Deferral (CongressionalGlossary.com)

From the Congressional Glossary – Including Legislative and Budget Terms

Deferral

Any executive branch action or inaction that temporarily withholds, delays, or effectively precludes the obligation or expenditure of budgetary resources. The president reports deferrals to Congress by special message. They are not identified separately in the budget.

Deferral: Executive branch action to defer, or delay, the spending of appropriated money. The 1974 Congressional Budget and Impoundment Control Act requires a special message from the president to Congress reporting a proposed deferral of spending. Deferrals may not extend beyond the end of the fiscal year in which the message is transmitted. A federal district court in 1986 struck down the president’s authority to defer spending for policy reasons; a federal appeals court upheld the ruling in 1987. Congress can and has prohibited proposed deferrals by enacting a law doing so; most often cancellations of proposed deferrals are included in appropriations bills.

At present, the president may defer funds only for limited reasons set forth in the Antideficiency Act: to provide for contingencies, or to achieve savings made possible through changes in requirements or efficiency of operations. The president may not defer funds for policy rescissions.

Temporary withholding or delaying of the obligation or expenditure of budget authority or any other type of executive action, which effectively precludes the obligation or expenditure of budget authority. A deferral is one type of impoundment. Under the Impoundment Control Act of 1974 (2 U.S.C. § 684), budget authority may only be deferred to provide for contingencies, to achieve savings or greater efficiency in the operations of the government, or as otherwise specifically provided by law. Budget authority may not be deferred for policy or any other reason.

There are two types of impoundments:

• Rescission means enacted legislation that reduces budget authority previously provided by law, prior to the time when the authority would otherwise expire. See section 112.18 for detailed instructions on rescission proposals by the President.
• Deferral means any Executive action or inaction that temporarily withholds or effectively precludes the obligation or expenditure of budgetary resources with the intent of using the funds before they expire. Deferrals are permitted only to provide for contingencies, to achieve savings made possible by or through changes in requirements or greater efficiency of operations, or as specially provided by law. Deferrals are generally effected through the apportionment process.
  See section 112.4 for instructions on reports to the Congress.
• Rescission proposals and deferrals are subject to the requirements of Title X of the Congressional Budget and Impoundment Control Act, which require the President to transmit a special message to the Congress (see section 20.4(i)).

From OMB Circular A-11, Section 112—Deferrals and Presidential Proposals to Rescind or Cancel Funds (21-page PDF)

Deferrals may be proposed by agencies but must be communicated to Congress by the president in a special message. Deferred budget authority may be withheld without further action by Congress. Congress may disapprove a deferral by law. A deferral may not extend beyond the end of the fiscal year of the budget authority’s availability. However, for multiyear funds, the president may re-report the deferral the next fiscal year. Deferred budget authority that is disapproved by Congress must be made available immediately. Agencies must release all other deferred budget authority with sufficient time remaining in the fiscal year to prudently obligate that budget authority before the end of the fiscal year.

Deferral and rescission are exclusive and comprehensive categories. An impoundment is either a rescission or a deferral–it cannot be both or something else.

Also see

• Apportionment
• Budget and Impoundment Control Act
• Budgetary Reserves
• Deferral of Budget Authority
• Impoundment
• Rescission
• Chapter 7, Legislating in Congress: Federal Budget Process, § 7.150 Impoundment: Deferrals and Rescissions, in Congressional Deskbook
• Chapter 7.O. Impoundment and Rescissions in Congressional Procedure

More

• OMB Circular A–11, Section 112—Deferrals and Presidential Proposals to Rescind or Cancel Funds
• House Budget Committee
• Senate Budget Committee
• “Federal Budget Process Reform: Analysis of Five Reform Issues,” CRS Report RL31478 (42-page PDF)
• “Introduction to the Federal Budget Process,” CRS Report 98-721 (38-page PDF)
• “Item Veto and Expanded Impoundment Proposals,” CRS Report IB89148 (22-page PDF)
• “Overview of the Executive Budget Process,” CRS Report RS20175 (3-page PDF)
• “Fiscal Year 2019 Budget Documents: Internet and GPO Availability,” CRS Report R43475 (11-page PDF)
• A Glossary of Terms Used in the Federal Budget Process, GAO-05-734SP (Supersedes AFMD-2.1.1)GAO-05-734SP: Published: Sep 1, 2005. (GAO)

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