Background on the Budget Caps
The 2011 Budget Control Act (BCA) established two alternative paths to deficit reduction:
1. a “Super Committee” charged with developing a responsible plan for reducing both “entitlement” spending (programs outside the annual budgeting process like Medicare) and “discretionary” spending (annually appropriated spending for federal departments and agencies like the Department of Defense and the National Institutes of Health); and
2. a fallback plan that would indiscriminately impose ten years of annual, austerity-level caps on discretionary spending, with separate caps on defense and non-defense agencies and programs.
Unfortunately, the Super Committee failed to reach a budget agreement, and the fallback plan went into effect.
Recognizing that this fallback budget mechanism – a blunt instrument overwhelmingly current national threats and opportunities – does not serve the strategic interests of our nation, Congress has acted four times to modify the Budget Control Act and increase the level of discretionary spending appropriated each year.
The last bipartisan deal to raise the spending caps ended in Fiscal Year (FY19). Absent another budget deal, defense discretionary spending must be cut by approximately $71 billion and non-defense discretionary (NDD) spending by $55 billion in FY20.
Answers to frequently asked questions about the Budget Control Act and the budget caps can be found here.