Implementing FY 1986 Reductions

In response to a congressional request, GAO reviewed several agencies' implementation of program changes required under the Balanced Budget and Emergency Deficit Control Act, specifically: (1) the application of exemptions and special rules set forth in sections 255 and 256; (2) the pattern of reductions in certain grant programs to states; and (3) how agencies achieved reductions in those entitlement programs without special rules.

GAO found that: (1) no significant problem existed in the implementation of the President's order with respect to the special rules contained in section 256; (2) two pending suits challenged the way that the order dealt with section 255 provisions in applying them only to the indexed benefit within each account and treating non-indexed items as sequesterable; (3) reductions in grant programs and those in most of the entitlement programs were in accordance with the act, did not alter budget priorities, and did not extinguish any entitlements; (4) allocation of states' reductions varied from program to program, depending upon the funds distribution formula; (5) sequestration had varying effects on payments from entitlement accounts, depending on the amount used as a base for the sequestration calculation and the most recent estimate of the amount needed to fully finance the entitlement; and (6) achieving the reductions by serving applicants on a first-come, first-served basis until funds were exhausted was not in violation of the act.