Sequestration 2025: An Update

The Fiscal Responsibility Act of 2023 (FRA, Public Law 118-5) established limits (often called caps) on discretionary budget authority for fiscal years 2024 and 2025. The Congressional Budget Office is required to report whether, according to its estimates, enacted legislation for the current fiscal year has exceeded those caps and thus would trigger a cancellation of budgetary resources, called a sequestration.

CBO estimates that discretionary funding for 2025 does not exceed the caps and that no sequestration will be required this year. For this report, CBO's calculations are based on the estimates it provided to the Congress when appropriation legislation was considered.

In March, CBO reported that appropriations had not exceeded the caps and therefore that no sequestration would be required. In April, the Office of Management and Budget (OMB)—which has sole authority to determine both the final amounts of the caps and whether enacted appropriations exceed them—published its estimates of the final caps for 2025 and determined that appropriations for 2025 had not exceeded those limits.

The Rescissions Act of 2025 (P.L. 119-28), enacted in July, reduced discretionary budget authority for 2025 by $7.9 billion. That law was enacted following a request submitted by the President in keeping with title X of the Congressional Budget and Impoundment Control Act of 1974 (P.L. 93-344). On August 1, 2025, OMB determined that the rescissions contained in P.L. 119-28 do not affect either OMB's estimates of the statutory caps for 2025 or its assessment that a sequestration will not be required. CBO also currently estimates that budget authority for discretionary funding for 2025, after accounting for the rescissions enacted in P.L. 119-28, will not exceed the caps as determined by OMB and that no sequestration will be required this year.

No additional appropriations for 2025 have been enacted since March. However, the caps still could be breached if lawmakers provided additional appropriations for 2025 before the end of the fiscal year without increasing the limits—unless those appropriations either fell into a category that triggered a cap adjustment or were offset by reductions in funding for other programs.

Because the caps established by the FRA expire at the end of this fiscal year, CBO cannot project caps for 2026.