Budget Issues

Pursuant to a congressional request, GAO reviewed the effects of the fiscal year (FY) 1990 sequester on five federal civil agencies under the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, focusing on governmentwide sequester reductions and overall changes in the deficit estimate.

GAO found that: (1) the $16.1-billion governmentwide sequester had minimal negative impact on the five civil agencies because of growth in agency appropriations and timing of the agencies' appropriation enactments; (2) most sequesterable budget accounts did not experience the full sequester of their final budget authority; (3) agencies absorbed reductions by postponing program expansions and improvements instead of reducing core services; and (4) if the Office of Management and Budget had been able to project the actual FY 1990 deficit of $220.4 billion, the resulting $120.4-billion sequester would have had a more significant effect on agency budgets. GAO believes that the federal government can not achieve meaningful deficit reduction solely through sequester and must instead employ good faith negotiations, political leadership, and compromise on difficult policy choices.