This report explains how sequestration was used during FY1986-2002 by the U.S. government to bring projected budget levels in line with deficit targets and limits on discretionary spending.
During the period encompassing FY1986-2002, the budgetary decisions of Congress and the President were guided in part by specific goals in statute enforced by a process known as sequestration. The statutory goals initially took the form of deficit targets, but later were changed to limits on discretionary spending (first effective for FY1991) and a “pay-as-you-go” requirement for direct spending and revenue legislation (first effective for FY1992). Five sequesters were triggered during years in which Congress and the President did not adhere to these statutory goals, three under the deficit targets and two under the discretionary spending limits. No sequester occurred, however, after FY1991.
In many of the years since FY1991, Congress and the President were able to avoid a sequester by ensuring that it did not enact spending or revenue legislation in violation of the statutory goals. At times, Congress and the President had to take advantage of flexibility in the procedures, such as the ability to designate certain spending as “emergency requirements,” in order to achieve this outcome. In other instances, however, Congress and the President prevented a sequester that otherwise would have occurred by enacting into law provisions that intervened in the normal operation of the process.