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Budget Deal Would Bust Original BCA Caps

Feb 8, 2018 | Other Spending

The budget deal currently being considered by Congress would increase discretionary spending caps over the next two years by $165 billion for defense and $131 billion for nondefense. That increase is far beyond the partial sequester relief negotiated in 2013 and 2015. These increases are the equivalent of fully repealing the sequester and raising the spending caps by an additional $115 billion above the levels in the 2011 Budget Control Act (BCA)

The BCA established spending caps that were expected to keep discretionary budget authority $840 billion below baseline levels over the 2012-2021 period, with funding levels at $1.156 trillion in 2019 and $1.182 trillion in 2019. The BCA also created a congressional "Super Committee" charged with recommending at least another $1.2 trillion in savings and an automatic sequester that would further reduce the discretionary caps after 2012 by $91 per year if the committee failed, which it did.

Thus, the current law sequester-level caps on discretionary spending are $1.065 trillion in 2018 and $1.091 trillion in 2019, each $91 billion below the original caps in the BCA. This deal would increase the 2018 cap by $143 billion and the 2019 cap by $153 billion, meaning that 2018 spending levels would be $52 billion over the BCA level and 2019 would be $62 billion over. The new $1.208 trillion and $1.244 trillion caps, however, will still be $40-45 billion below the pre-BCA amount.

Broken down by category, defense spending would see a two-year increase of $165 billion over current law levels compared to a $131 billion increase for nondefense. Compared to their original BCA capped levels, however, both defense and nondefense would be $26 billion higher in 2018 and $31 billion higher in 2019.

Base Discretionary Budget Authority (Billions)
  2018 2019
Defense    
Pre-BCA Baseline $646 $663
BCA Caps $603 $616
Sequester-Level Caps (Current Law) $549 $562
Proposed Deal $629 $647
     
Nondefense    
Pre-BCA Baseline $605 $622
BCA Caps $553 $566
Sequester-Level Caps (Current Law) $516 $529
Proposed Deal $579 $597
     
Total Discretionary BA    
Pre-BCA Baseline $1,251 $1,285
BCA Caps $1,156 $1,182
Sequester-Level Caps (Current Law) $1,065 $1,091
Proposed Deal $1,208 $1,244

Source: CBO, CRS  Note: Base discretionary spending does not include war spending.

Policymakers have never allowed the full "sequester" levels to go into effect, but past agreements raising the caps have all been paid for (at least on paper). Furthermore, previous budget deals have not increased the caps above the original levels established in the BCA. The current proposal not only fails to pay for sequester relief, it partially undoes one of the few deficit reduction measures Congress has been able to agree to in recent years.