I

104TH CONGRESS

1ST SESSION H. R. 13

To amend the Internal Revenue Code of 1986 to allow individuals to designate

that up to 10 percent of their income tax liability be used to reduce

the national debt, and to require spending reductions equal to the

amounts so designated.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 4, 1995

Mr. WALKER (for himself, Mr. KASICH, Mr. ARMEY, Mr. ALLARD, Mr.

BACHUS, Mr. BAKER of California, Mr. BAKER of Louisiana, Mr.

BALLENGER, Mr. BARTLETT of Maryland, Mr. BILIRAKIS, Mr. BLILEY,

Mr. BLUTE, Mr. BOEHNER, Mr. BONILLA, Mr. BURTON of Indiana, Mr.

CALVERT, Mr. CAMP, Mr. CANADY, Mr. COBLE, Mr. COMBEST, Mr. COX,

Mr. CRAPO, Mr. DOOLITTLE, Mr. DORNAN, Mr. DUNCAN, Ms. DUNN of

Washington, Mr. EVERETT, Mr. EWING, Mr. FAWELL, Mr. FOX, Mr.

FRANKS of New Jersey, Mr. FRISA, Mr. GEKAS, Mr. GOODLATTE, Mr.

GOSS, Mr. GREENWOOD, Mr. HANCOCK, Mr. HANSEN, Mr. HASTERT,

Mr. HEFLEY, Mr. HERGER, Mr. HOEKSTRA, Mr. HUNTER, Mr. HUTCHINSON, Mr. INGLIS of South Carolina, Mr. KLUG, Mr. KNOLLENBERG,

Mr. KOLBE, Mr. LIGHTFOOT, Mr. LINDER, Mr. LUCAS, Mr. MANZULLO,

Mr. MCCOLLUM, Mr. MCCRERY, Mr. MILLER of Florida, Mr. NUSSLE,

Mr. OXLEY, Mr. PACKARD, Mr. PAXON, Mr. PORTMAN, Mr. RAMSTEAD,

Mr. ROYCE, Mr. SALMON, Mr. SCHIFF, Mr. SENSENBRENNER, Mr.

SMITH of Texas, Mr. SMITH of Michigan, Mr. SOLOMON, Mr. STEARNS,

Mr. STUMP, Mr. TORKILDSEN, Mr. UPTON, Mrs. VUCANOVICH, Mr.

WELDON of Pennsylvania, and Mr. ZIMMER) introduced the following bill;

which was referred to the Committee on Ways and Means and, in addition, to the Committee on the Budget, for a period to be subsequently

determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To amend the Internal Revenue Code of 1986 to allow indi-
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viduals to designate that up to 10 percent of their income

tax liability be used to reduce the national debt, and

to require spending reductions equal to the amounts

so designated.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Taxpayer Debt Buy5 Down Act’’.

6 SEC. 2. DESIGNATION OF AMOUNTS FOR REDUCTION OF

7 PUBLIC DEBT.

8 (a) IN GENERAL.—Subchapter A of chapter 61 of the

9 Internal Revenue Code of 1986 (relating to returns and

10 records) is amended by adding at the end the following

11 new part:

12 ‘‘PART IX—DESIGNATION FOR REDUCTION OF

13 PUBLIC DEBT.

‘‘Sec. 6097. Designation.

14 ‘‘SEC. 6097. DESIGNATION.

15 ‘‘(a) IN GENERAL.—Every individual with adjusted

16 income tax liability for any taxable year may designate

17 that a portion of such liability (not to exceed 10 percent

18 thereof) shall be used to reduce the public debt.

19 ‘‘(b) MANNER AND TIME OF DESIGNATION.—A des20 ignation under subsection (a) may be made with respect

21 to any taxable year only at the time of filing the return
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1 of tax imposed by chapter 1 for the taxable year. The des2 ignation shall be made on the first page of the return or

3 on the page bearing the taxpayer’s signature.

4 ‘‘(c) ADJUSTED INCOME TAX LIABILITY.—For pur5 poses of this section, the term ‘adjusted income tax liabil6 ity’ means income tax liability (as defined in section

7 6096(b)) reduced by any amount designated under section

8 6096 (relating to designation of income tax payments to

9 Presidential Election Campaign Fund).’’

10 (b) CLERICAL AMENDMENT.—The table of parts for

11 such subchapter A is amended by adding at the end the

12 following new item:

‘‘Part IX. Designation for reduction of public debt.’’

13 (c) EFFECTIVE DATE.—The amendments made by

14 this section shall apply to taxable years ending after the

15 date of the enactment of this Act.

16 SEC. 3. PUBLIC DEBT REDUCTION TRUST FUND.

17 (a) IN GENERAL.—Subchapter A of chapter 98 of the

18 Internal Revenue Code of 1986 (relating to trust fund

19 code) is amended by adding at the end the following sec20 tion:

21 ‘‘SEC. 9512. PUBLIC DEBT REDUCTION TRUST FUND.

22 ‘‘(a) CREATION OF TRUST FUND.—There is estab23 lished in the Treasury of the United States a trust fund

24 to be known as the ‘Public Debt Reduction Trust Fund’,
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1 consisting of any amount appropriated or credited to the

2 Trust Fund as provided in this section or section 9602(b).

3 ‘‘(b) TRANSFERS TO TRUST FUND.—There are here4 by appropriated to the Public Debt Reduction Trust Fund

5 amounts equivalent to the amounts designated under sec6 tion 6097 (relating to designation for public debt reduc7 tion).

8 ‘‘(c) EXPENDITURES.—Amounts in the Public Debt

9 Reduction Trust Fund shall be used by the Secretary of

10 the Treasury for purposes of paying at maturity, or to

11 redeem or buy before maturity, any obligation of the Fed12 eral Government included in the public debt (other than

13 an obligation held by the Federal Old-Age and Survivors

14 Insurance Trust Fund, the Civil Service Retirement and

15 Disability Fund, or the Department of Defense Military

16 Retirement Fund). Any obligation which is paid, re17 deemed, or bought with amounts from the Public Debt Re18 duction Trust Fund shall be canceled and retired and may

19 not be reissued.’’

20 (b) CLERICAL AMENDMENT.—The table of sections

21 for such subchapter is amended by adding at the end the

22 following new item:

‘‘Sec. 9512. Public Debt Reduction Trust Fund.’’

23 (c) EFFECTIVE DATE.—The amendments made by

24 this section shall apply to amounts received after the date

25 of the enactment of this Act.
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1 SEC. 4. TAXPAYER-GENERATED SEQUESTRATION OF FED2 ERAL SPENDING TO REDUCE THE PUBLIC

3 DEBT.

4 (a) SEQUESTRATION TO REDUCE THE PUBLIC

5 DEBT.—Part C of the Balanced Budget and Emergency

6 Deficit Control Act of 1985 is amended by adding after

7 section 253 the following new section:

8 ‘‘SEC. 253A. SEQUESTRATION TO REDUCE THE PUBLIC

9 DEBT.

10 ‘‘(a) SEQUESTRATION.—Notwithstanding sections

11 255 and 256, within 15 days after Congress adjourns to

12 end a session, and on the same day as sequestration (if

13 any) under sections 251, 252, and 253, but after any se14 questration required by those sections, there shall be a se15 questration equivalent to the estimated aggregate amount

16 designated under section 6097 of the Internal Revenue

17 Code of 1986 for the last taxable year ending one year

18 before the beginning of that session of Congress, as esti19 mated by the Department of the Treasury on October 1

20 and as modified by the total of (1) any amounts by which

21 net discretionary spending is reduced by legislation below

22 the discretionary spending limits enacted after the enact23 ment of this section related to the fiscal year subject to

24 the sequestration (or, in the absence of such limits, any

25 net deficit change from the baseline amount calculated

26 under section 257 (except that such baseline for fiscal year
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1 1996 and thereafter shall be based upon fiscal year 1995

2 enacted appropriations less any 1995 sequesters) and (2)

3 the net deficit change that has resulted from all direct

4 spending legislation enacted after the enactment of this

5 section related to the fiscal year subject to the sequestra6 tion, as estimated by OMB. If the reduction in spending

7 under paragraphs (1) and (2) for a fiscal year is greater

8 than the estimated aggregate amount designated under

9 section 6097 of the Internal Revenue Code of 1986 re10 specting that fiscal year, then there shall be no sequestra11 tion under this section.

12 ‘‘(b) APPLICABILITY.—

13 ‘‘(1) IN GENERAL.—Except as provided by

14 paragraph (2), each account of the United States

15 shall be reduced by a dollar amount calculated by

16 multiplying the level of budgetary resources in that

17 account at that time by the uniform percentage nec18 essary to carry out subsection (a). All obligational

19 authority reduced under this section shall be done in

20 a manner that makes such reductions permanent.

21 ‘‘(2) EXEMPT ACCOUNTS.—No order issued

22 under this part may—

23 ‘‘(A) reduce benefits payable the old-age

24 and survivors insurance program established

25 under title II of the Social Security Act;
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1 ‘‘(B) reduce payments for net interest (all

2 of major functional category 900); or

3 ‘‘(C) make any reduction in the following

4 accounts:

5 ‘‘Federal Deposit Insurance Corpora6 tion, Bank Insurance Fund;

7 ‘‘Federal Deposit Insurance Corpora8 tion, FSLIC Resolution Fund;

9 ‘‘Federal Deposit Insurance Corpora10 tion, Savings Association Insurance Fund;

11 ‘‘National Credit Union Administra12 tion, credit union share insurance fund; or

13 ‘‘Resolution Trust Corporation.’’.

14 (b) REPORTS.—Section 254 of the Balanced Budget

15 and Emergency Deficit Control Act of 1985 is amended—

16 (1) in subsection (a), by inserting after the item

17 relating to the GAO compliance report the following:

18 ‘‘October 1 . . . Department of Treasury report to

19 Congress estimating amount of income tax designated

20 pursuant to section 6097 of the Internal Revenue Code

21 of 1986.’’;

22 (2) in subsection (d)(1), by inserting ‘‘, and se23 questration to reduce the public debt,’’;
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1 (3) in subsection (d), by redesignating para2 graph (5) as paragraph (6) and by inserting after

3 paragraph (4) the following new paragraph:

4 ‘‘(5) SEQUESTRATION TO REDUCE THE PUBLIC

5 DEBT REPORTS.—The preview reports shall set forth

6 for the budget year estimates for each of the follow7 ing:

8 ‘‘(A) The aggregate amount designated

9 under section 6097 of the Internal Revenue

10 Code of 1986 for the last taxable year ending

11 before the budget year.

12 ‘‘(B) The amount of reductions required

13 under section 253A and the deficit remaining

14 after those reductions have been made.

15 ‘‘(C) The sequestration percentage nec16 essary to achieve the required reduction in ac17 counts under section 253A(b).’’; and

18 (4) in subsection (g), by redesignating para19 graphs (4) and (5) as paragraphs (5) and (6), re20 spectively, and by inserting after paragraph (3) the

21 following new paragraph:

22 ‘‘(4) SEQUESTRATION TO REDUCE THE PUBLIC

23 DEBT REPORTS.—The final reports shall contain all

24 of the information contained in the public debt tax25 ation designation report required on October 1.’’.
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1 (c) EFFECTIVE DATE.—Notwithstanding section

2 275(b) of the Balanced Budget and Emergency Deficit

3 Control Act of 1985, the expiration date set forth in that

4 section shall not apply to the amendments made by this

5 section. The amendments made by this section shall cease

6 to have any effect after the first fiscal year during which

7 there is no public debt.

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