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[House Report 107-200]
[From the U.S. Government Publishing Office]

107th Congress                                            Rept. 107-200
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1

======================================================================

 
           COMMISSION ON FEDERAL BUDGET CONCEPTS ACT OF 2001
                                _______
                                

               September 5, 2001.--Ordered to be printed

                                _______
                                

 Mr. Nussle, from the Committee on the Budget, submitted the following

                              R E P O R T

                             together with

                           SUPPLEMENTAL VIEWS

                        [To accompany H.R. 981]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on the Budget, to whom was referred the bill 
(H.R. 981) to provide a biennial budget for the United State 
Government, having considered the same, report favorably 
thereon with amendments and recommend that the bill as amended 
do pass.
  The amendments are as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Commission on Federal Budget Concepts 
Act of 2001''.

SEC. 2. FINDINGS AND PURPOSE.

  (a) Findings.--Congress finds that--
          (1) President Lyndon Johnson created the Commission on 
        Federal Budget Concepts in 1967 by executive order to assess 
        the basic budget concepts that underlie the Federal budget 
        process;
          (2) the Commission's report provided a common framework for 
        the development, presentation, and execution of the Federal 
        budget for the ensuing decades;
          (3) since the release of that report, the Federal Government 
        has experienced major changes in the scope of its financial 
        commitments, the nature of its various budget transactions, the 
        role of Congress in budget decisions, and the imposition of 
        special controls over spending and revenue; and
          (4) in view of these changes, a new Commission on Federal 
        Budget Concepts should be created to assess the present state 
        of budget concepts and forge a bipartisan consensus for 
        necessary changes.
  (b) Purpose.--The purpose of this Act is to establish the Commission 
on Federal Budget Concepts to review, evaluate, and make 
recommendations respecting the budget concepts that underlie the 
Federal budget and the Federal budget process and to assess the 
feasibility of changing from an annual to a biennial budget cycle.

SEC. 3. ESTABLISHMENT OF COMMISSION ON FEDERAL BUDGET CONCEPTS.

  There is established a commission to be known as the Commission on 
Federal Budget Concepts (hereinafter referred to as the 
``Commission'').

SEC. 4. POWERS AND DUTIES OF COMMISSION.

  (a) Duties of the Commission.--
          (1) The duties of the Commission shall include--
                  (A) an identification of activities, entities, and 
                transactions to be included in the Federal budget and 
                the criteria for making such determinations;
                  (B) an assessment of the appropriate measures of 
                Federal financial commitments to allocate resources and 
                establish fiscal policy;
                  (C) an evaluation of the differences between user 
                fees and revenue, and between various forms of user 
                fees, and the circumstances when such fees should be 
                accounted for as offsetting spending or adding to 
                revenue;
                  (D) an appraisal of the appropriate usage of cash and 
                accrual-based measures for various types of Federal 
                financial commitments, such as Government insurance, 
                loan guarantees, and leasing;
                  (E) recommendations of the appropriate means for 
                recognizing the cost of acquisition and disposition of 
                various types of nonfinancial assets;
                  (F) an evaluation of appropriate measures of Federal 
                debt, borrowing, and means of financing;
                  (G) an assessment of the adequacy of the current 
                account and fund structure for recording revenue and 
                expenditures for specific classes of governmental 
                activities;
                  (H) recommendations for changes in Federal budget 
                practices to accommodate the Federal Accounting 
                Standards Advisory Board's recommended accounting 
                standards;
                  (I) recommendations for changes in budget practices 
                to reflect the Federal Government's multi-year 
                acquisitions;
                  (J) the appropriate means of accounting for the 
                financial risk the Federal Government incurs from 
                contractual and implied commitments; and
                  (K) an assessment of the value and feasibility of 
                changing the Federal budget cycle from annual to 
                biennial.
          (2) Exceptions.--Notwithstanding paragraph (1), the 
        Commission shall make no findings, conclusions, or 
        recommendations respecting the following:
                  (A) Social security and medicare.
                  (B) Budget estimates and projections that assume that 
                selected tax policies will increase gross domestic 
                product and thereby cause an indirect increase in 
                revenue, or that assume that increased spending for 
                human resources or capital development will cause an 
                indirect reduction in spending for other programs.
                  (C) Government-sponsored enterprises.
  (b) Powers of the Commission.--
          (1) Conduct of business.--The Commission may hold hearings, 
        take testimony, receive evidence, and undertake such other 
        activities necessary to carry out its duties.
          (2) Access to information.--The Commission may secure 
        directly from any department of agency of the United States 
        information necessary to carry out its duties. Upon request of 
        the Chair of the Commission, the head of that department or 
        agency shall furnish that information to the Commission.
          (3) Postal service.--The Commission may use the United States 
        mails in the same manner and under the same conditions as other 
        departments and agencies of the United States.

SEC. 5. MEMBERSHIP.

  (a) Membership.--The Commission shall be composed of 14 voting 
members and 2 nonvoting members, as follows:
          (1) Three members appointed by the chairman of the Committee 
        on the Budget of the Senate.
          (2) Three members appointed by the chairman of the Committee 
        on the Budget of the House of Representatives.
          (3) Three members appointed by the ranking member of the 
        Committee on the Budget of the Senate.
          (4) Three members appointed by the ranking member of the 
        Committee on the Budget of the House of Representatives.
          (5) The Director of the Office of Management and Budget (or 
        his designee).
          (6) The Secretary of the Treasury (or his designee).
          (7) The Comptroller General of the United States (or his 
        designee) and the Director of the Congressional Budget Office 
        (or his designee), who shall be nonvoting members.
  (b) Qualifications and Term.--
          (1) Qualifications.--Members appointed to the Commission 
        pursuant to subsection (a) shall--
                  (A) have expertise and experience in the fields or 
                disciplines related to the subject areas to be 
                considered by the Commission; and
                  (B) not be Members of Congress.
          (2) Term of appointment.--The term of an appointment to the 
        Commission shall be for the life of the Commission.
          (3) Chair and vice chair.--The member of the Commission 
        serving under subsection (a)(5) shall be the Chair of the 
        Commission. A Vice Chair may be elected from among the voting 
        members of the Commission and shall assume the duties of the 
        Chair in the Chair's absence.
  (c) Meetings; Quorum; and Vacancies.--
          (1) Meetings.--The Commission shall meet at least once a 
        month on a day to be decided by the Commission. The Commission 
        may meet at such other times at the call of the Chair or of a 
        majority of its voting members. The meetings of the Commission 
        shall be open to the public, unless by public vote, the 
        Commission shall determine to close a meeting or any portion of 
        a meeting to the public.
          (2) Quorum.--A majority of the voting membership shall 
        constitute a quorum of the Commission, except that 3 or more 
        voting members may conduct hearings.
          (3) Vacancies.--A vacancy on the Commission shall be filled 
        in the same manner in which the original appointment was filled 
        under subsection (a).
  (d) Compensation and Expenses.--Members of the Commission shall serve 
without pay for their service on the Commission, but may receive travel 
expenses, including per diem in lieu of subsistence, at rates 
authorized for employees of agencies under subchapter I of chapter 57 
of title 5, United States Code.

SEC. 6. STAFF AND SUPPORT SERVICES.

  (a) Staff.--With the advance approval of the Commission, the 
executive director may appoint such personnel as is appropriate. The 
staff of the Commission shall be appointed without regard to political 
affiliation and without regard to the provisions of title 5, United 
States Code, governing appointments in the competitive service, and may 
be paid without regard to the provisions of chapter 51 and subchapter 
III of chapter 53 of such title relating to classifications and General 
Schedule pay rates.
  (b) Executive Director.--The Chairman shall appoint an executive 
director, who shall be paid the rate of basic pay for level II of the 
Executive Schedule.
  (c) Experts and Consultants.--With the advance approval of the 
Commission, the executive director may procure temporary and 
intermittent services under section 3109(b) of title 5, United States 
Code.
  (d) Technical and Administrative Assistance.--Upon the request of the 
Commission--
          (1) the head of any agency, office, or establishment within 
        the executive or legislative branches of the United States 
        shall provide, without reimbursement, such technical assistance 
        as the Commission determines is necessary to carry out its 
        duties; and
          (2) the Administrator of the General Services Administration 
        shall provide, on a reimbursable basis, such administrative 
        support services as the Commission may require.
  (e) Detail of Federal Personnel.--Upon the request of the Commission, 
the head of an agency, office, or establishment in the executive or 
legislative branch of the United States is authorized to detail, 
without reimbursement, any of the personnel of that agency, office, or 
establishment to the Commission to assist the Commission in carrying 
out its duties. Any such detail shall not interrupt or otherwise affect 
the employment status or privileges of that employee.
  (f) CBO.--The Director of the Congressional Budget Office shall 
provide the Commission with its latest research on the accuracy of its 
past budget and economic projections as compared to those of the Office 
of Management and Budget and, if possible, those of private sector 
forecasters. The Commission shall work with the Directors of the 
Congressional Budget Office and the Office of Management and Budget in 
their efforts to explain the factors affecting the accuracy of budget 
projections.

SEC. 7. REPORT.

  Not later than November 15, 2002, the Commission shall transmit a 
report to the President and to each House of Congress. The report shall 
contain a detailed statement of the findings and conclusions of the 
Commission, together with its recommendations for such legislative or 
administrative actions as it considers appropriate. No finding, 
conclusion, or recommendation may be made by the Commission unless 
approved by a majority of those voting (including in such majority at 
least two members serving under paragraph (2), (3), (5), or (6) of 
section 5(a) and at least two members serving under paragraph (1) or 
(4) of such section), a quorum being present. At the request of any 
Commission member, the report shall include that member's dissenting 
findings, conclusions, or recommendations.

SEC. 8. TERMINATION.

  The Commission shall terminate 30 days after the date of transmission 
of the report required in section 7.

SEC. 9. FUNDING.

  There are authorized to be appropriated not more than $1,000,000 to 
carry out this Act. Sums so appropriated shall remain available until 
expended.

  Amend the title so as to read:

    A bill to establish the Commission on Federal Budget 
Concepts.

                             BRIEF SUMMARY

    H.R. 981, the ``Commission on Federal Budget Concepts Act 
of 2001,'' establishes a 16-member commission to review, 
evaluate, and make recommendations respecting the budget 
concepts that underlie the Federal budget and the Federal 
budget process.

                          LEGISLATIVE HISTORY

    On March 3, 1967, President Lyndon B. Johnson established a 
Commission of experts to evaluate budget concepts that underlie 
the Federal budget and the budget process. This Commission was 
known as the President's Commission on Budget Concepts. The 
Commission delivered its report to President Johnson in October 
of 1967.
    The 1967 Commission recommended the institution of a 
unitary budget that would include all receipts, expenditures, 
and direct lending activity. The practice in 1967 was for the 
President to submit three different budgets to Congress 
(administrative, consolidated cash, and national income and 
product accounts), which worked to obscure the overall budget 
picture. The Commission's additional recommendations included:
           broadening the definition of appropriations 
        to include all types of obligating authority;
           including all Federal programs in the 
        budget;
           reporting expenditures and receipts as they 
        become due rather than when the payments are actually 
        made or received. In other words, moving from cash 
        accounting to accrual accounting;
           distinguishing loans from expenditures in 
        the calculation of the surplus or deficit;
           excluding insurance and loan guarantees from 
        budget totals;
           treating non-tax receipts that are 
        enterprise oriented as offsets to their related 
        expenditures;
           providing more frequent mid-session updates 
        on the budget projections; and
           extending budget estimates farther into the 
        future.
    In addition, the Commission strongly recommended against 
the creation of a capital budget.
    The Johnson Administration adopted the Commission's most 
significant recommendation and presented a unitary budget to 
Congress for fiscal year 1969. In addition, the Commission's 
recommendations serve as the foundation for most budgetary 
concepts used at the present time. Despite the success of the 
1967 Commission, no similar Commission has been established 
since then.
    In the 106th and 107th Congresses, Representative George P. 
Radanovich introduced bills to establish the National 
Commission on Budget Concepts. These bills, H.R. 5233 (106th 
Congress) and H.R. 2307 (107th Congress), were referred to the 
House Committee on the Budget.
    At a House Budget Committee hearing, ``H.R. 853, The 
Comprehensive Budget Process Reform Act of 1999,'' on May 20, 
1999, Dan L. Crippen, the Director of the Congressional Budget 
Office, testified in favor of establishing a new Commission on 
Budget Concepts. Director Crippen testified:

          Finally, the extensive changes proposed by the bill 
        also suggest a broader issue of budget process reform 
        that I think should be addressed. It is time to convene 
        a new Commission on Federal Budget Concepts. In 
        general, Federal budget concepts are based on the 
        recommendations of the 1967 President's Commission on 
        Budget Concepts. Although the Commission's guidelines 
        continue to apply broadly in the budget process, they 
        do not address certain fundamental issues that 
        lawmakers and budget scorekeepers currently face. For 
        example, various proposals to reform Social Security, 
        especially those that call for personal retirement 
        accounts, raise thorny issues about the appropriate 
        budgetary treatment. Further, the dividing line between 
        Federal spending and revenue law has become blurred, as 
        evidenced by the increasing use of refundable tax 
        credits as a device for expanding budgetary resources. 
        The use of public private partnerships, such as those 
        involving military housing and various lease-purchase 
        arrangements, also raises questions of budgetary 
        treatment for which the Commission's original 
        recommendations provide little or no guidance.
          These and other issues put budget scorekeepers in a 
        difficult position as they seek to apply outdated or 
        incomplete concepts to novel policies. That situation 
        suggests the need to reevaluate current budgetary 
        concepts and to try to reach a consensus on changes 
        that will make them clearer and more comprehensive.

    At a June 27, 2001 House Budget Committee hearing, 
``Forthcoming Extension/Modification of the Budget Enforcement 
Act,'' Director Crippen again testified to the need for a new 
budget concepts commission. Director Crippen followed up on his 
June 27 testimony with a letter dated July 5, 2001. In this 
letter, Director Crippen enclosed a list of potential topics 
for a new budget concepts commission.
    At a July 19, 2001 House Budget Committee hearing, 
``Structural Reform of the Federal Budget Process,'' the Deputy 
Director of the Congressional Budget Office, Barry B. Anderson, 
testified in favor of establishing a new budget process 
commission. Deputy Director Anderson testified that the 1967 
Commission's report left a number of ``thorny'' questions that 
could be resolved by a new Commission on Budget Concepts. 
Deputy Director Anderson explained many of the issues that 
remain unresolved and urged the Committee to support the 
establishment of a new Commission.
    On August 3, 2001, Chairman Jim Nussle and Ranking Minority 
Member John M. Spratt Jr. offered an amendment in the nature of 
a substitute to H.R. 981, the ``Budget Responsibility and 
Efficiency Act of 2001,'' during the House Budget Committee 
markup on that bill. The amendment in the nature of a 
substitute, the ``Commission on Federal Budget Concepts Act of 
2001,'' replaced the entire text of H.R. 981. The Committee 
adopted the amendment in the nature of a substitute by a voice 
vote. Also by a voice vote, the Committee ordered H.R. 981, as 
amended, reported to the House of Representatives.

                               BACKGROUND

    In 1967, the President's Commission on Budget Concepts 
issued a report making recommendations for modifications of the 
Federal budget process. The recommendations were largely 
adopted through legislative or executive action. The impact of 
the report has been lasting and beneficial. In adopting many of 
the recommendations, the Federal budget changed markedly both 
in form and content. Perhaps the main recommendation made by 
the commission was to replace the system used at the time with 
a single, summary budget statement, rather than three or more 
different budgets.
    Before the changes made pursuant to the commission's 
report, three different federal budgets were produced and used 
during the 1960s: the administrative budget, the consolidated 
cash budget, and the national income and product accounts 
budget. The commission's recommendations helped to create a 
unitary Federal budget.
    Other recommendations included making the budget part of a 
broad financial plan and including appropriations, receipts, 
outlays, net lending, and the means of financing the deficit. 
It recommended shifting from cash-based budgeting to accrual 
budgeting for specific classes of obligations. This last item 
was adopted for loans and loan guarantees and continues to be 
considered for use in other appropriate areas. The commission 
also suggested that a distinction be made between loans and 
other expenses in the budget, an identification of loan 
subsidies, and for a means of financing section in the budget.
    Yet, since the issuance of the report, there have been 
major changes in the the budget process and in the scope of the 
Federal government. Since the late 1960s, the Federal 
government has moved away from simply purchasing goods and 
services and toward the provision of entitlements and other 
benefits. In addition, a radical transformation in information 
technology now allows those who participate in creating the 
Federal budget to take advantage of new forms of data and to 
analyze it at a more efficient and rapid pace. Since the 1967 
Commission made its recommendations, Congress has taken a more 
expansive role in determining and establishing budget 
priorities.
    In 1974, Congress enacted the Congressional Budget and 
Impoundment Control Act that significantly changed the process 
whereby decisions are made and legislation considered on the 
respective floors of Congress. Prior to that year, no 
comprehensive legislative document was prepared to guide 
members of Congress as to the overall appropriate spending and 
revenue levels. In addition, the practice of the President 
``impounding,'' or refusing to spend appropriated funds, was 
ended. This asserted a Congressional role in an overall 
budgetary framework--a role Congress had been conducting 
piecemeal through various appropriation bills.
    This was followed by significant legislative reforms in 
1985 with the passage of the Balanced Budget and Emergency 
Deficit Control Act, and in 1990 with the Budget Enforcement 
Act. These two additions to the U.S. Code provided Congress 
with a means to attempt to control deficits. Congressional and 
other Federal spending decision makers are now faced with the 
expiration of elements of the budget process that have served 
for just over a decade. The major enforcement procedures 
produced under these two acts, and which were extended in 1993 
and 1997, will expire at the end of 2002. Those procedures, 
which cap discretionary spending, appropriations, and require 
offsets for tax and entitlement legislation, have provided a 
companion structure to the Congressional budget process for 
budgetary decision making.
    The significant changes in the way the Federal government 
budgets, the newly decisive participation of Congress in 
budgetary decision making, and the greatly increased complexity 
of government programs are all reasons that the budget process 
needs to be re-evaluated. However, fundamental changes in 
budgeting procedures should not take place in isolation. In 
reforming this process, a newly created budget concepts 
commission will assist Congress in coming to decisions in a 
deliberate, comprehensive way, rather than through piecemeal 
changes.
    These and other changes call for reconstituting a budget 
commission that could, where necessary, reconcile procedures 
and conventions to the new budget environment, and reaffirm 
those that transcend changes brought on by specific budgetary 
needs. A commission is uniquely suited to establishing a 
consensus as what should be included in the budget and how such 
obligations should be recorded. It offers a forum for experts 
of all political persuasions to establish a conceptual 
framework for making budgetary decisions apart from the highly 
charged discussions on specific budget priorities.
    Finally, the Budget Committee believes that an agreement on 
basic budget concepts is an important prerequisite for reforms 
in the process by which the Congress makes budgetary decisions. 
It seems reasonable that Congress and the President should 
first reach an agreement on what commitments should be 
reflected in the budget and how these commitments should be 
measured before they turn their attention to the procedures by 
which they prioritize these commitments.

                           SECTION-BY-SECTION

Section 1. Short title

    This provides that the act may be cited as the ``Commission 
on Federal Budget Concepts Act of 2001''.

Section 2. Findings and purpose

            (a) Findings
    Subsection (a) sets forth four findings that provide the 
context for a new Concepts Commission. They are as follows: (1) 
President Lyndon Johnson created the Commission on Federal 
Budget Concepts in 1967 by executive order to assess the basic 
budget concepts that underlie the Federal budget process; (2) 
the Commission's report provided a common framework for the 
development, presentation, and execution of the Federal budget 
for the ensuing decades; (3) since the release of that report, 
the Federal Government has experienced major changes in the 
scope of its financial commitments, the nature of its various 
budget transactions, the role of Congress in budget decisions, 
and the imposition of special controls over spending and 
revenue; and (4) in view of these changes, a new Commission on 
Federal Budget Concepts should be created to assess the present 
state of budget concepts and forge a bipartisan consensus for 
necessary changes.
            (b) Purpose
    This subsection states that the purpose of the act is to 
establish the Commission on Federal Budget Concepts, which is 
to review, evaluate, and make recommendations respecting the 
budget concepts that underlie the Federal budget and the 
Federal budget process and to assess the feasibility of 
changing from an annual to a biennial budget cycle.

Section 3. Establishment of Commission on Federal Budget Concepts

    This section establishes the Commission on Federal Budget 
Concepts.

Section 4. Powers and duties of Commission

            (a) Duties of the Commission
    This subsection delineates the duties of the commission. 
They are as follows: (1) an identification of activities, 
entities, and transactions to be included in the Federal budget 
and the criteria for making such determinations; (2) an 
assessment of the appropriate measures of Federal financial 
commitments to allocate resources and establish fiscal policy; 
(3) an evaluation of the differences between user fees and 
revenue, and among various forms of user fees, and the 
circumstances when such fees should be accounted for as 
offsetting spending or adding to revenue; (4) an appraisal of 
the appropriate usage of cash and accrual-based measures for 
various types of Federal financial commitments, such as 
Government insurance, loan guarantees, and leasing; (5) 
recommendations on the appropriate means for recognizing the 
cost of acquisition and disposition of various types of 
nonfinancial assets; (6) an evaluation of appropriate measures 
of Federal debt, borrowing, and means of financing; (7) an 
assessment of the adequacy of the current account and fund 
structure for recording revenue and expenditures for specific 
classes of governmental activities; (8) recommendations for 
changes in Federal budget practices to accommodate the Federal 
Accounting Standards Advisory Board's recommended accounting 
standards; (9) recommendations for changes in budget practices 
to reflect the Federal Government's multi-year acquisitions; 
(10) the appropriate means of accounting for the financial risk 
the Federal Government incurs from contractual and implied 
commitments; and (11) an assessment of the value and 
feasibility of changing the Federal budget cycle from annual to 
biennial. This list is not exclusive and it is expected that 
the members may raise additional subjects on their own.
    This subsection also includes several exceptions to the 
duties of the Commission. It provides that it may make no 
findings, conclusions, or recommendations respecting the 
following: (1) Social security and medicare; (2) budget 
estimates and projections that assume that selected tax 
policies will increase gross domestic product and thereby cause 
an indirect increase in revenue, or that assume that increased 
spending for human resources or capital development will cause 
an indirect reduction in spending for other programs; and (3) 
government-sponsored enterprises.
            (b) Powers of the Commission
    Subsection (b) enumerates the specific powers of the 
Commission. The Commission may hold hearings, take testimony, 
receive evidence, and undertake any other activities necessary 
to carry out its duties. It is authorized to receive from a 
United States government agency any information necessary to 
carry out its duties. If the Chair of the Commission so 
requests, the head of a department or agency must furnish 
information to the Commission. It also provides that the 
Commission may use the United States mails in the same manner 
and under the same conditions as other departments and agencies 
of the United States.

Section 5. Membership

            (a) Membership
    The Commission will have 16 members, including two non-
voting members. Twelve of the members will be appointees. The 
Chairmen of the House and Senate Budget Committees and the 
Ranking Members of the House and Senate Budget Committees will 
each appoint three members to the Commission. The Director of 
the Office of Management and Budget and the Secretary of the 
Treasury or their designees will also be Members of the 
Commission.
    In addition, the Comptroller General of the United States 
and the Director of Congressional Budget Office or their 
designees will be non-voting Members of the Commission.
            (b) Qualifications and term
    Subsection (b) stipulates that Members appointed to the 
Commission must have expertise and experience in the fields and 
disciplines related to the budget concepts under consideration. 
Members of Congress may not be appointed to the Commission. 
Commission members will be appointed for the life of the 
Commission.
    The Director of the Office of Management and Budget or the 
member serving as the Director's designee will chair the 
Commission. The Commission may also elect a Vice Chairman to 
serve in case of the Chairman's absence. The Comptroller 
General and the Director of the Congressional Budget Office 
will not be eligible to be the Vice Chairman.
            (c) Meetings; quorums; and vacancies
    Subsection (c) requires the Commission to meet at least 
once a month. The Commission may meet on additional days at the 
call of the Chair or by a majority of the Commission's voting 
members. Meetings must be open to the public unless the 
Commission votes to close a meeting to the public.
    A majority of the Commission's voting membership will 
constitute a minimum quorum for conducting any business, but 
three voting members will be sufficient for taking testimony.
    Vacancies will be filled in the same manner as the original 
appointment.
            (b) Compensation and expenses
    Commission members will not be paid for their services. 
However, Commission members may receive travel expenses. Travel 
expenses will be paid at rates authorized for Federal 
employees.

Section 6. Staff and support services

            (a) Staff
    With the approval of the Commission, the executive director 
may appoint appropriate personnel. Staff appointments will be 
made without regard to political affiliation. In addition, 
staff may be paid without regard to personnel classifications 
and General Schedule pay rates.
            (b) Executive director
    The Chairman will appoint an executive director. The 
executive director will be paid the basic rate of pay for level 
II of the Executive schedule--$145,100 in 2001.
            (c) Experts and consultants
    With the approval of the Commission, the executive director 
may also hire consultants and experts pursuant to such 
restrictions on contracts as required by Title 5 of the United 
States Code.
            (d) Technical and administrative assistance
    Subsection (d) directs Executive and Legislative agencies 
to provide technical assistance to the Commission as requested. 
Such assistance will be provided without reimbursement from the 
Commission. The General Service Agency will provide 
administrative support services as requested by the Commission. 
The Commission will reimburse the General Service Agency for 
the cost of such services.
            (e) Detail of Federal personnel
    Legislative and Executive agencies and offices are 
authorized to detail personnel to the Commission if requested 
by the Commission. Agencies and offices will not be reimbursed 
for the detail.
            (f) CBO
    The Congressional Budget Office (CBO) is required to 
provide the Commission with CBO's latest research on the 
accuracy of its budget forecasts and economic projections. The 
CBO is further required to compare its forecasts and 
projections with those prepared by the Office of Management and 
Budget and where possible with private sector projections. The 
Commission will cooperate with the Directors of the 
Congressional Budget Office and the Office of Management and 
Budget in their efforts to explain the reasons for the accuracy 
of budget projections.

Section 7. Report

    Section 7 directs the Commission to deliver its final 
report to the President and Congress by November 15, 2002. The 
report is required to contain a detailed statement of the 
Commission's findings and conclusions. The Commission is also 
required to report its recommendations for legislative and 
administrative actions.
    The report must be approved by a majority of the 
Commission's voting members. It is the intent of the Committee 
that the majority voting to approve the report will include at 
least two members from each major political party. The bill 
requires that the reporting majority include at least two 
members from among those members appointed by the Chairman of 
the Senate Budget Committee and the Ranking Minority Member of 
the House Budget Committee. Likewise the reporting majority 
must also include two members from the group including the 
Director of the Office of Management and Budget, the Secretary 
of the Treasury, and those members appointed by the House 
Budget Committee Chairman and the Ranking Minority Member of 
the Senate Budget Committee.
    Any Commission member may include dissenting findings, 
conclusions or recommendations in the Commission's final 
report.

Section 8. Termination

    The Commission will terminate thirty days after it delivers 
its final report to the Congress and the President of the 
United States.

Section 9. Funding

    The bill authorizes up to $1 million to be appropriated for 
the purposes of the Commission established by this bill.

                       EXPLANATION OF AMENDMENTS

    The Amendment in the Nature of a Substitute is explained in 
the body of this report.

              APPLICATION OF LAW TO THE LEGISLATIVE BRANCH

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch. This bill establishes a Commission on Federal Budget 
Concepts to review, evaluate, and make recommendations 
respecting budget concepts that underlie the Federal budget and 
the Federal budget process and to assess the feasibility of 
changing from an annual to a biennial budget. The bill does not 
permit Members of Congress to be appointed as Members of the 
Commission, but employees of the legislative branch may be 
appointed as Members of the Commission and may also be detailed 
to the staff of the Commission.

                       UNFUNDED MANDATE STATEMENT

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandates Reform Act, P.L. 104-4) requires a statement of 
whether the provisions of the reported bill include unfunded 
mandates. This bill establishes a Commission on Federal Budget 
Concepts to review, evaluate, and make recommendations 
respecting budget concepts that underlie the Federal budget and 
the Federal budget process and to assess the feasibility of 
changing from an annual to a biennial budget. As such, the bill 
does not contain any unfunded mandates.

                             ROLLCALL VOTES

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee Report to include for 
each record vote on a motion to report the measure or matter 
and on any amendments offered to the measure or matter, the 
total number of votes for and against, and the names of the 
Members voting for and against. No recorded votes were taken on 
H.R. 981. An Amendment in the Nature of a Substitute was 
adopted by voice vote. H.R. 981 was ordered to be reported by 
voice vote.

  STATEMENT OF OVERSIGHT FINDINGS AND RECOMMENDATIONS OF THE COMMITTEE

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the body of this report.

                   CONSTITUTIONAL AUTHORITY STATEMENT

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional authority for this legislation is provided in 
Article I, section 8, clause 18, which grants Congress the 
general legislative power to make all laws necessary and proper 
for carrying into execution the enumerated powers of Congress.

                           COMMITTEE ESTIMATE

    Clauses 3(d)(2) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
H.R. 981. However, clause 3(d)(3)(B) of that rule provides that 
this requirement does not apply when the Committee has included 
in its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 402 of the Congressional Budget Act. An estimate 
prepared by the Congressional Budget Office is included below.

                  CONGRESSIONAL BUDGET OFFICE ESTIMATE

H.R. 981--Commission on Federal Budget Concepts Act of 2001

    CBO estimates that implementing H.R. 981 would cost $1 
million over the 2002-2003 period, assuming appropriation of 
the authorized amount. The bill would not affect direct 
spending or receipts, so pay-as-you-go procedures would not 
apply. The bill contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    H.R. 981 would establish a Commission on Federal Budget 
Concepts and would authorize the appropriation of $1 million 
for its activities. The commission would be directed to review, 
evaluate, and make recommendations on the budget concepts that 
underlie the federal budget and budget process and to assess 
the feasibility of converting from an annual to a biennial 
budget cycle. The bill would prohibit the commission from 
addressing or making recommendations on Social Security, 
Medicare, certain macroeconomic effects of policy changes, or 
government-sponsored enterprises. The commission would be 
required to report to the President and the Congress no later 
than November 15, 2002, and would terminate 30 days after 
transmitting its report.
    The commission would be composed of 14 voting members, 
including the Director of the Office of Management and Budget 
and the Secretary of the Treasury. The Comptroller General and 
the Director of the Congressional Budget Office would serve as 
nonvoting members. Members of the commission would serve 
without compensation. The chairman would be authorized to 
appoint an executive director, who could hire temporary staff 
and procure other services as authorized by law. Federal 
agencies could provide technical and administrative support 
under certain conditions. CBO estimates that the costs incurred 
by federal agencies would not be significant.
    The CBO staff contact for this estimate is Sandy Davis. 
This estimate was approved by Robert A. Sunshine, Assistant 
Director for Budget Analysis.

         STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

    In accordance with Clause (3)(c)(4) of House Rule XIII, the 
goals of H.R. 981 are to establish a Commission on Federal 
Budget Concepts that will review, evaluate, and make 
recommendations respecting budget concepts that underlie the 
Federal budget and the Federal budget process and to assess the 
feasibility of changing from an annual to a biennial budget. 
The Committee expects the Office of Management and Budget to 
comply with H.R. 981 and implement the changes to the law in 
accordance with these stated goals.

   NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
981 would result in no new or increased budget authority, 
entitlement authority, or tax expenditures or revenues.

                           SUPPLEMENTAL VIEWS

    I submit the attached letter as ``Supplemental Views'' to 
be included in the Budget Committee's report on the Commission 
on Federal Budget Concepts Act of 2001, the bill voted out of 
committee as a substitute to H.R. 981, the Budget 
Responsibility and Efficiency Act of 2001.
                                                John M. Spratt, Jr.
    Enclosure.
                          House of Representatives,
                                   Committee on the Budget,
                                    Washington, DC, August 1, 2001.
    Dear Budget Committee Colleague: When the Committee takes 
up H.R. 981 tomorrow, we will offer a bipartisan substitute 
amendment to create a Commission on Federal Budget Concepts. 
This letter is intended to explain our proposal, and to urge 
your support for our amendment.
    First, we are considering H.R. 981--the Budget 
Responsibility and Efficiency Act of 2001, cosponsored by our 
friends and Committee colleagues Charlie Bass and Bob Clement--
under conditions we would not have chosen. Through an 
unprecedented procedure, we have been required to act on this 
biennial budgeting bill by September 5, or be discharged from 
further consideration of it. We do not want to see the 
jurisdiction of the Committee on the Budget eroded through 
inaction. Equally important, we do not believe such a 
fundamental change in budgeting procedures should be considered 
in isolation. The budget process needs to be reformed in a 
comprehensive way. Adopting a piecemeal change such as this 
risks creating the illusion that budget process reform is 
complete--and depriving us of any further reform opportunities.
    Regarding the merits of biennial budgeting, we respect the 
earnest arguments of its proponents, but we have doubts that it 
can provide the returns promised. We believe that the 
difficulties Congress faces every autumn arise not from the 
frequency of the budget process, but because of the passionate 
disagreements over fiscal policy and how to allocate those 
resources across competing priorities. We fear that, by 
limiting the opportunities for Congress to adapt the budget to 
constantly changing economic conditions and needs of the 
voters, this bill could make it far more difficult to keep the 
budget in balance. We are concerned that biennial budgeting 
might actually reduce effective oversight, by reducing the 
number of times Appropriations subcommittees weigh the funding 
requests of Federal agencies--which are the times those 
agencies are most attentive to Congressional concerns.
    But regardless of our positions on biennial budgeting, we 
do need to overhaul not only how we conduct the process, but 
also how we think and talk about the budget, and how we analyze 
it. That is the reason for the Commission on Federal Budget 
Concepts that we propose. Not since the 1967 Budget 
Commission--which laid the cornerstone of our current budget--
have we assessed the concepts that underlie the budget. It is 
doubtful we can adequately update the budget process while 
retaining basic budget measurement concepts that are more than 
3 decades old. Some fundamental budget issues remain 
unresolved, causing the budget to measure some commitments and 
receipts inaccurately. These inaccuracies encourage Congress to 
adopt policies that make sense only because they are 
inaccurately reflected in the budget.
    The Commission we propose would, among other things, 
reassess the appropriate measures of Federal spending; evaluate 
differences between ``revenues'' and various forms of user 
fees; appraise the appropriate use of cash and accrual-based 
measures for various long-term Federal commitments; assess the 
adequacy of the current Government account and fund structure; 
review potential changes in budget practices to reflect the 
Federal Government's multiyear commitments for various 
acquisitions; and assess the value and feasibility of moving to 
a biennial budget cycle. By resolving these and other issues, 
the Congress will be able to adopt more transparent budgets 
that encourage better policies.
    We have agreed on the need for this Commission, its 
purview, its Membership, and its structure. We urge your 
support for our amendment.
            Sincerely,
                                   Jim Nussle,
                                           Chairman.
                                   John M. Spratt, Jr.,
                                           Ranking Member.

                                
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