### §903. Enforcing deficit targets

#### (a) Sequestration

Within 15 calendar days after Congress adjourns to end a session (other than of the One Hundred First Congress) and on the same day as a sequestration (if any) under section 901 of this title and section 902 of this title, but after any sequestration required by section 901 of this title (enforcing discretionary spending limits) or section 902 of this title (enforcing pay-as-you-go), there shall be a sequestration to eliminate the excess deficit (if any remains) if it exceeds the margin.

#### (b) Excess deficit; margin

The excess deficit is, if greater than zero, the estimated deficit for the budget year, minus—

(1) the maximum deficit amount for that year;

(2) the amounts for that year designated as emergency direct spending or receipts legislation under section 902(e) of this title; and

(3) for any fiscal year in which there is not a full adjustment for technical and economic reestimates, the deposit insurance reestimate for that year, if any, calculated under subsection (h).

The "margin" for fiscal year 1992 or 1993 is zero and for fiscal year 1994 or 1995 is $15,000,000,000.

#### (c) Dividing sequestration

To eliminate the excess deficit in a budget year, half of the required outlay reductions shall be obtained from non-exempt defense accounts (accounts designated as function 050 in the President's fiscal year 1991 budget submission) and half from non-exempt, non-defense accounts (all other non-exempt accounts).

#### (d) Defense

Each non-exempt defense account shall be reduced by a dollar amount calculated by multiplying the level of sequestrable budgetary resources in that account at that time by the uniform percentage necessary to carry out subsection (c), except that, if any military personnel are exempt, adjustments shall be made under the procedure set forth in section 901(a)(3) of this title.

#### (e) Non-defense

Actions to reduce non-defense accounts shall be taken in the following order:

#### (1) First

All reductions in automatic spending increases under section 906(a) 1 of this title shall be made.

#### (2) Second

If additional reductions in non-defense accounts are required to be made, the maximum reduction permissible under sections 906(b) of this title (guaranteed student loans) and 906(c) 1 of this title (foster care and adoption assistance) shall be made.

#### (3) Third

(A) If additional reductions in non-defense accounts are required to be made, each remaining non-exempt, non-defense account shall be reduced by the uniform percentage necessary to make the reductions in non-defense outlays required by subsection (c), except that—

(i) the medicare program specified in section 906(d) of this title shall not be reduced by more than 2 percent in total including any reduction of less than 2 percent made under section 902 of this title or, if it has been reduced by 2 percent or more under section 902 of this title, it may not be further reduced under this section; and

(ii) the health programs set forth in section 906(e) of this title shall not be reduced by more than 2 percent in total (including any reduction made under section 901 of this title),

and the uniform percent applicable to all other programs under this subsection shall be increased (if necessary) to a level sufficient to achieve the required reduction in non-defense outlays.

(B) For purposes of determining reductions under subparagraph (A), outlay reduction (as a result of sequestration of Commodity Credit Corporation commodity price support contracts in the fiscal year of a sequestration) that would occur in the following fiscal year shall be credited as outlay reductions in the fiscal year of the sequestration.

#### (f) Baseline assumptions; part-year appropriations

#### (1) Budget assumptions

For purposes of subsections (b), (c), (d), and (e), accounts shall be assumed to be at the level in the baseline minus any reductions required to be made under sections 901 and 902 of this title.

#### (2) Part-year appropriations

If, on the date specified in subsection (a), there is in effect an Act making or continuing appropriations for part of a fiscal year for any non-exempt budget account, then the dollar sequestration calculated for that account under subsection (d) or (e), as applicable, shall be subtracted from—

(A) the annualized amount otherwise available by law in that account under that or a subsequent part-year appropriation; and

(B) when a full-year appropriation for that account is enacted, from the amount otherwise provided by the full-year appropriation; except that the amount to be sequestered from that account shall be reduced (but not below zero) by the savings achieved by that appropriation when the enacted amount is less than the baseline for that account.

#### (g) Adjustments to maximum deficit amounts

#### (1) Adjustments

(A) When the President submits the budget for fiscal year 1992, the maximum deficit amounts for fiscal years 1992, 1993, 1994, and 1995 shall be adjusted to reflect up-to-date reestimates of economic and technical assumptions and any changes in concepts or definitions. When the President submits the budget for fiscal year 1993, the maximum deficit amounts for fiscal years 1993, 1994, and 1995 shall be further adjusted to reflect up-to-date reestimates of economic and technical assumptions and any changes in concepts or definitions.

(B) When submitting the budget for fiscal year 1994, the President may choose to adjust the maximum deficit amounts for fiscal years 1994 and 1995 to reflect up-to-date reestimates of economic and technical assumptions. If the President chooses to adjust the maximum deficit amount when submitting the fiscal year 1994 budget, the President may choose to invoke the same adjustment procedure when submitting the budget for fiscal year 1995. In each case, the President must choose between making no adjustment or the full adjustment described in paragraph (2). If the President chooses to make that full adjustment, then those procedures for adjusting discretionary spending limits described in sections 901(b)(1)(C) 1 and 901(b)(2)(E) 1 of this title, otherwise applicable through fiscal year 1993 or 1994 (as the case may be), shall be deemed to apply for fiscal year 1994 (and 1995 if applicable).

(C) When the budget for fiscal year 1994 or 1995 is submitted and the sequestration reports for those years under section 904 of this title are made (as applicable), if the President does not choose to make the adjustments set forth in subparagraph (B), the maximum deficit amount for that fiscal year shall be adjusted by the amount of the adjustment to discretionary spending limits first applicable for that year (if any) under section 901(b) of this title.

(D) For each fiscal year the adjustments required to be made with the submission of the President's budget for that year shall also be made when OMB submits the sequestration update report and the final sequestration report for that year, but OMB shall continue to use the economic and technical assumptions in the President's budget for that year.

Each adjustment shall be made by increasing or decreasing the maximum deficit amounts set forth in section 665 1 of this title.

#### (2) Calculations of adjustments

The required increase or decrease shall be calculated as follows:

(A) The baseline deficit or surplus shall be calculated using up-to-date economic and technical assumptions, using up-to-date concepts and definitions, and, in lieu of the baseline levels of discretionary appropriations, using the discretionary spending limits set forth in section 665 1 of this title as adjusted under section 901 of this title.

(B) The net deficit increase or decrease caused by all direct spending and receipts legislation enacted after November 5, 1990 (after adjusting for any sequestration of direct spending accounts) shall be calculated for each fiscal year by adding—

(i) the estimates of direct spending and receipts legislation transmitted under section 902(d) of this title applicable to each such fiscal year; and

(ii) the estimated amount of savings in direct spending programs applicable to each such fiscal year resulting from the prior year's sequestration under this section or section 902 of this title of direct spending, if any, as contained in OMB's final sequestration report for that year.

(C) The amount calculated under subparagraph (B) shall be subtracted from the amount calculated under subparagraph (A).

(D) The maximum deficit amount set forth in section 665 1 of this title shall be subtracted from the amount calculated under subparagraph (C).

(E) The amount calculated under subparagraph (D) shall be the amount of the adjustment required by paragraph (1).

#### (h) Treatment of deposit insurance

#### (1) Initial estimates

The initial estimates of the net costs of federal deposit insurance for fiscal year 1994 and fiscal year 1995 (assuming full funding of, and continuation of, the deposit insurance guarantee commitment in effect on the date of the submission of the budget for fiscal year 1993) shall be set forth in that budget.

#### (2) Reestimates

For fiscal year 1994 and fiscal year 1995, the amount of the reestimate of deposit insurance costs shall be calculated by subtracting the amount set forth under paragraph (1) for that year from the current estimate of deposit insurance costs (but assuming full funding of, and continuation of, the deposit insurance guarantee commitment in effect on the date of submission of the budget for fiscal year 1993).

(Pub. L. 99–177, title II, §253, Dec. 12, 1985, 99 Stat. 1078; Pub. L. 100–119, title I, §103, Sept. 29, 1987, 101 Stat. 775; Pub. L. 101–508, title XIII, §13101(a), Nov. 5, 1990, 104 Stat. 1388–583.)

#### **Editorial Notes**

#### References in Text

Section 906(a) of this title, referred to in subsec. (e)(1), was repealed by Pub. L. 111–139, title I, §10(a), Feb. 12, 2010, 124 Stat. 21.

Section 906(c) of this title, referred to in subsec. (e)(2), was repealed by Pub. L. 111–139, title I, §10(c), Feb. 12, 2010, 124 Stat. 22.

Section 901(b) of this title, referred to in subsec. (g)(1)(B), was amended by Pub. L. 105–33, title X, §10203(a)(4), Aug. 5, 1997, 111 Stat. 699; Pub. L. 105–178, title VIII, §8101(d), June 9, 1998, 112 Stat. 490; Pub. L. 109–59, title VIII, §8002, Aug. 10, 2005, 119 Stat. 1916; and Pub. L. 112–25, title I, §101, Aug. 2, 2011, 125 Stat. 241, and as so amended, no longer contains par. (1)(C) or (2)(E).

Section 665 of this title, referred to in subsec. (g)(1), (2)(A), (D), was repealed by Pub. L. 105–33, title X, §10118(a), Aug. 5, 1997, 111 Stat. 695.

#### Codification

November 5, 1990, referred to in subsec. (g)(2)(B), was in the original "the date of enactment of this section", which was translated as meaning the date of enactment of Pub. L. 101–508, which amended this section generally, to reflect the probable intent of Congress.

#### Amendments

1990—Pub. L. 101–508 amended section generally, substituting provisions relating to enforcement of deficit targets for provisions relating to compliance report by Comptroller General.

1987—Pub. L. 100–119 amended section generally, designating existing provisions as par. (1), substituting "(or December 15, 1987, in the case of the fiscal year 1988)" for "(or on or before April 1, 1986, in the case of the fiscal year 1986)", and adding pars. (2) and (3).

1 See References in Text note below.