Once full-year appropriations for federal activities funded by the 12 annual appropriation acts for a fiscal year are enacted, section 254 of the Balanced Budget and Emergency Deficit Control Act of 1985 (Public Law 99-177, as amended) requires the Congressional Budget Office to report estimates of the limits (often called caps) on discretionary budget authority that are in effect for that year. CBO also must 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. For this report, CBO's calculations are based on the estimates it provided to the Congress when appropriation legislation was considered.

In CBO's estimation, a sequestration will not be required for 2025. However, the authority to make that determination—and, if so, how to cut budgetary resources—rests with the Administration's Office of Management and Budget (OMB). Those determinations are based on OMB's own estimates of federal spending and the caps. In some cases, those estimates may be different from CBO's and could indicate that total funding is at or above the caps. OMB may adjust the caps by applying a technical estimating allowance when making that determination.