To apply recaptured taxpayer investments toward reducing the national debt.

Summary: Pay It Back Act - Amends the Emergency Economic Stabilization Act of 2008 (EESA) to revise the limitation on the authority of the Secretary of the Treasury to purchase troubled assets under the Troubled Asset Relief Program (TARP) to $700 billion outstanding at any one time. Changes the maximum authority to $700 billion, in the aggregate, or such higher amount, in the aggregate, as has been obligated or expended under TARP as of the enactment of this Act.

Requires the Secretary to report to Congress every six months on transfer to the Treasury's General Fund for reduction of the public debt of revenues of, and proceeds from the sale of troubled assets purchased under TARP, or from the sale, exercise, or surrender of warrants or senior debt instruments acquired under TARP.

Amends the Federal National Mortgage Association Charter Act, the Federal Home Loan Mortgage Corporation Act, and the Federal Home Loan Bank Act to require the Secretary to deposit in the Treasury solely for debt reduction any amounts received by the Secretary for the sale of any obligation or security acquired from the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), or a Federal Home Loan Bank for secondary market operations. Prohibits the use of any such amounts as an offset for other spending increases or revenue reductions.

Requires deposit in the Treasury solely for debt reduction of any periodic commitment fee or any other fee or assessment paid to the Secretary by Fannie Mae or Freddie Mac as a result of any preferred stock purchase agreement, mortgage-backed security purchase program, or any other program or activity under the Housing and Economic Recovery Act of 2008.

Requires the Director of the Federal Housing Finance Agency (FHFA) to report to Congress on FHFA plans to continue to support and maintain the nation's vital housing industry, while at the same time guaranteeing that the American taxpayer will not suffer unnecessary losses.

Amends the American Recovery and Reinvestment Act of 2009 (ARRA) to require: (1) rescission of any ARRA (stimulus) funds offered to but not accepted by the governor or legislature of a state; and (2) their deposit in the Treasury solely for debt reduction. Requires the same treatment for any funds withdrawn or recaptured by an executive agency head which have not been obligated by a state to a local government or for a specific project.

Rescinds for deposit in the Treasury solely for debt reduction specified discretionary appropriations that have not been obligated as of December 31, 2012.

Lowers the statutory limit on the public debt by the amounts the Secretary receives under this Act for deposit in the Treasury solely for debt reduction.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Pay It Back Act''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) the Congressional Budget Office estimates that the 
        deficit for this fiscal year will reach $1.6 trillion or 11 
        percent of the Gross Domestic Product;
            (2) this deficit represents the largest relative deficit 
        since the end of World War II;
            (3) the Congressional Budget Office estimates that the 
        fiscal year 2010 deficit will reach $1.4 trillion; and
            (4) given the choice between forcing our children to pay 
        for the national debt and requiring banks and other 
        beneficiaries of the goodwill of the taxpayer to make a down 
        payment now, we choose to help our kids.

SEC. 3. AMENDMENT TO TARP AUTHORIZATION.

    Section 115(a)(3) of the Emergency Economic Stabilization Act of 
2008 (12 U.S.C. 5225(a)(3)) is amended by striking ``outstanding at any 
one time'' and inserting ``, in the aggregate (or such higher amount, 
in the aggregate, as has been obligated or expended under this Act as 
of the date of enactment of the Pay It Back Act)''.

SEC. 4. REPORT.

    Section 106 of the Emergency Economic Stabilization Act of 2008 (12 
U.S.C. 5216) is amended by inserting at the end the following:
    ``(f) Report.--The Secretary of the Treasury shall report to 
Congress every 6 months on amounts received and transferred to the 
general fund under subsection (d).''.

SEC. 5. AMENDMENTS TO HOUSING AND ECONOMIC RECOVERY ACT OF 2008.

    (a) Sale of Fannie Mae Obligations and Securities by the Treasury; 
Deficit Reduction.--Section 304(g)(2) of the Federal National Mortgage 
Association Charter Act (12 U.S.C. 1719(g)(2)) is amended--
            (1) by redesignating subparagraph (C) as subparagraph (D); 
        and
            (2) by inserting after subparagraph (B) the following:
                    ``(C) Deficit reduction.--The Secretary of the 
                Treasury shall--
                            ``(i) deposit in the General Fund of the 
                        Treasury any amounts received by the Secretary 
                        for the sale of any obligation or security 
                        acquired by the Secretary under this 
                        subsection; and
                            ``(ii) ensure that such amounts so 
                        deposited--
                                    ``(I) are dedicated for the sole 
                                purpose of deficit reduction; and
                                    ``(II) are prohibited from use as 
                                an offset for other spending increases 
                                or revenue reductions.''.
    (b) Sale of Freddie Mac Obligations and Securities by the Treasury; 
Deficit Reduction.--Section 306(l)(2) of the Federal Home Loan Mortgage 
Corporation Act (12 U.S.C. 1455(l)(2)) is amended--
            (1) by redesignating subparagraph (C) as subparagraph (D); 
        and
            (2) by inserting after subparagraph (B) the following:
                    ``(C) Deficit reduction.--The Secretary of the 
                Treasury shall--
                            ``(i) deposit in the General Fund of the 
                        Treasury any amounts received by the Secretary 
                        for the sale of any obligation or security 
                        acquired by the Secretary under this 
                        subsection; and
                            ``(ii) ensure that such amounts so 
                        deposited--
                                    ``(I) are dedicated for the sole 
                                purpose of deficit reduction; and
                                    ``(II) are prohibited from use as 
                                an offset for other spending increases 
                                or revenue reductions.''.
    (c) Sale of Federal Home Loan Banks Obligations by the Treasury; 
Deficit Reduction.--Section 11(l)(2) of the Federal Home Loan Bank Act 
(12 U.S.C. 1431(l)(2)) is amended--
            (1) by redesignating subparagraph (C) as subparagraph (D); 
        and
            (2) by inserting after subparagraph (B) the following:
                    ``(C) Deficit reduction.--The Secretary of the 
                Treasury shall--
                            ``(i) deposit in the General Fund of the 
                        Treasury any amounts received by the Secretary 
                        for the sale of any obligation acquired by the 
                        Secretary under this subsection; and
                            ``(ii) ensure that such amounts so 
                        deposited--
                                    ``(I) are dedicated for the sole 
                                purpose of deficit reduction; and
                                    ``(II) are prohibited from use as 
                                an offset for other spending increases 
                                or revenue reductions.''.
    (d) Repayment of Fees.--Any periodic commitment fee or any other 
fee or assessment paid by the Federal National Mortgage Association or 
Federal Home Loan Mortgage Corporation to the Secretary of the Treasury 
as a result of any preferred stock purchase agreement, mortgage-backed 
security purchase program, or any other program or activity authorized 
or carried out pursuant to the authorities granted to the Secretary of 
the Treasury under the amendments made by section 1117 of the Housing 
and Economic Recovery Act of 2008 (Public Law 110-289; 122 Stat. 2683), 
including any fee agreed to by contract between the Secretary and the 
Association or Corporation, shall be deposited in the General Fund of 
the Treasury where such amounts shall be--
            (1) dedicated for the sole purpose of deficit reduction; 
        and
            (2) prohibited from use as an offset for other spending 
        increases or revenue reductions.

SEC. 6. FEDERAL HOUSING FINANCE AGENCY REPORT.

    The Director of the Federal Housing Finance Agency shall submit to 
Congress a report on the plans of the Agency to continue to support and 
maintain the Nation's vital housing industry, while at the same time 
guaranteeing that the American taxpayer will not suffer unnecessary 
losses.

SEC. 7. REPAYMENT OF UNOBLIGATED ARRA FUNDS.

    (a) Rejection of ARRA Funds by State.--Section 1607 of division A 
of the American Recovery and Reinvestment Act of 2009 (Public Law 111-
5; 123 Stat. 303) is amended by adding at the end the following:
    ``(d) Statewide Rejection of Funds.--If funds provided to any State 
in any division of this Act are not accepted for use by the Governor of 
the State pursuant to subsection (a) or by the State legislature 
pursuant to subsection (b), then all such funds shall be--
            ``(1) rescinded; and
            ``(2) deposited in the General Fund of the Treasury, where 
        such amounts shall be--
                    ``(A) dedicated for the sole purpose of deficit 
                reduction; and
                    ``(B) prohibited from use as an offset for other 
                spending increases or revenue reductions.''.
    (b) Withdrawal or Recapture of Unobligated Funds.--Title XVI of 
division A of the American Recovery and Reinvestment Act of 2009 
(Public Law 111-5; 123 Stat. 302) is amended by adding at the end the 
following:

             ``withdrawal or recapture of unobligated funds

    ``Sec. 1613. Notwithstanding any other provision of this Act, if 
the head of any executive agency withdraws or recaptures for any reason 
funds appropriated or otherwise made available under this division, and 
such funds have not been obligated by a State to a local government or 
for a specific project, such recaptured funds shall be--
            ``(1) rescinded; and
            ``(2) deposited in the General Fund of the Treasury, where 
        such amounts shall be--
                    ``(A) dedicated for the sole purpose of deficit 
                reduction; and
                    ``(B) prohibited from use as an offset for other 
                spending increases or revenue reductions.''.
    (c) Return of Unobligated Funds by End of 2012.--Section 1603 of 
division A of the American Recovery and Reinvestment Act of 2009 
(Public Law 111-5; 123 Stat. 302) is amended--
            (1) by striking ``All funds'' and inserting ``(a) In 
        General.--All funds''; and
            (2) by adding at the end the following:
    ``(b) Repayment of Unobligated Funds.--Any discretionary 
appropriations made available in this division that have not been 
obligated as of December 31, 2012, are hereby rescinded, and such 
amounts shall be deposited in the General Fund of the Treasury, where 
such amounts shall be--
            ``(1) dedicated for the sole purpose of deficit reduction; 
        and
            ``(2) prohibited from use as an offset for other spending 
        increases or revenue reductions.
    ``(c) Presidential Waiver Authority.--
            ``(1) In general.--The President may waive the requirements 
        under subsection (b), if the President determines that it is 
        not in the best interest of the Nation to rescind a specific 
        unobligated amount after December 31, 2012.
            ``(2) Requests.--The head of an executive agency may also 
        apply to the President for a waiver from the requirements under 
        subsection (b).''.

SEC. 8. REDUCTION OF STATUTORY LIMIT ON THE PUBLIC DEBT.

    Section 3101 of title 31, United States Code, is amended--
            (1) in subsection (b), by inserting ``minus the aggregate 
        amounts described in subsection (d)'' before ``, outstanding at 
        one time''; and
            (2) by adding at the end the following:
    ``(d) Amounts described in this subsection are any amounts received 
by the Secretary of the Treasury pursuant to--
            ``(1) section 106(d) of the Emergency Economic 
        Stabilization Act of 2008 before, on, or after the date of 
        enactment of this subsection; and
            ``(2) section 304(g) of the Federal National Mortgage 
        Association Charter Act (12 U.S.C. 1719(g)), section 306(l) of 
        the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
        1455(l)), section 11(l) of the Federal Home Loan Bank Act (12 
        U.S.C. 1431(l)), section 1607(d) of division A of the American 
        Recovery and Reinvestment Act of 2009 (Public Law 111-5), 
        section 1613 of division A of the American Recovery and 
        Reinvestment Act of 2009 (Public Law 111-5), and sections 5(d) 
        and 7(c) of the Pay It Back Act after the date of enactment of 
        this subsection.''.