Congressional Budget Office

Testimony

CONGRESSIONAL BUDGET OFFICE

SECOND AND D STREETS, S.W.

WASHINGTON, D.C. 20515

Statement of 

Douglas W. Elmendorf 

Director

Discretionary Spending

before the 

Joint Select Committee on Deficit Reduction 

U.S. Congress

October 26, 2011

This document is embargoed until it is delivered at 

10:00 a.m. (EDT) on Wednesday, October 26, 2011. 

The contents may not be published, transmitted, or 

otherwise communicated by any print, broadcast, or 

electronic media before that time.

CBO

Senator Murray, Congressman Hensarling, and Members of the Committee, thank 

you for the invitation to testify about discretionary spending in the federal budget. 

Discretionary outlays—the part of federal spending that lawmakers generally control 

through annual appropriation acts—totaled about $1.35 trillion in 2011, or close to 

40 percent of federal outlays.1 Slightly more than half of that spending was for 

defense. The remainder went for a wide variety of government programs and activities, with the largest amounts spent for education, training, employment, and social 

services; transportation; income security (mostly housing and nutrition assistance); 

veterans’ benefits (primarily for health care); health-related research and public health; 

international affairs; and the administration of justice. 

Discretionary outlays declined from about 10 percent of gross domestic product 

(GDP) during much of the 1970s and 1980s to 6.2 percent in 1999, mostly because 

defense spending, as a share of GDP, declined over that period. Since then, discretionary outlays have risen relative to the size of the economy, totaling about 9 percent of 

GDP in 2010 and 2011, in part because of military operations in Afghanistan and 

Iraq and in part because of the discretionary funding provided by the American 

Recovery and Reinvestment Act of 2009 (ARRA, Public Law 111-5). The 2010 and 

2011 figures were the highest in about 20 years. 

However, lawmakers have already taken significant steps to constrain discretionary 

spending. Budget authority—the authority to incur financial obligations—provided 

for defense activities in 2011 was $3 billion (or less than 1 percent) below the amount 

provided the year before; budget authority for discretionary nondefense programs 

(plus the obligation limitations that govern spending for certain discretionary transportation programs whose budget authority is not classified as discretionary) was 

$39 billion (or 7 percent) below the amount provided in 2010. As a result, total 

discretionary funding (that is, budget authority plus obligation limitations) in 2011 

was the lowest, as a share of GDP, since 2002. Nevertheless, discretionary outlays in 

2011 were close to the amounts spent in 2010, the Congressional Budget Office 

(CBO) estimates, because of spending from funds appropriated in previous years. 

In addition, the Budget Control Act of 2011 (P.L. 112-25) instituted statutory caps 

on discretionary appropriations for each of the fiscal years 2012 through 2021. (By 

contrast, in most recent years the total amount of annual appropriations—except for 

those designated as emergency requirements—was governed by annual funding allocations agreed to by the House of Representatives and the Senate but not enacted into 

law.) The new caps do not constrain spending for the war in Afghanistan or similar 

activities or for designated emergencies; however, if implemented as written in the act, 

the caps would keep other appropriations for 2012 and 2013 below the amounts pro1. The data presented for 2011 come from Congressional Budget Office, The Budget and Economic 

Outlook: An Update (August 2011). Although the amount of total spending for 2011 has been 

reported by the Department of the Treasury, the data available to date do not identify the amounts 

of discretionary and mandatory outlays.
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CBO

vided for 2011 and would limit the growth of those appropriations to about 2 percent 

a year from 2014 to 2021. Compared with allowing nonwar discretionary appropriations to grow at the rate of inflation, the capped amount of discretionary budget 

authority would be about 4 percent lower in 2012 and 9 percent lower in 2021; as a 

result, budget deficits would be reduced by $778 billion between 2012 and 2021, 

CBO estimates (not counting the savings in interest payments resulting from lower 

outlays).2

The future path of discretionary spending may be affected by the actions of the Joint 

Select Committee on Deficit Reduction. Under provisions of the Budget Control Act, 

legislation originating from this Committee could directly alter the path of such 

spending, for example, by changing the caps. Alternatively, if legislation originating 

from this Committee and estimated to produce at least $1.2 trillion in deficit reduction (including an allowance for interest savings) is not enacted by January 15, 2012, 

automatic procedures to cut spending will take effect in January 2013. CBO expects 

that 71 percent of the net savings from the automatic procedures would come from 

reductions in discretionary appropriations. If those procedures were triggered, appropriations for defense, excluding funding for overseas contingency operations (warrelated funding), would be $110 billion—or 16 percent—lower by 2021 than they 

would be if they kept up with inflation; funding for nondefense activities would be 

$99 billion—or 15 percent—lower. 

Moreover, for some programs, a comparison with inflation-adjusted funding understates the magnitude of reductions relative to the cost of maintaining current policies 

or plans. For example, implementing the Administration’s multiyear defense plans 

would require nonwar defense spending to grow faster than the rate of inflation, and 

the demands for veterans’ health care and Pell grants for higher education have also 

been growing more quickly than inflation. In contrast, the funding required for warrelated activities—in Afghanistan and other countries—will be smaller than the 

amounts provided in recent years if the number of deployed troops is smaller and the 

pace of operations is diminished. 

Regardless of the constraints placed on discretionary spending through the Budget 

Control Act or other actions taken by this Congress, subsequent Congresses will make 

the final decisions about future discretionary appropriations. Those decisions might 

or might not satisfy the constraints put in place by this Congress. Nevertheless, CBO 

2. In its letter to the Honorable John A. Boehner and the Honorable Harry Reid analyzing the impact 

on the deficit of the Budget Control Act of 2011 (August 1, 2011), CBO estimated that the act’s 

caps on nonwar discretionary budget authority would reduce projected deficits by $756 billion 

between 2012 and 2021 compared with CBO’s March 2011 baseline adjusted to reflect enactment 

of full-year appropriations for 2011 (and not counting the savings in interest payments that would 

result from lower outlays). CBO’s most recent baseline, prepared in August, incorporated slightly 

higher projections of inflation and reflected other technical adjustments; as a result, the caps are 

now estimated to reduce discretionary outlays by a slightly larger amount compared with what 

would be spent if appropriations grew at the rate of inflation.
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CBO

assumes in its baseline projections that discretionary funding subject to the caps in the 

coming years will be equal to the amounts currently specified in law for those caps. As 

a result, legislation that reduced the funds available for a particular discretionary activity or achieved savings in undertaking a particular activity would only reduce projected total appropriations if the legislation also lowered the caps; without a reduction 

in the caps, funding for other discretionary activities would probably fill the gap created by the specific reduction or savings.

Concepts and Definitions Related to Discretionary Spending

Discretionary spending can be categorized and analyzed in a variety of ways. Some of 

the metrics derive from differences between how much spending authority is provided 

and how much is disbursed in a given year. Others derive from distinctions between 

types and purposes of discretionary spending. Still others stem from legislation that 

has aggregated discretionary spending into specific categories. 

Budget Authority and Outlays

Appropriation acts provide authority to federal agencies to incur financial obligations. 

Such budget authority generally takes the form of a direct appropriation of funds from 

the Treasury or authority to obligate and expend certain collections.

Agencies use their budget authority to make commitments over the course of a fiscal 

year (and sometimes longer), and the money is spent sometime after the commitment 

is made. Some appropriations (such as for employees’ salaries) are spent quickly, but 

others (such as for major construction projects) are disbursed over several years. Outlays are the amount of money spent each year. In any given year, discretionary outlays 

include spending from both new budget authority and budget authority provided in 

previous years. Thus, the Congress specifies the amount of budget authority provided 

each year, but it does not directly control when outlays occur. 

Several transportation programs have an unusual budgetary treatment: Their budget 

authority is provided in authorizing legislation, rather than in appropriation acts, but 

their spending is constrained by obligation limitations imposed by appropriation bills. 

Consequently, their budget authority is considered mandatory, but their outlays are 

discretionary. (The largest of those programs is the Federal-Aid Highway Program, 

which is funded from the Highway Trust Fund.) As a result, total discretionary outlays in the budget are greater than total discretionary budget authority. In some presentations, the amounts of those obligation limitations are added to discretionary 

budget authority to produce a measure of the total funding provided for discretionary 

programs.
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CBO

Categories of Spending: Defense/Nondefense and Security/Nonsecurity 

Budget presentations often divide discretionary spending between defense and 

nondefense activities, where defense spending is defined as the sums that are recorded 

in budget function 050 (which is labeled “national defense”).3 That budget function 

includes all of the spending on military activities of the Department of Defense plus 

spending for the Department of Energy’s atomic energy defense activities and some 

defense-related activities of other agencies. 

The Budget Control Act set caps on discretionary budget authority for 2012 and 

2013 using a different set of categories: security and nonsecurity. Under that act, the 

security category includes most (but not all) funding normally categorized as for 

national defense, but it also includes discretionary appropriations for the Department 

of Homeland Security, the Department of Veterans Affairs, and accounts in budget 

function 150 (international affairs). The nonsecurity category comprises all discretionary appropriations not included in the security category. Those separate security 

and nonsecurity caps apply only for fiscal years 2012 and 2013; for each of the fiscal 

years 2014 through 2021, the Budget Control Act specified a single cap on most discretionary funding. The caps do not encompass funding for the war in Afghanistan or 

similar activities (overseas contingency operations).4

If legislation originating from the Joint Select Committee on Deficit Reduction 

achieving at least $1.2 trillion in deficit reduction over the 2012–2021 period is not 

enacted, the Budget Control Act will trigger further reductions in discretionary 

spending. The act specifies a set of caps to be used as a starting point for the automatic reductions. Those caps are equal in total to the ones that apply in the absence of 

the automatic reductions, but they divide the spending differently, separating defense 

spending (budget function 050) from nondefense spending (although the act continues to apply the terms “security” and “nonsecurity” to describe the two categories). 

Baseline Projections

CBO’s baseline projections incorporate the assumption that current law remains in 

place so that those projections can serve as a benchmark for policymakers to use in 

considering possible changes to law. Although that current-law concept is generally 

straightforward for spending under permanent laws (such as that for many entitle3. Federal spending is categorized in 20 general-subject categories, or budget functions, so that budget 

authority and outlays can be presented according to the purposes the spending is intended to serve.

4. The law allows for adjustments to the caps when appropriations are provided for certain purposes. 

Funding for overseas contingency operations would lead to an increase in the caps, as would other 

funding designated as an emergency requirement. Furthermore, the law allows for an increase in 

the caps if additional budget authority is provided for program integrity initiatives aimed at reducing improper benefit payments in the Disability Insurance and Supplemental Security Income programs, Medicare, Medicaid, and the Children’s Health Insurance Program. Finally, the caps would 

be increased if appropriations were provided for disaster relief, but the adjustments would be limited on the basis of historical averages for such funding.
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CBO

ment programs), it may be less clear what benchmark should be used in the context of 

discretionary spending because appropriations are revisited each year.

In the absence of discretionary caps (such as those established by the Budget Control 

Act), CBO’s baseline for discretionary spending has incorporated the assumption that 

such appropriations grow with inflation from the most recent year’s level. That 

approach for a baseline for discretionary spending was specified in the Balanced Budget and Emergency Deficit Control Act of 1985.5

 With the imposition of caps on discretionary funding in the Budget Control Act, CBO’s August 2011 baseline also 

incorporates the assumption that total discretionary appropriations—other than those 

for overseas contingency operations—will equal the caps set in that act. To reduce discretionary spending below that projected in CBO’s baseline, legislation would have to 

lower those caps or restrain discretionary spending not constrained by the caps, such 

as funding for the war in Afghanistan or for similar activities. Reducing spending for 

individual discretionary programs without changing the caps would not necessarily 

change total discretionary funding or result in savings.

CBO’s baseline includes a placeholder of $1.2 trillion in projected deficit reduction 

between 2012 and 2021 that is assumed to stem either from legislation produced by 

this Committee or from the automatic cuts that would be triggered if such legislation 

is not enacted. Because the composition of that additional deficit reduction would 

depend on the specific provisions of any legislation resulting from the Committee’s 

proposals and the extent of any automatic reductions that would be triggered, CBO 

did not allocate the $1.2 trillion between revenues and outlays. Hence, the baseline 

projections for discretionary spending do not incorporate any such additional reductions.

Funding for Wars

Funding for the wars in Afghanistan and Iraq and for similar activities has often been 

separated from other types of discretionary appropriations. In the early years of those 

wars, budget authority was routinely provided through supplemental appropriations 

and often designated as meeting an emergency requirement. Perhaps as a result of the 

timing of such appropriations and a perception that such funding was “temporary” in 

nature, it was treated separately from other appropriations. The caps set by the Budget 

Control Act of 2011 also treat funding for the wars separately—the caps do not constrain funding for overseas contingency operations (or funding designated as an emergency requirement). Consequently, for its baseline projections, CBO follows the standard procedures specified in law and assumes that budget authority for overseas 

contingency operations will continue at current levels with adjustments for inflation. 

Placing caps on appropriations for overseas contingency operations could result in 

estimated savings relative to those current-law projections. Such savings, however, 

might simply reflect policy decisions that have already been made and that would be 

realized even without such funding constraints. Moreover, if future policymakers 

5. Section 257 of the Balanced Budget and Emergency Deficit Control Act of 1985 specifies the rules 

for constructing the baseline (see 2 U.S.C. 907).
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CBO

believed that national security required appropriations above the capped levels, they 

would almost certainly provide emergency appropriations that would not, under current law, be counted against the caps.

The baseline projections that CBO published in August were based on appropriations 

for fiscal year 2011, which totaled $159 billion for overseas contingency operations. 

Since then, appropriations for overseas contingency operations have been set for the 

first part of fiscal year 2012 (through November 18, 2011) at an annual level of 

$119 billion, reflecting the planned drawdown of troops in Afghanistan and withdrawal of U.S. forces from Iraq. Reflecting those latest appropriations, the total budget authority that CBO would now project for overseas contingency operations over 

the 2012–2021 period is about $440 billion less than the amount shown in CBO’s 

August baseline. Therefore, if CBO were to make estimates today of savings from any 

caps on such funding, those estimates would be based on those lower projections. 

What Does Discretionary Funding Comprise? 

Discretionary funding for 2011 totaled $1,277 billion: budget authority of $712 billion for defense and funding totaling $566 billion for nondefense activities, including 

$54 billion in obligation limitations for some transportation programs (see Table 1). 

Budget authority provided for defense activities in 2011 was $3 billion (or less than 

1 percent) below the amount provided the year before; the sum of discretionary budget authority and obligation limitations for nondefense programs was $39 billion (or 

7 percent) below the amount provided in 2010. Nevertheless, discretionary outlays in 

2011 were close to the amounts spent in 2010, CBO estimates, because of spending 

from funds appropriated in previous years.

No full-year appropriations have been enacted for fiscal year 2012, which began on 

October 1. However, the Congress has enacted a continuing resolution to provide discretionary funding through November 18, 2011. That continuing resolution provides 

funding at an annualized level of $1,216 billion, about 5 percent less than the amount 

provided for 2011. That amount equals the sum of the security and nonsecurity caps 

for 2012 established in the Budget Control Act ($1,043 billion), obligation limitations for transportation programs provided by the continuing resolution ($54 billion), 

and funding for overseas contingency operations provided by the continuing resolution (just under $119 billion). 

Funding for National Defense

Three major categories of funding for the Department of Defense (DoD) accounted 

for 83 percent of the defense appropriation in 2011: funding for operation and maintenance ($308 billion), military personnel ($154 billion), and procurement ($129 billion) (see Figure 1). Operation and maintenance accounts, which constitute the single 

largest category of defense spending, fund the day-to-day activities of the military, the 

training of military units, the majority of costs for the military’s health care program,
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CBO

Table 1.

Discretionary Funding for 2011

(Billions of dollars)

Source: Congressional Budget Office.

a. Includes funding for overseas contingency operations such as the wars in Afghanistan and Iraq. 

b. Includes $54 billion in budgetary resources provided by obligation limitations for certain ground 

and air transportation programs.

c. Full-year appropriations for 2011 included an across-the-board cut of 0.2 percentage points for 

all nondefense discretionary accounts.

308

154

129

Research, development, test, and evaluation 76

Other Department of Defense 21

23 ___

Subtotal, defense 712

92

85

63

57

55

52

50

Natural resources and environment 33

General science, space, and technology 30

General government 17

Community and regional development 15

Agriculture 6

Medicare 6

Social Security 6

Energy 4

Commerce and housing credit -6 ___

 Subtotal, other 112

Across-the-board reductionsc -1 ___

566

Total 1,277

Nondefense

2011 Funding

Defensea

Military personnel

Procurement

Other

Operation and maintenance

Education, training, employment, and social services

Transportationb

Income security

Health

International affairs

Administration of justice

Other

Subtotal, nondefense

Veterans' benefits and services
8

CBO

Figure 1.

Defense Discretionary Funding for 2011

Source: Congressional Budget Office.

Note: Discretionary funding for defense includes funding for overseas contingency operations such 

as the wars in Afghanistan and Iraq.

a. Includes spending on some defense-related activities by government entities other than the 

Department of Defense (DoD).

b. Includes funding for military construction and family housing.

Operation and

Maintenance

 (43%)

Military

Personnel

 (22%)

Procurement

 (18%)

Research,

Development,

Test, and

Evaluation

 (11%)

Other

Non-DoD

 (3%)

Other DoD

 (3%)

100

a

b
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CBO

and compensation for most of DoD’s civilian employees. The military personnel 

accounts fund compensation for uniformed service members, including pay, housing 

and food allowances, and related activities, such as moving service members and their 

families to new duty stations. Procurement accounts fund the purchase of new 

weapon systems and other major equipment and upgrades to existing weapon 

systems.

Appropriations for research, development, test, and evaluation ($76 billion), which 

fund basic and applied research as well as the development and testing of weapon systems, accounted for another 11 percent of total funding for national defense. The rest 

of the appropriations (about 6 percent) were for military construction, family housing, and other programs in DoD ($21 billion); the atomic energy defense activities of 

the Department of Energy ($17 billion); and various defense-related programs in 

other departments and agencies ($7 billion).

Appropriations for the wars in Afghanistan and Iraq and related activities in 2011 

were distributed across several of the categories just described and are included in the 

amounts of funding reported here. Such appropriations totaled $159 billion in 2011, 

accounting for about 22 percent of the total funding for national defense. 

Funding for Nondefense Activities

Seven broad budget categories, or budget functions, account for about 80 percent of 

the $566 billion in resources provided for nondefense discretionary activities in 2011. 

Education, training, employment, and social services programs together received 

$92 billion in funding, claiming 16 percent of total nondefense discretionary funding 

(see Figure 2).6

 Nearly $40 billion of that total funded grants to state and local governments for elementary, secondary, and vocational education, and another $28 billion supported programs for higher education.

Transportation programs received $85 billion, or 15 percent, of the total resources, 

which included $54 billion in obligation limitations for several surface and air transportation programs. (Although those programs receive mandatory budget authority 

through authorizing legislation, the annual appropriation acts govern spending 

because they limit how much of that authority the Department of Transportation can 

obligate in a given year.) About one-half of all discretionary funding for transportation is for highway programs.

Income security programs (mostly for housing and nutrition assistance) received 

funding totaling $63 billion, representing 11 percent of nondefense appropriations.7

6. The student loan program and several other programs in that category are not included in that total 

because their funding is considered mandatory.

7. Other income security programs, such as unemployment compensation, the Supplemental Nutrition Assistance Program (formerly known as Food Stamps), and Temporary Assistance for Needy 

Families, are not included in the total because they are included in mandatory spending.
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CBO

Figure 2.

Nondefense Discretionary Funding for 2011

Source: Congressional Budget Office.

Note: Nondefense discretionary funding includes budgetary resources provided by obligation 

limitations for certain ground and air transportation programs.

a. Includes funding for natural resources and environment; general science, space, and technology; general government; community and regional development; agriculture; Medicare and 

Social Security (for administrative activities); energy; and commerce and housing credit.

Education, Training,

Employment, and

Social Services

 (16%)

Transportation

 (15%)

Income

Security

Veterans' (11%)

Benefits and

Services

 (10%)

Health

 (10%)

International

Affairs

 (9%)

Administration

of

Justice

 (9%)

Other

 (20%)

100

a
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CBO

Discretionary appropriations for veterans’ benefits (primarily for health care) and for 

health-related research and public health were $57 billion and $55 billion, respectively, each constituting 10 percent of total discretionary funding for nondefense 

activities. More than half of the discretionary funding for health-related research and 

public health is devoted to the National Institutes of Health. Finally, international 

affairs accounted for roughly 9 percent, as did the administration of justice.8

About one-third of total nondefense discretionary spending is disbursed in the form 

of grants to state and local governments. Of those grants, about one-third are devoted 

to education and training programs and one-quarter to transportation programs, with 

the remainder going to environmental protection, economic development, law 

enforcement, and various other purposes.

The funding provided for nondefense discretionary programs in 2011 was $39 billion 

lower than it was in 2010. The largest reduction ($8 billion, including a rescission in 

2011 of $2 billion in unobligated balances) occurred because the decennial census was 

carried out in 2010 and therefore did not require much spending in 2011; lower 

amounts for disaster relief and high-speed rail ($4 billion and $2.5 billion less, respectively) constituted the next largest reductions. In addition, net gains of the Federal 

Housing Administration’s Mutual Mortgage Insurance Fund are estimated to have 

risen by $4.6 billion in 2011. (Those gains, which are calculated on a present-value 

basis, are recorded as an offset against discretionary appropriations.)

Funding for the Federal Workforce

According to CBO’s estimates, the federal government provided about $200 billion in 

funding to compensate federal civilian workers in 2011; that amount represents about 

15 percent of total discretionary spending. Of that $200 billion, about $80 billion (or 

11 percent of defense appropriations) was for civilian personnel working in the 

Department of Defense and on other defense-related activities, and about $120 billion (or 21 percent of nondefense discretionary funding) was for nondefense personnel; most of those nondefense personnel work in the Departments of Veterans Affairs, 

Homeland Security, Justice, and the Treasury (including the Internal Revenue 

Service).

What Have Been the Trends in Discretionary Outlays? 

Discretionary outlays declined from about 10 percent of GDP during much of the 

1970s and 1980s to 6.2 percent in 1999, mostly because defense spending, as a share 

of GDP, declined over that period.9 Those outlays then began to increase somewhat 

relative to the size of the economy, reaching 7.0 percent of GDP in 2002 and 7.9 percent in 2008 (see Figure 3). The rise between 2002 and 2008 can be attributed

8. Funding for programs that are intended to enhance homeland security is spread across budget 

functions, including some of those mentioned here, and it is not recorded in a single place in the 

budget. 

9. This discussion is framed in terms of outlays, rather than budget authority, because more long-term 

historical data are available for outlays.
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CBO

Figure 3.

Defense, Nondefense, and Total Discretionary Outlays, 

1971 to 2011

(Percentage of gross domestic product)

Source: Congressional Budget Office.

to the actions taken in response to the terrorist attacks of September 11, 2001, and 

subsequent military operations in Afghanistan and Iraq. In 2009 and 2010, discretionary outlays jumped to 8.8 percent and 9.3 percent of GDP, respectively, in part 

because of $281 billion in discretionary funding provided by the American Recovery 

and Reinvestment Act of 2009. The 2010 figure was the highest since 1988 (in part 

because much of the ARRA funding provided in 2009 was disbursed in 2010). By 

CBO’s estimate, discretionary spending in 2011 was about 9.0 percent of GDP; those 

outlays stemmed from budgetary resources provided for 2011 and for earlier years, 

including some from ARRA.

Defense Spending

Trends in discretionary outlays during the past few decades have been heavily influenced by spending on defense. In 1971, defense discretionary outlays accounted for 

7.3 percent of GDP; however, that share fell rapidly over the following several years, 

dropping to 4.7 percent of GDP by 1978. Such spending then rose, reaching 6.2 percent in 1986. From that point, defense outlays resumed their slide, dropping to a low 

of 3.0 percent of GDP between 1999 and 2001. 

In 2002, defense outlays rose back to 3.3 percent of GDP, not only because of operations in Afghanistan and other war-related activities (see Appendix A) but also 

because of initiatives that were planned before September 11, 2001. Outlays for 

defense activities continued to climb as military operations began in Iraq, and by 

2005, defense outlays equaled 4.0 percent of GDP. Such outlays subsequently 

1971 1976 1981 1986 1991 1996 2001 2006 2011

0

2

4

6

8

10

12

Defense

Nondefense

Total Discretionary
13

CBO

increased further relative to the size of the economy, reaching 4.7 percent of GDP (or 

$689 billion) in 2010 and about the same share of GDP in 2011. That level is the 

highest relative to GDP since 1992 but well below the average for defense spending 

since World War II.

Nondefense Spending

Outlays for nondefense discretionary programs have averaged about 4 percent of 

GDP during the past 40 years, with significant variation over time but little apparent 

trend. Thus, on average, such outlays increased during that period roughly in line 

with the size and income of the population. 

Such outlays rose from 4.0 percent of GDP in 1971 to a high of 5.2 percent of GDP 

in 1980 before declining. Nondefense outlays as a share of GDP fell through the rest 

of the 1980s and were relatively stable from 1990 through 2008, ranging between 

3.2 percent and 3.8 percent. However, funding from ARRA then helped push that 

share higher—to 4.5 percent of GDP in 2010. In 2011, nondefense discretionary 

outlays dropped to 4.3 percent of GDP, CBO estimates, in part because spending of 

ARRA funds declined. 

How Will Discretionary Spending Evolve Over the 

Next Decade Under Current Law?

CBO’s baseline for discretionary funding reflects the caps placed on such budget 

authority for 2012 through 2021 by the Budget Control Act. Discretionary budget 

authority subject to the caps will be limited to $1,043 billion in 2012 and $1,047 billion in 2013, and increases will be restricted to about 2 percent per year after that, 

with discretionary budget authority reaching a maximum of $1,234 billion in 2021. 

The baseline also incorporates projections of obligation limitations for certain transportation programs (calculated by adjusting for inflation the $54 billion provided in 

2011). Combining the budget authority subject to the caps with those obligation limitations, CBO projects that such discretionary funding will decline from 7.0 percent 

of GDP in 2012 to 5.5 percent of GDP in 2021 (see Figure 4).

Appropriations of those amounts will mean reductions in the real (inflationadjusted) resources available for the government’s programs. Compared with allowing 

discretionary appropriations to grow at the rate of inflation, the capped amount of 

discretionary budget authority is about 4 percent lower in 2012 and 9 percent lower 

in 2021. Compared with allowing discretionary budget authority to grow at the rate 

of nominal GDP, the caps are about 6 percent lower in 2012 and about 28 percent 

lower in 2021.

According to CBO’s estimates, if appropriations in the next 10 years are equal to the 

caps on discretionary spending, implementing those caps will reduce budget deficits 

by $778 billion between 2012 and 2021 (not counting the savings in interest payments that will result from lower outlays) compared with what would occur if discretionary budget authority was allowed to grow at the rate of inflation.
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Figure 4.

Total Discretionary Funding Excluding War Funding, 

1980 to 2021

(Percentage of gross domestic product)

Source: Congressional Budget Office.

Note: Funding includes budget authority as well as budgetary resources provided by obligation 

limitations for certain ground and air transportation programs.

The future path of discretionary spending may be affected by the actions of this 

Committee. Legislation originating from the Committee could directly alter the 

path of discretionary spending, for example, by changing the caps. Alternatively, if 

legislation originating from the Committee and estimated to produce at least 

$1.2 trillion in deficit reduction (including an allowance for interest savings) is not 

enacted by January 15, 2012, automatic procedures to cut spending will take effect. 

According to the law, such procedures would lead to a sequestration (that is, a cancellation) of discretionary resources in 2013 and a reduction in the caps in subsequent 

years—as well as reductions in mandatory spending.10 The magnitude of those cuts 

would depend on any shortfall in the estimated effects of legislation originating from 

this Committee relative to the trigger point of $1.2 trillion.

Automatic Enforcement Procedures Under the Budget Control Act

The automatic reductions in spending under the Budget Control Act—if triggered—

would take the form of equal cuts (in dollar terms) in funding for defense and nondefense programs from 2013 through 2021. Those reductions would be achieved by 

lowering the caps on discretionary budget authority specified in the Budget Control 

Act and by automatically cancelling budgetary resources for some programs and 

10. Mandatory spending is the budget authority provided by laws other than appropriation acts and 

the outlays that result from that budget authority.

1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 2020

0

2

4

6

8

10

12

Current Year Funding Inflated

CBO's Baseline (Capped)

No Savings from the Joint Select Committee

Actual Projected
15

CBO

activities financed by mandatory spending.11 The law exempts a significant portion of 

mandatory spending from sequestration, however.

CBO has estimated the changes in discretionary and mandatory spending that would 

occur if the automatic enforcement mechanisms were triggered because no new deficit 

reduction legislation was enacted (see Table 2). CBO’s analysis can only approximate 

the ultimate results; the Administration’s Office of Management and Budget would be 

responsible for implementing any such automatic reductions on the basis of its own 

estimates.

Under those circumstances, the automatic enforcement procedures would reduce 

budgetary resources for defense by $492 billion between 2013 and 2021. Such annual 

reductions would be split proportionally between mandatory and discretionary 

defense spending. Because mandatory spending makes up much less than 1 percent of 

all defense spending, however, CBO estimates that only about $150 million would be 

sequestered from mandatory defense programs over the 2013–2021 period. Consequently, almost all of the required deficit reduction in the defense category would 

have to be achieved by lowering the caps on future discretionary appropriations for 

defense activities.

Estimating automatic reductions for nondefense programs is more complicated, particularly because of provisions in the Budget Control Act that limit cuts in most 

spending for Medicare benefits to 2 percent. CBO estimates that about 90 percent of 

Medicare spending would be subject to that limit, and another 8 percent of such 

spending would be exempt from sequestration altogether, leaving just 2 percent of 

Medicare spending subject to the same sequestration as nonexempt mandatory 

programs.

The act would require the same total reductions—$492 billion over the 2013–2021 

period—in the budgetary resources for nondefense activities as in those for defense. In 

calculating the reductions required in the nondefense spending category, the targeted 

savings would first be allocated proportionally between nonexempt discretionary and 

mandatory programs. CBO estimates that mandatory spending accounts for roughly 

58 percent of all nondefense spending that would be subject to enforcement procedures under the Budget Control Act during those nine years. Of that nonexempt 

mandatory spending, the vast majority is for Medicare programs and activities that 

would be subject to the 2 percent limit. In the absence of such a limit, reductions in 

budgetary resources for Medicare would total $256 billion between 2013 and 2021, 

CBO estimates; with the 2 percent ceiling, however, such reductions would total 

$123 billion over that period. The other $133 billion in required reductions that 

could not be accomplished because of the 2 percent limit would be reallocated 

11. Budgetary resources consist of all sources of authority provided to federal agencies that permit them 

to incur financial obligations, including new budget authority, unobligated balances, direct spending authority, and obligation limitations. For 2013, reductions in discretionary budget authority 

would take place via sequestration rather than through a reduction in the caps.
16

CBO

Table 2.

CBO’s Estimates of Sequestration Amounts for 

Mandatory Spending and Reductions in Caps on 

Discretionary Budget Authority 

(Billions of dollars)

Source: Congressional Budget Office.

Notes: * = between -$500 million and zero; n.a. = not applicable. 

Budget authority refers to the authority provided by law to incur financial obligations, which 

eventually result in outlays. 

a. For the purposes of this table, “defense” refers to all accounts in budget function 050, and 

“nondefense” refers to all other budget accounts.

b. For 2013, reductions in discretionary budget authority would take place via sequestration rather 

than through a reduction in the caps.

c. Because a portion of Medicare spending cannot be subject to a sequestration of more than 

2 percent, the remaining amount of required reductions must be reallocated proportionally 

among other nonexempt mandatory programs and nondefense discretionary funding.

Total,

2013-

2013 2014 2015 2016 2017 2018 2019 2020 2021 2021

Defensea

Mandatory sequestration * * * * * * * * * *

Reduction in the cap on discretionary

budget authorityb -55 -55 -55 -55 -55 -55 -55 -55 -55 -492 ___ ___ ___ ___ ___ ___ ___ ___ ___ ____

Total -55 -55 -55 -55 -55 -55 -55 -55 -55 -492

Nondefensea

Mandatory sequestration

Medicare spending subject to

2 percent limit -11 -11 -12 -13 -13 -14 -15 -16 -17 -123

Other nonexempt programs -3 -3 -4 -4 -3 -3 -3 -3 -3 -30

Additional sequestration applied to 

other programs because of the

2 percent limit for Medicarec -2 -2 -2 -2 -2 -2 -2 -2 -2 -17

__ __ __ __ __ __ __ __ __ ___

Subtotal -16 -17 -18 -19 -19 -19 -20 -21 -22 -170

Reduction in the cap on discretionary

budget authorityb

Preliminary reductions -25 -24 -24 -23 -23 -23 -22 -21 -21 -206

Further reductions because of the

2 percent limit for Medicare -14 -14 -13 -13 -13 -13 -12 -12 -12 -116 ___ ___ ___ ___ ___ ___ ___ ___ ___ ____

Total -55 -55 -55 -55 -55 -55 -55 -55 -55 -492

Memorandum:

Percentage Cut to Nonexempt Budget Accounts

Defense 10.0 9.8 9.7 9.5 9.3 9.1 8.9 8.7 8.5 n.a.

Nondefense

Discretionary 7.8 7.4 7.1 6.8 6.6 6.4 6.1 5.8 5.5 n.a.

Mandatory

Medicare spending subject to

2 percent limit 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 n.a.

Other 7.8 7.4 7.1 6.8 6.6 6.4 6.1 5.8 5.5 n.a.
17

CBO

proportionally among the remaining nonexempt mandatory programs and discretionary programs in the nondefense category. 

Altogether, the majority of the savings from the automatic spending reductions would 

stem from further cuts in discretionary programs beyond those embodied in the Budget Control Act’s caps on discretionary budget authority. CBO expects that 71 percent of the net savings from the automatic procedures would come from lowering the 

caps on discretionary appropriations (and from a sequestration of those appropriations in 2013), 13 percent would come from a net reduction in mandatory spending, 

and 16 percent would result from lower debt-service costs arising from those other 

cuts.12

Of course, outcomes could be different from the figures in the table. The Congress 

could enact legislation originating from this Committee that would produce $1.2 trillion in savings through changes that differ significantly from the automatic reductions 

that would be required in the absence of such legislation. Or such legislation could 

yield some savings, but less than $1.2 trillion, so the automatic procedures would 

have a smaller impact than CBO has estimated here. Alternatively, this Committee 

could recommend, and the Congress could enact, legislation saving significantly more 

than $1.2 trillion.

Defense Spending

To illustrate the potential impact of the caps on discretionary appropriations set in the 

Budget Control Act and of the automatic enforcement procedures contained in that 

act, CBO has projected defense and nondefense appropriations and outlays under several different assumptions. For defense, those projections exclude appropriations and 

outlays for overseas contingency operations.

Compliance with the caps on discretionary funding could occur through many different combinations of defense and nondefense funding. For example, defense and nondefense appropriations might be cut proportionally relative to the funding that would 

be necessary to keep pace with inflation. In that case, funding for defense programs 

apart from overseas contingency operations would drop from $552 billion in 2011 to 

$538 billion in 2012 before rising again and reaching $637 billion in 2021 (see 

Table 3). Between 2012 and 2021, such funding would be $445 billion less than the 

amount that would occur if the amount of funding for 2011 grew at the rate of inflation. When measured as a share of GDP, funding for defense would decline by about 

1 percentage point from 2011 to 2021, or by more than one-fourth (see Figure 5). 

Funding for defense in 2021 (excluding overseas contingency operations) would represent 2.7 percent of GDP; by comparison, annual funding for defense (excluding 

overseas contingency operations) has averaged 3.4 percent of GDP during the past 

decade. 

12. For further details, see Congressional Budget Office, Estimated Impact of Automatic Budget 

Enforcement Procedures Specified in the Budget Control Act (September 2011).
18

CBO

Table 3.

Projections of Discretionary Budget Authority for Defense Programs

(Billions of dollars)

Continued

2012- 2012-

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2016 2021

Funding for 2011 (Excluding overseas

contingency operations) Adjusted for Inflationa 552 562 574 586 599 614 630 646 664 682 700 2,935 6,256

Potential Paths for Defense Discretionary 

Budget Authority Subject to the Caps as 

Set in the Budget Control Act of 2011b

All reductions from defensec 552 532 531 516 524 531 541 550 560 569 578 2,634 5,432

Proportional reductions 552 538 541 550 560 571 584 597 610 623 637 2,760 5,811

No reductions from defense 552 562 574 586 599 614 630 646 664 682 700 2,935 6,256

If No Savings Result from the

Joint Select Committeed 552 538 491 501 511 522 535 548 561 575 589 2,565 5,374

Potential Paths for Defense Discretionary 

Budget Authority Subject to the Caps as 

Set in the Budget Control Act of 2011b

All reductions from defensec 0 -30 -43 -70 -76 -82 -89 -96 -104 -113 -122 -301 -825

Proportional reductions 0 -24 -33 -36 -39 -42 -46 -50 -54 -58 -63 -175 -445

No reductions from defense 0 0 0 0 0 0 0 0 0 0 0 0 0

If No Savings Result from the

Joint Select Committeed 0 -24 -83 -85 -88 -91 -94 -98 -102 -106 -110 -371 -882

Projected Budget Authority

Total 

Reduction in Budget Authority Relative to the Funding for 2011 Adjusted for Inflation
19

CBO

Table 3. Continued

Projections of Discretionary Budget Authority for Defense Programs

(Billions of dollars)

Source: Congressional Budget Office.

Note: n.a. = not applicable.

a. These amounts were estimated by assuming that budget authority for fiscal years 2012 to 2021 will be equal to the 2011 

appropriation adjusted for inflation.

b. No caps were in place in 2011. Excludes overseas contingency operations.

c. In 2012 and 2013, reductions in defense funding would not be sufficient to meet the caps on “nonsecurity” funding; therefore, some reductions would have to come from nondefense programs even if all available defense funding classified as nonsecurity was eliminated. Caps for those two years are allocated to “security” and “nonsecurity” spending. The security 

category comprises discretionary appropriations for the Department of Defense, the Department of Homeland Security, the 

Department of Veterans Affairs, the National Nuclear Security Administration, the intelligence community management 

account (95-0401-0-1-054), and discretionary accounts in budget function 150 (international affairs). The nonsecurity category comprises all discretionary appropriations not included in the security category. Excludes overseas contingency 

operations. 

d. Assumes that the automatic enforcement procedures delineated in the Budget Control Act would take effect and, therefore, 

that caps for each year from 2013 through 2021 would be reset to cover defense (budget function 050) and nondefense 

budget authority. The caps for 2012 set in the Budget Control Act would not be affected by the automatic enforcement 

procedures. Because no adjustment to the caps for 2012 would be made if the automatic enforcement procedures take 

effect, CBO has assumed that the reductions in 2012 would be proportional.

e. The caps do not constrain appropriations for military operations in Afghanistan (or for similar activities). For its August 2011 

baseline, CBO projected future war-related funding by adjusting for inflation the $159 billion appropriated for 2011. The 

Continuing Appropriations Act, 2012 (Public Law 112-36) funded such operations through November 18, 2011, at an annual 

rate of $119 billion.

2012- 2012-

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2016 2021

Memorandum:

Overseas Contingency Operationse

August 2011 baseline 159 161 164 167 169 172 176 180 183 188 191 834 1,752

Extrapolation of annualized amount

provided in continuing resolution

for fiscal year 2012 n.a. 119 121 124 126 129 132 135 139 142 146 619 1,314

Total 
20

CBO

Figure 5.

Defense Discretionary Budget Authority, 1980 to 2021

(Percentage of gross domestic product)

Source: Congressional Budget Office.

a. The base budget funds the normal activities of the government for national defense, including 

the development and procurement of weapon systems and day-to-day operations of the military 

and related civilian workforce. Base-budget data include supplemental and emergency funding 

unrelated to operations in Afghanistan, Iraq, and the war on terrorism.

b. For 2001 to 2011, supplemental and emergency funding for overseas contingency operations 

(OCO), such as those in Afghanistan and Iraq, and for other purposes is shown separately from 

the base-budget data. 

c. The CBO projection of the Department of Defense’s (DoD’s) Future Years Defense Plan for 2012 

(without funding for overseas contingency operations) incorporates costs that are consistent 

with DoD’s recent experience. It also assumes that the non-DoD portions of defense discretionary funding remain at 2011 levels, adjusted only for inflation.

d. Assumes proportional reductions in defense and nondefense discretionary budget authority subject to the caps as set in the Budget Control Act of 2011.

e. Assumes that the automatic enforcement procedures delineated in the Budget Control Act 

would take effect and, therefore, that caps for each year from 2013 through 2021 would be reset 

to cover defense and nondefense budget authority. Because no adjustment to the caps for 2012 

would be made if the automatic enforcement procedures take effect, CBO has assumed that the 

reductions in 2012 would be proportional.

1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 2020

0

1

2

3

4

5

6

7

8

CBO Projection of

Base Budget Plus DoD's 2012 Plan

Funding for OCO

Proportional

Reductions

No Savings from the

Joint Select

Committtee

Actual

Base Budgeta

Projected

b

c

d

e
21

CBO

Alternatively, nearly all reductions in appropriations that would be needed to meet the 

caps—relative to the funding that would be necessary to keep pace with inflation—

could come from defense activities. In that case, budget authority for defense programs apart from overseas contingency operations would drop from $552 billion in 

2011 to $516 billion in 2014 before beginning to rise again.13 By 2021, such funding 

would total $578 billion and would equal 2.4 percent of GDP, one-third less than the 

3.7 percent of GDP represented by 2011 defense appropriations excluding overseas 

contingency operations. 

As another possibility, defense funding could grow at the rate of inflation, and all 

reductions needed to meet the caps could come from nondefense programs. In that 

case, CBO projects, defense appropriations would total $700 billion, or 2.9 percent of 

GDP, in 2021—still a decline of more than a fifth from the funding in 2011, when 

the amounts are measured as a share of GDP.

If none of the specified savings of $1.2 trillion was obtained through legislation originating with this Committee, the estimated reduction in defense funding in 2013 

would require a sequestration of 10.0 percent in discretionary budget authority for 

defense (see the memorandum in Table 2). The percentage reductions in the caps for 

later years would be successively slightly smaller, amounting to 8.5 percent in 2021. 

By 2021, defense budget authority (excluding funding for overseas contingency operations) would be about $110 billion—or 16 percent—lower than it would be if such 

appropriations kept up with inflation. During the 2012–2021 period as a whole, 

defense funding would be $882 billion less than the amount that would occur if the 

amount of funding for 2011 grew at the rate of inflation (see Table 3).14 By 2021, 

such funding would equal 2.5 percent of GDP. (Discretionary outlays for defense that 

would result from these different streams of budget authority are presented in 

Appendix B.)

The caps do not constrain appropriations for the war in Afghanistan or for similar 

activities, and the automatic enforcement procedures would not affect funding for 

such purposes. 

Nondefense Spending

Alternative ways of keeping discretionary spending within the caps specified in the 

Budget Control Act would have different implications for nondefense spending as 

well. 

13. In 2012 and 2013, the total amount of nonsecurity funding that would be available within the 

defense category if 2011 funding was adjusted for inflation is not large enough—even if all such 

funding was eliminated—to meet the caps on nonsecurity funding; therefore, to adhere to the caps 

on nonsecurity funding, some reductions would have to come from nondefense programs.

14. That amount is the sum of two components: (1) the estimated amount of the automatic reductions 

that would apply to defense funding ($492 billion) and (2) the difference between the defense caps 

specified in law that are to be used as the basis for such automatic reductions and what funding for 

defense would be if appropriations after 2011 grew at the rate of inflation ($390 billion).
22

CBO

If defense and nondefense appropriations were cut proportionally relative to the funding that would be necessary to keep pace with inflation, nondefense budget auhority 

would decrease from $511 billion in 2011 to $505 billion in 2012 before rising again 

and reaching $597 billion in 2021 (see Table 4). Between 2012 and 2021, budget 

authority for nondefense purposes would be $418 billion less than the amount that 

would be provided if funding grew at the rate of inflation after 2011. Under an 

assumption that the obligation limitations for certain transportation programs grow 

over time at the rate of inflation, nondefense funding in 2021 would represent 

2.8 percent of GDP; by comparison, such funding has averaged 4.1 percent of GDP 

during the past decade (see Figure 6).

Alternatively, if all reductions in appropriations—relative to the funding that would 

be necessary to keep pace with inflation—came from nondefense activities, budget 

authority for nondefense programs would drop from $511 billion in 2011 to 

$473 billion in 2013 before beginning to rise again. By 2021, budget authority would 

total $534 billion. Combining that amount with the projected obligation limitations 

would result in total nondefense funding equal to 2.5 percent of GDP, a drop of 

about one-third relative to the 3.8 percent of GDP represented by 2011 nondefense 

funding.

As another possibility, nondefense funding could grow nearly at the rate of inflation, 

and almost all reductions needed to meet the caps could come from defense programs.15 In that case, CBO projects, nondefense budget authority would total 

$656 billion in 2021. The resulting funding (including obligation limitations) would 

equal 3.0 percent of GDP—a decline of nearly a fifth from the funding in 2011, 

when the amounts are measured as a percentage of GDP.

If no savings were obtained through legislation originating with this Committee, the 

estimated reduction in nondefense funding in 2013 would require a sequestration of 

7.8 percent in discretionary budget authority for nondefense purposes (see the memorandum in Table 2). The percentage reductions in the caps for later years would be 

successively smaller, amounting to 5.5 percent in 2021. By 2021, nondefense budget 

authority would be $99 billion—or 15 percent—lower than it would be if such 

appropriations kept up with inflation, and total nondefense funding (including obligation limitations) would equal 2.6 percent of GDP. During the 2012–2021 period as 

a whole, nondefense funding would be $794 billion less than the amount that would 

occur if the amount of funding for 2011 grew at the rate of inflation.16 (Discretionary 

outlays for nondefense activities that would result from these different streams of budget authority are presented in Appendix B.)

15. In 2012 and 2013, reductions in defense funding would not be sufficient to meet the caps on nonsecurity funding; therefore, some reductions would have to come from nondefense programs even if 

all available defense funding classified as nonsecurity was eliminated.

16. That amount is the sum of two components: (1) the estimated amount of the automatic reductions 

that would apply to nondefense funding ($322 billion) and (2) the difference between the nondefense caps specified in law that are to be used as the basis for such automatic reductions and what 

funding for nondefense activities would be if appropriations after 2011 grew at the rate of inflation 

($473 billion). 
23

CBO

Table 4.

Projections of Discretionary Budget Authority for Nondefense Programs

(Billions of dollars)

Source: Congressional Budget Office.

a. These amounts were estimated by assuming that budget authority for fiscal years 2012 to 2021 will be equal to the 2011 

appropriation adjusted for inflation.

b. No caps were in place in 2011.

c. In 2012 and 2013, reductions in defense funding would not be sufficient to meet the caps on “nonsecurity” funding; therefore, some reductions would have to come from nondefense programs even if all available defense funding classified as nonsecurity was eliminated. Caps for those two years are allocated to “security” and “nonsecurity” spending. The security 

category comprises discretionary appropriations for the Department of Defense, the Department of Homeland Security, the 

Department of Veterans Affairs, the National Nuclear Security Administration, the intelligence community management 

account (95-0401-0-1-054), and discretionary accounts in budget function 150 (international affairs). The nonsecurity category comprises all discretionary appropriations not included in the security category. Excludes overseas contingency 

operations. 

d. Assumes that the automatic enforcement procedures delineated in the Budget Control Act would take effect and, therefore, 

that caps for each year from 2013 through 2021 would be reset to cover defense (budget function 050) and nondefense 

budget authority. The caps for 2012 set in the Budget Control Act would not be affected by the automatic enforcement 

procedures. Because no adjustment to the caps for 2012 would be made if the automatic enforcement procedures take 

effect, CBO has assumed that the reductions in 2012 would be proportional.

2012- 2012-

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2016 2021

Funding for 2011 Adjusted for Inflationa 511 528 538 550 562 576 590 606 622 639 656 2,753 5,867

Potential Paths for Nondefense 

Discretionary Budget Authority Subject

to the Caps as Set in the Budget Control 

Act of 2011b

All reductions from nondefense 511 481 473 480 487 493 501 510 518 526 534 2,414 5,004

Proportional reductions 511 505 506 516 526 536 547 559 572 585 597 2,589 5,449

No reductions from nondefensec 511 511 516 550 562 576 590 606 622 639 656 2,715 5,828

If No Savings Result from the

Joint Select Committeed 511 505 462 472 483 494 505 518 532 545 557 2,416 5,072

Potential Paths for Nondefense 

Discretionary Budget Authority Subject 

to the Caps as Set in the Budget Control 

Act of 2011b

All reductions from nondefense 0 -47 -65 -70 -76 -82 -89 -96 -104 -113 -122 -340 -863

Proportional reductions 0 -23 -31 -34 -37 -40 -43 -47 -50 -55 -59 -164 -418

No reductions from nondefensec 0 -17 -22 0 0 0 0 0 0 0 0 -38 -38

If No Savings Result from the

Joint Select Committeed 0 -23 -76 -78 -79 -82 -85 -88 -90 -95 -99 -338 -794

Total 

Reduction in Budget Authority Relative to the Funding for 2011 Adjusted for Inflation

Projected Budget Authority
24

CBO

Figure 6.

Nondefense Discretionary Funding, 1980 to 2021

(Percentage of gross domestic product)

Source: Congressional Budget Office.

Note: Funding includes budget authority as well as budgetary resources provided by obligation 

limitations for certain ground and air transportation programs.

a. Assumes proportional reductions in defense and nondefense discretionary budget authority subject to the caps as set in the Budget Control Act of 2011.

b. Assumes that the automatic enforcement procedures delineated in the Budget Control Act 

would take effect and, therefore, that caps for each year from 2013 through 2021 would be reset 

to cover defense and nondefense budget authority. Because no adjustment to the caps for 2012 

would be made if the automatic enforcement procedures take effect, CBO has assumed that the 

reductions in 2012 would be proportional. 

How Might the Path of Discretionary Spending Be Altered?

Because discretionary spending is determined by the appropriation process each year, 

it is not always clear what metric should be used when thinking about future needs 

and measuring the impact of policy changes. 

One metric is to assume that current funding grows at the rate of inflation (that is, 

that it stays the same in real terms). For some programs, however, such an approach 

understates the cost of maintaining current policies or plans. For example, early in 

2011 the Administration put forth a plan to address future defense needs that would 

require defense spending to grow faster than the rate of inflation. As further examples, 

the demands for veterans’ health care and Pell grants for higher education are growing 

more quickly than inflation. In addition, current funding for some programs is less 

than many analysts believe is necessary to address the nation’s needs. An example in 

this category is spending on transportation and other forms of infrastructure. 

1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 2020

0

1

2

3

4

5

6

7

Proportional

Reductions

Actual Projected

No Savings from the

Joint Select

Committtee

a

b
25

CBO

In contrast, the funding needed for overseas contingency operations, such as the war 

in Afghanistan, may decline during the coming decade. Indeed, the appropriations 

currently in place for such operations for fiscal year 2012 are well below the amounts 

provided in 2011. 

Regardless of the constraints placed on discretionary spending through the Budget 

Control Act, legislation proposed by this Committee, or other actions by this Congress, the amounts of future discretionary appropriations will ultimately be enacted by 

future lawmakers. The limitations already enacted into law, or others that may be set 

in the future, might or might not be upheld by subsequent Congresses.

Nevertheless, CBO assumes in its baseline projections that discretionary funding subject to the caps in the coming years will be equal to the amounts specified in current 

law for those caps. As a result, changes that would reduce the funds necessary to 

accomplish a particular discretionary activity or that achieved savings in undertaking a 

particular activity would reduce projected total appropriations only if legislation also 

lowered the caps; without a reduction in the caps, funding for other discretionary 

activities would probably fill the gap created by the specific reduction or savings.

Defense Spending

Even if budget authority for defense programs (other than overseas contingency operations) grew at the rate of inflation, that amount of funding would be insufficient to 

pay for the Future Years Defense Program (FYDP) provided to the Congress in April 

2011 by the Department of Defense. CBO has examined the programs and plans 

contained in that document, which did not include war-related activities, and projected their budgetary impact.17 According to CBO’s calculations, over the period 

from 2012 to 2021, the funding needed to implement DoD’s plan (and finance the 

small portion of defense spending carried out by other agencies) would exceed by 

about $480 billion the amounts projected by assuming that current budget authority 

increased at the rate of inflation. (The funding needed to implement that plan and 

keep the non-DoD portion of defense spending growing at the rate of inflation would 

represent 3.2 percent of GDP in 2021; see Figure 5.) Thus, if the discretionary spending caps were met through proportional reductions in defense and nondefense appropriations relative to the funding that would be necessary to keep pace with inflation, 

the shortfall in defense appropriations during the 2012–2021 period relative to the 

amounts needed to implement the FYDP (and keep the non-DoD portion of defense 

spending growing at the rate of inflation) would be roughly $925 billion.18

17. See Congressional Budget Office, Long-Term Implications of the 2012 Future Years Defense 

Program (June 2011).

18. That amount is the sum of the $480 billion difference just noted and the $445 billion gap 

(described on page 17) between what future defense funding would be if it were maintained at the 

2011 level with adjustments for inflation and what it would be if proportional reductions were 

made to comply with the discretionary caps.
26

CBO

In contrast, the funding required for war-related activities—in Afghanistan and other 

countries—will be smaller than the amounts provided in recent years if the number of 

deployed troops is smaller and the pace of operations is diminished. Recently, the 

Congress recognized that the need for such funding has lessened; in the continuing 

resolution now in place, lawmakers provided appropriations for such purposes at an 

annualized level of $119 billion—a drop of about $40 billion from the $159 billion 

provided for 2011. If the current amount, $119 billion, was provided in future years 

with adjustments for inflation, the budget authority over the 2012–2021 period 

would sum to $1.3 trillion, about $440 billion less than a projection based on the 

2011 appropriation. 

If the number of troops deployed continues to decline and if the pace of operations 

continues to diminish, even less funding may suffice in future years. To illustrate, 

CBO formulated an alternative budget scenario that assumes a reduction in the 

deployment of forces abroad for military actions. On the basis of data through June 

2011, CBO estimates, the number of U.S. active-duty, reserve, and National Guard 

personnel deployed for war-related activities in 2011 averaged about 180,000. Under 

that alternative scenario, the average number of military personnel deployed for warrelated purposes would decline over four years: from 130,000 in 2012 to 95,000 in 

2013; 65,000 in 2014; and 45,000 in 2015 and thereafter. (Those numbers could 

represent various allocations among Afghanistan and other countries.) Under that 

alternative scenario, total discretionary outlays for the period from 2012 through 

2021 would be $700 billion less than the amount based on extending appropriations 

in the continuing resolution. Of course, the scope of such activities 10 years from now 

is highly uncertain, and many other scenarios—some costing more and some less—

also are possible.

Assessing large, sustained reductions in defense spending would involve considering 

their effects on military capabilities. Cuts could be targeted toward personnel levels, 

pay rates, and benefits; training and supplies; day-to-day operating and administrative 

costs; operation and maintenance of existing weapon systems; procurement of new 

weapon systems; and research and development related to more-advanced weapon 

systems. Such reductions in funding could require changes in broad strategic objectives—such as the number of simultaneous conflicts in which the military could 

engage and their intensity, duration, and overlap—or changes in how the nation seeks 

to achieve those broad objectives. Trade-offs could involve, for example, the choice 

between fielding a smaller force with more-capable weapon systems and maintaining 

the current number of units but forgoing some of the upgrades to their weapon systems. A smaller force might not be able to handle as many conflicts at the same time, 

but it could be structured to maximize its flexibility to fight a variety of opponents 

with different capabilities or in different parts of the world. Conversely, a larger 

force would be better able to sustain longer-term counterinsurgency or peacekeeping 

operations.19

19. See Congressional Budget Office, Reducing the Deficit: Spending and Revenue Options (March 

2011).
27

CBO

Nondefense Spending

Even if budget authority for nondefense programs grew at the rate of inflation, that 

amount of funding would be insufficient to continue some current policies over the 

2012–2021 period. For example, the cost of veterans’ health benefits—under an 

assumption that current enrollment rules remain unchanged—is projected to rise 

more rapidly than inflation and thus to exceed the budget authority calculated simply 

by extrapolating the current year’s appropriations at the projected rate of inflation. 

CBO has estimated that this gap will total $70 billion over the 2012-2021 period.20

Similarly, maintaining current award amounts for Pell grants would require funding 

above what would be shown in a projection based on inflating 2011 appropriations.

Moreover, many analysts believe that current funding for some programs is insufficient to meet the nation’s future needs. For example, many analysts believe that current national spending on infrastructure is inadequate to provide enough roads, 

bridges, and other capital assets to maintain the current level of highway services or to 

fund all of the projects whose benefits exceed their costs. Projections from the Federal 

Highway Administration (FHWA) suggest that maintaining the current level of services from highway infrastructure would require increasing federal capital spending 

on highways from $43 billion in 2010 to $57 billion per year (in 2010 dollars), 

assuming that the federal government and state and local governments continue to 

pay their historical shares of such costs. In addition, if the FHWA’s assessment is accurate, undertaking all highway infrastructure investment for which benefits equal or 

exceed their costs would require $94 billion per year (in 2010 dollars), more than 

twice the spending in 2010.21 Analyses of other types of infrastructure—such as aviation, mass transit systems, water supply, and wastewater treatment—reach qualitatively similar conclusions about the need to increase funding to maintain current services or meet growing demand for such services.22

However, if spending on certain programs is allowed to grow faster than inflation, 

then less room under the caps will be available for other nondefense discretionary 

activities. Cuts in nondefense discretionary spending could affect a broad range of 

activities, and decisions about particular programs have impacts that would need to be 

weighed against the effects of alternative decisions. Many programs—especially in the 

areas of education and transportation—involve financing from federal, state, and local 

governments. Reducing federal support for such activities would force other levels of 

government to make decisions about decreasing the scope of the activities, increasing 

their own funding, or some combination of the two. 

20. See Congressional Budget Office, Potential Costs of Veterans’ Health Care (October 2010).

21. See Statement of Joseph Kile, Assistant Director, Congressional Budget Office, before the Senate 

Committee on Finance, The Highway Trust Fund and Paying for Highways (May 17, 2011).

22. See Congressional Budget Office, Public Spending on Transportation and Water Infrastructure

(November 2010) and Issues and Options in Infrastructure Investment (May 2008).
28

CBO

Lowering pay rates for federal civilian employees could hamper efforts to recruit and 

retain workers (particularly in some occupations), which could reduce the overall skill 

level of the federal workforce over time. Having fewer federal workers would probably 

lower the levels of service that federal agencies provide to the public, unless cuts in the 

agencies’ workforces were accompanied by actions to enhance productivity. Charging 

users—such as drivers, air travelers, and users of waterways—for services they receive 

from federal programs would allow those programs to operate more efficiently and 

reduce the amount of government spending needed to maintain or improve service, 

but such charges would impose added burdens on users compared with current 

arrangements.23

Federal income support payments and education grants to low-income households 

could be reduced or provided to fewer households, which would mean less assistance 

for people who may value those benefits highly. A variety of federal activities could 

simply be curtailed—ranging from research by the National Institutes of Health to 

export promotion by the Department of Commerce—but curtailing those activities 

could have costs as well.

23. See Congressional Budget Office, Alternative Approaches to Funding Highways (March 2011).
CBO

Appendix A: 

Funding for Operations in Iraq and 

Afghanistan and for Related Activities

Since September 2001, lawmakers have provided almost $1.3 trillion in budget 

authority for operations in Afghanistan and Iraq and related activities (see the table). 

That amount includes funding for military and diplomatic operations in Afghanistan, 

Iraq, and certain other regions; for some veterans’ benefits and services; and for related 

activities of the Department of Justice. Appropriations specifically designated for 

those purposes averaged about $100 billion a year from 2003 through 2006, rose to 

$170 billion in 2007 and $187 billion in 2008, and then declined to an average of 

$159 billion over the 2009–2011 period. The Continuing Appropriations Act, 2012 

(Public Law 112-36) provides funding for war-related activities in the current fiscal 

year through November 18, 2011, at an annual rate of $119 billion.

Funding through the end of fiscal year 2011 for military operations and other defense 

activities totaled $1.1 trillion, most of which went to the Department of Defense 

(DoD). Lawmakers also provided $66 billion to train and equip indigenous security 

forces in Afghanistan and Iraq.1 In addition, they have made $52 billion available for 

diplomatic operations and aid to Afghanistan, Iraq, and other countries assisting the 

United States in those efforts. 

DoD reports that in fiscal year 2011, obligations for operations in Afghanistan and 

Iraq and for related activities averaged $11.6 billion per month (through July, the last 

month for which data are available). That monthly average is almost $1 billion less 

than the amount reported for 2010. Obligations were lower in the first half of the 

year, while the department operated with funding from a series of continuing resolutions, but increased to over $13 billion in May after the enactment of a regular appropriation, and to $19 billion in July. Operation Enduring Freedom (in and around 

Afghanistan) accounted for 67 percent of those obligations in 2011—up from 51 percent in 2010 and 34 percent in 2009. Operation New Dawn (formerly Operation 

Iraqi Freedom) accounted for 33 percent of those obligations, down from 49 percent 

in 2010 and 65 percent in 2009. Additional security missions that have taken place in 

the United States since the terrorist attacks of September 11, 2001—such as combat 

air patrols over Washington, D.C., and New York City, known as Operation Noble 

Eagle—accounted for less than 1 percent of obligations in 2011. 

1. That $66 billion includes $5 billion provided for Iraqi security forces in 2004 in an appropriation 

for the State Department’s Iraq Relief and Reconstruction Fund.
30

CBO

Table A-1.

Estimated Appropriations Provided for U.S. Operations in Iraq and 

Afghanistan and for Other War-Related Activities, 2001 to 2011

(Billions of dollars of budget authority)

Source: Congressional Budget Office.

Notes: The Continuing Appropriations Act, 2012 (Public Law 112-36) provided funding in budget function 050 (National 

Defense) for war-related operations through November 18, 2011, at an annual rate of $119 billion, similar to the amount 

requested for such operations by the President for the current year. The President also requested about $9 billion for 

diplomatic operations and foreign aid related to overseas contingency operations. (Such spending would be recorded in 

budget function 150, International Affairs.) P.L. 112-36 did not specify funding for those purposes. Final appropriations 

for fiscal year 2012 could be greater or less than the amount provided to date. Funding for fiscal year 2012 is not 

included in this table.

* = between zero and $500 million.

Continued

Total,

2001-

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2011

Military Operations and Other 

Defense Activitiesa

Iraq 0 0 51 70 50 85 113 133 90 59 42 693

Afghanistan 0 12 12 13 8 12 24 29 38 87 98 332

Otherb 14 5 18 5 11 13 15 13 13 5 6 117

__ __ __ __ __ ___ ___ ___ ___ ___ ___ ____

Subtotal 14 18 80 88 69 110 152 175 140 151 146 1,142

Indigenous Security Forcesc

Iraq 0 0 0 5 6 3 6 3 1 1 2 26

Afghanistan * 0 0 0 1 2 7 3 6 9 12 40 _ _ _ _ _ _ __ _ _ __ __ __

Subtotal * 0 0 5 7 5 13 6 7 10 13 66

Diplomatic Operations and Foreign Aidd

Iraq 0 0 3 15 1 3 3 3 2 2 0 32

Afghanistan 0 * 1 2 1 * 1 1 5 2 0 13

Other * 1 5 * * * * * 1 * 0 8 _ _ _ __ _ _ _ _ _ _ _ __

Subtotal * 2 8 17 3 3 4 5 7 4 0 52

Other Services and Activitiese

Iraq 00*0**11*00 2

Afghanistan 0 0 0 0 *****00 *

Other 0 0 0 0 *****00 1 _ _ _ _ _ _ _ _ _ _ _ _

Subtotal 0 0 * 0 * * 1 2 * 0 0 3

Total Budget Authority 14 19 88 110 79 118 170 187 154 165 159 1,263
31

CBO

Table A-1. Continued

Estimated Appropriations Provided for U.S. Operations in Iraq and 

Afghanistan and for Other War-Related Activities, 2001 to 2011

(Notes, continued)

a. CBO estimated funding provided for operations in Afghanistan and Iraq by allocating funds on the basis of information in 

budget justification materials from the Department of Defense and in monthly reports on its obligations. Some allocations 

for prior years have been adjusted on the basis of more recent information.

b. Includes Operation Noble Eagle (homeland security missions, such as combat air patrols, in the United States), the restructuring of Army and Marine Corps units, classified activities other than those funded by appropriations for the Iraq Freedom 

Fund, efforts to increase the size of the Army and Marine Corps, and other operations. (For fiscal years 2005 through 2011, 

funding for Operation Noble Eagle has been intermingled with regular appropriations for the Department of Defense; that 

funding is not included in this table.)

c. Funding for indigenous security forces is used to train and equip local military and police units in Afghanistan and Iraq. That 

funding was appropriated in accounts for diplomatic operations and foreign aid (budget function 150) in 2004, and in 

accounts for defense (budget function 050) starting in 2005.

d. Beginning in 2010, most funding for diplomatic operations in, and foreign aid to, countries helping the United States fight 

terrorism has been in regular appropriations, and cannot be separated from appropriations for activities unrelated to those 

operations.

e. Includes funding for some veterans’ benefits and services, as well as certain activities of the Department of Justice. 

Excludes about $12 billion in spending by the Department of Veterans Affairs (VA) for the incremental costs for medical 

care, disability compensation, and survivor benefits for veterans of operations in Afghanistan and Iraq and the war on terrorism. That amount is CBO’s estimate of spending from regular appropriations for the Department of Veterans Affairs and 

was not explicitly appropriated for war-related expenses.

Because most appropriations for operations in Afghanistan and Iraq and for related 

activities appear in the same budget accounts as appropriations for DoD’s other functions, it is impossible to determine precisely how much has been spent on those activities. The Congressional Budget Office (CBO) estimates that the $1.2 trillion appropriated for military operations, other defense activities, and indigenous security forces 

in those two countries resulted in outlays of just over $1 trillion through 2011; about 

$160 billion of that occurred in 2011. Of the $52 billion appropriated for international affairs activities related to the war efforts, about $50 billion was spent through 

2011, CBO estimates, including $5 billion in 2011. In total, outlays for all of those 

activities amounted to about $165 billion last year. 

CBO

Appendix B: 

Projections of Discretionary Outlays

This testimony has focused on discretionary funding rather than on outlays because 

the Congress specifies the amount of funding provided each year but it does not 

directly control when outlays occur. In addition, enactment of the Budget Control 

Act of 2011 in August instituted statutory caps on discretionary budget authority for 

each of the fiscal years 2012 through 2021. If legislation originating from this Committee producing at least $1.2 trillion in deficit reduction (including an allowance for 

interest savings) is not enacted by January 15, 2012, automatic procedures would further reduce discretionary appropriations starting in 2013. 

Discretionary funding could follow a variety of paths over the next decade, and the 

outlays stemming from such funding decisions will affect the deficit (which is computed as the difference between revenues and outlays). To more easily make historical 

comparisons (historical data are typically expressed in terms of outlays), CBO has estimated the effect on outlays of a range of potential changes to both defense funding 

(Table B-1) and nondefense funding (Table B-2). (For a further discussion of the various scenarios shown in the tables, see pages 17 to 24.)
34

CBO

Table B-1.

Projections of Discretionary Outlays for Defense Programs

(Billions of dollars)

Continued

2012- 2012-

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2016 2021

Funding for 2011 (Excluding overseas

contingency operations) Adjusted for Inflationa 542 546 562 575 589 607 618 629 651 668 686 2,880 6,132

Potential Paths for Defense Outlays 

Resulting from the Caps as 

Set in the Budget Control Act of 2011b

All reductions from defensec 542 527 528 520 522 531 535 539 553 562 571 2,628 5,388

Proportional reductions 542 531 536 543 553 567 575 582 600 613 626 2,730 5,726

No reductions from defense 542 546 562 575 589 607 618 629 651 668 686 2,880 6,132

If No Savings Result from the

Joint Select Committeed 542 531 505 501 507 520 526 534 552 565 579 2,564 5,320

Potential Paths for Defense Discretionary 

Outlays Resulting from the Caps as 

Set in the Budget Control Act of 2011b

All reductions from defensec 0 -19 -34 -55 -68 -76 -84 -91 -98 -106 -115 -252 -744

Proportional reductions 0 -15 -26 -32 -36 -40 -43 -47 -51 -55 -60 -150 -407

No reductions from defense 0 0 0 0 0 0 0 0 0 0 0 0 0

If No Savings Result from the

Joint Select Committeed 0 -15 -57 -74 -82 -87 -92 -95 -99 -103 -107 -316 -812

Total 

Reduction in Outlays Relative to the Outlays from Adjusting 2011 Funding for Inflation

Projected Outlays
35

CBO

Table B-1. Continued

Projections of Discretionary Outlays for Defense Programs

(Billions of dollars)

Source: Congressional Budget Office.

a. These amounts were estimated by assuming that budget authority for fiscal years 2012 to 2021 will be equal to the 2011 

appropriation adjusted for inflation.

b. No caps were in place in 2011. Excludes overseas contingency operations.

c. In 2012 and 2013, reductions in defense funding would not be sufficient to meet the caps on “nonsecurity” funding; therefore, some reductions would have to come from nondefense programs even if all available defense funding classified as nonsecurity was eliminated. Caps for those two years are allocated to “security” and “nonsecurity” spending. The security 

category comprises discretionary appropriations for the Department of Defense, the Department of Homeland Security, the 

Department of Veterans Affairs, the National Nuclear Security Administration, the intelligence community management 

account (95-0401-0-1-054), and discretionary accounts in budget function 150 (international affairs). The nonsecurity category comprises all discretionary appropriations not included in the security category. Excludes overseas contingency operations. 

d. Assumes that the automatic enforcement procedures delineated in the Budget Control Act would take effect and, therefore, 

that caps for each year from 2013 through 2021 would be reset to cover defense (budget function 050) and nondefense 

budget authority. The caps for 2012 set in the Budget Control Act would not be affected by the automatic enforcement 

procedures. Because no adjustment to the caps for 2012 would be made if the automatic enforcement procedures take 

effect, CBO has assumed that the reductions in 2012 would be proportional.

e. The caps do not constrain appropriations for military operations in Afghanistan (or for similar activities). For its August 2011 

baseline, CBO projected future war-related funding by adjusting for inflation the $159 billion appropriated for 2011. The 

Continuing Appropriations Act, 2012 (Public Law 112-36) funded such operations through November 18, 2011, at an annual 

rate of $119 billion.

2012- 2012-

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2016 2021

Memorandum:

Overseas Contingency Operationse

August 2011 baseline 161 163 165 166 167 170 172 174 179 182 186 830 1,723

Extrapolation of annualized amount

provided in continuing resolution

for fiscal year 2012 161 148 136 129 126 127 130 132 135 139 142 666 1,345

Total 
36

CBO

Table B-2.

Projections of Discretionary Outlays for Nondefense Programs

(Billions of dollars)

Source: Congressional Budget Office.

Note: * = between -$500 million and zero.

a. These amounts were estimated by assuming that budget authority for fiscal years 2012 to 2021 will be equal to the 2011 

appropriation adjusted for inflation.

b. No caps were in place in 2011.

c. In 2012 and 2013, reductions in defense funding would not be sufficient to meet the caps on “nonsecurity” funding; therefore, some reductions would have to come from nondefense programs even if all available defense funding classified as nonsecurity was eliminated. Caps for those two years are allocated to “security” and “nonsecurity” spending. The security 

category comprises discretionary appropriations for the Department of Defense, the Department of Homeland Security, 

the Department of Veterans Affairs, the National Nuclear Security Administration, the intelligence community management 

account (95-0401-0-1-054), and discretionary accounts in budget function 150 (international affairs). The nonsecurity 

category comprises all discretionary appropriations not included in the security category. Excludes overseas contingency 

operations. 

d. Assumes that the automatic enforcement procedures delineated in the Budget Control Act would take effect and, therefore, 

that caps for each year from 2013 through 2021 would be reset to cover defense (budget function 050) and nondefense 

budget authority. The caps for 2012 set in the Budget Control Act would not be affected by the automatic enforcement procedures. Because no adjustment to the caps for 2012 would be made if the automatic enforcement procedures take effect, 

CBO has assumed that the reductions in 2012 would be proportional.

2012- 2012-

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2016 2021

Funding for 2011 Adjusted for Inflationa 646 631 621 621 625 632 643 657 672 689 707 3,130 6,498

Potential Paths for Nondefense 

Discretionary Outlays Resulting from

the Caps as Set in the Budget Control 

Act of 2011b

All reductions from nondefensec 646 604 571 559 555 555 560 566 574 583 592 2,845 5,720

Proportional reductions 646 619 598 592 592 595 603 613 625 639 652 2,995 6,127

No reductions from nondefense 646 622 605 615 623 632 643 657 672 689 707 3,096 6,464

If No Savings Result from the

Joint Select Committeed 646 619 575 555 551 555 562 572 585 599 612 2,855 5,783

Potential Paths for Nondefense 

Discretionary Outlays Resulting from 

the Caps as Set in the Budget Control 

Act of 2011b

All reductions from nondefense 0 -27 -49 -62 -70 -77 -84 -91 -98 -106 -115 -285 -778

Proportional reductions 0 -12 -23 -29 -33 -37 -40 -43 -47 -51 -55 -135 -371

No reductions from nondefensec 0 -8 -16 -6 -2 -1 * 0 0 0 0 -33 -33

If No Savings Result from the

Joint Select Committeed 0 -12 -46 -66 -74 -78 -82 -84 -87 -91 -95 -275 -714

Total 

Reduction in Outlays Relative to the Outlays from Adjusting 2011 Funding for Inflation

Projected Outlays