# Balanced Budget Act of 1997/Title X/Subtitle B
## SUBTITLE B — Amendments to the Balanced Budget and Emergency Deficit Control Act of 1985
### Sec. 10201. Purpose.

    The purpose of this subtitle is to extend discretionary spending limits and pay-as-you-go requirements.

### Sec. 10202. General Statement and Definitions.

    (a) GENERAL STATEMENT.—
       Section 250(b) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by striking the first 2 sentences and inserting the following: ``This part provides for budget enforcement as called for in House Concurrent Resolution 84 (105th Congress, 1st session).´´.
    (b) DEFINITIONS.—
       Section 250(c) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended—
          (1) in paragraph (1)—
                (A) by striking ``(but including´´ through ``amount´´ ´´; and
                (B) by striking ``section 601 of that Act as adjusted under sections 251 and 253´´ and inserting ``section 251´´;
          (2) by striking paragraph (4) and inserting the following:
             ``(4) The term ``category´´ means the subsets of discretionary appropriations in section 251(c). Discretionary appropriations in each of the categories shall be those designated in the joint explanatory statement accompanying the conference report on the Balanced Budget Act of 1997/Title X. New accounts or activities shall be categorized only after consultation with the committees on Appropriations and the Budget of the House of Representatives and the Senate and that consultation shall, to the extent practicable, include written communication to such committees that affords such committees the opportunity to comment before official action is taken with respect to new accounts or activities.´´;
          (3) by striking paragraph (6) and inserting the following:
             ``(6) The term ``budgetary resources´´ means new budget authority, unobligated balances, direct spending authority, and obligation limitations.´´;
          (4) in paragraph (9), by striking ``submission of the fiscal year 1992 budget that are not included with a budget submission´´ and inserting ``that budget submission that are not included with it´´;
          (5) in paragraph (14), by inserting ``first 4´´ before ``fiscal years´´ and by striking ``through fiscal year 1995´´;
          (6) by striking paragraphs (17) and (20) and by redesignating paragraphs (18), (19), and (21) as paragraphs (17), (18), and (19), respectively;
          (7) in paragraph (17) (as redesignated), by striking ``Omnibus Budget Reconciliation Act of 1990´´ and inserting ``Balanced Budget Act of 1997/Title X´´;
          (8) in paragraph (18) (as redesignated), by striking all after ``expenses´´ and inserting ``the Federal deposit insurance agencies, and other Federal agencies supervising insured depository institutions, resulting from full funding of, and continuation of, the deposit insurance guarantee commitment in effect under current estimates.´´; and
          (9) by striking paragraph (19) (as redesignated) and inserting the following:
             ``(19) The term ``asset sale´´ means the sale to the public of any asset (except for those assets covered by title V of the Congressional Budget Act of 1974), whether physical or financial, owned in whole or in part by the United States.´´.

### Sec. 10203. Enforcing Discretionary Spending Limits.

    (a) EXTENSION THROUGH FISCAL YEAR 2002.—
       Section 251 of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended—
          (1) in the heading of subsection (a), by striking ``Fiscal Years 1991-1998´´;
          (2) in subsection (a)(3), by striking ``(h)´´ both places it appears and inserting ``(f)´´;
          (3) by striking subsection (a)(7) and inserting the following:
          ``(7) ESTIMATES.—
                ``(A) CBO ESTIMATES.— As soon as practicable after Congress completes action on any discretionary appropriation, CBO, after consultation with the Committees on the Budget of the House of Representatives and the Senate, shall provide OMB with an estimate of the amount of discretionary new budget authority and outlays for the current year (if any) and the budget year provided by that legislation.
                ``(B) OMB ESTIMATES AND EXPLANATION OF DIFFERENCES.— Not later than 7 calendar days (excluding Saturdays, Sundays, and legal holidays) after the date of enactment of any discretionary appropriation, OMB shall transmit a report to the House of Representatives and to the Senate containing the CBO estimate of that legislation, an OMB estimate of the amount of discretionary new budget authority and outlays for the current year (if any) and the budget year provided by that legislation, and an explanation of any difference between the 2 estimates. If during the preparation of the report OMB determines that there is a significant difference between OMB and CBO, OMB shall consult with the Committees on the Budget of the House of Representatives and the Senate regarding that difference and that consultation shall include, to extent practicable, written communication to those committees that affords such committees the opportunity to comment before the issuance of the report.
                ``(C) ASSUMPTIONS AND GUIDELINES.— OMB estimates under this paragraph shall be made using current economic and technical assumptions. OMB shall use the OMB estimates transmitted to the Congress under this paragraph. OMB and CBO shall prepare estimates under this paragraph in conformance with scorekeeping guidelines determined after consultation among the House and Senate Committees on the Budget, CBO, and OMB.
                ``(D) ANNUAL APPROPRIATIONS.— For purposes of this paragraph, amounts provided by annual appropriations shall include any new budget authority and outlays for the current year (if any) and the budget year in accounts for which funding is provided in that legislation that result from previously enacted legislation.´´;
          (4) by striking subsection (b) and inserting the following:
    ``(b) ADJUSTMENTS TO DISCRETIONARY SPENDING LIMITS.—
          ``(1) PREVIEW REPORT.— When the President submits the budget under section 1105 of title 31, United States Code, OMB shall calculate and the budget shall include adjustments to discretionary spending limits (and those limits as cumulatively adjusted) for the budget year and each outyear to reflect changes in concepts and definitions. Such changes shall equal the baseline levels of new budget authority and outlays using up-to-date concepts and definitions minus those levels using the concepts and definitions in effect before such changes. Such changes may only be made after consultation with the committees on Appropriations and the Budget of the House of Representatives and the Senate and that consultation shall include written communication to such committees that affords such committees the opportunity to comment before official action is taken with respect to such changes.
          ``(2) SEQUESTRATION REPORTS.— When OMB submits a sequestration report under section 254(e), (f), or (g) for a fiscal year, OMB shall calculate, and the sequestration report and subsequent budgets submitted by the President under section 1105(a) of title 31, United States Code, shall include adjustments to discretionary spending limits (and those limits as adjusted) for the fiscal year and each succeeding year through 2002, as follows:
                ``(A) EMERGENCY APPROPRIATIONS.— If, for any fiscal year, appropriations for discretionary accounts are enacted that the President designates as emergency requirements and that the Congress so designates in statute, the adjustment shall be the total of such appropriations in discretionary accounts designated as emergency requirements and the outlays flowing in all fiscal years from such appropriations. This subparagraph shall not apply to appropriations to cover agricultural crop disaster assistance.
                ``(B) SPECIAL OUTLAY ALLOWANCE.— If, in any fiscal year, outlays for a category exceed the discretionary spending limit for that category but new budget authority does not exceed its limit for that category (after application of the first step of a sequestration described in subsection (a)(2), if necessary), the adjustment in outlays for a fiscal year is the amount of the excess but not to exceed 0.5 percent of the sum of the adjusted discretionary spending limits on outlays for that fiscal year.
                ``(C) CONTINUING DISABILITY REVIEWS.—
                      ``(i) If a bill or joint resolution making appropriations for a fiscal year is enacted that specifies an amount for continuing disability reviews under the heading ``Limitation on Administrative Expenses´´ for the Social Security Administration, the adjustments for that fiscal year shall be the additional new budget authority provided in that Act for such reviews for that fiscal year and the additional outlays flowing from such amounts, but shall not exceed—
                            ``(I) for fiscal year 1998, $290,000,000 in additional new budget authority and $338,000,000 in additional outlays;
                            ``(II) for fiscal year 1999, $520,000,000 in additional new budget authority and $520,000,000 in additional outlays;
                            ``(III) for fiscal year 2000, $520,000,000 in additional new budget authority and $520,000,000 in additional outlays;
                            ``(IV) for fiscal year 2001, $520,000,000 in additional new budget authority and $520,000,000 in additional outlays; and
                            ``(V) for fiscal year 2002, $520,000,000 in additional new budget authority and $520,000,000 in additional outlays.
                      ``(ii) As used in this subparagraph—
                            ``(I) the term ``continuing disability reviews´´ means reviews or redeterminations as defined under section 201(g)(1)(A) of the Social Security Act and reviews and redeterminations authorized under section 211 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996;
                            ``(II) the term ``additional new budget authority´´ means the amount provided for a fiscal year, in excess of $200,000,000, in an appropriations Act and specified to pay for the costs of continuing disability reviews under the heading ``Limitation on Administrative Expenses´´ for the Social Security Administration; and
                            ``(III) the term ``additional outlays´´ means outlays, in excess of $200,000,000 in a fiscal year, flowing from the amounts specified for continuing disability reviews under the heading ``Limitation on Administrative Expenses´´ for the Social Security Administration, including outlays in that fiscal year flowing from amounts specified in Acts enacted for prior fiscal years (but not before 1996).
                ``(D) ALLOWANCE FOR IMF.— If an appropriation bill or joint resolution is enacted for a fiscal year through 2002 that includes an appropriation with respect to clause (i) or (ii), the adjustment shall be the amount of budget authority in the measure that is the dollar equivalent of the Special Drawing Rights with respect to—
                      ``(i) an increase in the United States quota as part of the International Monetary Fund Eleventh General Review of Quotas (United States Quota); or
                      ``(ii) any increase in the maximum amount available to the Secretary of the Treasury pursuant to section 17 of the Bretton Woods Agreements Act, as amended from time to time (New Arrangements to Borrow).
                ``(E) ALLOWANCE FOR INTERNATIONAL ARREARAGES.—
                      ``(i) ADJUSTMENTS.— If an appropriation bill or joint resolution is enacted for fiscal year 1998, 1999, or 2000 that includes an appropriation for arrearages for international organizations, international peacekeeping, and multilateral development banks for that fiscal year, the adjustment shall be the amount of budget authority in that measure and the outlays flowing in all fiscal years from that budget authority.
                      ``(ii) LIMITATIONS.— The total amount of adjustments made pursuant to this subparagraph for the period of fiscal years 1998 through 2000 shall not exceed $1,884,000,000 in budget authority.
                ``(F) EITC COMPLIANCE INITIATIVE.— If an appropriation bill or joint resolution is enacted for a fiscal year that includes an appropriation for an earned income tax credit compliance initiative, the adjustment shall be the amount of budget authority in that measure for that initiative and the outlays flowing in all fiscal years from that budget authority, but not to exceed—
                      ``(i) with respect to fiscal year 1998, $138,000,000 in new budget authority and $131,000,000 in outlays;
                      ``(ii) with respect to fiscal year 1999, $143,000,000 in new budget authority and $143,000,000 in outlays;
                      ``(iii) with respect to fiscal year 2000, $144,000,000 in new budget authority and $144,000,000 in outlays;
                      ``(iv) with respect to fiscal year 2001, $145,000,000 in new budget authority and $145,000,000 in outlays; and
                      ``(v) with respect to fiscal year 2002, $146,000,000 in new budget authority and $146,000,000 in outlays.´´.
    (b) SHIFTING OF DISCRETIONARY SPENDING LIMITS INTO THE BALANCED BUDGET AND EMERGENCY DEFICIT CONTROL ACT OF 1985.—
       Section 251 of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by adding at the end the following new subsection:
    ``(c) DISCRETIONARY SPENDING LIMIT.— As used in this part, the term ``discretionary spending limit´´ means—
          ``(1) with respect to fiscal year 1997, for the discretionary category, the current adjusted limits of new budget authority and outlays;
          ``(2) with respect to fiscal year 1998—
                ``(A) for the defense category: $269,000,000,000 in new budget authority and $266,823,000,000 in outlays;
                ``(B) for the nondefense category: $252,357,000,000 in new budget authority and $282,853,000,000 in outlays; and
                ``(C) for the violent crime reduction category: $5,500,000,000 in new budget authority and $3,592,000,000 in outlays;
          ``(3) with respect to fiscal year 1999—
                ``(A) for the defense category: $271,500,000,000 in new budget authority and $266,518,000,000 in outlays;
                ``(B) for the nondefense category: $255,699,000,000 in new budget authority and $287,850,000,000 in outlays; and
                ``(C) for the violent crime reduction category: $5,800,000,000 in new budget authority and $4,953,000,000 in outlays;
             ``(4) with respect to fiscal year 2000—
                ``(A) for the discretionary category: $532,693,000,000 in new budget authority and $558,711,000,000 in outlays; and
                ``(B) for the violent crime reduction category: $4,500,000,000 in new budget authority and $5,554,000,000 in outlays;
          ``(5) with respect to fiscal year 2001, for the discretionary category: $542,032,000,000 in new budget authority and $564,396,000,000 in outlays; and
          ``(6) with respect to fiscal year 2002, for the discretionary category: $551,074,000,000 in new budget authority and $560,799,000,000 in outlays;
       ``as adjusted in strict conformance with subsection (b).´´.
    (c) REPEAL OF DUPLICATIVE PROVISIONS.—
       Sections 201, 202, 204(b), 206, and 211 of House Concurrent Resolution 84 (105th Congress) are repealed.

### Sec. 10204. Violent Crime Reduction Spending.

    (a) SEQUESTRATION REGARDING VIOLENT CRIME REDUCTION SPENDING.—
          (1) REPEAL.—
             Section 251A of the Balanced Budget and Emergency Deficit Control Act of 1985 is repealed.
          (2) TABLE OF CONTENTS.—
             The item relating to section 251A in the table contents set forth in section 250(a) of the Balanced Budget and Emergency Deficit Control Act of 1985 is repealed.
    (b) CONFORMING AMENDMENT.—
       Section 310002 of Public Law 103-322 (42 U.S.C. 14212) is repealed.

### Sec. 10205. Enforcing Pay-As-You-Go.

    Section 252 of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended—
          (1) by striking subsections (a) and (b) and inserting the following:
    ``(a) PURPOSE.— The purpose of this section is to assure that any legislation enacted before October 1, 2002, affecting direct spending or receipts that increases the deficit will trigger an offsetting sequestration.
    ``(b) SEQUESTRATION.—
          ``(1) TIMING.— Not later than 15 calendar days after the date Congress adjourns to end a session and on the same day as a sequestration (if any) under section 251 or 253, there shall be a sequestration to offset the amount of any net deficit increase caused by all direct spending and receipts legislation enacted before October 1, 2002, as calculated under paragraph (2).
          ``(2) CALCULATION OF DEFICIT INCREASE.— OMB shall calculate the amount of deficit increase or decrease by adding—
                ``(A) all OMB estimates for the budget year of direct spending and receipts legislation transmitted under subsection (d);
                ``(B) the estimated amount of savings in direct spending programs applicable to budget year resulting from the prior year's sequestration under this section or section 253, if any, as published in OMB's final sequestration report for that prior year; and
                ``(C) any net deficit increase or decrease in the current year resulting from all OMB estimates for the current year of direct spending and receipts legislation transmitted under subsection (d) that were not reflected in the final OMB sequestration report for the current year.´´;
          (2) by amending subsection (c)(1)(B), by inserting ``and direct´´ after ``guaranteed´´;
          (3) by amending subsection (d) to read as follows:
    ``(d) ESTIMATES.—
          ``(1) CBO ESTIMATES.— As soon as practicable after Congress completes action on any direct spending or receipts legislation, CBO shall provide an estimate to OMB of that legislation.
          ``(2) OMB ESTIMATES.— Not later than 7 calendar days (excluding Saturdays, Sundays, and legal holidays) after the date of enactment of any direct spending or receipts legislation, OMB shall transmit a report to the House of Representatives and to the Senate containing—
                ``(A) the CBO estimate of that legislation;
                ``(B) an OMB estimate of that legislation using current economic and technical assumptions; and
                ``(C) an explanation of any difference between the 2 estimates.
          ``(3) SIGNIFICANT DIFFERENCES.— If during the preparation of the report under paragraph (2) OMB determines that there is a significant difference between the OMB and CBO estimates, OMB shall consult with the Committees on the Budget of the House of Representatives and the Senate regarding that difference and that consultation, to the extent practicable, shall include written communication to such committees that affords such committees the opportunity to comment before the issuance of that report.
          ``(4) SCOPE OF ESTIMATES.— The estimates under this section shall include the amount of change in outlays or receipts for the current year (if applicable), the budget year, and each outyear excluding any amounts resulting from—
                ``(A) full funding of, and continuation of, the deposit insurance guarantee commitment in effect under current estimates; and
                ``(B) emergency provisions as designated under subsection (e).
          ``(5) SCOREKEEPING GUIDELINES.— OMB and CBO, after consultation with each other and the Committees on the Budget of the House of Representatives and the Senate, shall—
                ``(A) determine common scorekeeping guidelines; and
                ``(B) in conformance with such guidelines, prepare estimates under this section.´´; and
          (4) in subsection (e), by striking ``, for any fiscal year from 1991 through 1998,´´ and by striking ``through 1995´´.

### Sec. 10206. Reports and Orders.

    Section 254 of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended—
          (1) by striking subsection (c) and redesignating subsections (d) through (k) as (c) through (j), respectively;
          (2) in subsection (c) (as redesignated), by striking ``1998´´ and inserting ``2002´´;
          (3) in subsection (d) (as redesignated), by striking ``(h)´´ and inserting ``(f)´´;
          (4)(A) in subsection (f)(2)(A) (as redesignated), by striking ``1998´´ and inserting ``2002´´;
                (B) in subsection (f)(3) (as redesignated), by striking ``through 1998´´; and
                (C) by striking subsection (f)(4) (as redesignated) and by redesignating paragraphs (5) and (6) of that subsection as paragraphs (4) and (5), respectively; and
          (5) in subsection (g) (as redesignated), by striking ``(g)´´ each place it appears and inserting ``(f)´´.

### Sec. 10207. Exempt Programs and Activities.

    (a) VETERANS PROGRAMS.—
       Section 255(b) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended as follows:
          (1) In the item relating to Veterans Insurance and Indemnity, strike ``Indemnity´´ and insert ``Indemnities´´.
          (2) In the item relating to Veterans' Canteen Service Revolving Fund, strike ``Veterans'´´.
          (3) In the item relating to Benefits under chapter 21 of title 38, strike ``(36-0137-0-1-702)´´ and insert ``(36-0120-0-1-701)´´.
          (4) In the item relating to Veterans' compensation, strike ``Veterans' compensation´´ and insert ``Compensation´´.
          (5) In the item relating to Veterans' pensions, strike ``Veterans' pensions´´ and insert ``Pensions´´.
          (6) After the last item, insert the following new items:
             ``Benefits under chapter 35 of title 38, United States Code, related to educational assistance for survivors and dependents of certain veterans with service-connected disabilities (36-0137-0-1-702);
             ``Assistance and services under chapter 31 of title 38, United States Code, relating to training and rehabilitation for certain veterans with service-connected disabilities (36-0137-0-1-702);
             ``Benefits under subchapters I, II, and III of chapter 37 of title 38, United States Code, relating to housing loans for certain veterans and for the spouses and surviving spouses of certain veterans Guaranty and Indemnity Program Account (36-1119-0-1-704);
             ``Loan Guaranty Program Account (36-1025-0-1-704); and
             ``Direct Loan Program Account (36-1024-0-1-704).´´.
    (b) CERTAIN PROGRAM BASES.—
       Section 255(f) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended to read as follows:
          ``(f) OPTIONAL EXEMPTION OF MILITARY PERSONNEL.—
             ``(1) IN GENERAL.— The President may, with respect to any military personnel account, exempt that account from sequestration or provide for a lower uniform percentage reduction than would otherwise apply.
             ``(2) LIMITATION.— The President may not use the authority provided by paragraph (1) unless the President notifies the Congress of the manner in which such authority will be exercised on or before the date specified in section 254(a) for the budget year.´´.
    (c) OTHER PROGRAMS AND ACTIVITIES.—
          (1) Section 255(g)(1)(A) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended as follows:
                (A) After the first item, insert the following new item:
                   ``Activities financed by voluntary payments to the Government for goods or services to be provided for such payments;´´.
                (B) Strike ``Thrift Savings Fund (26-8141-0-7-602);´´.
                (C) In the first item relating to the Bureau of Indian Affairs, insert ``Indian land and water claims settlements and´´ after the comma.
                (D) In the second item relating to the Bureau of Indian Affairs, strike ``miscellaneous´´ and insert ``Miscellaneous´´ and strike ``, tribal trust funds´´.
                (E) Strike ``Claims, defense (97-0102-0-1-051);´´.
                (F) In the item relating to Claims, judgments, and relief acts, strike ``806´´ and insert ``808´´.
                (G) Strike ``Coinage profit fund (20-5811-0-2-803);´´.
                (H) Insert ``Compact of Free Association (14-0415-0-1-808);´´ after the item relating to the Claims, judgments, and relief acts.
                (I) Insert ``Conservation Reserve Program (12-2319-0-1-302);´´ after the item relating to the Compensation of the President.
                (J) In the item relating to the Customs Service, strike ``852´´ and insert ``806´´.
                (K) In the item relating to the Comptroller of the Currency, insert ``, Assessment funds (20-8413-0-8-373)´´ before the semicolon.
                (L) Strike ``Director of the Office of Thrift Supervision;´´.
                (M) Strike ``Eastern Indian land claims settlement fund (14-2202-0-1-806);´´.
                (N) After the item relating to the Exchange stabilization fund, insert the following new items:
                   ``Farm Credit Administration, Limitation on Administrative Expenses (78-4131-0-3-351);
                   ``Farm Credit System Financial Assistance Corporation, interest payment (20-1850-0-1-908);´´.
                (O) Strike ``Federal Deposit Insurance Corporation;´´.
                (P) In the first item relating to the Federal Deposit Insurance Corporation, insert ``(51-4064-0-3-373)´´ before the semicolon.
                (Q) In the second item relating to the Federal Deposit Insurance Corporation, insert ``(51-4065-0-3-373)´´ before the semicolon.
                (R) In the third item relating to the Federal Deposit Insurance Corporation, insert ``(51-4066-0-3-373)´´ before the semicolon.
                (S) In the item relating to the Federal Housing Finance Board, insert ``(95-4039-0-3-371)´´ before the semicolon.
                (T) In the item relating to the Federal payment to the railroad retirement account, strike ``account´´ and insert ``accounts´´.
                (U) In the item relating to the health professions graduate student loan insurance fund, insert ``program account´´ after ``fund´´ and strike ``(Health Education Assistance Loan Program) (75-4305-0-3-553)´´ and insert ``(75-0340-0-1-552)´´.
                (V) In the item relating to Higher education facilities, strike ``and insurance´´.
                (W) In the item relating to Internal revenue collections for Puerto Rico, strike ``852´´ and insert ``806´´.
                (X) Amend the item relating to the Panama Canal Commission to read as follows:
                   ``Panama Canal Commission, Panama Canal Revolving Fund (95-4061-0-3-403);´´.
                (Y) In the item relating to the Medical facilities guarantee and loan fund, strike ``(75-4430-0-3-551)´´ and insert ``(75-9931-0-3-550)´´.
                (Z) In the first item relating to the National Credit Union Administration, insert ``operating fund (25-4056-0-3-373)´´ before the semicolon.
                (AA) In the second item relating to the National Credit Union Administration, strike ``central´´ and insert ``Central´´ and insert ``(25-4470-0-3-373)´´ before the semicolon.
                (BB) In the third item relating to the National Credit Union Administration, strike ``credit´´ and insert ``Credit´´ and insert ``(25-4468-0-3-373)´´ before the semicolon.
                (CC) After the third item relating to the National Credit Union Administration, insert the following new item:
                   ``Office of Thrift Supervision (20-4108-0-3-373);´´.
                (DD) In the item relating to Payments to health care trust funds, strike ``572´´ and insert ``571´´.
                (EE) Strike ``Compact of Free Association, economic assistance pursuant to Public Law 99-658 (14-0415-0-1-806);´´.
                (FF) In the item relating to Payments to social security trust funds, strike ``571´´ and insert ``651´´.
                (GG) Strike ``Payments to state and local government fiscal assistance trust fund (20-2111-0-1-851);´´.
                (HH) In the item relating to Payments to the United States territories, strike ``852´´ and insert ``806´´.
                (II) Strike ``Resolution Funding Corporation;´´.
                (JJ) In the item relating to the Resolution Trust Corporation, insert ``Revolving Fund (22-4055-0-3-373)´´ before the semicolon.
                (KK) After the item relating to the Tennessee Valley Authority funds, insert the following new items:
                   ``Thrift Savings Fund;
                   ``United States Enrichment Corporation (95-4054-0-3-271);
                   ``Vaccine Injury Compensation (75-0320-0-1-551);
                   ``Vaccine Injury Compensation Program Trust Fund (20-8175-0-7-551);´´.
          (2) Section 255(g)(1)(B) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended as follows:
                (A) Strike ``The following budget´´ and insert ``The following Federal retirement and disability´´.
                (B) In the item relating to Black lung benefits, strike ``lung benefits´´ and insert ``Lung Disability Trust Fund´´.
                (C) In the item relating to the Court of Federal Claims Court Judges´´ Retirement Fund, strike ``Court of Federal´´.
                (D) In the item relating to Longshoremen's compensation benefits, insert ``Special workers compensation expenses,´´ before ``Longshoremen's´´.
                (E) In the item relating to Railroad retirement tier II, strike ``retirement tier II´´ and insert ``Industry Pension Fund´´.
          (3) Section 255(g)(2) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended as follows:
                (A) Strike the following items:
                   ``Agency for International Development, Housing, and other credit guarantee programs (72-4340-0-3-151);
                   ``Agricultural credit insurance fund (12-4140-0-1-351);´´.
                (B) In the item relating to Check forgery, strike ``Check´´ and insert ``United States Treasury check´´.
                (C) Strike ``Community development grant loan guarantees (86-0162-0-1-451);´´.
                (D) After the item relating to the United States Treasury Check forgery insurance fund, insert the following new item:
                   ``Credit liquidating accounts;´´.
                (E) Strike the following items:
                   ``Credit union share insurance fund (25-4468-0-3-371);´´.
                   ``Economic development revolving fund (13-4406-0-3-452);´´.
                   ``Export-Import Bank of the United States, Limitation of program activity (83-4027-0-3-155);´´.
                   ``Federal Deposit Insurance Corporation (51-8419-0-8-371);´´.
                   ``Federal Housing Administration fund (86-4070-0-3-371);´´.
                   ``Federal ship financing fund (69-4301-0-3-403);´´.
                   ``Federal ship financing fund, fishing vessels (13-4417-0-3-376);´´.
                   ``Government National Mortgage Association, Guarantees of mortgage-backed securities (86-4238-0-3-371);´´.
                   ``Health education loans (75-4307-0-3-553);´´.
                   ``Indian loan guarantee and insurance fund (14-4410-0-3-452);´´.
                   ``Railroad rehabilitation and improvement financing fund (69-4411-0-3-401);´´.
                   ``Rural development insurance fund (12-4155-0-3-452);´´.
                   ``Rural electric and telephone revolving fund (12-4230-8-3-271);´´.
                   ``Rural housing insurance fund (12-4141-0-3-371);´´.
                   ``Small Business Administration, Business loan and investment fund (73-4154-0-3-376);´´.
                   ``Small Business Administration, Lease guarantees revolving fund (73-4157-0-3-376);´´.
                   ``Small Business Administration, Pollution control equipment contract guarantee revolving fund (73-4147-0-3-376);´´.
                   ``Small Business Administration, Surety bond guarantees revolving fund (73-4156-0-3-376);´´.
                   ``Department of Veterans Affairs Loan guaranty revolving fund (36-4025-0-3-704);´´.
    (d) LOW-INCOME PROGRAMS.—
       Section 255(h) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended as follows:
          (1) Amend the item relating to Child nutrition to read as follows:
             ``Child nutrition programs (with the exception of special milk programs) (12-3539-0-1-605);´´.
          (2) After the second item insert the following new items:
             ``Temporary assistance for needy families (75-1552-0-1-609);
             ``Contingency fund (75-1522-0-1-609);´´
             ``Child care entitlement to States (75-1550-0-1-609);
          (3) Amend the item relating to Women, infants, and children program to read as follows:
             ``Special supplemental nutrition program for women, infants, and children (WIC) (12-3510-0-1-605);´´.
          (4) After the last item add the following new item:
             ``Family support payments to States (75-1501-0-1-609);´´.
    (e) IDENTIFICATION OF PROGRAMS.—
       Section 255(i) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended to read as follows:
          ``(i) IDENTIFICATION OF PROGRAMS.— For purposes of subsections (b), (g), and (h), each account is identified by the designated budget account identification code number set forth in the Budget of the United States Government 1998-Appendix, and an activity within an account is designated by the name of the activity and the identification code number of the account.´´.
    (f) OPTIONAL EXEMPTION OF MILITARY PERSONNEL.—
       Section 255(h) of the Balanced Budget and Emergency Deficit Control Act of 1985 (relating to optional exemption of military personnel) is repealed.

### Sec. 10208. General and Special Sequestration Rules.

    (a) HEADINGS.—
          (1) SECTION.—
             The section heading of section 256 of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by striking ``EXCEPTIONS, LIMITATIONS, AND SPECIAL RULES´´ and inserting ``GENERAL AND SPECIAL SEQUESTRATION RULES´´.
          (2) TABLE OF CONTENTS.—
             The item relating to section 256 in the table contents set forth in section 250(a) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended to read as follows:
                ``SEC. 256. GENERAL AND SPECIAL SEQUESTRATION RULES.´´.
    (b) AUTOMATIC SPENDING INCREASES.—
       Section 256(a) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by striking paragraph (1) and redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively.
    (c) GUARANTEED AND DIRECT STUDENT LOAN PROGRAMS.—
       Section 256(b) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended to read as follows:
          ``(b) STUDENT LOANS.— For all student loans under part B or D of title IV of the Higher Education Act of 1965 made during the period when a sequestration order under section 254 is in effect as required by section 252 or 253, origination fees under sections 438(c)(2) and 455(c) of that Act shall each be increased by 0.50 percentage point.´´.
    (d) HEALTH CENTERS.—
       Section 256(e)(1) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by striking the dash and all that follows thereafter and inserting ``2 percent.´´.
    (e) TREATMENT OF FEDERAL ADMINISTRATIVE EXPENSES.—
       Section 256(h) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended—
          (1) in paragraph (2), by striking ``joint resolution´´ and inserting ``part´´; and
          (2) in paragraph (4), by striking subparagraphs (D) and (H), by redesignating subparagraphs (E), (F), (G), and (I), as subparagraphs (D), (E), (F), and (G), respectively, and by adding at the end the following new subparagraph:
             ``(H) Farm Credit Administration.´´.
    (f) COMMODITY CREDIT CORPORATION.—
       Section 256(j) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by striking paragraphs (2) through (5) and inserting the following:
          ``(2) REDUCTION IN PAYMENTS MADE UNDER CONTRACTS.—
                ``(A) Loan eligibility under any contract entered into with a person by the Commodity Credit Corporation prior to the time an order has been issued under section 254 shall not be reduced by an order subsequently issued. Subject to subparagraph (B), after an order is issued under such section for a fiscal year, any cash payments for loans or loan deficiencies made by the Commodity Credit Corporation shall be subject to reduction under the order.
                ``(B) Each loan contract entered into with producers or producer cooperatives with respect to a particular crop of a commodity and subject to reduction under subparagraph (A) shall be reduced in accordance with the same terms and conditions. If some, but not all, contracts applicable to a crop of a commodity have been entered into prior to the issuance of an order under section 254, the order shall provide that the necessary reduction in payments under contracts applicable to the commodity be uniformly applied to all contracts for the next succeeding crop of the commodity, under the authority provided in paragraph (3).
          ``(3) DELAYED REDUCTION IN OUTLAYS PERMISSIBLE.— Notwithstanding any other provision of this title, if an order under section 254 is issued with respect to a fiscal year, any reduction under the order applicable to contracts described in paragraph (1) may provide for reductions in outlays for the account involved to occur in the fiscal year following the fiscal year to which the order applies.
          ``(4) UNIFORM PERCENTAGE RATE OF REDUCTION AND OTHER LIMITATIONS.— All reductions described in paragraph (2) which are required to be made in connection with an order issued under section 254 with respect to a fiscal year shall be made so as to ensure that outlays for each program, project, activity, or account involved are reduced by a percentage rate that is uniform for all such programs, projects, activities, and accounts, and may not be made so as to achieve a percentage rate of reduction in any such item exceeding the rate specified in the order.
          ``(5) DAIRY PROGRAM.— Notwithstanding any other provision of this subsection, as the sole means of achieving any reduction in outlays under the milk price support program, the Secretary of Agriculture shall provide for a reduction to be made in the price received by producers for all milk produced in the United States and marketed by producers for commercial use. That price reduction (measured in cents per hundred weight of milk marketed) shall occur under section 201(d)(2)(A) of the Agricultural Act of 1949 (7 U.S.C. 1446(d)(2)(A)), shall begin on the day any sequestration order is issued under section 254, and shall not exceed the aggregate amount of the reduction in outlays under the milk price support program that otherwise would have been achieved by reducing payments for the purchase of milk or the products of milk under this subsection during the applicable fiscal year.´´.
    (g) EFFECTS OF SEQUESTRATION.—
       Section 256(k) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended as follows:
          (1) In paragraph (1), strike ``other than a trust or special fund account´´ and insert ``, except as provided in paragraph (5)´´ before the period.
          (2) Amend paragraph (6) to read as follows:
             ``(6) Budgetary resources sequestered in revolving, trust, and special fund accounts and offsetting collections sequestered in appropriation accounts shall not be available for obligation during the fiscal year in which the sequestration occurs, but shall be available in subsequent years to the extent otherwise provided in law.´´.

### Sec. 10209. The Baseline.

    (a) IN GENERAL.—
       Section 257 of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended—
          (1) in subsection (b)(2) by amending subparagraph (A) to read as follows:
             ``(A)(i) No program established by a law enacted on or before the date of enactment of the Balanced Budget Act of 1997/Title X 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 Budget or OMB, as applicable. OMB, CBO, and the Budget Committees shall consult on the scoring of such programs where there are differenes 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.´´;
          (2) by adding the end of subsection (b)(2) the following new subparagraph:
             ``(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) in the second sentence of subsection (c)(5), by striking ``national product fixed-weight price index´´ and inserting ``domestic product chain-type price index´´; and
          (4) by striking subsection (e) and inserting the following:
             ``(e) ASSET SALES.— Amounts realized from the sale of an asset shall not be included in estimates under section 251, 252, or 253 if that sale would result in a financial cost to the Federal Government as determined pursuant to scorekeeping guidelines.´´.
    (b) PRESIDENT'S BUDGET.—
       Section 1105(a) of title 31, United States Code, is amended by adding at the end the following:
          ``(32) a statement of the levels of budget authority and outlays for each program assumed to be extended in the baseline as provided in section 257(b)(2)(A) and for excise taxes assumed to be extended under section 257(b)(2)(C) of the Balanced Budget and Emergency Deficit Control Act of 1985.´´.
    (c) BUDGETARY TREATMENT OF CERTAIN TRUST FUND OPERATIONS.—
       Section 710 of the Social Security Act (42 U.S.C. 911) is amended to read as follows:
``Sec. 710. Budgetary Treatment of Trust Fund Operations.
    ``(a) The receipts and disbursements of the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund and the taxes imposed under sections 1401 and 3101 of the Internal Revenue Code of 1986 shall not be included in the totals of the budget of the United States Government as submitted by the President or of the congressional budget and shall be exempt from any general budget limitation imposed by statute on expenditures and net lending (budget outlays) of the United States Government.
    ``(b) No provision of law enacted after the date of enactment of the Balanced Budget and Emergency Deficit Control Act of 1985 (other than a provision of an appropriation Act that appropriated funds authorized under the Social Security Act as in effect on the date of the enactment of the Balanced Budget and Emergency Deficit Control Act of 1985) may provide for payments from the general fund of the Treasury to any Trust Fund specified in subsection (a) or for payments from any such Trust Fund to the general fund of the Treasury.´´.

### Sec. 10210. Technical Correction.

    Section 258 of the Balanced Budget and Emergency Deficit Control Act of 1985, entitled ``Modification of Presidential Order´´, is repealed.

### Sec. 10211. Judicial Review.

    Section 274 of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended as follows:
          (1) Strike ``252´´ or ``252(b)´´ each place it occurs and insert ``254´´.
          (2) In subsection (d)(1)(A), strike ``257(l) to the extent that´´ and insert ``256(a) if´´ and at the end insert ``or´´.
          (3) In subsection (d)(1)(B), strike ``new budget´´ and all that follows through ``spending authority´´ and insert ``budgetary resources´´ and strike ``or´´ after the comma.
          (4) Strike subsection (d)(1)(C).
          (5) Strike subsection (f) and redesignate subsections (g) and (h) as subsections (f) and (g), respectively.
          (6) In subsection (g) (as redesignated), strike ``base levels of total revenues and total budget outlays, as´´ and insert ``figures´´, and strike ``251(a)(2)(B) or (c)(2),´´ and insert ``254´´.

### Sec. 10212. Effective Date.

    (a) EXPIRATION.—
       Section 275(b) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended—
          (1) by striking ``Part C of this title, section´´ and inserting ``Sections 251, 253, 258B, and´´;
          (2) by striking ``1995´´ and inserting ``2002´´; and
          (3) by adding at the end the following new sentence: ``The remaining sections of part C of this title shall expire September 30, 2006.´´.
    (b) EXPIRATION.—
       Section 14002(c)(3) of the Omnibus Budget Reconciliation Act of 1993 (2 U.S.C. 900 note) is repealed.

### Sec. 10213. Reduction of Preexisting Balances and Exclusion of Effects of this Act from PAYGO Scorecard.

    Upon the enactment of this Act, the Director of the Office of Management and Budget shall—
          (1) reduce any balances of direct spending and receipts legislation for any fiscal year under section 252 of the Balanced Budget and Emergency Deficit Control Act of 1985 to zero; and
          (2) not make any estimates of changes in direct spending outlays and receipts under subsection (d) of that section for any fiscal year resulting from the enactment of this Act or of the Taxpayer Relief Act of 1997.