§935 Calculating a Sequestration

Summary

The Office of Management and Budget (OMB) must work out one single percentage cut to apply to budget money for nonexempt mandatory programs so that the spending saved will cancel out any PAYGO scorecard deficit for the budget year. If that single percentage would be more than 4 percent, Medicare programs described in section 906(d) must be cut by exactly 4 percent, and OMB must raise the cut on all other nonexempt mandatory programs so the total savings still match the required amount. OMB only does this for programs in the unified budget and follows the exemptions in section 11. When checking whether the cuts produce enough savings, OMB counts savings that lower outlays in the budget year and the next fiscal year. That includes savings from crop support payment cuts under section 906(j), savings from Medicare payment cuts during the 12-month period after a sequestration order under section 906(d), and savings from cuts to other nonexempt mandatory programs.