> **THE FAMILY BUDGET PROTECTION ACT**
>
> **Representatives Jeb Hensarling, Paul Ryan, and John Campbell**
>
> April 25, 2007
>
> **[A Simple and Legally Binding Budget]{.underline}**

-   Converts the concurrent budget resolution into a [joint budget
    resolution]{.underline} that is signed by the President and has the
    force of law. This budget will force the President and Congress to
    commit to the same budget before spending any money that year.

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-   Simplifies the current budget by replacing the 20 budget functions
    with a [one-page budget]{.underline}, establishing spending levels
    for only five broad spending categories: mandatory, defense and
    non-defense discretionary, interest payments, and emergencies.

-   [Abolishes the practice of designating spending as "emergencies" to
    avoid spending safeguards]{.underline}. True non-military
    emergencies will now be budgeted for with a new "[rainy day"
    fund]{.underline}, and all spending from that fund must be defined
    as sudden, urgent, unforeseen, and temporary. Funding for military
    operations authorized by either a declaration of war or use of
    military force will also be budgeted for as an emergency. However,
    it will not be included in the rainy day fund nor will it face a
    point of order if in excess of what was originally budgeted for.

-   Allows for [biennial budgeting]{.underline} in the future **IF** the
    President and Congress agree during their negotiations to extend
    funding over a two-year fiscal period. This option could only be
    exercised for the start of the 111^th^ Congress and thereafter.

-   Provides [government shutdown protection]{.underline} by providing
    an automatic continuing resolution in the event that an agreement is
    not reached on spending levels by the legal deadline.

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-   Raises the bar for points of order to require a [two-thirds
    supermajority vote,]{.underline} in both the House and the Senate,
    to sanction over-budget spending and spending in violation of the
    caps.

-   Provides ["point of order protection"]{.underline} from rules that
    are reported to waive any applicable points of order. This
    protection ensures that points of order can actually be raised as
    intended against spending that violates the budget and/or the
    spending caps.

-   Modifies the [Byrd Rule]{.underline} in the Senate from imposing a
    ten-year limit on tax cuts.

-   [Defines an omnibus appropriation]{.underline} measure as any bill
    that contains more than one regular appropriations bill and creates
    a point of order against the addition of any extraneous spending
    measure that is not under the jurisdiction of the appropriations
    subcommittees.

> **[Putting a Lid on Federal Spending]{.underline}**

-   Limits growth in entitlement spending to inflation and the growth in
    population. This [entitlement cap]{.underline} will be protected by
    a point of order and enforced with an across-the-board sequester if
    breached. It will not cover Social Security.

-   Sets [discretionary caps]{.underline} that allow spending to grow
    for inflation -- with a firewall separating defense, nondefense, and
    emergency spending. The caps will be protected by a point of order
    and enforced by a sequester in the amount of any excess. Within this
    amount, defense spending would be allowed to grow at a faster rate.

-   Creates "[Budget Protection Accounts]{.underline}" that allow
    Congress to target spending during the appropriations and direct
    spending process and redirect that spending to family tax relief or
    deficit reduction at the end of the fiscal year.

-   [Redraws and expands the list of exempt programs that are eligible
    for a sequester]{.underline}. This will prevent a small share of
    total mandatory outlays from being unfairly targeted. However,
    certain priority programs could only face up to a two percent
    reduction. These so-called "2% programs" include voluntary Medicare
    programs (Parts B and D), Medicaid, veterans, military, and federal
    retiree benefits, as well as certain low-income programs. In
    addition, the President could exempt any defense or homeland
    security account if necessary for national security purposes.
    [Earned entitlements, such as Social Security and Medicare part A,
    are exempt from sequestration]{.underline}.

-   [Freezes advance appropriations]{.underline} at their FY07 level.
    This will prevent proponents of further spending from shifting
    spending into the future to avoid spending safeguards.

-   Requires the President's budget to analyze the long-term unfunded
    obligations of current entitlements, increases enacted in the prior
    Congress, and the impact of any proposals included in that
    particular budget submission. In addition, any legislation that
    increases such long-term obligations will be subject to an [unfunded
    liability point of order]{.underline} in both the House and the
    Senate.

> **[Combating Waste, Fraud, and Abuse]{.underline}**

-   [Sunsets every voluntary entitlement program and all discretionary
    programs]{.underline} in FY11 and FY12 to allow for a thorough
    cost-benefit analysis as to whether they still merit federal
    funding. No benefits that individuals earn through time spent in the
    work force (e.g. Social Security, Medicare Part A, federal retiree
    benefits, etc.) or earn through service (e.g. veterans benefits)
    would face a sunset. This "sunshine" process will be repeated every
    ten years after each census.

-   Freezes the funding of programs where authorization has lapsed
    (including those that are sunset). These funding restrictions will
    be enforced by a point of order.

-   Includes the text of the [Legislative Line Item Veto
    Act]{.underline} which passed the House in the 109^th^ Congress
    (H.R. 4890).

-   Sets up a [commission to submit recommendations]{.underline} on how
    to eliminate waste, fraud, and abuse. The commission's
    recommendation would be either approved or rejected by Congress as a
    package, eliminating votes on changes to individual programs. Unlike
    past proposals, it will include defense and entitlement spending in
    its assessment.

**[Truth in Accounting]{.underline}**

-   [Eliminates baseline budgeting,]{.underline} which allows proponents
    of spending to call scaled-back increases a "cut." The budget will
    use real dollars to compare the prior year's actual spending with
    proposed new spending.

-   Requires agencies to fund the full government share of the accruing
    costs of pensions, retired pay, and retiree health benefits, as they
    are earned by all federal civilian and military employees. Such
    [accrual funding]{.underline} will not change any retiree's
    benefits.

-   [Separates intragovernmental debt]{.underline} from overall public
    debt calculations.

-   Begins the process of budgeting for the long-term liabilities of
    certain business-related federal insurance programs through
    [risk-assumed budgeting]{.underline}. Social insurance programs,
    such as Social Security and Medicare, will be specifically exempt.

-   Provides for [earmark transparency]{.underline} (as included in the
    Republican FY08 Budget Substitute) by reporting earmarks to be
    included in the text of the bill in order to receive funding.

For more information, please contact Brad Watson at 6-9719