The Effects of Budget Enforcement Act Discretionary Spending Limits in Fiscal Years 1994 and 1995

GAO discussed the implications of the Budget Enforcement Act discretionary spending limits for fiscal year (FY) 1994 and FY 1995. GAO noted that: (1) full compliance with the act's provisions will not necessarily reduce the overall deficit as much as anticipated, since the act does not require offsets for mandatory program increases driven by inflation, recession, and other external factors; (2) the total amount of discretionary budget authority allowed in FY 1995 is slightly above the FY 1993 level, and the amount allowed by the limits in FY 1994 is slightly below the total amount allowed in FY 1993; (3) the budget resolution amounts represent budget authority cuts in defense discretionary spending of $14.2 billion in FY 1994 and $24.3 billion in FY 1995, in international discretionary spending of $1 billion in FY 1994 and $1.7 billion in FY 1995, and in domestic discretionary spending of $10 billion in FY 1994 and $16.8 billion in FY 1995; (4) in FY 1994 and FY 1995, discretionary spending limits will not allow funding for all high priority programs; (5) current funding decisions may limit the realistic choices available in the future and careful planning will allow spending cuts to be made in a way that minimizes the impact of the cuts; and (6) there will be pressures to increase spending related to achieving current goals and providing current levels of benefits, and on savings that might be achieved without changing goals or benefit levels.