SECTION 1. ADJUSTMENTS OF DISCRETIONARY SPENDING LIMITS.

    (a) Adjustments.--The Director shall reduce the discretionary 
spending limit for new budget authority for a fiscal year set forth in 
section 601(a)(2) of the Congressional Budget Act of 1974, as adjusted 
in strict conformance with section 251 of the Balanced Budget and 
Emergency Deficit Control Act of 1985, by the net aggregate amount for 
that fiscal year in all deficit reduction line items set forth in each 
appropriation bill or rescission bill. The Director shall reduce the 
adjusted discretionary spending limit for outlays for that fiscal year 
and each outyear as set forth in such section 601(a)(2) as a result of 
the reduction of such budget authority, based upon the spendout rates 
applicable to the discretionary spending programs to which the deficit 
reduction line items apply. Reductions (if any) shall occur on the day 
that each such appropriation bill is enacted into law. For purposes of 
the Balanced Budget and Emergency Deficit Control Act of 1985, amounts 
in deficit reduction line items and outlay reductions associated with 
them shall be taken into account only to make the adjustments specified 
in this subsection. For purposes of the Congressional Budget Act of 
1974, amounts in deficit reduction line items and outlay reductions 
associated with them shall be considered budget authority and outlays. 
For all other purposes, including subchapter I of chapter 15 of title 
31, United States Code (popularly known as the Anti-Deficiency Act), 
the amount in deficit reduction line items shall not be considered to 
provide authority to enter into obligations. Whenever the Director 
makes any adjustment required by this subsection, he shall notify the 
House of Representatives, the Senate, and the President on the day such 
adjustment is made.
    (b) Definition.--As used in this section--
            (1) the term ``appropriation bill'' means any general or 
        supplemental appropriation bill;
            (2) the term ``Director'' means the Director of the Office 
        of Management and Budget; and
            (3) the term ``rescission bill'' means any bill which 
        rescinds budget authority, including a bill referred to by 
        section 1012 of the Congressional Budget Act of 1974.

SEC. 2. DEFICIT REDUCTION LINE ITEMS IN APPROPRIATION MEASURES AND IN 
              RESCISSION BILLS.

    (a) Deficit Reduction Line Items.--Title III of the Congressional 
Budget Act of 1974 is amended by adding at the end the following new 
section:

 ``deficit reduction line items in appropriation bills and rescission 
                                 bills

    ``Sec. 314. (a) Whenever the Committee on Appropriations of the 
House of Representatives reports an appropriation bill or a rescission 
bill, that bill may contain provisions entitled `Deficit Reduction Line 
Item', comprised solely of an amount of deficit reduction associated 
with a reduction in a specified discretionary appropriation.
    ``(b)(1) Any amendment offered in the Committee on Appropriations 
(or any subcommittee thereof) of either House of Congress or in either 
House of Congress to an appropriation bill or rescission bill to reduce 
a particular appropriation for a discretionary spending program may 
include a provision designating an amount (not to exceed the amount of 
the reduction) for a deficit reduction line item associated with that 
appropriation.
    ``(2) Any amendment offered in the Committee on Appropriations (or 
any subcommittee thereof) of either House of Congress or in either 
House of Congress to an appropriation bill or rescisison bill to 
increase a particular appropriation or reduce a rescission for a 
discretionary spending program may include a provision designating an 
amount (not to exceed the amount of the increase in the appropriation 
or reduction in the rescission) by which the amount for one or more 
specified deficit reduction line items is to be reduced (but the 
resulting amount may not be less than zero), notwithstanding that any 
such deficit reduction line item has been changed by an amendment.
    ``(3) No amendment establishing or increasing the amount for a 
deficit reduction line item shall be in order in the House of 
Representatives or Senate unless it is printed in the Congressional 
Record at least one day before it is offered.
    ``(c) It shall not be in order in the House of Representatives or 
in the Senate to offer an amendment establishing or increasing the 
amount for a deficit reduction line item unless the amendment reduces 
an appropriation for a discretionary spending program associated with 
that line item by at least an equivalent amount.
    ``(d) It shall not be in order in the House of Representatives or 
the Senate to consider a conference report proposing an amendment to a 
deficit reduction line item respecting a particular discretionary 
spending program that is beyond the scope of that deficit reduction 
line item as so committed to the conference committee.
    ``(e) As used in this section--
            ``(1) the term `appropriation bill' means any general or 
        supplemental appropriation bill; and
            ``(2) the term `rescission bill' means any bill which 
        rescinds budget authority, including a bill referred to by 
        section 1012.''.
    (b) Conforming Amendment.--The table of contents set forth in 
section 1(b) of the Congressional Budget and Impoundment Control Act of 
1974 is amended by inserting after the item relating to section 313 the 
following new item:

``Sec. 314. Deficit reduction line items in appropriation bills.''.
Requires the Director of the Office of Management and Budget to reduce discretionary spending limits for new budget authority for a fiscal year by the net aggregate amount for that fiscal year in all deficit reduction line items set forth in an appropriation bill or rescission bill. 
Amends the Congressional Budget Act of 1974 to establish congressional procedures for the inclusion of deficit reduction line items in such bills.
To provide a mechanism for dedicating spending cuts in discretionary spending programs to deficit reduction.