Budget Issues

As required by the Budget Enforcement Act of 1990, also known as Gramm-Rudman-Hollings, this compliance report covers budget sequestration reports issued by the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO). In GAO's opinion, the OMB and CBO reports substantially complied with the act. GAO does raise three compliance issues and some implementation issues that represent questionable and inconsistent scoring practices.

GAO found that: (1) overall, CBO and OMB substantially complied with the act; (2) three compliance issues and some implementation issues represent questionable and inconsistent scoring practices; (3) because OMB delayed the issuance of its final sequestration report so that it could include estimates of all legislation passed during the second session of the 104th Congress, it did not issue the report within 15 days of the end of the congressional session as required by section 254(a); (4) although not consistent with the law, OMB's decision to delay the report so it could be complete does not seem unreasonable to GAO, especially since the Omnibus Consolidated Appropriations Act, enacted during the 104th Congress, required that pay-as-you-go (PAYGO) balances for 1997 be set at zero; (5) OMB did not issue most of its appropriation and PAYGO scoring reports within 5 days of enactment as required by law; (6) in scoring the Personal Responsibility and Work Opportunity Reconciliation Act, OMB charged to the PAYGO scorecard an amount equal to the discretionary cap adjustment provided for in the law, as if it were direct spending, but it does not meet the definition of direct spending; (7) under longstanding practice, both OMB and CBO have included the most recent farm bill in their baselines; (8) rather than scoring the Federal Agriculture Improvement and Reform Act of 1996 (FAIR) against the most recent legislation for all years, OMB scored against the 1949 act for crop year 1996 and against the 1990 act for all other years in its baseline; (9) although OMB cited a court case as justification for its scoring of FAIR, GAO's view of that case is that it does not support OMB's position; (10) in contrast to OMB, CBO, which was also aware of the court decision, scored against the 1990 act for all years; (11) if OMB had scored FAIR as CBO did, an offset would have been required to avoid a PAYGO sequester; and (12) other implementation issues related to discretionary spending include differences in OMB and CBO treatment for adjustments to the discretionary caps and scoring estimates for appropriations actions.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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