Budget Issues

In GAO's opinion, the Office of Management and Budget (OMB) and the Congressional Budget Office sequestration reports substantially complied with the law with two exceptions. Their inflation adjustment to the fiscal year 1994 discretionary spending limits was incomplete because it did not cover personnel costs. Also, OMB's final sequester report did not include an upward adjustment to the 1993 discretionary spending limits for released contingent emergency appropriations. If the inflation adjustment had been applied to all discretionary spending, the spending limit for discretionary budget authority would have been about $2.3 billion lower because actual inflation was lower than that assumed in the Budget Enforcement Act when caps were originally set in 1990. Appropriated amounts, however, were far enough under the spending limit that such an adjustment would not have required a sequester. OMB's decision not to adjust the 1993 discretionary spending limits for the release of contingent emergency appropriations resulted in official discretionary spending limits that understated the full amount of spending allowed by $132 million but did not affect any sequestration calculation.

GAO found that: (1) the OMB and CBO reports complied with the act; (2) the inflation adjustment to the fiscal year 1994 discretionary spending limits was incomplete, since it did not include personnel costs; (3) the spending limit for discretionary budget authority was $2.3 billion lower than it should have been; and (4) the OMB decision not to adjust the 1993 discretionary spending limits resulted in spending limits that understated the full amount of spending allowed by $132 million.