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[House Report 106-673]
[From the U.S. Government Publishing Office]

106th Congress                                            Rept. 106-673
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 1

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

 
               DEBT REDUCTION RECONCILIATION ACT OF 2000
                                _______
                                

 June 12, 2000.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Archer, from the Committee on Ways and Means, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 4601]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 4601) to provide for reconciliation pursuant to 
section 213(c) of the concurrent resolution on the budget for 
fiscal year 2001 to reduce the public debt and to decrease the 
statutory limit on the public debt, having considered the same, 
report favorably thereon with an amendment and recommend that 
the bill as amended do pass.

                                CONTENTS

                                                                   Page
  I. Summary and Background...........................................3
        A. Purpose and Summary...................................     3
        B. Background and Need for Legislation...................     4
        C. Legislative History...................................     4
 II. Explanation of the Bill..........................................4
        A. Present Law...........................................     4
        B. Reasons for Change....................................     5
        C. Explanation of Provisions.............................     5
III. Votes of the Committee...........................................6
 IV. Budget Effects of the Bill.......................................7
  V. Other Matters to Be Discussed Under the Rules of the House.......9
 VI. Changes in Existing Law Made By the Bill, as Reported...........10
VII. Letter From the Committee on the Budget.........................11

    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Debt Reduction Reconciliation Act of 
2000''.

SEC. 2. FINDINGS AND PURPOSE.

  (a) Findings.--The Congress finds that--
          (1) fiscal discipline, resulting from the Balanced Budget Act 
        of 1997, and strong economic growth have ended decades of 
        deficit spending and have produced budget surpluses without 
        using the social security surplus;
          (2) fiscal pressures will mount in the future as the aging of 
        the population increases budget obligations;
          (3) until Congress and the President agree to legislation 
        that strengthens social security, the social security surplus 
        should be used to reduce the debt held by the public;
          (4) strengthening the Government's fiscal position through 
        public debt reduction increases national savings, promotes 
        economic growth, reduces interest costs, and is a constructive 
        way to prepare for the Government's future budget obligations; 
        and
          (5) it is fiscally responsible and in the long-term national 
        economic interest to use an additional portion of the nonsocial 
        security surplus to reduce the debt held by the public.
  (b) Purpose.--It is the purpose of this Act to--
          (1) reduce the debt held by the public with the goal of 
        eliminating this debt by 2013; and
          (2) decrease the statutory limit on the public debt.

SEC. 3. ESTABLISHMENT OF PUBLIC DEBT REDUCTION PAYMENT ACCOUNT.

  (a) In General.--Subchapter I of chapter 31 of title 31, United 
States Code, is amended by adding at the end the following new section:

``Sec. 3114. Public debt reduction payment account

  ``(a) There is established in the Treasury of the United States an 
account to be known as the Public Debt Reduction Payment Account 
(hereinafter in this section referred to as the `account').
  ``(b) The Secretary of the Treasury shall use amounts in the account 
to pay at maturity, or to redeem or buy before maturity, any obligation 
of the Government held by the public and included in the public debt. 
Any obligation which is paid, redeemed, or bought with amounts from the 
account shall be canceled and retired and may not be reissued. Amounts 
deposited in the account are appropriated and may only be expended to 
carry out this section.
  ``(c) If the Congressional Budget Office estimates an on-budget 
surplus for fiscal year 2000 in the report submitted pursuant to 
section 202(e)(2) of the Congressional Budget Act of 1974 in excess of 
the amount of the surplus set forth for that fiscal year in section 
101(4) of the concurrent resolution on the budget for fiscal year 2001 
(House Concurrent Resolution 290, 106th Congress), then there is hereby 
appropriated into the account on the later of the date of enactment of 
this Act or the date upon which the Congressional Budget Office submits 
such report, out of any money in the Treasury not otherwise 
appropriated, for the fiscal year ending September 30, 2000, an amount 
equal to that excess. The funds appropriated to this account shall 
remain available until expended.
  ``(d) The appropriation made under subsection (c) shall not be 
considered direct spending for purposes of section 252 of Balanced 
Budget and Emergency Deficit Control Act of 1985.
  ``(e) Establishment of and appropriations to the account shall not 
affect trust fund transfers that may be authorized under any other 
provision of law.
  ``(f) The Secretary of the Treasury and the Director of the Office of 
Management and Budget shall each take such actions as may be necessary 
to promptly carry out this section in accordance with sound debt 
management policies.
  ``(g) Reducing the debt pursuant to this section shall not interfere 
with the debt management policies or goals of the Secretary of the 
Treasury.''.
  (b) Conforming Amendment.--The chapter analysis for chapter 31 of 
title 31, United States Code, is amended by inserting after the item 
relating to section 3113 the following:

``3114. Public debt reduction payment account.''.

SEC. 4. REDUCTION OF STATUTORY LIMIT ON THE PUBLIC DEBT.

  Section 3101(b) of title 31, United States Code, is amended by 
inserting ``minus the amount appropriated into the Public Debt 
Reduction Payment Account pursuant to section 3114(c)'' after 
``$5,950,000,000,000''.

SEC. 5. OFF-BUDGET STATUS OF PUBLIC DEBT REDUCTION PAYMENT ACCOUNT.

  Notwithstanding any other provision of law, the receipts and 
disbursements of the Public Debt Reduction Payment Account established 
by section 3114 of title 31, United States Code, shall not be counted 
as new budget authority, outlays, receipts, or deficit or surplus for 
purposes of--
          (1) the budget of the United States Government as submitted 
        by the President,
          (2) the congressional budget, or
          (3) the Balanced Budget and Emergency Deficit Control Act of 
        1985.

SEC. 6. REMOVING PUBLIC DEBT REDUCTION PAYMENT ACCOUNT FROM BUDGET 
                    PRONOUNCEMENTS.

  (a) In General.--Any official statement issued by the Office of 
Management and Budget, the Congressional Budget Office, or any other 
agency or instrumentality of the Federal Government of surplus or 
deficit totals of the budget of the United States Government as 
submitted by the President or of the surplus or deficit totals of the 
congressional budget, and any description of, or reference to, such 
totals in any official publication or material issued by either of such 
Offices or any other such agency or instrumentality, shall exclude the 
outlays and receipts of the Public Debt Reduction Payment Account 
established by section 3114 of title 31, United States Code.
  (b) Separate Public Debt Reduction Payment Account Budget 
Documents.--The excluded outlays and receipts of the Public Debt 
Reduction Payment Account established by section 3114 of title 31, 
United States Code, shall be submitted in separate budget documents.

SEC. 7. REPORTS TO CONGRESS.

  (a) Reports of the Secretary of the Treasury.--(1) Within 30 days 
after the appropriation is deposited into the Public Debt Reduction 
Payment Account under section 3114 of title 31, United States Code, the 
Secretary of the Treasury shall submit a report to the Committee on 
Ways and Means of the House of Representatives and the Committee on 
Finance of the Senate confirming that such account has been established 
and the amount and date of such deposit. Such report shall also include 
a description of the Secretary's plan for using such money to reduce 
debt held by the public.
  (2) Not later than October 31, 2000, and October 31, 2001, the 
Secretary of the Treasury shall submit a report to the Committee on 
Ways and Means of the House of Representatives and the Committee on 
Finance of the Senate setting forth the amount of money deposited into 
the Public Debt Reduction Payment Account, the amount of debt held by 
the public that was reduced, and a description of the actual debt 
instruments that were redeemed with such money.
  (b) Report of the Comptroller General of the United States.--Not 
later than November 15, 2001, the Comptroller General of the United 
States shall submit a report to the Committee on Ways and Means of the 
House of Representatives and the Committee on Finance of the Senate 
verifying all of the information set forth in the reports submitted 
under subsection (a).

                       I. SUMMARY AND BACKGROUND

                         A. Purpose and Summary

    The bill, H.R. 4601, the Debt Reduction Reconciliation Act 
of 2000, provides for reconciliation pursuant to section 213(c) 
of the concurrent resolution on the budget for fiscal year 2001 
to reduce the public debt.
    The purpose of H.R. 4601 is to reduce the debt held by the 
public by the amount of any additional on-budget surplus in 
fiscal year 2000. The bill would establish an off-budget 
account in the U.S. Treasury, called the Public Debt Reduction 
Payment Account. If the Congressional Budget Office's revised 
estimate of the fiscal year 2000 on-budget surplus is higher 
than specified in the fiscal year 2001 Congressional budget 
resolution, the increased amount would be automatically 
appropriated to the account, and the statutory debt limit would 
be reduced by an equivalent amount. Funds in the account could 
be used only to reduce the debt held by the public. The 
reduction in the debt limit emphasizes Congress's intent to 
reverse years of increasing debt and rising debt limits. The 
bill would also require the Secretary of the Treasury and U.S. 
Comptroller General of the United States to report to Congress 
on how the funds were used to reduce the debt.

                 B. Background and Need for Legislation

    The gross federal debt consists of debt held by the public 
and debt held by government accounts, including the Social 
Security trust funds. Almost all of this debt is subject to a 
``debt limit,'' which was first established in statute in 1917. 
This limit represents the maximum amount the U.S. Treasury may 
borrow without receiving additional authority from Congress. 
The current statutory debt limit is $5.95 trillion. The 
outstanding debt subject to the limit was $5.57 trillion at the 
end of 1999. Of this amount, $3.63 trillion was held by the 
public, and $1.97 trillion was held by government accounts. 
Although the debt held by the public has decreased in recent 
years, the gross federal debt continues to rise because of 
increases in the government-held debt.
    Under present law, any budget surpluses remaining at the 
end of the fiscal year are used to reduce the debt held by the 
public. Present law includes several mechanisms to limit 
spending, such as pay-as-you-go scorekeeping rules and 
discretionary spending limits. In addition, current law 
provides for points of order in the House and Senate to enforce 
the Congressional Budget Resolution. This year's Budget 
Resolution added new budget, debt, and surplus-related points 
of order. Although these tools have effectively controlled 
spending in the past, they have been less effective in 
controlling spending during an era of budget surpluses. The 
current legislation is needed to emphasize that public debt 
reduction is a priority of the Congress, and a portion of the 
non-social security surplus should be reserved for this 
purpose.

                         C. Legislative History

    The bill, H.R. 4601, was introduced by Mr. Fletcher et al 
on June 8, 2000. The Committee marked up the bill on June 8, 
2000, and approved the bill with a Chairman's amendment in the 
nature of a substitute, by a rollcall vote.

                      II. EXPLANATION OF THE BILL

                             A. Present Law

    The public debt outstanding comprises the total face amount 
or principal of marketable and non-marketable securities 
currently outstanding. With the exception of certain debt,\1\ 
currently representing less than $100 billion, the Congress has 
established a public debt limit that represents the maximum 
amount of money the Government is allowed to borrow without 
receiving additional authority from Congress. Debt subject to 
the public debt limit generally includes debt owed to the 
public which comprises all Federal securities held by 
individuals, corporations, State and local governments, foreign 
governments, and other foreign persons, and debt held by the 
Government which comprises Federal securities held by 
Government trust funds, revolving funds, and special funds.
---------------------------------------------------------------------------
    \1\ Debt not subject to the public debt limit comprise unamortized 
discount on Treasury bills and zero-coupon Treasury bonds, certain old 
debt, debt held by the Federal Financing Bank, and certain guaranteed 
debt.
---------------------------------------------------------------------------
    The statutory limit on the public debt currently is $5.95 
trillion. It was set at this level in the Balanced Budget Act 
of 1997 (P.L. 105-33), enacted into law on August 5, 1997.
    With the approval of the President, the Secretary of the 
Treasury may use money received from the sale of bonds or notes 
of the United States and other money in the general fund of the 
Treasury to make purchases, redemptions, or refunds of bonds, 
notes, certificates of indebtedness, Treasury bills, or savings 
certificates of the United States Government at or before 
maturity of such instruments of indebtedness.
    By June 1 of each year, the Secretary of the Treasury must 
submit a report to Congress regarding the Treasury's public 
debt activities.

                         B. Reasons for Change

    The U.S. economy continues its healthy growth. As a result, 
what were reasonable projections of the Federal Government's 
surplus are likely to be revised upwards. In particular, the 
non-social security portion of the Federal budget is in 
surplus, and the estimated size of the surplus is likely to 
increase when the Congressional Budget Office (``CBO'') 
releases its revised budget estimates. The Committee believes 
that, if the CBO revises upward its projection of the fiscal 
year 2000 surplus, the best use of that additional surplus 
would be to reduce the national debt. Accordingly, the 
Committee believes that to help enforce fiscal discipline 
monies equal to the value of the upward revision in the Federal 
Government's surplus should be appropriated to a newly 
established account from which the Secretary of the Treasury 
should draw funds to retire debt held by the public.
    The Committee also believes it is important to reduce the 
statutory limit on the public debt to mark the progress the 
Federal Government has made in maintaining fiscal discipline.
    The bill also contains language directing the Secretary of 
the Treasury and the Director of the Office of Management and 
Budget (``OMB'') to use the money to pay down the debt in a 
manner consistent with sound debt management. In its management 
of the public debt, Treasury generally adheres to three goals: 
(1) ensuring adequate cash balances so the government can pay 
its day-to-day operating expenses, (2) financing the debt at 
the lowest cost to taxpayers, and (3) promoting efficient 
capital markets. The bill provides Treasury with maximum 
flexibility in using the funds to pay down the debt so that 
none of these goals are compromised.
    The bill emphasizes that reduction of the debt held by the 
public is a priority of the Congress, and the Congress should 
pro-actively set aside a portion of the non-social security 
surplus for this purpose.

                      C. Explanation of Provisions

    H.R. 4601, as reported, establishes an account in the 
Treasury to be called the Public Debt Reduction Payment Account 
(``the Account''). The bill provides that an amount of money is 
to be appropriated to the Account out of any money in the 
Treasury not otherwise appropriated. The amount of money to be 
appropriated is to equal the value of the CBO projection 
submitted pursuant to section 202(e)(2) of the Congressional 
Budget Act of 1974 of the fiscal year 2000 surplus in excess of 
the amount of fiscal year 2000 surplus specified in the 
concurrent budget resolution for fiscal year 2001.\2\ The 
appropriation will not be considered direct spending. Amounts 
appropriated to the Account may only be expended to redeem or 
buy at maturity public debt held by the public. The bill 
provides that the Account has off-budget status. The bill 
further provides that any official statement regarding surplus 
or deficit totals of the Federal Government issued by the OMB, 
the CBO, or any other agency of the Federal Government shall 
exclude the outlays and receipts of the Account. The outlays 
and receipts of the Account will be submitted in separate 
budget documents.
---------------------------------------------------------------------------
    \2\ The surplus specified in section 101(4) of the concurrent 
budget resolution is $24.4 billion for fiscal year 2000.
---------------------------------------------------------------------------
    In addition, the bill reduces the statutory limit on the 
public debt by the amount deposited into the Account. That is, 
the current statutory debt limit of $5.95 trillion is to be 
reduced by an amount of money equal to the value of the CBO's 
projection submitted pursuant to section 202(e)(2) of the 
Congressional Budget Act of 1974 of the fiscal year 2000 
surplus in excess of the amount of fiscal year 2000 surplus 
specified in the concurrent budget resolution for fiscal year 
2001.
    The bill provides that the Secretary of the Treasury and 
the Director of the OMB shall take such action as necessary to 
ensure that the funds appropriated to the Account are promptly 
used to reduce the debt held by the public in a manner 
consistent with sound debt management policies.
    The bill requires the Secretary of the Treasury to make 
three reports to Congress related to the Account. The first 
report is due within 30 days after the appropriation is 
deposited into the Account. This report will confirm the 
establishment of the account and provide a description of the 
Secretary's plan for using the money deposited into the account 
to retire debt held by the public. A second report is due no 
later than October 31, 2000. In this report, the Secretary will 
account for money used from the Account to reduce debt held by 
the public during fiscal year 2000. The third report is due no 
later than October 31, 2001. This report will provide a 
detailed accounting of the debt redeemed from amounts deposited 
into the Account. The bill further requires that the 
Comptroller General verify the accuracy of the Secretary's 
reports not later than November 15, 2001.
    Effective Date.--The bill is effective on the date of 
enactment.

                      III. VOTES OF THE COMMITTEE

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the following statements are made 
concerning the votes of the Committee on Ways and Means in its 
consideration of the bill, H.R. 4601.

                       motion to report the bill

    The bill, H.R. 4601, as amended, was ordered favorably 
reported by a rollcall vote of 32 yeas to 3 nays (with a quorum 
being present). The vote was as follows:

----------------------------------------------------------------------------------------------------------------
        Representatives             Yea       Nay     Present    Representatives      Yea       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Archer.....................        X   ........  .........  Mr. Rangel.......        X   ........  .........
Mr. Crane......................        X   ........  .........  Mr. Stark........  ........  ........  .........
Mr. Thomas.....................        X   ........  .........  Mr. Matsui.......        X   ........  .........
Mr. Shaw.......................        X   ........  .........  Mr. Coyne........        X   ........  .........
Mrs. Johnson...................        X   ........  .........  Mr. Levin........        X   ........  .........
Mr. Houghton...................  ........  ........  .........  Mr. Cardin.......  ........        X   .........
Mr. Herger.....................        X   ........  .........  Mr. McDermott....  ........  ........  .........
Mr. McCrery....................        X   ........  .........  Mr. Kleczka......        X   ........  .........
Mr. Camp.......................        X   ........  .........  Mr. Lewis (GA)...        X   ........  .........
Mr. Ramstad....................        X   ........  .........  Mr. Neal.........        X   ........  .........
Mr. Nussle.....................        X   ........  .........  Mr. McNulty......        X   ........  .........
Mr. Johnson....................        X   ........  .........  Mr. Jefferson....        X   ........  .........
Ms. Dunn.......................        X   ........  .........  Mr. Tanner.......  ........        X   .........
Mr. Collins....................        X   ........  .........  Mr. Becerra......        X   ........  .........
Mr. Portman....................        X   ........  .........  Mrs. Thurman.....  ........        X   .........
Mr. English....................        X   ........  .........  Mr. Doggett......  ........  ........  .........
Mr. Watkins....................        X   ........  .........
Mr. Hayworth...................        X   ........  .........
Mr. Weller.....................        X   ........  .........
Mr. Hulshof....................        X   ........  .........
Mr. McInnis....................        X   ........  .........
Mr. Lewis (KY).................        X   ........  .........
Mr. Foley......................        X   ........  .........
----------------------------------------------------------------------------------------------------------------

                     IV. BUDGET EFFECTS OF THE BILL

              A. Committee Estimates of Budgetary Effects

    In compliance with clause 3(d)(2) of rule XIII of the Rules 
of the House of Representatives, the following statement is 
made concerning the effects on the budget of the bill, H.R. 
4601, as reported.
    The Committee has provided the estimate of the 
Congressional Budget Office, which is below.

    B. Statement Regarding New Budget Authority and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee states that the 
bill involves no new or increased budget authority and no 
increased tax expenditures.

      C. Cost Estimate Prepared by the Congressional Budget Office

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, requiring a cost estimate 
prepared by the Congressional Budget Office (``CBO''), the 
following statement by CBO is provided.

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 12, 2000.
Hon. Bill Archer,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4601, the Debt 
Reduction Reconciliation Act of 2000.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Paul 
Cullinan.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 4601--Debt Reduction Reconciliation Act of 2000

    H.R. 4601 would establish the Public Debt Reduction Payment 
Account, a new account in the Treasury of the United States, 
and would appropriate into that account an amount equal to any 
increase in the on-budget surplus projected by the 
Congressional Budget Office (CBO) for fiscal year 2000. The 
increase would be measured relative to the $24.4 billion on-
budget surplus specified in the concurrent resolution on the 
budget for fiscal year 2001. Transactions of the new account 
would be off-budget, and funds in the account would be used to 
retire or purchase outstanding federal debt held by the public. 
The bill would also reduce the statutory limit on the public 
debt by the same amount that is appropriated to this account.
    This bill would have no effect on the total spending, 
receipts, or surplus of the federal government. Whether it 
would affect the allocation of the budget surplus between the 
on-budget and off-budget categories would depend on the 
budgetary treatment chosen by the Office of Management and 
Budget (OMB).
    H.R. 4601 could reduce the on-budget surplus and increase 
the off-budget surplus in fiscal year 2000 by the same amount. 
Because CBO has not yet completed its summer budget update, we 
do not yet have a specific estimate of the budgetary impact of 
the bill. CBO has stated that it anticipates an on-budget 
surplus of at least $40 billion for the current fiscal year, 
which would indicate that at least $16 billion would be 
transferred to the Public Debt Reduction Payment Account.
    H.R. 4601 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would have no effect on the budgets of state, local, or tribal 
governments.

Budgetary implications

    Although H.R. 4601 would have no budgetary effect relative 
to the current CBO baseline estimates, the bill could change 
the on-budget and off-budget surpluses if CBO's forthcoming 
budget update projects an increase in the on-budget surplus. In 
that case, the bill would appropriate the increase to an off-
budget account, leaving the on-budget surplus at the level 
assumed in the budget resolution and increasing the off-budget 
surplus--but the total federal surplus would not be affected by 
the bill. That budgetary treatment would parallel the budgetary 
treatment of subsidy appropriations to the Postal Service and 
interest payments to the Social Security trust funds--that is, 
on-budget outlays precisely offset by off-budget receipts or 
collections. (It is possible however, that OMB would choose an 
alternative approach, which would result in no change in either 
the on-budget or off-budget surplus.)
    Any increase in the on-budget surplus, if not used for 
additional spending or for reductions in taxes, would 
automatically be used to reduce the federal debt. This bill, 
therefore, would help reduce the public debt only to the extent 
that, by reducing the reported on-budget surplus, it inhibits 
the use of some of that surplus for spending increases or tax 
reductions.

Budgetary treatment

    For Congressional scorekeeping purposes, CBO would record 
payments from the general fund of the Treasury to the off-
budget Public Debt Reduction Payment Account as direct 
spending. H.R. 4601, however, specifies that the appropriation 
to the account would not be classified as direct spending. 
Therefore, once the bill is enacted into law, pay-as-you-go 
procedures would not apply to the appropriation. However, that 
language does not affect the treatment of the bill for 
Congressional scorekeeping purposes.
    The CBO staff contact for H.R. 4601 is Paul Cullinan. This 
estimate was approved by Robert A. Sunshine, Assistant Director 
for Budget Analysis.

     V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE

          A. Committee Oversight Findings and Recommendations

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives (relating to oversight findings), 
the Committee advises that it was the result of the Committee's 
oversight review concerning the statutory limit on the public 
debt that the Committee concluded that it is appropriate and 
timely to enact the provisions included in the bill as 
reported. On January 20, 1999, the Committee on Ways and Means 
held a public hearing on ``the Outlook for the State of the 
U.S. Economy in 1999'' which discussed the benefits of using 
budget surpluses to reduce the debt held by the public. On 
September 29, 1999, the Committee on Ways and Means held a 
public hearing on ``Treasury's Debt Buyback Proposal'' which 
discussed Treasury's debt management policies.

    B. Summary of Findings and Recommendations of the Committee on 
                           Government Reform

    With respect to clause 3(c)(4) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that no 
oversight findings or recommendations have been submitted to 
this Committee by the Committee on Government Reform with 
respect to the provisions contained in the bill.

                 C. Constitutional Authority Statement

    With respect to clause (3)(d)(1) of rule XIII of the Rules 
of the House of Representatives (relating to Constitutional 
Authority), the Committee states that the Committee's action in 
reporting this bill is derived from Article I of the 
Constitution, Section 8 (``The Congress shall have the Power To 
lay and collect Taxes, Duties, Imposts and Excises * * *'').

       VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

CHAPTER 31 OF TITLE 31, UNITED STATES CODE

           *       *       *       *       *       *       *

                        CHAPTER 31--PUBLIC DEBT

                    SUBCHAPTER I--BORROWING AUTHORITY

Sec.
3101. Public debt limit.
     * * * * * * *
3114. Public debt reduction payment account.
     * * * * * * *

                   SUBCHAPTER I--BORROWING AUTHORITY

Sec. 3101. Public debt limit

  (a) * * *
  (b) The face amount of obligations issued under this chapter 
and the face amount of obligations whose principal and interest 
are guaranteed by the United States Government (except 
guaranteed obligations held by the Secretary of the Treasury) 
may not be more than $5,950,000,000,000 minus the amount 
appropriated into the Public Debt Reduction Payment Account 
pursuant to section 3114(c) outstanding at one time, subject to 
changes periodically made in that amount as provided by law 
through the congressional budget process described in Rule XLIX 
of the Rules of the House of Representatives or otherwise.

           *       *       *       *       *       *       *

Sec. 3114. Public debt reduction payment account

  (a) There is established in the Treasury of the United States 
an account to be known as the Public Debt Reduction Payment 
Account (hereinafter in this section referred to as the 
``account'').
  (b) The Secretary of the Treasury shall use amounts in the 
account to pay at maturity, or to redeem or buy before 
maturity, any obligation of the Government held by the public 
and included in the public debt. Any obligation which is paid, 
redeemed, or bought with amounts from the account shall be 
canceled and retired and may not be reissued. Amounts deposited 
in the account are appropriated and may only be expended to 
carry out this section.
  (c) If the Congressional Budget Office estimates an on-budget 
surplus for fiscal year 2000 in the report submitted pursuant 
to section 202(e)(2) of the Congressional Budget Act of 1974 in 
excess of the amount of the surplus set forth for that fiscal 
year in section 101(4) of the concurrent resolution on the 
budget for fiscal year 2001 (House Concurrent Resolution 290, 
106th Congress), then there is hereby appropriated into the 
account on the later of the date of enactment of this Act or 
the date upon which the Congressional Budget Office submits 
such report, out of any money in the Treasury not otherwise 
appropriated, for the fiscal year ending September 30, 2000, an 
amount equal to that excess. The funds appropriated to this 
account shall remain available until expended.
  (d) The appropriation made under subsection (c) shall not be 
considered direct spending for purposes of section 252 of 
Balanced Budget and Emergency Deficit Control Act of 1985.
  (e) Establishment of and appropriations to the account shall 
not affect trust fund transfers that may be authorized under 
any other provision of law.
  (f) The Secretary of the Treasury and the Director of the 
Office of Management and Budget shall each take such actions as 
may be necessary to promptly carry out this section in 
accordance with sound debt management policies.
  (g) Reducing the debt pursuant to this section shall not 
interfere with the debt management policies or goals of the 
Secretary of the Treasury.

              VII. LETTER FROM THE COMMITTEE ON THE BUDGET

                          House of Representatives,
                                   Committee on the Budget,
                                      Washington, DC, June 8, 2000.
Hon. Bill Archer,
Committee on Ways and Means, Longworth House Office Building, 
        Washington, DC.
    Dear Chairman Archer: As you know, the Concurrent Budget 
Resolution for FY 2001, H. Con. Res. 290, established a 
procedure to consider legislation to reduce the debt held by 
the public.
    Section 213(c) states: ``If the Congressional Budget Office 
estimates an on-budget surplus for fiscal year 2000 in excess 
of the level set forth in this resolution, then the chairman of 
the Committee on the Budget of the House may direct the 
Committee on Ways and Means to report by a date certain an 
additional reconciliation bill that reduces debt held by the 
public by such amount.''
    In its Monthly Budget Review released May 12, 2000, CBO 
reported the surplus for FY 2000 would be at least $14 billion 
higher than the level set forth in the budget resolution. While 
CBO has not yet released its official mid-session update, I 
urge the Committee on Ways and Means to report the Debt 
Reduction Reconciliation Act of 2000. This bill is fully 
consistent with the intent of Section 213.
    Although the Debt Reduction Reconciliation Act of 2000 
contains provisions within the jurisdiction of the Committee on 
the Budget, I will ask that the Budget Committee be discharged 
from consideration of this bill.
            Sincerely,
                                            John R. Kasich,
                                 Chairman, Committee on the Budget.

                                
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