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CRS: The American Taxpayer Relief Act of 2012: Modifications to the Budget Enforcement Procedures in the Budget Control Act

Author: Bill Heniff Jr.
February 4, 2013

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"The BCA established an automatic process to reduce spending, partially entailing a sequester of budgetary resources, if Congress did not pass and the President did not sign, by January 15, 2012, legislation reducing the deficit by $1.2 trillion over the FY2012-FY2021 period. No such legislation was enacted by the deadline. Therefore, the automatic spending reduction process was triggered."

The Budget Control Act of 2011 (BCA; P.L. 112-25) established, among other things, statutory limits on discretionary spending and an automatic process of spending reductions if Congress and the President did not enact deficit reduction legislation by January 15, 2012. Both of these procedures involve sequestration—the automatic, largely across-the-board cancellation of previously-enacted budgetary resources. The American Taxpayer Relief Act of 2012 (ATRA, P.L. 112-240), signed into law on January 2, 2013, however, made substantive modifications to these procedures, affecting the possible sequestration of budgetary resources in FY2013.

Perhaps the most important modifications were to postpone, but not cancel, any potential sequestration of FY2013 resources. To summarize, the ATRA postponed the so-called BCA sequester, originally scheduled for January 2, 2013, until March 1, 2013, and postponed the enforcement of the statutory limits on discretionary spending for FY2013 (i.e., through a sequester), originally scheduled for 15 days after Congress adjourns to end a session, until March 27, 2013 (see Table 1). In addition, the ATRA reduced the amount of the spending reductions in FY2013 resources under the BCA sequester by $24 billion and reduced the statutory limits for FY2013 and FY2014 by a total of $4 billion and $8 billion, respectively. This report provides a brief summary of these modifications.

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