Comments on Questions Concerning Sequestration Under the Balanced Budget and Emergency Deficit Act of 1985

B-221498.38: Jun 27, 1986

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Pursuant to a congressional request, GAO commented on: (1) the Office of Management and Budget's (OMB) view that funds sequestered from permanent appropriations should be held in their accounts for release in the next fiscal year (FY); (2) how the release of such funds would affect the deficit in the following FY; and (3) whether the release of these sequestered funds would further deficit reduction goals. GAO believes that: (1) appropriations sequestered in special and trust funds should remain in the funds for the FY that the sequestration order covers and the statutory authority for the funds should determine their release at the end of the FY; (2) previously held funds should be considered new budgetary resources subject to sequester in the next fiscal year; and (3) the release of sequestered funds in the following FY would affect deficit reduction only slightly.