*\n*\n1\n1\n\n= Total Adjustments\n\n138\n152\n99\n86\n\nAdjusted BCA Caps\n\n1,181\n1,195\n1,111\n1,100\n\n- Sequester\n\nn/a\n64\n0\n0\n\n= Total Discretionary BA\n\n1,181\n1,131\n1,111\n1,100\n\n\n\n\n\n\n\n\nMemo: Total Spending Subject to BCA Caps, as modified\n1,043\n988\n1,012\n1,014\n\nSource: Congressional Budget Office, Sequestration Update Report, August 2012, Table 1; Updated Budget Projections: Fiscal Years 2013 to 2023, May 2013, Table 3 and Table 4; Sequestration Update Report: August 2014, August 2014, Table 1; and Final Sequestration Report for Fiscal Year 2015, January 2015, Table 1.\nNotes: Totals may not sum due to rounding. * indicates less than $1 billion. Does not include modifications to original scoring. N/a indicates not applicable.\nThough total discretionary spending followed the trends described above, what happened to spending in each year can be subject to some interpretation. In other words, the provisions of the BCA affected spending beginning in FY2012. However, the automatic spending reduction process was not scheduled to begin until FY2013. Therefore, discretionary spending in FY2012 was, by definition, going to be higher than the FY2013 level because FY2012 spending was not subject to a sequester or other type of spending reduction via the automatic process. In FY2013, ATRA reduced the amount of the sequester set to take effect that year, thereby increasing spending relative to the level provided in the BCA. In addition, spending in FY2014 and FY2015 was increased from the level provided in the BCA by $45 billion and $18 billion, respectively, as a result of the BBA. Though spending may fall in certain years, it may be useful to compare spending levels to what they would have been under the BCA absent ATRA and BBA. In that case, spending could have been $24 billion lower in FY2013 had a portion of the sequester not been eliminated by ATRA and $45 billion lower in FY2014 and $18 billion lower in FY2015 had the BBA not revised the cap. However, assuming discretionary spending continued to grow at historical rates of about 5%-6% per year in nominal terms, discretionary spending in FY2013, FY2014, and FY2015 would have likely been higher than the levels shown above, absent the spending reductions from the BCA.\nBCA and the Budget Deficit\nAs originally scored, the BCA was projected to reduce the cumulative deficit between FY2012 and FY2021 by roughly $2 trillion. This figure includes both the direct effect of lower spending and the interest savings stemming from the lower deficits and debt resulting from lower spending. A goal of the BCA was to match its deficit reduction provisions to the BCA\u2019s multi-step increase in the debt limit, although the savings are achieved over a different timeframe than the debt limit increases. The deficit reduction achieved in the BCA in isolation would not prevent the need for future debt limit increases.\nBecause individual policy changes cannot be taken in isolation, the savings contained in the BCA do not mean that the resulting deficit will reach the specified lower level if other policies are enacted which increase the deficit. Since the law has been enacted, both ATRA and BBA have changed the amount and timing of savings contained in the BCA itself. Specifically, since the BCA was enacted in August 2011, Congress and the President have adhered to the spending restrictions originally intended in that legislation for only one year, FY2012, prior to the beginning of the automatic spending reduction process. Outside of the legislative changes made by ATRA and the BBA, other actions have also led to changes in the baseline budget deficit projections. As shown in Table 3, since the BCA was enacted in August 2011, legislation has cumulatively increased the deficit by nearly $1.6 trillion. Absent the BCA, the deficit is projected to be $3.5 trillion higher over the FY2012-FY2021 period.\n\nTable 3. Legislative Changes Affecting the Current Law Baseline Deficit Since August 2011\n(billions of $)\nEffect on Deficit (Increase (+)/Decrease (-))\nFY2012\nFY2013\nFY2014\nFY2015\nFY2016\nFY2017\nFY2018\nFY2019\nFY2020\nFY2021\nFY2012-FY2021\n\nBudget Control Act\n\n\n\n\n\n\n\n\n\n\n\n\nDiscretionary Spending Caps and Other Provisions\n-22\n-41\n-56\n-69\n-76\n-83\n-91\n-99\n-106\n-115\n-758\n\nAutomatic Spending Reductions\n0\n-66\n-93\n-101\n-104\n-106\n-106\n-105\n-105\n-105\n-891\n\nNet Interest Savings from the BCA\n0\n-1\n-3\n-7\n-15\n-25\n-37\n-50\n-62\n-76\n-276\n\nNon-BCA Spending Changes\n48\n49\n44\n-4\n-28\n-49\n-50\n-83\n-90\n-99\n-259\n\nRevenue Changes\n89\n313\n339\n347\n244\n322\n357\n392\n425\n467\n3,295\n\nOther Net Interest\n0\n2\n7\n10\n23\n43\n68\n88\n107\n132\n480\n\nTotal Increase in the Deficit as a Result of Legislative Action since August 2011 Excluding the BCA\n137\n364\n390\n353\n239\n316\n375\n397\n442\n500\n3,516\n\nTotal Increase in the Deficit as a Result of Legislative Action since August 2011 Including the BCA\n115\n256\n238\n176\n44\n102\n141\n143\n169\n204\n1,591\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nMemo (not including net interest effects):\n\n\n\n\n\n\n\n\n\n\n\n\nEffect on the deficit due to ATRA\n0\n329\n354\n311\n340\n371\n405\n416\n448\n482\n3,456\n\nEffect on the deficit due to BBA\n0\n0\n42\n15\n-4\n-5\n-5\n-5\n-5\n-5\n30\n\nSource: CRS calculations and CBO, The Budget and Economic Outlook: An Update, August 2011, Table A-1; The Budget and Economic Outlook: Fiscal Years 2012 to 2022, January 2012, Table A-1 and A-2; Updated Budget Projections: Fiscal Years 2012 to 2022, March 2012, Table 3; An Update to the Budget and Economic Outlook: Fiscal Years 2012 to 2022, August 2012, Table A-1; The Budget and Economic Outlook: Fiscal Years 2013 to 2023, February 2013, Table A-1; Updated Budget Projections: Fiscal Years 2013 to 2023, May 2013, Box 1-1 and Table 6; Cost Estimate of the Bipartisan Budget Act of 2013, December 11, 2013, Table 1; The Budget and Economic Outlook: Fiscal Years 2014 to 2024, February 2014, Table A-1; Updated Budget Projections: 2014 to 2024, April 2014, Table 5; An Update to the Budget and Economic Outlook: 2014 to 2024, August 2014, Table A-1; The Budget and Economic Outlook: 2015 to 2025, January 2015, Table A-1; and Updated Budget Projections: 2015 to 2025, March 2015, Table 5.\nNotes: Totals may not sum due to rounding. A portion of the non-BCA spending changes result from baseline rules that extrapolate discretionary funding from the current year to future years. For example, non-BCA spending reductions from FY2014 to FY2021 stem primarily from removing FY2013 disaster funding from the baseline. \nThe legislation that increased the deficit the most relative to current law since August 2011 was ATRA. ATRA made various changes to the tax code and several spending programs, including modification of the provisions of the BCA as it related to the FY2013 sequester, as discussed earlier. As a result of ATRA, CBO projected the deficit would increase by nearly $3.5 trillion between FY2013 and FY2021. (The total increase in the deficit from the legislation was estimated at $4 trillion over the FY2013-FY2022 period. Compared with a current policy baseline that assumes expiring provisions will be extended, however, ATRA reduced the deficit.)\nThe BBA increased the amount of discretionary spending allowed under the provisions of the BCA offset by other changes to mandatory spending and non-tax receipts, as discussed earlier. CBO projected the deficit would increase by nearly $30 billion between FY2014 and FY2021. (Over the FY2014 to FY2023 period, the BBA is projected to decrease the deficit by an estimated $22 billion.) Other legislation since that time had much smaller effects on both spending and revenue levels.\nThough changes to the BCA implemented through ATRA and the BBA were offset by other savings measures, they were largely offset outside of the parameters of the BCA itself. In other words, ATRA and the BBA delayed the start of and amount of the FY2013 sequester, and rolled-back the FY2014 and FY2015 automatic spending reductions. These changes were paid for largely by making other cuts to mandatory spending and by increasing non-tax receipts. Therefore, the deficit reduction attributed to spending cuts in the BCA was reduced by approximately $12 billion in FY2013, $45 billion in FY2014, and $1", "type": "CRS Report", "typeId": "REPORTS", "active": false, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/R43411", "sha1": "34b0e4d1320571b3597277b5ad53ffbc00c0a1e5", "filename": "files/20150325_R43411_34b0e4d1320571b3597277b5ad53ffbc00c0a1e5.html", "images": null }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/R43411", "sha1": "e5544c96d8ca7c38577f271e164fa6107b91d3f9", "filename": "files/20150325_R43411_e5544c96d8ca7c38577f271e164fa6107b91d3f9.pdf", "images": null } ], "topics": [] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc284468/", "id": "R43411_2014Mar06", "date": "2014-03-06", "retrieved": "2014-05-06T21:21:54", "title": "The Budget Control Act of 2011: Legislative Changes to the Law and Their Budgetary Effects", "summary": "This report provides information on the levels of deficit reduction that would occur if the Budget Control Act's (BCA) automatic cuts are implemented as under current law, contrasted with alternative proposals offered by some Members of Congress and President Obama. It also discusses specific determinations made by the Office of Management and Budget regarding the exempt/non-exempt status of certain programs, as well as a discussion of information to be disclosed regarding the FY2013 BCA sequester impact.", "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20140306_R43411_0e32d76a6b45fb86906ded3cf2fab105b5d5ee63.pdf" }, { "format": "HTML", "filename": "files/20140306_R43411_0e32d76a6b45fb86906ded3cf2fab105b5d5ee63.html" } ], "topics": [ { "source": "LIV", "id": "Budgets", "name": "Budgets" }, { "source": "LIV", "id": "Federal budgets", "name": "Federal budgets" }, { "source": "LIV", "id": "Public debt", "name": "Public debt" }, { "source": "LIV", "id": "Fiscal policy", "name": "Fiscal policy" } ] } ], "topics": [ "Appropriations", "Intelligence and National Security" ] }