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2016 Sequestration Updates

Jul 5, 2016

No Sequestration of discretionary spending will be required this year because the fiscal year 2016 budget act passed last year is within the defense and non-defense caps. Congress could still exceed the caps if lawmakers provide extra appropriations between now and the end of the fiscal year on Sept. 30, the Congressional Budget Office noted. If that is the case, the excess spending would count against the fiscal year 2017 total.

The Bipartisan Budget Act that President Obama signed on Dec. 17 modified the caps on defense and nondefense funding for fiscal year 2016 that were established by the 2011 Budget Control Act. According to the CBO, the new law reset those limits as follows:   

Total - $1,066.6 billion

Defense programs - $548.1 billion

  • Cap will shrink by $54 billion each year
  • 8.9 percent reduction in 2018 and slightly small percentages in later years

Non-defense programs- $518.5 billion

  • Cap will shrink by $37 billion in 2018 and by similar amounts in later years
  • 6.8 percent reduction in 2018 and slightly smaller percentages in later years

Under current law, CBO noted, “the reductions in the caps for defense programs will be proportionately larger than the reductions in the caps for nondefense programs...” How those reductions are apportioned among the various budget accounts will be determined by future appropriations acts.

Additional Resources: 

Independent Sector's snapshot of the 2016 federal budget 

Related Topics: 
Financial Management