Budget Issues:

Budget Enforcement Compliance Report

AIMD-97-28: Published: Jan 16, 1997. Publicly Released: Jan 16, 1997.

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Pursuant to a congressional request, GAO reviewed the Office of Management and Budget's (OMB) and the Congressional Budget Office's (CBO) compliance with the requirements of the Balanced Budget and Emergency Deficit Control Act of 1985, focusing on OMB and CBO reports issued on legislation enacted during the second session of the 104th Congress that ended October 4, 1996.

GAO found that: (1) overall, CBO and OMB substantially complied with the act; (2) three compliance issues and some implementation issues represent questionable and inconsistent scoring practices; (3) because OMB delayed the issuance of its final sequestration report so that it could include estimates of all legislation passed during the second session of the 104th Congress, it did not issue the report within 15 days of the end of the congressional session as required by section 254(a); (4) although not consistent with the law, OMB's decision to delay the report so it could be complete does not seem unreasonable to GAO, especially since the Omnibus Consolidated Appropriations Act, enacted during the 104th Congress, required that pay-as-you-go (PAYGO) balances for 1997 be set at zero; (5) OMB did not issue most of its appropriation and PAYGO scoring reports within 5 days of enactment as required by law; (6) in scoring the Personal Responsibility and Work Opportunity Reconciliation Act, OMB charged to the PAYGO scorecard an amount equal to the discretionary cap adjustment provided for in the law, as if it were direct spending, but it does not meet the definition of direct spending; (7) under longstanding practice, both OMB and CBO have included the most recent farm bill in their baselines; (8) rather than scoring the Federal Agriculture Improvement and Reform Act of 1996 (FAIR) against the most recent legislation for all years, OMB scored against the 1949 act for crop year 1996 and against the 1990 act for all other years in its baseline; (9) although OMB cited a court case as justification for its scoring of FAIR, GAO's view of that case is that it does not support OMB's position; (10) in contrast to OMB, CBO, which was also aware of the court decision, scored against the 1990 act for all years; (11) if OMB had scored FAIR as CBO did, an offset would have been required to avoid a PAYGO sequester; and (12) other implementation issues related to discretionary spending include differences in OMB and CBO treatment for adjustments to the discretionary caps and scoring estimates for appropriations actions.

Matters for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: The Budget Enforcement Act of 1997 extended the provisions of the Budget Enforcement Act of 1990 and made other changes in the budget process. The 1997 legislation did not address the issue of timing of OMB's final sequester report, but it did address the issue of late 5-day scoring reports. GAO reported that 71 percent of OMB's 5-day scoring reports were issued late, averaging 7.1 days. Sections 10203 and 10205 of the 1997 legislation extend the time for OMB to issue its scoring reports on discretionary and pay-as-you-go legislation from 5 days to 7 days excluding Saturdays, Sundays, and legal holidays. This effectively gives OMB either 9 or 10 calendar days to issue its scoring reports. In addition, the 1997 legislation requires that OMB, in cases where there are significant differences between CBO and OMB budget scoring estimates on newly enacted legislation, to consult with the Budget Committees on such differences prior to issuing its scoring reports.

    Matter: Congress may wish to consider changing the required timing of OMB's final sequestration report to link its issuance to the completion of Presidential action on all legislation passed during a session of Congress.

  2. Status: Closed - Not Implemented

    Comments: Title X of the Balanced Budget Act of 1997 (Budget Enforcement Act of 1997) extended the limits on discretionary spending and the pay-as-you-go procedures for direct (mandatory) spending and receipts through 2002, as well as making other changes in the budget process and repealing out of date provisions in the law. But the 1997 legislation did not directly address the issue of making tradeoffs between mandatory and discretionary spending, and GAO believes that it is unlikely that the Congress will take any action on it in the near future.

    Matter: To enhance its ability to accommodate shifts in spending priorities, Congress should consider specifying the circumstances and conditions under which tradeoffs between mandatory and discretionary spending are permitted.

  3. Status: Closed - Implemented

    Comments: Section 10209 of the Budget Enforcement Act of 1997 (P.L. 105-33) amended existing law covering budget baseline construction. The new language in Section 10209 specifically states that if any law expires before the budget year or any outyear, then any program with estimated outlays greater than $50 million which operates under that law shall be assumed to continue to operate under that law as in effect immediately before its expiration. Other provisions in the 1997 budget legislation also require OMB to consult with the Budget Committees when there are significant differences between OMB and CBO in the scoring of the budgetary costs and impacts of enacted legislation.

    Matter: Congress should consider clarifying section 257(b) to explicitly require the most recently expiring provisions of law for programs with current year outlays greater than $50 million be used to construct the baseline.


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