Congress established reporting requirements for rescissions and deferrals in the Congressional Budget and Impoundment Control Act of 1974. The Balanced Budget and Emergency Deficit Control Act changed deferral procedures to reflect Supreme Court Decisions regarding vetoes by one House of Congress and overruling deferrals made for policy reasons. Section 112 of OMB Circular A-11 provides guidance on: preparing special and supplementary messages on rescission and deferral proposals; the establishment of reserves; and preparing apportionment requests for deferrals and rescission proposals.
A rescission is enacted legislation which cancels previously enacted budget authority before the authority would otherwise lapse. A rescission may be proposed by the President or a Member of Congress. A rescission proposed by the President must be approved by both Houses of Congress within 45 days of continuous session in order to take effect.
A deferral is any action or inaction by an officer or employee of the United States Government that temporarily withholds, delays, or effectively precludes the obligation or expenditure of budget authority. A deferral occurs unless both Houses of Congress pass a resolution disapproving the deferral.
Reserves may be established under 31 U.S.C. 1512 solely to:
The President must transmit a special message to Congress whenever he proposes a rescission or funds are deferred. A rescission message is required whenever the President determines that:
A deferral message is required whenever funds provided for a specific purpose or project are deferred. Agencies must report all amounts deferred, whether or not the deferral is reflected on an apportionment. If an agency has made a policy decision to obligate apportioned funds at a slower pace than that intended by Congress, it is a reportable deferral. Each special message contains the information listed in Section 112.7 of Circular A-11. If information contained in a special message changes, agency submits the information on supplementary messages discussed in Section 112.9. OMB prepares reports on the status of all rescissions and deferrals. Generally, OMB can complete these reports without further assistance from agency. However, bureaus should notify the Office of Budget if all or portions of agency deferrals are released.
Agency should review all deferrals periodically so that amounts deferred for part of the year may be released in time to be used before the end of the year. Deferrals of funds which expire at the end of the year should be reviewed in sufficient time to determine if a rescission should be proposed before the beginning of the fourth quarter. A fourth quarter rescission of expiring funds is proposed only in exceptional cases.
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