To reduce Federal spending in several programs.

Summary: TABLE OF CONTENTS: 
     Title I:  Defense 
     Title II:  Other Discretionary Accounts 
     Title III:  Entitlements 
Title I:  Defense
 - Directs the Secretary of Defense to reduce: (1) by FY 2004 the Department of Defense (DOD) strategic nuclear force to include a maximum of 300 Minuteman III intercontinental ballistic missiles; and (2) DOD theater missile defense programs by terminating the Navy sea-based area theater missile defense system, the Army Medium Extended Air Defense System, the Air Force airborne laser for destruction of missiles system, and the Space and Missile Tracking System. 
(Sec. 102) Prohibits funds from being appropriated to DOD for fiscal years after 1998 for the production of Trident II (D-5) missiles for the Navy.  Requires the Secretary to retire eight Trident I submarines during FY 2001 through 2004. 
(Sec. 103) Prohibits funds from being appropriated to DOD for fiscal years after 1998 for:  (1) assistance to Israel for development of the Arrow missile; and (2) research, development, test, and evaluation or for procurement for the Marine Corps V-22 Osprey aircraft program. 
(Sec. 105) Requires the Secretary to retire 20 Air Force KC-135E aircraft during each of FY 1999 through 2003. 
(Sec. 106) Directs the Secretary to assign to a unit of the armed forces members who are:  (1) in transit during a scheduled move from one military installation to another; or (2) undergoing military training other than basic training. 
(Sec. 107) Amends the Arms Export Control Act to provide that any sale of major defense equipment approved under such Act shall include an appropriate charge for costs incurred by the United States in the research, development, and production of such equipment.  Provides an exception.  Repeals a provision of such Act which allows for the recovery of certain administrative expenses when such expenses are neither salaries of U.S. armed forces nor unfunded estimated costs of civilian retirement and other benefits. 
Title II:  Other Discretionary Accounts
 - Requires the Administrator of the National Aeronautics and Space Administration (NASA) to terminate U.S. participation in the International Space Station program.   Authorizes appropriations for termination costs. 
(Sec. 202) Amends the Rural Electrification Act of 1936 to require the interest rates on loans and advances under such Act to equal the coupon equivalent yield on Treasury obligations of comparable maturity at the most recent Treasury auction.  Provides for loan origination fees from borrowers of loans made under such Act. 
Eliminates references to existing interest rates under such Act. 
(Sec. 203) Amends the National Forest Management Act of 1976 to eliminate below-cost timber sales from National Forest System lands. 
(Sec. 204) Repeals provisions of the Agricultural Trade Act of 1978 regarding the foreign market development cooperator program. 
(Sec. 205) Repeals provisions of the Food, Agriculture, Conservation, and Trade Act of 1990 regarding the Cochran Fellowship Program. 
(Sec. 206) Prohibits the NASA Administrator from obligating funds for the Advanced Subsonic Technology Program, High-Speed Research, or the National Aeronautics Facility. 
(Sec. 207) Repeals the Appalachian Regional Development Act of 1965 effective September 30, 1998. 
(Sec. 208) Amends the Tennessee Valley Authority Act of 1933 to prohibit the authorization of appropriations to carry out such Act after September 30, 1998. 
Title III:  Entitlements
 - Requires, for any arrangement for the sale of electric power entered into by a Federal Power Marketing Administration after October 1, 1998, that:  (1) the rate for the sale of power be the market rate established by competitive bidding and no discount be provided to any purchaser; and (2) no entity be entitled to any preference or priority right to contract for or purchase such power. 
Makes certain provisions of the Pacific Northwest Electric Power Planning and Conservation Act regarding a residential power exchange program inapplicable to arrangements for the purchase or sale of electric power entered into after October 1, 1998. 
Prohibits Federal Power Marketing Administrations from entering into or renewing a power marketing contract for a term that exceeds five years. 
(Sec. 302) Repeals provisions of the Agricultural Trade Act of 1978 regarding a market access program. 
(Sec. 303) Amends the Agricultural Act of 1949 to extend and increase tobacco price support program marketing assessments on producers, purchasers, and importers. 
(Sec. 304) Amends the Higher Education Act of 1965 to provide for the payment of in-school interest by certain student loan borrowers. 
(Sec. 305) Amends Federal veterans' provisions to increase from $2 to $5 the prescription drug copayment required from certain veterans. Extends such requirement through FY 2003.

TITLE I--DEFENSE

SEC. 101. REDUCTION OF NUCLEAR DELIVERY SYSTEMS.

    The Secretary of Defense shall reduce the strategic nuclear force 
of the Department of Defense by fiscal year 2004 to include a maximum 
of 300 Minuteman III intercontinental ballistic missiles.

SEC. 102. TERMINATION OF PRODUCTION OF TRIDENT II (D-5) MISSILES AND 
              RETIREMENT OF TRIDENT I SUBMARINES.

    (a) Termination of Trident II Missile Production.--No funds may be 
appropriated to the Department of Defense for any fiscal year after 
fiscal year 1998 for production of Trident II (D-5) missiles for the 
Department of the Navy.
    (b) Retirement of Trident I Submarines.--The Secretary of Defense 
shall retire eight Trident I submarines during fiscal years 2001 
through 2004.

SEC. 103. REDUCTION IN THEATER MISSILE DEFENSE PROGRAMS.

    (a) Termination of Programs.--The Secretary of Defense shall reduce 
theater missile defense programs by terminating development of--
            (1) the Navy sea-based area theater missile defense system;
            (2) the Army Medium Extended Air Defense System (MEADS);
            (3) the Air Force airborne laser for destruction of 
        missiles system; and
            (4) the Space and Missile Tracking System (Brilliant Eyes).
    (b) Prohibition on Funding for Development of Arrow Missile for 
Israel.--No funds may be appropriated to the Department of Defense for 
any fiscal year after fiscal year 1998 to provide assistance to Israel 
for development of the Arrow missile.

SEC. 104. TERMINATION OF THE MARINE CORPS V-22 OSPREY AIRCRAFT PROGRAM.

    No funds may be appropriated to the Department of Defense for any 
fiscal year after fiscal year 1998 for research, development, test, and 
evaluation or for procurement for the Marine Corps V-22 Osprey aircraft 
program.

SEC. 105. RETIREMENT OF EXCESS KC-135 TANKERS.

    The Secretary of Defense shall retire 20 Air Force KC-135E aircraft 
during each of fiscal years 1999 through 2003.

SEC. 106. ASSIGNMENT OF WARTIME FUNCTION TO MILITARY PERSONNEL IN 
              TRAINING OR TRANSIT.

    The Secretary of Defense shall assign to a unit of the Armed Forces 
each member of the Armed Forces--
            (1) who is in transit during a scheduled move from one 
        military installation to another military installation; or
            (2) who is undergoing military training other than basic 
        training.

SEC. 107. RECOVERY OF FULL COST OF MILITARY EXPORTS.

    (a) Recoupment of Certain Nonrecurring Costs in Commercial Export 
Sales of Major Defense Equipment.--
            (1) In general.--Section 38 of the Arms Export Control Act 
        (22 U.S.C. 2778) is amended by adding at the end the following 
        new subsection:
    ``(i)(1) Any sale involving the export of major defense equipment 
pursuant to a license or other approval granted under this section 
shall include an appropriate charge for a proportionate amount of the 
nonrecurring costs incurred by the United States in the research, 
development, and production of such equipment. Such charge shall be 
comparable to the charge imposed pursuant to section 21(e)(1)(B) of 
this Act relating to government-to-government sales of major defense 
equipment.
    ``(2) The charge provided for in paragraph (1) shall not apply with 
respect to major defense equipment that is wholly paid for from funds 
transferred under section 503(a)(3) of the Foreign Assistance Act of 
1961 (22 U.S.C. 2311(a)(3)) or from funds made available on a grant or 
other nonrepayable basis under section 23 of this Act.''.
            (2) Effective date.--Section 38(i) of the Arms Export 
        Control Act, as added by paragraph (1), applies with respect to 
        major defense equipment sold pursuant to a contract entered 
        into on or after the date of the enactment of this Act.
    (b) Recovery of Certain Administrative Expenses in Connection With 
Foreign Military Sales.--Section 43(b) of the Arms Export Control Act 
(22 U.S.C. 2792(b)) is amended--
            (1) by adding ``and'' at the end of paragraph (1);
            (2) by striking ``; and'' at the end of paragraph (2) and 
        inserting a period; and
            (3) by striking paragraph (3).

                 TITLE II--OTHER DISCRETIONARY ACCOUNTS

SEC. 201. TERMINATION OF SPACE STATION PROGRAM.

    (a) Termination.--The Administrator of the National Aeronautics and 
Space Administration shall terminate the participation of the United 
States in the International Space Station program.
    (b) Termination Costs.--There are authorized to be appropriated to 
the Administrator of the National Aeronautics and Space Administration 
$700,000,000 for fiscal year 1999 for costs associated with carrying 
out subsection (a).

SEC. 202. ELIMINATION OF LOAN SUBSIDIES AVAILABLE UNDER THE RURAL 
              ELECTRIFICATION ACT OF 1936.

    (a) In General.--Title I of the Rural Electrification Act of 1936 
(7 U.S.C. 901-946) is amended by adding at the end the following:

``SEC. 19. INTEREST RATE ON LOANS AND ADVANCES UNDER THIS ACT.

    ``The rate of interest on any loan made under this Act on or after 
the date of the enactment of this section, and the rate of interest on 
any advance made under this Act on or after such date under loan 
commitments made at any time, shall equal the coupon equivalent yield 
on obligations of the Treasury of the United States of comparable 
maturity, at the most recent auction of such obligations by the 
Department of the Treasury.

``SEC. 20. LOAN ORIGINATION FEES.

    ``(a) In General.--The Secretary and the Governor of the telephone 
bank shall charge and collect a loan origination fee, in an amount 
determined by use of the schedule prescribed under subsection (b), from 
each borrower to whom a loan is made under this Act on or after the 
date of the enactment of this section.
    ``(b) Fee Schedule.--The Secretary shall prescribe a schedule of 
loan origination fees to be collected under subsection (a), which shall 
be calculated so as to result in the collection of amounts sufficent to 
cover the cost of defaults on loans made under this Act on or after the 
date of the enactment of this section.''.
    (b) Conforming Amendments.--
            (1) Section 305(a) of such Act (7 U.S.C. 935(a)) is amended 
        by striking ``and at the interest rates hereinafter provided''.
            (2) Section 305(c)(1) of such Act (7 U.S.C. 935(c)(1)) is 
        amended by striking ``of 5 percent per year'' each place it 
        appears and inserting ``determined pursuant to section 19''.
            (3) Section 305(c)(2)(A) of such Act (7 U.S.C. 
        935(c)(2)(A)) is amended--
                    (A) by striking ``the interest rate described in 
                subparagraph (B)'' and inserting ``an interest rate 
                determined pursuant to section 19''; and
                    (B) by striking ``(C)'' and inserting ``(B)'';
            (4) Section 305(c)(2)(C)(i) of such Act (7 U.S.C. 
        935(c)(2)(C)(i)) is amended by striking ``subparagraph (B)'' 
        and inserting ``section 19''.
            (5) Section 305(c)(2) of such Act (7 U.S.C. 935(c)(2)) is 
        amended by striking subparagraph (B) and redesignating 
        subparagraphs (C) and (D) as subparagraphs (B) and (C), 
        respectively.
            (6) Section 305(d)(1)(A) of such Act (7 U.S.C. 935(d)) is 
        amended by striking ``of 5 percent per year'' and inserting 
        ``determined pursuant to section 19''.
            (7) Section 305(d)(2) of such Act (7 U.S.C. 935(d)(2)) is 
        amended by striking ``equal to the then current cost of money 
        to the Government of the United States for loans of similar 
        maturity, but not more than 7 percent per year,'' and inserting 
        ``determined pursuant to section 19''.
            (8) Section 305(d)(3)(C) of such Act (7 U.S.C. 
        935(d)(3)(C)) is amended by striking ``408(b)(4)(C)'' and 
        inserting ``408(b)(3)(C)''.
            (9) Section 306C(c)(1) of such Act (7 U.S.C. 936c(c)(1)) is 
        amended--
                    (A) by striking ``the interest rate described in 
                paragraph (2)'' and inserting ``an interest rate 
                determined pursuant to section 19''; and
                    (B) by striking ``(3)'' and inserting ``(2)''.
            (10) Section 306C(c)(3)(A) of such Act (7 U.S.C. 
        936c(c)(3)(A)) is amended by striking ``paragraph (2)'' and 
        inserting ``section 19''.
            (11) Section 306C(c)(4) of such Act (7 U.S.C. 936c(c)(4)) 
        is amended by striking ``(3)'' and inserting ``(2)''.
            (12) Section 306C(c) of such Act (7 U.S.C. 936c(c)) is 
        amended by striking paragraph (2) and redesignating paragraphs 
        (3) and (4) as paragraphs (2) and (3), respectively.
            (13) Section 306C of such Act (7 U.S.C. 936c) is amended by 
        striking subsection (d).
            (14) Section 310 of such Act (7 U.S.C. 940) is amended by 
        striking ``provided in section 305'' and inserting ``determined 
        pursuant to section 19''.
            (15) Section 408(b)(2) of such Act (7 U.S.C. 948(b)(2)) is 
        amended by striking ``, however, to'' and inserting ``to 
        section 19 and''.
            (16) Section 408(b) of such Act (7 U.S.C. 948(b)) is 
        amended by striking paragraph (3) and redesignating paragraphs 
        (4) through (8) as paragraphs (3) through (7), respectively.
            (17) Section 408(e) of such Act (7 U.S.C. 948(e)) is 
        amended by striking the 1st and 2nd sentences.

SEC. 203. ELIMINATION OF BELOW-COST SALES OF TIMBER FROM NATIONAL 
              FOREST SYSTEM LANDS.

    The National Forest Management Act of 1976 is amended by inserting 
after section 14 (16 U.S.C. 472a) the following new section:

``SEC. 14A. ELIMINATION OF BELOW-COST TIMBER SALES FROM NATIONAL FOREST 
              SYSTEM LANDS.

    ``(a) Requirement That Sale Revenues Exceed Costs.--On and after 
October 1, 2003, in appraising timber and setting a minimum bid for 
trees, portions of trees, or forest products located on National Forest 
System lands proposed for sale under section 14 or any other provision 
of law, the Secretary of Agriculture shall ensure that the estimated 
cash returns to the United States Treasury from each sale exceed the 
estimated costs to be incurred by the Federal Government in the 
preparation of the sale or as a result of the sale.
    ``(b) Costs To Be Considered.--For purposes of estimating under 
this section the costs to be incurred by the Federal Government from 
each timber sale, the Secretary shall assign to the sale the following 
costs:
            ``(1) The actual appropriated expenses for sale preparation 
        and harvest administration incurred or to be incurred by the 
        Federal Government from the sale and the payments to counties 
        to be made as a result of the sale.
            ``(2) A portion of the annual timber resource planning 
        costs, silvicultural examination costs, other resource support 
        costs, road design and construction costs, road maintenance 
        costs, transportation planning costs, appropriated 
        reforestation costs, timber stand improvement costs, forest 
        genetics costs, general administrative costs (including 
        administrative costs of the national and regional offices of 
        the Forest Service), and facilities construction costs of the 
        Federal Government directly or indirectly related to the timber 
        harvest program conducted on National Forest System lands.
    ``(c) Method of Allocating Costs.--The Secretary shall allocate the 
costs referred to in subsection (b)(2) to each unit of the National 
Forest System, and each proposed timber sale in such unit, on the basis 
of harvest volume.
    ``(d) Transitional Requirements.--To ensure the elimination of all 
below-cost timber sales by the date specified in subsection (a), the 
Secretary shall progressively reduce the number and size of below-cost 
timber sales on National Forest System lands as follows:
            ``(1) In fiscal years 1999 and 2000, the quantity of timber 
        sold in below-cost timber sales on National Forest System lands 
        shall not exceed 75 percent of the quantity of timber sold in 
        below-cost timber sales in the preceding fiscal year.
            ``(2) In fiscal year 2001, the quantity of timber sold in 
        below-cost timber sales on National Forest System lands shall 
        not exceed 65 percent of the quantity of timber sold in below-
cost timber sales in fiscal year 1998.
            ``(3) In fiscal years 2002 and 2003, the quantity of timber 
        sold in below-cost timber sales on National Forest System lands 
        shall not exceed 50 percent of the quantity of timber sold in 
        below-cost timber sales in the fiscal year 2001.
    ``(e) Below-Cost Timber Sale.--For purposes of this section, the 
term `below-cost timber sale' means a sale of timber in which the costs 
to be incurred by the Federal Government exceed the cash returns to the 
United States Treasury.''.

SEC. 204. ELIMINATION OF THE FOREIGN MARKET DEVELOPMENT COOPERATOR 
              PROGRAM.

    Title VII of the Agricultural Trade Act of 1978 (7 U.S.C. 5712 et 
seq.) is repealed.

SEC. 205. ELIMINATION OF COCHRAN FELLOWSHIP PROGRAM.

    Section 1543 of the Food, Agriculture, Conservation, and Trade Act 
of 1990 (7 U.S.C. 3293) is repealed.

SEC. 206. ELIMINATION OF SUPPORT FOR PRODUCERS AND USERS OF COMMERCIAL 
              AIRLINERS.

    The Administrator of the National Aeronautics and Space 
Administration shall not obligate any funds for the Advanced Subsonic 
Technology Program, High-Speed Research, or the National Aeronautics 
Facility.

SEC. 207. ELIMINATION OF APPALACHIAN REGIONAL COMMISSION.

    Effective September 30, 1998, the Appalachian Regional Development 
Act of 1965 (Public Law 89-4) is repealed.

SEC. 208. ELIMINATION OF FEDERAL FUNDING FOR TVA.

    Section 27 of the Tennessee Valley Authority Act of 1933 (16 U.S.C. 
831z) is amended to read as follows:
    ``Sec. 27. No appropriations are authorized to carry out the 
provisions of this Act after September 30, 1998.''.

                        TITLE III--ENTITLEMENTS

SEC. 301. SALE AND PURCHASE OF POWER BY FEDERAL POWER MARKETING 
              ADMINISTRATIONS.

    (a) Market Based Rates.--Notwithstanding sections 4 and 5 of the 
Bonneville Project Act of 1937 (16 U.S.C. 832), sections 9 and 10 of 
the Federal Columbia River Transmission System Act (16 U.S.C. 838 and 
following), the Act of August 31, 1964 (16 U.S.C. 837-837h), section 7 
of the Pacific Northwest Electric Power Planning and Conservation Act 
(16 U.S.C. 839-839h), section 5 of the Flood Control Act of 1944, the 
Department of Energy Organization Act (Public Law 93-454), or any other 
authority of law, for any contract or other arrangement entered into by 
any Federal Power Marketing Administration after October 1, 1998 for 
the sale of electric power, notwithstanding any other provision of 
law--
            (1) the rate for the sale of such power shall be the market 
        rate established by competitive bidding and no discount or 
        special rate shall be provided to any purchaser; and
            (2) no public body or cooperative, Federal agency, 
        investor-owned utility, direct service industrial customer, or 
        other entity shall be entitled to any preference or priority 
        right to contract for or otherwise purchase such power.
Nothing in this subsection shall affect any contract entered into 
before October 1, 1998. Notwithstanding the Federal Power Act or 
section 7 of the Pacific Northwest Electric Power Planning and 
Conservation Act (16 U.S.C. 839-839h), the Federal Energy Regulatory 
Commission shall not be authorized or required to approve or confirm 
any rate for the sale of electric power or transmission services 
established under this subsection.
    (b) Termination of Residential Exchange Program.--Section 5(c) of 
the Pacific Northwest Power Planning and Conservation Act (16 U.S.C. 
839-839h) shall not apply to any contract or other arrangement for the 
purchase or sale of electric power entered into after October 1, 1998.
    (c) Contract Renewal.--After the enactment of this Act, no Federal 
Power Marketing Administration may enter into or renew any power 
marketing contract for a term that exceeds 5 years.

SEC. 302. ELIMINATION OF MARKET ACCESS PROGRAM.

    Section 203 of the Agricultural Trade Act of 1978 (7 U.S.C. 5623) 
is repealed.

SEC. 303. INCREASE IN ASSESSMENTS UNDER TOBACCO PRICE SUPPORT PROGRAM.

    (a) Increase in Assessment Rate.--Section 106(g)(1) of the 
Agricultural Act of 1949 (7 U.S.C. 1445(g)(1)) is amended--
            (1) in subparagraph (A), by striking ``.5 percent'' and 
        inserting ``1 percent''; and
            (2) in subparagraph (B), by striking ``1 percent'' and 
        inserting ``2 percent''.
    (b) Duration of Assessments.--Such section is further amended by 
striking ``1998 crops'' and inserting ``2003 crops''.

SEC. 304. PAYMENT OF IN-SCHOOL INTEREST BY STUDENT LOAN BORROWERS.

    Section 428(b)(7) of the Higher Education Act of 1965 (20 U.S.C. 
1078(b)(7)) is amended--
            (1) in subparagraph (A), by striking ``In the case'' and 
        inserting ``Except as provided in subparagraph (D), in the 
        case''; and
            (2) by adding at the end the following new subparagraph:
            ``(D) In the case of a loan made under section 427 or 428 
        after October 1, 1998, the repayment period shall exclude any 
        period of authorized deferment or forbearance, and shall begin 
        as described in clause (i) or (ii) of subparagraph (A), but 
        interest shall begin to accrue or be paid by the borrower at 
        the beginning of the 6 month period described in such clause 
        (i).''.

SEC. 305. COPAYMENT FOR PRESCRIPTION MEDICATIONS FURNISHED TO VETERANS 
              BY THE DEPARTMENT OF VETERANS AFFAIRS.

    (a) Increase in Copyament.--Subsection (a)(1) of 1722A of title 38, 
United States Code, is amended by striking ``$2'' and inserting ``$5''.
    (b) Extension of Copayment Requirement.--Subsection (c) of such 
section is amended by striking ``September 30, 2002'' and inserting 
``September 30, 2003''.