A permanent appropriation may  have been made available through an annual appropriations act or  through laws other than the annual appropriations acts. Spending Limits and Sequestration

Sequestration—cancellation of budgetary resources under a presidential  order—was first established in the Balanced Budget and Emergency  Deficit Control Act of 1985 (BBEDCA) to control the deficit. Reported Use of Spending Authority and Permanent Appropriations Has Increased Government-Wide, and Agencies Using the Authorities Have Changed Reported Budget Authority Amount Was Higher for Three of the Five Authority Types in Fiscal Year 2015, as Compared to Fiscal Year 1994

The amount of spending authority and permanent appropriations reported  government-wide grew 88 percent, from fiscal years 1994 through 2015  adjusted for inflation. Entitlement  programs, such as Medicare and the Social Security Administration’s  (SSA) Old-Age and Survivors Insurance and Disability Insurance  programs, are funded through permanent appropriations, and are a  significant proportion of budget authority in our inventory, as discussed  below. Agencies Reporting the Largest Amount of Spending Authority and Permanent Appropriations in Fiscal Year 2015 Have Changed, as Compared to Fiscal Year 1994

The majority of spending authority and permanent appropriations reported  in fiscal year 2015 was concentrated in large agencies and budget  accounts that fund entitlement programs such as Social Security and  Medicare. HHS also had the most accounts in the list of top 10  accounts in fiscal year 2015. HHS reported the largest amount of spending authority and permanent  appropriations in fiscal year 2015 with about $979 billion, or about 30  percent. SSA, which oversees the Old-Age and Survivors Insurance  program, the Disability Insurance and Supplemental Security Income  programs, as well as the Special Benefits for Certain World War II  Veterans program, reported about $920 billion or about 28 percent of total  spending authority and permanent appropriations. Programs  administered by HHS and SSA continue to show spending increases  largely as a result of the aging of the population and increasing health  care costs. Treasury reported the third highest amount of spending  authority and permanent appropriations, about $542 billion, the majority of  which is for interest on debt held by the public and intragovernmental  debt. All of  these are permanent appropriations, except for the Postal Service’s  Postal Service Fund account which is an offsetting collection that includes  revenue for mail services. HHS reported the highest dollar amount of permanent  appropriations for the first time in fiscal year 2006, likely due to rising  health care costs. The text box  below provides examples of accounts with offsetting collections authority. The Percentage of Spending Authority and Permanent Appropriations Authorities Subject to Sequestration in Fiscal Year 2015 Decreased Compared to Fiscal Year 1994

The majority of spending authority and permanent appropriations  authorities were exempt from sequestration in fiscal year 2015. As shown in table 4, in fiscal year 2015, 57 percent of spending authority  and permanent appropriations authorities were exempt from  sequestration, and therefore were not subject to this budgetary  enforcement mechanism for helping to control the deficit. This is a 20  percentage point increase since fiscal year 1994. Since spending authority and permanent  appropriations permit agencies to obligate budget authority without further  congressional action, when these authorities are exempt from  sequestration, agencies can continue to use these authorities without  reductions when sequestration is in effect. Agency Comments

We provided a draft of this report and the online dataset to the Director of  OMB for review and comment. OMB staff provided technical comments,  which we incorporated as appropriate. GAO staff who made key contributions to  this report are listed in appendix V.

Appendix I: Objectives, Scope, and Methodology

Our objectives were to (1) identify and analyze federal budget accounts  with spending authority and permanent appropriations, including the  statutory references for the authorities, changes in the number of  accounts and dollar amounts since fiscal year 1994, and other relevant  information; and (2) describe whether the identified accounts are subject  to or exempt from sequestration or subject to any special sequestration  rules or limitations. We are also providing an online  dataset of our inventory of accounts with spending authority and  permanent appropriations on our public website at  https://www.gao.gov/products/GAO-19-36. For purposes of this report, spending  authority and permanent appropriations include five types of budget  authority: contract authority, authority to borrow, monetary credits or  bartering, permanent appropriations, and offsetting collections. If information was unavailable from the 1996  report, we asked agencies to provide it. The  primary dataset we used includes accounts with mandatory budget  authority in fiscal year 2015 and the corresponding sequestration  designation. The fiscal year 2013 dataset was the most recent  available for which sequestration occurred for discretionary spending  when we began our work, and we used fiscal year 2015 data to match the  end year of our inventory data. A permanent appropriation may  have been made available through an annual appropriations act or  through laws other than the annual appropriations acts. These  include permanent appropriations, contract authority, borrowing authority,  offsetting collections, and monetary credits or bartering, all of which are  defined in table 7. Appendix IV: Five Largest Permanent Appropriations, Contract, and Borrowing Authority Accounts, Fiscal Year 2015

The tables below list the accounts reporting the largest amounts of  budget authority for permanent appropriations, contract authority, and  borrowing authority in fiscal year 2015.
Why GAO Did This Study

Congress can provide budget authority to federal agencies and programs through the annual appropriations process. It can also provide budget authority through laws other than annual appropriations acts, or through permanent appropriations that permit the agency to obligate budget authority without further congressional action. Analysis of these authorities helps provide Congress with visibility into spending authority that is not considered during the annual appropriations process.
GAO was asked to update its 1996 report that had provided an inventory of accounts with spending authority and permanent appropriations for fiscal years 1985 through 1994. This report discusses (1) federal budget accounts with spending authority and permanent appropriations, including the statutory references for the authorities, changes in the number of accounts and dollar amounts since fiscal year 1994, and other relevant information; and (2) whether the identified accounts are subject to or exempt from sequestration, or subject to any special sequestration rules or limitations. GAO also is providing an online dataset of the inventory of accounts with spending authority and permanent appropriations on GAO's public website at https://www.gao.gov/products/GAO-19-36 .
GAO analyzed Office of Management and Budget (OMB) budget data to identify accounts with spending authority and permanent appropriations. GAO reviewed data through fiscal year 2015 because that was the most recent data available when GAO began its work. GAO reviewed agency information to confirm data and statutory authority. Agencies also reviewed and verified the final data for their accounts. For the sequestration designation, GAO analyzed OMB data for fiscal years 2013 and 2015--the most recently completed years for which sequestration occurred and OMB identified designations when GAO began its work.
GAO provided a draft of this report and the online dataset to the Director of OMB for review and comment. OMB staff provided technical comments, which GAO incorporated as appropriate.

What GAO Found

A total of $3.2 trillion in spending authority and permanent appropriations was reported in fiscal year 2015; an increase of 88 percent from fiscal year 1994 adjusted for inflation in fiscal year 2015 dollars. Fiscal year 1994 was the last year included in GAO's prior work. For the purposes of this report, spending authority and permanent appropriations is budget authority provided to agencies through laws other than annual appropriations acts or available permanently by law without further legislation. These authorities include permanent appropriations, contract authority, borrowing authority, offsetting collections, and monetary credits or bartering. Permanent appropriations were the primary driver of the increase in spending authority and permanent appropriations. Offsetting collections authority--which includes certain fees, fines, and penalties--also grew. Agencies reported no use of monetary credits or bartering.
a
Permanent appropriations fund federal entitlement programs, such as Medicare, administered by the Department of Health and Human Services (HHS), and the Social Security Administration's (SSA) Old-Age, Survivors, and Disability Insurance program. These programs are a significant proportion of reported budget authority in GAO's inventory of accounts in fiscal year 2015. These programs continue to show spending increases largely as a result of the aging population and rising health care costs and are projected to continue to increase in the future. In fiscal year 2015, 7 of the 10 accounts reporting the largest dollar amounts of spending authority and permanent appropriations funded entitlement programs.
Three agencies comprised three quarters of the total government-wide spending authority and permanent appropriations in fiscal year 2015.
HHS reported the largest amount of spending authority and permanent appropriations with $979 billion, or about 30 percent--mainly from Medicare. HHS overtook SSA and reported the highest dollar amounts of permanent appropriations for the first time in fiscal year 2006.
SSA reported $920 billion, or about 28 percent of total spending authority and permanent appropriations--mainly from its Old-Age and Survivor's Insurance program and the Disability Insurance program.
The Department of the Treasury reported the third largest amount--$542 billion, or about 17 percent--the majority of which is for interest on debt held by the public and intragovernmental debt. This interest dropped as a percentage of permanent appropriations since fiscal year 1994, due to lower interest rates that allow the government to borrow money more cheaply. However, interest rates are predicted to rise in the long term, which would increase the net interest costs on the debt.
The second largest reported budget authority type was offsetting collections--a total of $421 billion in fiscal year 2015, more than double the fiscal year 1994 amount, adjusted for inflation. The Postal Service reported the largest use of offsetting collections authority in fiscal year 2015 in its Postal Service Fund, which includes revenue from mail services.
Sequestration--cancellation of budgetary resources under a presidential order--is a process established in statute which helps to enforce spending limits and thereby control the deficit. In fiscal year 2015, 57 percent of spending authority and permanent appropriations authorities were exempt from sequestration, up from 37 percent in fiscal year 1994. This means that fewer of these authorities were subject to this budgetary enforcement mechanism in fiscal year 2015.