Budget Issues

This report assesses compliance by the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO) with the requirements of the Balanced Budget and Emergency Deficit Control Act of 1985. GAO's assessment covers reports issued by OMB and CBO for legislation enacted during the first session of the 106th Congress, which ended in November 1999. According to CBO's final sequestration report issued in December 1999, discretionary outlays for all spending categories combined are estimated to exceed the spending limits by $16.6 billion for fiscal year 2000. CBO estimates that a four percent sequestration would be required for the overall discretionary category. In contrast, OMB's Final Sequestration Report, issued in January 2000, estimates that no sequestration of discretionary spending will be required for fiscal year 2000. There will be no sequester in fiscal year 2000 because, by law, OMB's estimates are controlling.

GAO noted that: (1) overall, OMB and CBO substantially complied with the act; (2) however, some of the required OMB reports were issued late; (3) the Deficit Control Act (DCA) sets a specific timetable for issuance of OMB reports; (4) by law, OMB must issue sequestration reports at three specific times during the year: (a) the preview report when the President submits his budget; (b) the update on August 20; and (c) the final report 15 days after the end of a congressional session; (5) OMB issued its fiscal year (FY) 2000 Sequestration Update Report on August 25, 1999--5 days late; (6) its final sequestration report for FY 2000 was issued on January 25, 2000--49 days later than the required date of December 7, 1999; (7) the extremely late issuance of OMB's final report resulted in the late issuance of CBO's FY 2001 Sequestration Preview Report; (8) DCA requires that CBO issue a sequestration preview report for the coming fiscal year 5 days before the President submits his budget to Congress; (9) because OMB's final sequestration report for FY 2000 was issued 49 days late, CBO did not have the data needed to use as the starting point to update its estimates for FY 2001 and issue its report in a timely manner; (10) this in turn meant that OMB did not have CBO's published adjustments to include in the OMB FY 2001 Preview Report, published in the President's budget, which was issued in February 2000; (11) as has been the case for the past 3 fiscal years, OMB issued most of its FY 2000 scorekeeping reports late; (12) on average, the FY 2000 discretionary spending reports were 39 working days late and the pay-as-you-go reports were 7 working days late; (13) OMB's timeliness on these reports has continued to be a problem; (14) excluding final sequestration reports, 94 percent of FY 2000 reports were late, 83 percent of FY 1999 reports were late, 50 percent of the 1998 reports were late, and about 70 percent of the 1997 reports were late; (15) the extremely late issuance of OMB's final sequestration report could have had an impact on the report's usefulness for its original purposes; and (16) CBO and OMB also differed substantially in scoring various appropriation acts.