Budget “Sequestration” and Selected Program Exemptions and Special Rules

Karen Spar, Coordinator
Specialist in Domestic Social Policy and Division Research Coordinator

“Sequestration” is a process of automatic, largely across-the-board spending reductions under which budgetary resources are permanently canceled to enforce certain budget policy goals. It was first authorized by the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA, Title II of P.L. 99-177, commonly known as the Gramm-Rudman-Hollings Act).

Sequestration is of current interest because it has been triggered as an enforcement tool under the Budget Control Act of 2011 (BCA, P.L. 112-25). Sequestration can also occur under the Statutory Pay-As-You-Go Act of 2010 (Statutory PAYGO, Title I of P.L. 111-139). In either case, certain programs are exempt from sequestration, and special rules govern the effects of sequestration on others. Most of these provisions are found in Sections 255 and 256 of BBEDCA, as amended.

Two provisions were included in the BCA that can result in automatic sequestration:

• Establishment of discretionary spending limits, or caps, for each of FY2012- FY2021. If Congress appropriates more than allowed under these limits in any given year, sequestration would cancel the excess amount. 
• Failure of Congress to enact legislation developed by a Joint Select Committee on Deficit Reduction, by January 15, 2012, to reduce the deficit by at least $1.2 trillion. The BCA provided that such failure would trigger a series of automatic spending reductions, including sequestration of mandatory spending in each of FY2013-FY2021, a one-year sequestration of discretionary spending for FY2013, and lower discretionary spending limits for each of FY2014-FY2021. 

In fact, the Joint Committee did not develop the necessary legislation and Congress did not meet the January 15, 2012, deadline. Thus, automatic spending cuts under the BCA were triggered, with the first originally scheduled for January 2, 2013. P.L. 112-240 subsequently delayed this until March 1, 2013, and President Obama signed a sequestration order on that date.

Under the Statutory PAYGO Act, sequestration is part of a budget enforcement mechanism that is intended to prevent enactment of mandatory spending and revenue legislation that would increase the federal deficit. This act requires the Office of Management and Budget (OMB) to track costs and savings associated with enacted legislation and to determine at the end of each congressional session if net total costs exceed net total savings. If so, a sequestration will be triggered.

Under sequestration—triggered either by the BCA or Statutory PAYGO Act—the exemptions and special rules of Sections 255 and 256 of BBEDCA apply. Most exempt programs are mandatory, and include Social Security and Medicaid; refundable tax credits to individuals; and low-income programs such as the Children’s Health Insurance Program, Supplemental Nutrition Assistance Program, Temporary Assistance for Needy Families, and Supplemental Security Income. Some discretionary programs also are exempt, notably all programs administered by the Department of Veterans Affairs. Also, subject to notification of Congress by the President, military personnel accounts may either be exempt or reduced by a lower percentage.

Special rules also apply to several, primarily mandatory, programs. For example, under Section 256 of BBEDCA, Medicare may not be sequestered by more than 4%. However, under a BCAtriggered sequester, reduction of Medicare is limited to no more than 2%.


Date of Report: June 13, 2013
Number of Pages: 32
Order Number: R42050
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Unfunded Mandates Reform Act: History, Impact, and Issues

Robert Jay Dilger
Senior Specialist in American National Government

Richard S. Beth
Specialist on Congress and the Legislative Process

The Unfunded Mandates Reform Act of 1995 (UMRA) culminated years of effort by state and local government officials and business interests to control, if not eliminate, the imposition of unfunded intergovernmental and private-sector federal mandates. Advocates argued the statute was needed to forestall federal legislation and regulations that imposed obligations on state and local governments or businesses that resulted in higher costs and inefficiencies. Opponents argued that federal mandates may be necessary to achieve national objectives in areas where voluntary action by state and local governments and business failed to achieve desired results.

UMRA provides a framework for the Congressional Budget Office (CBO) to estimate the direct costs of mandates in legislative proposals to state and local governments and to the private sector, and for issuing agencies to estimate the direct costs of mandates in proposed regulations to regulated entities. Aside from these informational requirements, UMRA controls the imposition of mandates only through a procedural mechanism allowing Congress to decline to consider unfunded intergovernmental mandates in proposed legislation if they are estimated to cost more than specified threshold amounts. UMRA applies to any provision in legislation, statute, or regulation that would impose an enforceable duty upon state and local governments or the private sector. It does not apply to conditions of federal assistance; duties stemming from participation in voluntary federal programs; rules issued by independent regulatory agencies; rules issued without a general notice of proposed rulemaking; and rules and legislative provisions that cover individual constitutional rights, discrimination, emergency assistance, grant accounting and auditing procedures, national security, treaty obligations, and certain elements of Social Security.

State and local government officials argue that UMRA has restrained the growth of unfunded federal mandates, but that its coverage should be broadened, with special consideration given to including conditions of federal financial assistance. During the 112th Congress, H.R. 4078, the Red Tape Reduction and Small Business Job Creation Act: Title IV, the Unfunded Mandates Information and Transparency Act of 2012, passed by the House on July 26, 2012, would have broadened UMRA’s coverage to include both direct and indirect costs, such as foregone profits and costs passed onto consumers, and, when requested by the chair or ranking Member of a committee, the prospective costs of legislation that would change conditions of federal financial assistance. The UMRA provisions in the bill (reintroduced as H.R. 899, the Unfunded Mandates Information and Transparency Act of 2013, during the 113th Congress), as well as several other bills considered during the 112th Congress, would have made private-sector mandates subject to a substantive point of order and would have removed UMRA’s exemption for rules issued by most independent agencies. Other organizations have argued that UMRA’s coverage should be maintained or reinforced by adding exclusions for mandates regarding public health, safety, workers’ rights, environmental protection, and the disabled.

This report examines debates over what constitutes an unfunded federal mandate and UMRA’s implementation. It focuses on UMRA’s requirement that CBO issue written cost estimate statements for federal mandates in legislation, its procedures for raising points of order in the House and Senate concerning unfunded federal mandates in legislation, and its requirement that federal agencies prepare written cost estimate statements for federal mandates in rules. It also assesses UMRA’s impact on federal mandates and arguments concerning UMRA’s future, focusing on UMRA’s definitions, exclusions, and exceptions that currently exempt many federal actions with potentially significant financial impacts on nonfederal entities. An examination of the rise of unfunded federal mandates as a national issue and a summary of UMRA’s legislative


Date of Report: June 13, 2013
Number of Pages: 57
Order Number: R40957
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Federal Grants to State and Local Governments: An Historical Perspective on Contemporary Issues

Robert Jay Dilger
Senior Specialist in American National Government

The federal government is expected to provide state and local governments more than $560 billion in federal grants in FY2013, funding a wide range of public policies, such as health care, transportation, income security, education, job training, social services, community development, and environmental protection. Federal grants account for about one-third of total state government funding, and more than half of state government funding for health care and public assistance.

Congressional interest in federal grants to state and local governments has always been high given the central role Congress has in determining the scope and nature of the federal grant-in-aid system, the amount of funding involved, and disagreements over the appropriate role of the federal government in domestic policy generally and in its relationship with state and local governments.

Federalism scholars agree that congressional decisions concerning the scope and nature of the federal grants-in-aid system are influenced by both internal and external factors. Internal factors include congressional party leadership and congressional procedures; the decentralized nature of the committee system; the backgrounds, personalities, and ideological preferences of individual Members; and the customs and traditions (norms) that govern congressional behavior. Major external factors include input provided by voter constituencies, organized interest groups, the President, and executive branch officials. Although not directly involved in the legislative process, the Supreme Court, through its rulings on federalism issues, also influences congressional decisions concerning the federal grants-in-aid system.

Overarching all of these factors is the evolving nature of cultural norms and expectations concerning government’s role in American society. Over time, the American public has become increasingly accepting of government activism in domestic affairs generally, and of federal government activism in particular. Federalism scholars attribute this increased acceptance of, and sometimes demand for, government action as a reaction to the industrialization and urbanization of American society, technological innovations in communications which have raised awareness of societal problems, and exponential growth in economic interdependencies brought about by an increasingly global economy.

This report provides an historical synopsis of the evolving nature of the federal grants-in-aid system, focusing on the role Congress has played in defining the system’s scope and nature. It begins with an overview of the contemporary federal grants-in-aid system and then examines its evolution over time, focusing on the internal and external factors that have influenced congressional decisions concerning the system’s development. It concludes with an assessment of the scope and nature of the contemporary federal grants-in-aid system and raises several issues for congressional consideration, including possible ways to augment congressional capacity to provide effective oversight of this system.


Date of Report: June 12, 2013
Number of Pages: 43
Order Number: R40638
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Congressional Liaison Offices of Selected Federal Agencies

Audrey Celeste Crane-Hirsch 
Information Research Specialist

This list of about 200 congressional liaison offices is intended to help congressional offices in placing telephone calls and addressing correspondence to government agencies. In each case, the information was supplied by the agency itself and is current as of the date of publication. Entries are arranged alphabetically in four sections: legislative branch; judicial branch; executive branch; and agencies, boards, and commissions.

Specific telephone numbers for correspondence, publications, and fax transmissions have been provided for each applicable agency. When using fax, it is important to include the entire mailing address on a cover sheet, as many of the listed fax machines are not directly located in the liaison offices.

A number of agency listings include an e-mail address. When e-mailing agencies please remember to include your name, affiliation, phone number, and return address, to ensure a speedy response. Users should be aware that e-mail is not a confidential means of transmission.


Date of Report: June 13, 2013
Number of Pages: 40
Order Number: 98-446
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Journalists’ Privilege: Overview of the Law and Legislation in the 113th Congress

Kathleen Ann Ruane
Legislative Attorney

In May of 2013, news broke that the Department of Justice (DOJ) had subpoenaed telephone toll records for numerous telephone lines, including some personal telephone lines, of reporters at the Associated Press (AP). The DOJ had issued these subpoenas and obtained the toll record information prior to notifying the AP The AP and many other news organizations have responded critically, noting that the DOJ’s failure to negotiate with the AP regarding the release of the records deprived AP of the ability to attempt to quash the subpoena in federal court. The media argues this action enabled the DOJ to evade judicial review of its subpoenas. In defending its decision to issue the subpoenas, the DOJ argued that it had complied with its own internal guidelines regarding obtaining information from news media in the course of a criminal investigation, which allowed the agency to circumvent a requirement to negotiate with the affected news media entities if negotiations would pose a substantial threat to the integrity of the investigation.

When controversies surrounding the government gaining access to reporters’ confidential information arise, news media and other journalists often respond by arguing that journalists should receive special protection from government investigation and interference because the First Amendment’s protections of a free press are of paramount importance in a free society. The circumstances surrounding the DOJ subpoenas of AP toll records have been no different.

The Supreme Court has only decided one case related to a constitutional privilege allowing journalists to refuse to divulge confidential information to the government. In Branzburg v. Hayes, 408 U.S. 665, 679-680 (1972), the Supreme Court held that the First Amendment did not provide even a qualified privilege for journalists to refuse “to appear and testify before state or federal grand juries.” The only situation it mentioned in which the First Amendment would allow a reporter to refuse to testify was in the case of harassment or grand jury investigations instituted in bad faith. Nonetheless, a concurrence by Justice Powell that has been followed by a number of federal circuits suggested that there may be a qualified privilege for journalists in grand jury investigations.

Despite the fact that there may be either limited or no constitutional protection for journalists, statutory and common law protections do exist. Though many states do have either judicially created or statutory “shield laws” in place, there is no federal statutory shield law. It has been argued that if there had been a federal shield law in place at the time the controversial AP toll record subpoenas were issued, many of the issues raised by the incident could have been avoided. The Obama Administration announced a renewed interest in enacting a federal statute that would grant a qualified evidentiary privilege to reporters. New versions of the Free Flow of Information Act, which has been debated by a number of Congresses in the past, have already been introduced in the House (H.R. 1962) and Senate (S. 987). This report will provide an overview of the constitutional status of a journalist’s privilege under the First Amendment; a description of two recent cases in which the government sought confidential information from the press (the Judith Miller case, and the recent AP case); and an analysis of the current proposals for enacting a federal shield law.


Date of Report: May 31, 2013
Number of Pages: 15
Order Number: RL34193
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