2 U.S.C. § 902: Enforcing pay-as-you-go

The purpose of this section is to assure that any legislation enacted before October 1, 2002 , affecting direct spending or receipts that increases the deficit will trigger an offsetting sequestration. Not later than 15 calendar days after the date Congress adjourns to end a session and on the same day as a sequestration (if any) under section 901 or 903 of this title, there shall be a sequestration to offset the amount of any net deficit increase caused by all direct spending and receipts legislation enacted before October 1, 2002 , as calculated under paragraph (2). all OMB estimates for the budget year of direct spending and receipts legislation transmitted under subsection (d); the estimated amount of savings in direct spending programs applicable to the budget year resulting from the prior year’s sequestration under this section or section 903 of this title , if any, as published in OMB’s final sequestration report for that prior year; and any net deficit increase or decrease in the current year resulting from all OMB estimates for the current year of direct spending and receipts legislation transmitted under subsection (d) that were not reflected in the final OMB sequestration report for the current year. All reductions in automatic spending increases specified in section 906(a) 1 of this title shall be made. 1 See References in Text note below. If additional reductions in direct spending accounts are required to be made, the maximum reductions permissible under sections 906(b) of this title (guaranteed and direct student loans) and 906(c) 1 of this title (foster care and adoption assistance) shall be made. If additional reductions in direct spending accounts are required to be made, each remaining non-exempt direct spending account shall be reduced by the uniform percentage necessary to make the reductions in direct spending required by subsection (b); except that the medicare programs specified in section 906(d) of this title shall not be reduced by more than 4 percent and the uniform percentage applicable to all other direct spending programs under this paragraph shall be increased (if necessary) to a level sufficient to achieve the required reduction in direct spending. For purposes of determining reductions under clause (i), outlay reductions (as a result of sequestration of Commodity Credit Corporation commodity price support contracts in the fiscal year of a sequestration) that would occur in the following fiscal year shall be credited as outlay reductions in the fiscal year of the sequestration. For purposes of this subsection, accounts shall be assumed to be at the level in the baseline. As soon as practicable after Congress completes action on any direct spending or receipts legislation, CBO shall provide an estimate to OMB of that legislation. the CBO estimate of that legislation; an OMB estimate of that legislation using current economic and technical assumptions; and an explanation of any difference between the 2 estimates. If during the preparation of the report under paragraph (2) OMB determines that there is a significant difference between the OMB and CBO estimates, OMB shall consult with the Committees on the Budget of the House of Representatives and the Senate regarding that difference and that consultation, to the extent practicable, shall include written communication to such committees that affords such committees the opportunity to comment before the issuance of that report. full funding of, and continuation of, the deposit insurance guarantee commitment in effect under current estimates; and emergency provisions as designated under subsection (e). determine common scorekeeping guidelines; and in conformance with such guidelines, prepare estimates under this section. If a provision of direct spending or receipts legislation is enacted that the President designates as an emergency requirement and that the Congress so designates in statute, the amounts of new budget authority, outlays, and receipts in all fiscal years resulting from that provision shall be designated as an emergency requirement in the reports required under subsection (d). This subsection shall not apply to direct spending provisions to cover agricultural crop disaster assistance. reduce any balances of direct spending and receipts legislation for any fiscal year under section 252 of the Balanced Budget and Emergency Deficit Control Act of 1985 [ 2 U.S.C. 902 ] to zero; and not make any estimates of changes in direct spending outlays and receipts under subsection (d) of that section for any fiscal year resulting from the enactment of this Act [see Tables for classification] or of the Taxpayer Relief Act of 1997 [ Pub. L. 105–34 , see Tables for classification].”