President’s Budget Would Eliminate Separate Funding Caps for Defense and Nondefense Discretionary Programs
Likely Result Would Be More Funding for Defense, Less for Domestic Programs
 The discretionary caps apply to funding, or "budget authority" — i.e., to the dollar amounts provided in appropriations bills. The rate at which those appropriations are spent is not constrained by caps — i.e., there are no outlay caps; it is the amount of funding provided through the appropriations process that is constrained. (Mandatory spending and revenues are not controlled by caps but rather by the Pay-As-You-Go rule, which requires Congress to offset the cost of legislation that cuts taxes or increases mandatory spending. If the net cost of all mandatory and revenue legislation enacted in a congressional session is not fully offset, then specified mandatory programs are cut automatically.)
 This sequestration is separate from any sequestration that may be needed to enforce either the discretionary caps themselves or the Pay-As-You-Go rule.
 The cuts in discretionary programs required by the existing nondefense caps might be somewhat smaller than the dollar and percent figures we show above. The reason is that congressional rules allow Congress to enact cuts in mandatory programs through language contained in appropriations bills, and those cuts can take the place of cuts that would otherwise have to occur in discretionary programs. For 2013, the Administration has proposed $18 billion of such mandatory cuts in appropriations bills. To the extent Congress goes along, discretionary programs will be cut somewhat less. But while this might mean that discretionary programs do not need to be cut in 2013 more deeply than they already have been in 2012, the caps will still squeeze more tightly with each year after that. And the actual cuts already made by 2012 are sizable; overall funding for nondefense discretionary programs in 2012 is 10.6 percent below the 2010 level, adjusted for inflation.