To amend the Congressional Budget Act of 1974 and the Balanced Budget and Emergency Deficit Control Act of 1985 to limit the rate of growth of Federal outlays to 2 percent per year.

Summary: Amends the Congressional Budget Act of 1974 to establish maximum spending amounts for FY 1996 through 2002. 
Amends the Balanced Budget and Emergency Deficit Control Act of 1985 (Gramm-Rudman-Hollings Act) to revise sequestration procedures for enforcement. 
Requires look-back sequestration in the last quarter of each fiscal year. 
Revises preview sequestration reports to include total spending (instead of deficit spending). 
Makes it out of order in the House of Representatives or the Senate to consider legislation that would result in total spending exceeding maximum permissible total spending, unless waived or suspended by a three-fifths vote of Members of each House.

SECTION 1. MAXIMUM SPENDING AMOUNTS.

    Section 601(a)(1) of the Congressional Budget Act of 1974 is 
amended to read as follows:
            ``(1) Maximum spending amount.--The term `maximum spending 
        amount' means--
                    ``(A) with respect to fiscal year 1996, 
                $1,562,000,000,000 in outlays;
                    ``(B) with respect to fiscal year 1997, 
                $1,593,000,000,000 in outlays;
                    ``(C) with respect to fiscal year 1998, 
                $1,625,000,000,000 in outlays;
                    ``(D) with respect to fiscal year 1999, 
                $1,658,000,000,000 in outlays;
                    ``(E) with respect to fiscal year 2000, 
                $1,691,000,000,000 in outlays;
                    ``(F) with respect to fiscal year 2001, 
                $1,725,000,000,000 in outlays; and
                    ``(G) with respect to fiscal year 2002, 
                $1,760,000,000,000 in outlays.''.

SEC. 2. ENFORCING MAXIMUM SPENDING SEQUESTRATION.

    (a) Sequestration.--Section 253(a) of the Balanced Budget and 
Emergency Deficit Control Act of 1985 is amended to read as follows:
    ``(a) Sequestration.--Within 15 days after Congress adjourns to end 
a session (other than the One Hundred Fourth Congress), and on the same 
day as sequestration (if any) under sections 251 and 252, but after any 
sequestration required by those sections, there shall be a 
sequestration (if necessary) to reduce total Federal spending to the 
maximum permissible level as set forth in section 601(a)(1) of the 
Congressional Budget Act of 1974.''.
    (b) Conforming Amendment to Heading.--The section heading of 
section 253 of the Balanced Budget and Emergency Deficit Control Act of 
1985 is amended to read as follows:

``SEC. 253. ENFORCING MAXIMUM SPENDING LIMITS.''.

    (c) Additional Conforming Amendments.--Section 253 of the Balanced 
Budget and Emergency Deficit Control Act of 1985 is amended--
            (1) by repealing subsections (b), (g), and (h), and by 
        redesignating subsections (c), (d), (e), and (f), as 
        subsections (b), (c), (d), and (e), respectively;
            (2) in subsection (b) (as redesignated), by amending the 
        first sentence to read as follows: ``To reduce total Federal 
        spending to the maximum permissible level for a budget year, 20 
        percent of the required outlay reductions shall be obtained 
        from non-exempt defense accounts (accounts designated as 
        function 050 in the President's fiscal year 1995 budget 
        submission) and 80 percent from non-exempt, non-defense 
        accounts (all other non-exempt accounts).'';
            (3) in subsection (c) (as redesignated), by striking 
        ``subsection (c)'' and inserting ``subsection (b)''; and
            (4) in subsection (e) (as redesignated), by striking ``(b), 
        (c), (d), and (e)'' and inserting ``(b), (c), and (d)'' and by 
        striking ``(d) or (e)'' and inserting ``(c) or (d)''.
    (d) Look-Back Sequester.--Section 253 of the Balanced Budget and 
Emergency Deficit Control Act of 1985 is amended by adding at the end 
the following new subsection:
    ``(f) Look-Back Sequester.--
            ``(1) In general.--On July 1 of each fiscal year, the 
        Director of OMB shall determine if laws effective during the 
        current fiscal year will cause the spending to exceed the 
        maximum spending amount for such fiscal year. If the limit is 
        exceeded, there shall be a preliminary sequester on July 1 to 
        eliminate the excess.
            ``(2) Permanent sequester.--Budget authority sequestered on 
        July 1 pursuant to paragraph (1) shall be permanently canceled 
        on July 15.
            ``(3) No margin.--The margin for determining a sequester 
        under this subsection shall be zero.
            ``(4) Sequestration procedures.--The provision of 
        subsections (b), (c), and (d) of this section shall apply to a 
        sequester under this subsection.''.
    (e) Reports.--Section 254 of the Balanced Budget and Emergency 
Deficit Control Act of 1985 is amended--
            (1) by striking subsection (c);
            (2) in subsection (d)(1), by striking ``deficit 
        sequestration'' and inserting ``total spending sequestration'';
            (3) in subsection (d) by repealing paragraph (4) and 
        inserting the following new paragraph:
            ``(4) Total Spending Sequestration Reports.--The preview 
        reports shall set forth for the budget year estimates for each 
        of the following:
                    ``(A) The amount of reductions required from 
                defense accounts and the reductions required from non-
                defense accounts.
                    ``(B) The sequestration percentage necessary to 
                achieve the required reduction in defense accounts 
                under section 253(c).
                    ``(C) The reductions required under sections 
                253(d)(1) and 253(d)(2).
                    ``(D) The sequestration percentage necessary to 
                achieve the required reduction in non-defense accounts 
                under section 253(d)(3).''; and
            (4) in subsection (g)(3), by striking ``Deficit'' and 
        inserting ``Total Spending'' in the side heading and in the 
        first sentence by striking ``deficit'' and inserting ``total 
        spending''.
    (f) Conforming Amendment to Table of Contents.--The item relating 
to section 253 is amended by striking ``Enforcing deficit targets'' and 
inserting ``Enforcing maximum spending limits''.

SEC. 3. TOTAL SPENDING POINT OF ORDER.

    (a) Total Spending Point of Order.--Section 605(b) of the 
Congressional Budget Act of 1974 is amended to read as follows:
    ``(b) Total Spending Point of Order.--
            ``(1) In general.--It shall not be in order in the House of 
        Representatives or the Senate to consider any bill, joint 
        resolution, amendment, or conference report that includes any 
        provision that would result in total spending for a fiscal year 
        that exceeds the maximum permissible total spending amount for 
        such fiscal year as set forth in section 601(a)(1).
            ``(2) Waiver or suspension.--This subsection may be waived 
        or suspended in the House of Representatives or the Senate only 
        by the affirmative vote of three-fifths of its Members, duly 
        chosen and sworn.''.