Discretionary Spending Limits (or Caps)

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Discretionary Spending Limits (or Caps) are statutory ceilings imposed for a fiscal year on total discretionary spending, or on subcategories of discretionary spending, and enforced by automatic across-the-board cuts (sequestration) to eliminate any overages.

Spending limits were first imposed by the Budget Enforcement Act of 1990 (BEA) and were applied to budget authority and outlays, and were eventually extended through FY 2002.

Spending limits were again imposed by the Budget Control Act of 2011 (BCA) for each year through FY 2021, but applied to budget authority only. The BCA spending caps were automatically reduced by a “Joint Committee trigger” in 2012 and were subsequently referred to as “sequester caps.” However, the sequester caps were, in large part, rolled back by a series of four Bipartisan Budget Acts. The BCA spending caps expired in FY 2021.

The history and operation of spending caps are explained in detail in TRILLIONS: A Primer on Federal Spending, Taxes, the U.S. Debt Ceiling, and Fiscal Law.