To amend the Balanced Budget and Emergency Deficit Control Act of 1985 to reform the budget baseline.

Summary: Baseline Reform Act of 2012 - (Sec. 2) Amends the Balanced Budget and Emergency Deficit Control Act of 1985 (Gramm-Rudman-Hollings Act) to revise the formula for establishing the budget baseline.

Revises the annual baseline, for any fiscal year, to mean a projection of current-year levels of new budget authority (as under current law), outlays (as under current law), or receipts (instead of revenues) and the surplus or deficit (as under current law) for the current year, the budget year, and the ensuing nine outyears based on laws enacted through the applicable date.

Includes estimates for direct spending in the baseline calculation formula for the budget year and each outyear.

Revises the formula for calculating the baseline for discretionary spending for the budget year and each outyear to eliminate adjustments for: (1) expiring multiyear subsidized housing contracts; (2) administrative expenses of the Federal Hospital Insurance Trust Fund, the Supplementary Medical Insurance Trust Fund, the Unemployment Trust Fund, and the Railroad Retirement account; (3) offsets to federal employees' annual pay; and (4) certain inflators used to adjust budgetary resources in the Act.

(Sec. 3) Amends the Congressional Budget Act of 1974 to require the Director of the Congressional Budget Office (CBO), after the President's budget submission and in addition to the baseline projections, to report a supplemental projection to the congressional budget committees, assuming extension of current tax policy for the fiscal year commencing on October 1 of that year, with a supplemental projection for the 10-fiscal year period beginning with that fiscal year, again assuming the extension of current tax policy.

 Defines "current tax policy" as the tax policy in statute as of December 31 of the current year, assuming: (1) the budgetary effects of measures extending the Economic Growth and Tax Relief Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation Act of 2003; (2) the continued application of the alternative minimum tax (AMT) as in effect for taxable years beginning in 2011, with a specified assumption for taxable years beginning after 2011; and (3) the budgetary effects of extending the estate, gift, and generation-skipping transfer tax provisions of title III of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.

Requires CBO to report to such committees, on or before July 1 of each year, the Long-Term Budget Outlook for: (1) the fiscal year commencing on October 1 of that year, and (2) at least the ensuing 40 fiscal years.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Baseline Reform Act of 2012''.

SEC. 2. THE BASELINE.

    Section 257 of the Balanced Budget and Emergency Deficit Control 
Act of 1985 is amended to read as follows:

``SEC. 257. THE BASELINE.

    ``(a) In General.--(1) For any fiscal year, the baseline refers to 
a projection of current-year levels of new budget authority, outlays, 
or receipts and the surplus or deficit for the current year, the budget 
year, and the ensuing nine outyears based on laws enacted through the 
applicable date.
    ``(2) The baselines referred to in paragraph (1) shall be prepared 
annually.
    ``(b) Direct Spending and Receipts.--For the budget year and each 
outyear, estimates for direct spending in the baseline shall be 
calculated as follows:
            ``(1) In general.--Laws providing or creating direct 
        spending and receipts are assumed to operate in the manner 
        specified in those laws for each such year and funding for 
        entitlement authority is assumed to be adequate to make all 
        payments required by those laws.
            ``(2) Exceptions.--(A)(i) No program established by a law 
        enacted on or before the date of enactment of the Balanced 
        Budget Act of 1997 with estimated current year outlays greater 
        than $50,000,000 shall be assumed to expire in the budget year 
        or the outyears. The scoring of new programs with estimated 
        outlays greater than $50,000,000 a year shall be based on 
        scoring by the Committees on the Budget or OMB, as applicable. 
        OMB, CBO, and the Committees on the Budget shall consult on the 
        scoring of such programs where there are differences between 
        CBO and OMB.
            ``(ii) On the expiration of the suspension of a provision 
        of law that is suspended under section 171 of Public Law 104-
        127 and that authorizes a program with estimated fiscal year 
        outlays that are greater than $50,000,000, for purposes of 
        clause (i), the program shall be assumed to continue to operate 
        in the same manner as the program operated immediately before 
        the expiration of the suspension.
            ``(B) The increase for veterans' compensation for a fiscal 
        year is assumed to be the same as that required by law for 
        veterans' pensions unless otherwise provided by law enacted in 
        that session.
            ``(C) Excise taxes dedicated to a trust fund, if expiring, 
        are assumed to be extended at current rates.
            ``(D) If any law expires before the budget year or any 
        outyear, then any program with estimated current year outlays 
        greater than $50,000,000 that operates under that law shall be 
        assumed to continue to operate under that law as in effect 
        immediately before its expiration.
            ``(3) Hospital insurance trust fund.--Notwithstanding any 
        other provision of law, the receipts and disbursements of the 
        Hospital Insurance Trust Fund shall be included in all 
        calculations required by this Act.
    ``(c) Discretionary Spending.--For the budget year and each of the 
nine ensuing outyears, the baseline shall be calculated using the 
following assumptions regarding all amounts other than those covered by 
subsection (b):
            ``(1) Estimated appropriations.--Budgetary resources other 
        than unobligated balances shall be at the level provided for 
        the budget year in full-year appropriation Acts. If for any 
        account a full-year appropriation has not yet been enacted, 
        budgetary resources other than unobligated balances shall be at 
        the level available in the current year.
            ``(2) Current-year appropriations.--If, for any account, a 
        continuing appropriation is in effect for less than the entire 
        current year, then the current-year amount shall be assumed to 
        equal the amount that would be available if that continuing 
        appropriation covered the entire fiscal year. If law permits 
        the transfer of budget authority among budget accounts in the 
        current year, the current-year level for an account shall 
        reflect transfers accomplished by the submission of, or assumed 
        for the current year in, the President's original budget for 
        the budget year.
    ``(d) Up-To-Date Concepts.--In calculating the baseline for the 
budget year or each of the nine ensuing outyears, current-year amounts 
shall be calculated using the concepts and definitions that are 
required for that budget year.
    ``(e) Asset Sales.--Amounts realized from the sale of an asset 
shall not be included in estimates under section 251, 251A, 252, or 253 
of this part or section 5 of the Statutory Pay-As-You-Go Act of 2010 if 
that sale would result in a financial cost to the Government as 
determined pursuant to scorekeeping guidelines.''.

SEC. 3. ADDITIONAL CBO REPORT TO BUDGET COMMITTEES.

    Section 202(e) of the Congressional Budget Act of 1974 is amended 
by adding at the end the following new paragraphs:
            ``(4)(A) After the President's budget submission under 
        section 1105(a) of title 31, United States Code, in addition to 
        the baseline projections, the Director shall submit to the 
        Committees on the Budget of the House of Representatives and 
        the Senate a supplemental projection assuming extension of 
        current tax policy for the fiscal year commencing on October 1 
        of that year with a supplemental projection for the 10 fiscal-
        year period beginning with that fiscal year, assuming the 
        extension of current tax policy.
            ``(B) For the purposes of this paragraph, the term `current 
        tax policy' means the tax policy in statute as of December 31 
        of the current year assuming--
                    ``(i) the budgetary effects of measures extending 
                the Economic Growth and Tax Relief Reconciliation Act 
                of 2001;
                    ``(ii) the budgetary effects of measures extending 
                the Jobs and Growth Tax Relief Reconciliation Act of 
                2003;
                    ``(iii) the continued application of the 
                alternative minimum tax as in effect for taxable years 
                beginning in 2011 pursuant to title II of the Tax 
                Relief, Unemployment Insurance Reauthorization, and Job 
                Creation Act of 2010, assuming that for taxable years 
                beginning after 2011 the exemption amount shall equal--
                            ``(I) the exemption amount for taxable 
                        years beginning in 2011, as indexed for 
                        inflation; or
                            ``(II) if a subsequent law modifies the 
                        exemption amount for later taxable years, the 
                        modified exemption amount, as indexed for 
                        inflation; and
                    ``(iv) the budgetary effects of extending the 
                estate, gift, and generation-skipping transfer tax 
                provisions of title III of the Tax Relief, Unemployment 
                Insurance Reauthorization, and Job Creation Act of 
                2010.
            ``(5) On or before July 1 of each year, the Director shall 
        submit to the Committees on the Budget of the House of 
        Representatives and the Senate, the Long-Term Budget Outlook 
        for the fiscal year commencing on October 1 of that year and at 
        least the ensuing 40 fiscal years.''.

            Passed the House of Representatives February 3, 2012.

            Attest:

                                                 KAREN L. HAAS,

                                                                 Clerk.