§903 Enforcing Deficit Targets

Summary

Within 15 calendar days after Congress adjourns to end a session (except the One Hundred First Congress), there must be a sequestration on the same day as any sequestration under sections 901 and 902, but after those actions. If the estimated budget-year deficit is bigger than allowed, the law calls that an "excess deficit." The excess deficit is the budget-year deficit minus three things: the maximum allowed deficit for that year, any amounts officially labeled as emergency spending or receipts under section 902(e), and, when full technical reestimates are not made, a deposit insurance reestimate calculated under subsection (h). If the excess deficit is larger than the allowed margin, a further sequestration must be done to eliminate it. To shrink the excess deficit, half of the needed cuts must come from non-exempt defense accounts (called function 050 in the President’s 1991 budget) and half from non-exempt, non-defense accounts. Defense accounts are cut by a uniform percentage of their sequester-able resources, with adjustments if military pay is exempt. Non-defense cuts happen in order: first reduce automatic spending increases under section 906(a); next take the maximum reductions allowed for guaranteed student loans and foster care/adoption assistance under sections 906(b) and 906(c); then reduce the remaining non-exempt non-defense accounts by a uniform percentage needed, except Medicare and certain health programs cannot be cut by more than 2 percent in total (including any earlier reductions). Outlay reductions that would show up next year from commodity support contracts are counted in the sequestration year. Accounts are measured after earlier required cuts under sections 901 and 902. If only a part-year appropriation is in effect on the sequestration date, the dollar cut is taken from that annualized amount and later from any full-year appropriation, but the cut is reduced (not below zero) by any savings when the enacted amount is less than the baseline. The President must update the maximum deficit numbers when submitting budgets for fiscal years 1992–1995 as described, OMB must apply the same adjustments in its sequestration reports using the President’s budget assumptions, and initial and later reestimates for deposit insurance for 1994 and 1995 are handled as set out in subsection (h).