Implementation of the Balanced Budget and Emergency Deficit Control Act of 1985

Testimony was given on the first implementation of the Balanced Budget and Emergency Deficit Control Act of 1985. GAO found that, although there were changes made in the number of accounts for defense and nondefense programs, the changes were not sufficient in the aggregate to alter the general percentage of reductions of 4.9 percent for defense and 4.3 percent for nondefense programs contained in the Office of Management and Budget and Congressional Budget Office report. The principal change in the defense programs was the addition of $6.3 billion of unobligated balances available for transfer to the sequester base, increasing its amount by $309 million with associated outlays of $45 million. Unlike the defense programs, the nondefense programs had a variety of changes in both directions; however, there is no way to represent the change in the sequester base or its amount because of the various budgetary resources that were affected. The change in the nondefense outlays is a net increase of only $3 million and is indicative of the size of the changes made. Since the President has not issued the order, the operating departments and agencies have not fully implemented the required reductions; therefore, complications may arise before the process is complete.