I

103D CONGRESS

2D SESSION H. R. 4593

Entitlement Control Act of 1994.

IN THE HOUSE OF REPRESENTATIVES

JUNE 16, 1994

Mr. STENHOLM (for himself, Mr. PENNY, Mr. DEAL, Mr. LAROCCO, and Mr.

ORTON) introduced the following bill; which was referred jointly to the

Committees on Government Operations and Rules

A BILL

Entitlement Control Act of 1994.

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; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Entitlement Control Act of 1994’’.

6 (b) TABLE OF CONTENTS.—

Sec. 1. Short title; table of contents.

Sec. 2. Purpose.

Sec. 3. Definitions and treatments.

Sec. 4. Establishment of direct spending targets.

Sec. 5. Special direct spending message by President.

Sec. 6. Congressional action required.

Sec. 7. Spin-off law.

Sec. 8. Targeted sequestration.

Sec. 9. Comprehensive sequestration.

Sec. 10. Exempt programs and activities.

Sec. 11. General and special sequestration rules.
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Sec. 12. Estimating assumptions, reports, and orders.

Sec. 13. The current policy baseline.

Sec. 14. Relationship to pay-as-you-go.

Sec. 15. Judicial review.

Sec. 16. Application.

Sec. 17. Effective date.

1 SEC. 2. PURPOSE.

2 The purpose of this Act is to create a mechanism to

3 control spending on mandatory programs and to increase

4 accountability for mandatory spending.

5 SEC. 3. DEFINITIONS AND TREATMENTS.

6 As used in this Act:

7 (1) The terms ‘‘budget authority’’, ‘‘new budget

8 authority’’, ‘‘entitlement authority’’, ‘‘outlays’’, and

9 ‘‘deficit’’ have the meanings given to such terms in

10 section 3 of the Congressional Budget and Impound11 ment Control Act of 1974.

12 (2) The term ‘‘account’’ means an item for

13 which there is a designated budget account identi14 fication code number in the President’s budget.

15 (3) The term ‘‘budget year’’ means, with re16 spect to a session of Congress, the fiscal year of the

17 Government that starts on October 1 of the calendar

18 year in which that session begins.

19 (4) The term ‘‘budget-year session’’ means any

20 session of Congress that starts in the calendar year

21 in which that budget year starts.
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1 (5) The term ‘‘CBO’’ means the Director of the

2 Congressional Budget Office.

3 (6) The term ‘‘current policy baseline’’ means

4 the projection (described in section 13) of current5 year levels of new budget authority and outlays into

6 the budget year and the outyears.

7 (7) The term ‘‘current year’’ means the fiscal

8 year that immediately precedes a budget year.

9 (8) The term ‘‘deposit insurance’’ refers to the

10 expenses of the Federal Deposit Insurance Corpora11 tion and the funds it incorporates, the Resolution

12 Trust Corporation, the National Credit Union Ad13 ministration and the funds it incorporates, the Of14 fice of Thrift Supervision; the Comptroller of the

15 Currency Assessment Funds, the RTC Office of the

16 Inspector General, and the deposit insurance activi17 ties of the Federal Reserve.

18 (9) The term ‘‘direct spending’’ means—

19 (A) budget authority provided by law other

20 than appropriation Acts;

21 (B) entitlement authority; and

22 (C) the food stamp program.

23 If a law other than an appropriation Act alters the

24 level of discretionary appropriations, that effect shall

25 be treated as direct spending. If an Appropriations
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1 Act alters the level of direct spending, that effect

2 shall be treated as discretionary spending.

3 (10) The term ‘‘legislative day’’ means, with re4 spect to either House of Congress, any day of ses5 sion.

6 (11) The term ‘‘OMB’’ means the Director of

7 the Office of Management and Budget.

8 (12) The term ‘‘outyear’’ means any of the 4

9 fiscal years that follow a budget year.

10 (13) The terms ‘‘sequester’’ and ‘‘sequestra11 tion’’ mean the cancellation under section 8 or 9 of

12 direct spending authority.

13 SEC. 4. ESTABLISHMENT OF DIRECT SPENDING TARGETS.

14 (a) COVERAGE.—The direct spending targets shall

15 apply to all direct spending programs within the Federal

16 budget except for net interest and deposit insurance.

17 (b) INITIAL REPORT.—Not later than 30 days after

18 the date of enactment of this Act, OMB shall submit a

19 report to Congress setting forth the direct spending tar20 gets for each of fiscal years 1995 through 2000 in accord21 ance with this section.

22 (c) DETERMINING DIRECT SPENDING LIMITS.—In

23 calculating the direct spending targets, OMB shall—

24 (1) calculate the projected level of direct spend25 ing outlays for fiscal year 1995;
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1 (2) calculate the increase in the direct spending

2 targets for each subsequent fiscal year through fiscal

3 year 2000 to allow growth in direct spending outlays

4 to reflect—

5 (A) changes in the Consumer Price Index;

6 (B) changes in the number of beneficiaries

7 under direct spending programs for which the

8 number of beneficiaries is a variable in deter9 mining costs; and

10 (C) an additional growth allowance of—

11 (i) 1 percent in 1996;

12 (ii) 1 percent in 1997; and

13 (iii) 1 percent in 1998;

14 (d) ADJUSTMENT FOR HEALTH CARE REFORM.—

15 OMB shall calculate adjustments to the direct spending

16 targets to reflect any increase in direct spending resulting

17 from health care reform legislation, enacted into law by

18 December 31, 1994, if such legislation would not increase

19 the total deficit for the period of fiscal years 1995 through

20 1999.

21 (e) ANNUAL ADJUSTMENTS.—When the President

22 submits a budget under section 1105(a) of title 31, United

23 States Code, for a fiscal year, OMB shall calculate adjust24 ments to the direct spending targets to reflect the follow25 ing:
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1 (1) Changes in inflation projections from the

2 Director’s initial report under section 4(b).

3 (2) Changes in projections of the number of

4 beneficiaries from the Director’s initial report under

5 section 4(b).

6 (3) The costs of direct spending legislation to

7 the extent that it is offset by revenue increases or

8 designated as an emergency by Congress and the

9 President under section 252 of the Balanced Budget

10 and Emergency Deficit Control Act of 1985.

11 (4) Legislation reducing direct spending to the

12 extent that it offsets the deficit impact of a tax cut

13 under section 252 of the Balanced Budget and

14 Emergency Deficit Control Act of 1985.

15 SEC. 5. SPECIAL DIRECT SPENDING MESSAGE BY PRESI16 DENT.

17 (a) SPECIAL MESSAGE.—If the OMB sequestration

18 preview report submitted under section 12(e) indicates

19 that direct spending for the budget year or any outyear

20 will exceed the applicable direct spending target, the budg21 et submitted under section 1105(a) of title 31, United

22 States Code, shall include a special direct spending mes23 sage that includes proposed legislative changes to offset

24 the net deficit impact of the excess identified by that OMB
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1 sequestration preview report for each such year through

2 any combination of:

3 (1) Reductions in direct spending outlays.

4 (2) Increases in the direct spending targets, if

5 the President has submitted a written determination

6 that, because of economic or programmatic reasons,

7 only some or none of the excess should be offset.

8 (b) INTRODUCTION OF PRESIDENT’S PACKAGE.—

9 Within 10 days after the President submitted a special

10 direct spending message, the text referred to in subsection

11 (a) shall be introduced as a concurrent resolution in the

12 House of Representatives by the chairman of its Commit13 tee on the Budget and in the Senate by the chairman of

14 its Committee on the Budget. If the chairman fails to do

15 so, after the 10th day the resolution may be introduced

16 by any Member of the House of Representatives or the

17 Senate, as the case may be. A concurrent resolution intro18 duced under this subsection shall be referred to the Com19 mittee on the Budget of the House of Representatives or

20 the Senate, as the case may be.

21 SEC. 6. CONGRESSIONAL ACTION REQUIRED.

22 (a) IN GENERAL.—The requirements of this section

23 shall be in effect for any year in which the OMB seques24 tration preview report submitted under section 12(e) indi-
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1 cates that direct spending for the budget year or any out2 year will exceed the applicable direct spending target.

3 (b) REQUIREMENTS FOR SPECIAL BUDGET RESOLU4 TION IN THE HOUSE.—The Committee on the Budget in

5 the House shall report not later than March 15 a concur6 rent resolution, either as a separate section of the concur7 rent resolution on the budget reported pursuant to section

8 301 of the Congressional Budget Act of 1974 or as a sepa9 rate resolution, that includes reconciliation instructions in10 structing the appropriate committees of the House and

11 Senate to report changes in laws within their jurisdiction

12 to offset any excess in direct spending identified in the

13 OMB sequestration preview report submitted under sec14 tion 12(e) as follows:

15 (1) Reductions in direct spending programs.

16 (2) Increases in the direct spending targets, ex17 cept that any increase in those targets may not be

18 greater than the increase included in the special rec19 onciliation message submitted by the President.

20 (c) PROCEDURE IF HOUSE BUDGET COMMITTEE

21 FAILS TO REPORT REQUIRED RESOLUTION.—

22 (1) AUTOMATIC DISCHARGE OF HOUSE BUDGET

23 COMMITTEE.—In the event that the House Commit24 tee on the Budget fails to report a resolution meet25 ing the requirements of subsection (b), the commit-
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1 tee shall be automatically discharged from further

2 consideration of the concurrent resolution reflecting

3 the President’s recommendations introduced pursu4 ant to section 5(b), and the concurrent resolution

5 shall be placed on the appropriate calendar.

6 (2) CONSIDERATION BY HOUSE OF DISCHARGED

7 RESOLUTION.—Ten days after the House Committee

8 on the Budget has been discharged under paragraph

9 (1), any member may move that the House proceed

10 to consider the resolution. Such motion shall be

11 highly privileged and not debatable. It shall not be

12 in order to consider any amendment to the resolu13 tion except amendments which are germane and

14 which do not change the net deficit impact of the

15 resolution. Consideration of such resolution shall be

16 pursuant to the procedures set forth in section 305

17 of the Congressional Budget Act of 1974 and sub18 section (d).

19 (d) CONSIDERATION BY THE HOUSE OF REPRESENT20 ATIVES.—(1) It shall not be in order in the House of Rep21 resentatives to consider a concurrent resolution on the

22 budget unless that concurrent resolution fully addresses

23 the entirety of any excess of the direct spending targets

24 as identified in the OMB sequestration preview report sub25 mitted under section 12(e) through reconciliation instruc-
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1 tions requiring spending reductions, or changes in the di2 rect spending targets.

3 (2) If the concurrent resolution on the budget pro4 poses to eliminate or offset less than the entire excess for

5 budget year and any subsequent fiscal years, then the

6 Committee on the Budget shall report a separate resolu7 tion directing the Committee on Government Operations

8 to report legislation increasing the direct spending targets

9 for each applicable year by the full amount of the excess

10 not offset or eliminated. It shall not be in order to consider

11 any concurrent resolution on the budget that does not off12 set the full amount of the excess until the House of Rep13 resentatives has agreed to the resolution directing the in14 crease in the direct spending targets.

15 (e) TRANSMITTAL TO SENATE.—If a concurrent reso16 lution passes the House pursuant to subsection (d), the

17 Clerk of the House of Representatives shall cause the reso18 lution to be engrossed, certified, and transmitted to the

19 Senate within one calendar day of the day on which the

20 resolution is passed. The resolution shall be referred to

21 the Senate Committee on the Budget.

22 (f) REQUIREMENTS FOR SPECIAL BUDGET RESOLU23 TION IN THE SENATE.—The Committee on the Budget in

24 the Senate shall report not later than April 1 a concurrent

25 resolution, either as a separate section of a budget resolu-
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1 tion reported pursuant to section 301 of the Congressional

2 Budget Act of 1974 or as a separate resolution, that shall

3 include reconciliation instructions instructing the appro4 priate committees of the House and Senate to report

5 changes in laws within their jurisdiction to offset any ex6 cess through any combination of:

7 (1) Reductions in direct spending programs.

8 (2) Increases in the direct spending targets, ex9 cept that any increase in those targets may not be

10 greater than the increase included in the special rec11 onciliation message submitted by the President.

12 (g) PROCEDURE IF SENATE BUDGET COMMITTEE

13 FAILS TO REPORT REQUIRED RESOLUTION.—

14 (1) AUTOMATIC DISCHARGE OF SENATE BUDG15 ET COMMITTEE.—In the event that the Senate Com16 mittee on the Budget fails to report a resolution

17 meeting the requirements of subsection (f), the com18 mittee shall be automatically discharged from fur19 ther consideration of the concurrent resolution re20 flecting the President’s recommendations introduced

21 pursuant to section 5(b), and the concurrent resolu22 tion shall be placed on the appropriate calendar.

23 (2) CONSIDERATION BY SENATE OF DIS24 CHARGED RESOLUTION.—Ten days after the Senate

25 Committee on the Budget has been discharged under
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1 paragraph (1), any member may move that the Sen2 ate proceed to consider the resolution. Such motion

3 shall be privileged and not debatable. Consideration

4 of such resolution shall be pursuant to the proce5 dures set forth in section 305 of the Congressional

6 Budget Act of 1974 and subsection (h).

7 (h) CONSIDERATION BY SENATE.—(1) It shall not be

8 in order in the Senate to consider a concurrent resolution

9 on the budget unless that concurrent resolution fully ad10 dresses the entirety of any excess of the direct spending

11 targets as identified in the OMB sequestration report sub12 mitted under section 12(e) through reconciliation instruc13 tions requiring direct spending reductions, or changes in

14 the direct spending targets.

15 (2) If the concurrent resolution on the budget pro16 poses to eliminate or offset less than the entire overage

17 of a budget year, then the Committee on the Budget shall

18 report a resolution increasing the direct spending target

19 by the full amount of the overage not eliminated. It shall

20 not be in order to consider any concurrent resolution on

21 the budget that does not offset the entire amount of the

22 overage until the Senate has agreed to the resolution di23 recting the increase in the direct spending targets.

24 (i) CONFERENCE REPORTS MUST FULLY ADDRESS

25 OVERAGE.—It shall not be in order in the House of Rep-
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1 resentatives or the Senate to consider a conference report

2 on a concurrent resolution on the budget unless that con3 ference report fully addresses the entirety of any excess

4 identified by the OMB sequestration preview report sub5 mitted pursuant to section 12(e) through reconciliation in6 structions requiring direct spending reductions, or changes

7 in the direct spending targets.

8 (j) WAIVERS.—The points of order established by

9 subsection (d)(1), (h)(1), or (i) may be waived or sus10 pended—

11 (1) in the House of Representatives only by a

12 resolution devoted solely to the subject of waiving

13 that point of order, or

14 (2) in the Senate only by an affirmative vote of

15 three-fifths of the Members duly chosen and sworn.

16 SEC. 7. SPIN-OFF LEGISLATION.

17 (a) ALLOCATIONS OF DIRECT SPENDING.—The joint

18 explanatory statement accompanying a conference report

19 on a concurrent resolution on the budget shall include an

20 estimated allocation based upon such concurrent resolu21 tion as recommended in such conference report, of the ap22 propriate levels of direct spending budget authority and

23 outlays for each major functional category.

24 (b) INTRODUCTION OF SPIN-OFF LEGISLATION.—On

25 the third legislative day after adoption of a concurrent res-
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1 olution on the budget, the chairman of the Committee on

2 the Budget of the House of Representatives or the Senate,

3 as the case may be, shall introduce legislation specifying

4 the budget year amount of direct spending allowed by

5 budget functional categories, based on the allocations set

6 forth in the joint explanatory statement accompanying the

7 conference report on such concurrent resolution. The total

8 amount of direct spending under such legislation may not

9 exceed the target set forth for that fiscal year by section

10 4 unless Congress has adopted a resolution directing an

11 increase in the direct spending targets. Legislation intro12 duced under this subsection shall be referred to the Com13 mittee on the Budget.

14 (c) PROCEDURE IN HOUSE OF REPRESENTATIVES.—

15 (1) AUTOMATIC DISCHARGE OF HOUSE BUDGET

16 COMMITTEE.—In the event that the House Budget

17 Committee fails to report legislation introduced pur18 suant to subsection (b) within 7 legislative days of

19 the introduction of the bill in the House, the com20 mittee shall be automatically discharged from fur21 ther consideration of such legislation.

22 (2) CONSIDERATION BY HOUSE OF SPIN-OFF

23 LEGISLATION.—Three legislative days after the

24 House Budget Committee has reported spin-off leg25 islation described in subsection (b) or has been dis-
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1 charged under paragraph (1), it shall be in order to

2 move that the House proceed to consider the legisla3 tion. Such motion shall be highly privileged and not

4 debatable.

5 (3) DEBATE IN HOUSE.—General debate on any

6 spin-off legislation in the House of Representatives

7 shall be limited to not more than 5 hours, which

8 shall be divided equally between the majority and

9 minority parties. A motion to further limit debate

10 shall not be in order. It shall not be in order to con11 sider any amendments which would cause the total

12 amount of direct spending under the spin-off legisla13 tion to exceed the target set forth for the fiscal year

14 under section 4.

15 (4) HOUSE CONSIDERATION OF CONFERENCE

16 REPORT.—Debate in the House of Representatives

17 on the conference report on spin-off legislation shall

18 be limited to not more than 1 hour, which shall be

19 divided equally between the majority and minority

20 parties. A motion to further limit debate is not de21 batable. A motion to recommit the conference report

22 is not in order, and it is not in order to move to re23 consider the vote by which the conference report is

24 agreed to or disagreed to.

25 (d) PROCEDURE IN THE SENATE.—
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1 (1) AUTOMATIC DISCHARGE OF SENATE BUDG2 ET COMMITTEE.—In the event that the Senate

3 Budget Committee fails to report legislation de4 scribed in subsection (b), the committee shall be

5 automatically discharged from further consideration

6 of such legislation.

7 (2) CONSIDERATION BY SENATE OF SPIN-OFF

8 LEGISLATION.—Three days after the Senate Budget

9 Committee has reported spin-off legislation described

10 in subsection (b) or has been discharged under para11 graph (1), it shall be in order to move that the Sen12 ate proceed to consider the legislation. Such motion

13 shall be privileged and not debatable.

14 (3) DEBATE IN SENATE.—Debate in the Senate

15 on any spin-off legislation, and all amendments

16 thereto and debatable motions and appeals in con17 nection therewith, shall be limited to not more than

18 25 hours. The time shall be equally divided between,

19 and controlled by, the majority leader and the mi20 nority leader or their designees. It shall not be in

21 order to consider any amendments which would

22 cause the total amount of direct spending under the

23 spin-off legislation to exceed the target set forth for

24 the fiscal year under section 4 or includes provisions

25 on a subject other than the levels of budget year
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1 amount or direct spending allowed by budget func2 tional categories.

3 (4) A MOTION TO FURTHER LIMIT DEBATE IS

4 NOT DEBATABLE.—A motion to recommit (except a

5 motion to recommit with instruction to report back

6 within a specified number of days, not to exceed 3,

7 not counting any day on which the Senate is not in

8 session) is not in order. Debate on any such motion

9 to recommit shall be limited to 1 hour, to be equally

10 divided between, and controlled by, the mover and

11 the manager of the concurrent resolution.

12 (5) MOTION TO PROCEED TO CONFERENCE IN

13 SENATE.—A motion to proceed to the consideration

14 of the conference report on any spin-off legislation

15 may be made even though a previous motion to the

16 same effect has been disagreed to.

17 (6) SENATE CONSIDERATION OF CONFERENCE

18 REPORT.—Debate in the Senate on a conference re19 port on spin-off legislation shall be limited to not

20 more than 5 hours, which shall be divided equally

21 between the majority leader and minority leader or

22 their designees. A motion to further limit debate is

23 not debatable. Debate on any debatable motion or

24 appeal related to the conference report (or a mes25 sage between House) shall be limited to 1 hour, to
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1 be equally divided between, and controlled by, the

2 mover and the manager of the conference report.

3 (7) REQUEST FOR NEW CONFERENCE.—Should

4 the conference report be defeated, debate on any re5 quest for a new conference and the appointment of

6 conferees shall be limited to 1 hour, to be equally di7 vided between, and controlled by, the manager of the

8 conference report and the minority leader or his des9 ignee, and should any motion be made to instruct

10 the conferees before the conferees are named, debate

11 on such motion shall be limited to one-half hour, to

12 be equally divided between, and controlled by, the

13 mover and the manager of the conference report. In

14 all cases when the manager of the conference report

15 is in favor of any motion, appeal or amendment, the

16 time in opposition shall be under the control of the

17 minority leader or his designee.

18 SEC. 8. TARGETED SEQUESTRATION.

19 (a) APPLICATION.—This section shall apply for any

20 budget year only if a spin-off law as described in section

21 7 is in effect for that year on the date of the final seques22 tration report described in section 12.

23 (b) SEQUESTRATION IN EACH FUNCTIONAL CAT24 EGORY.—(1) The purpose of this subsection is to ensure
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1 that total direct spending for each functional category is

2 no more than allowed for the budget year.

3 (2) The amount to be sequestered for the budget year

4 from direct spending programs in each functional category

5 is the amount by which direct spending during the budget

6 year results in a greater amount of direct spending than

7 allowed in that functional category in the spin-off law.

8 (c) SEQUESTRATION.—Within 15 days after Con9 gress adjourns to end a session, there shall be a sequestra10 tion to reduce the amount of direct spending in the cur11 rent policy baseline in any functional category by the

12 amount specified in subsection (b)(2). The amount re13 quired to be sequestered from direct spending in a func14 tional category shall be achieved by reducing each non15 exempt direct spending account (or activity within an ac16 count) within that functional category by the uniform per17 centage necessary to achieve that amount.

18 SEC. 9. COMPREHENSIVE SEQUESTRATION.

19 (a) APPLICATION.—This section shall apply for any

20 budget year unless a spin-off law as described in section

21 7 is in effect for that year on the date of the final seques22 tration report described in section 12.

23 (b) SEQUESTRATION BASED ON BUDGET-YEAR

24 SHORTFALL.—The amount to be sequestered for the
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1 budget year is the amount (if any) by which direct spend2 ing exceeds the cap for that year under section 4.

3 (c) SEQUESTRATION.—Within 15 days after Con4 gress adjourns to end a session, there shall be a sequestra5 tion to reduce the amount of direct spending in the cur6 rent policy baseline by the amounts specified in subsection

7 (b). The amount required to be sequestered shall be

8 achieved by reducing each direct spending account (or ac9 tivity within an account) by the uniform percentage nec10 essary to achieve that amount.

11 SEC. 10. EXEMPT PROGRAMS AND ACTIVITIES.

12 The following budget accounts, activities within ac13 counts, or income shall be exempt from sequestration—

14 (1) net interest;

15 (2) deposit insurance and pension benefit guar16 antees;

17 (3) all payments to trust funds from excise

18 taxes or other receipts or collections properly cred19 itable to those trust funds;

20 (4) offsetting receipts and collections;

21 (5) all payments from one Federal direct spend22 ing budget account to another Federal budget ac23 count; all intragovernmental funds including those

24 from which funding is derived primarily from other

25 Government accounts;
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1 (6) expenses to the extent they result from pri2 vate donations, bequests, or voluntary contributions

3 to the Government;

4 (7) nonbudgetary activities, including but not

5 limited to—

6 (A) credit liquidating and financing ac7 counts;

8 (B) the Pension Benefit Guarantee Cor9 poration Trust Funds;

10 (C) the Thrift Savings Fund;

11 (D) the Federal Reserve System; and

12 (E) appropriations for the District of Co13 lumbia to the extent they are appropriations of

14 locally raised funds;

15 (8) payments resulting from Government insur16 ance, Government guarantees, or any other form of

17 contingent liability, to the extent those payments re18 sult from contractual or other legally binding com19 mitments of the Government at the time of any se20 questration;

21 (9) the following accounts, which largely fulfill

22 requirements of the Constitution or otherwise make

23 payments to which the Government is committed:
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1 Administration of Territories, Northern

2 Mariana Islands Covenant grants (14–0412–0–

3 1–806);

4 Bureau of Indian Affairs, miscellaneous

5 payments to Indians (14–2303–0–1–452);

6 Bureau of Indian Affairs, miscellaneous

7 trust funds, tribal trust funds (14–9973–0–7–

8 999);

9 Claims, defense;

10 Claims, judgments, and relief act (20–

11 1895–0–1–806);

12 Compact of Free Association, economic as13 sistance pursuant to Public Law 99–658 (14–

14 0415–0–1–806);

15 Compensation of the President (11–0001–

16 0–1–802);

17 Customs Service, miscellaneous permanent

18 appropriations (20–9992–0–2–852);

19 Eastern Indian land claims settlement

20 fund (14–2202–0–1–806)

21 Farm Credit System Financial Assistance

22 Corporation, interest payments (20–1850–0–1–

23 351);

24 Internal Revenue collections of Puerto Rico

25 (20–5737–0–2–852);
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1 Panama Canal Commission, operating ex2 penses and capital outlay (95–5190–0–2–403);

3 Payments of Vietnam and USS Pueblo

4 prisoner-of-war claims (15–0104–0–1–153);

5 Payments to copyright owners (03–5175–

6 0–2–376);

7 Payments to the United States territories,

8 fiscal assistance (14–0418–0–1–801);

9 Salaries of Article III judges;

10 Soldier’s and Airmen’s Home, payment of

11 claims (84–8930–0–7–705);

12 Washington Metropolitan Area Transit Au13 thority, interest payments (46–0300–0–1–401);

14 (10) the following noncredit special, revolving,

15 or trust-revolving funds:

16 Coinage profit fund (20–5811–0–2–803);

17 Exchange Stabilization Fund (20–4444–0–

18 3–155);

19 Foreign Military Sales trust fund (11–

20 82232–0–7–155);

21 (11)(A) any amount paid as regular unemploy22 ment compensation by a State from its account in

23 the Unemployment Trust Fund (established by sec24 tion 904(a) of the Social Security Act);
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1 (B) any advance made to a State from the Fed2 eral unemployment account (established by section

3 904(g) of such Act) under title XII of such Act and

4 any advance appropriated to the Federal unemploy5 ment account pursuant to section 1203 of such Act;

6 (C) any payment made from the Federal Em7 ployees Compensation Account (as established under

8 section 909 of such Act) for the purpose of carrying

9 out chapter 85 of title 5, United States Code, and

10 funds appropriated or transferred to or otherwise

11 deposited in such Account;

12 (12) the earned income tax credit (payments to

13 individuals pursuant to section 32 of the Internal

14 Revenue Code of 1986); and

15 (13) the uranium enrichment program.

16 SEC. 11. GENERAL AND SPECIAL SEQUESTRATION RULES.

17 (a) PERMANENT SEQUESTRATION OF DIRECT

18 SPENDING.—

19 (1) The purpose of any direct spending seques20 tration under this Act is to ensure deficit reduction

21 in the budget year and all subsequent fiscal years,

22 so that the budget-year direct spending cap in sec23 tion 4 is not exceeded.

24 (2) Obligations in sequestered direct spending

25 accounts shall be reduced in the fiscal year in which
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1 a sequestration occurs and in all succeeding fiscal

2 years. Notwithstanding any other provision of this

3 section, after the first direct spending sequestration,

4 any later sequestration shall reduce direct spending

5 by an amount in addition to, rather than in lieu of,

6 the reduction in direct spending in place under the

7 existing sequestration or sequestrations.

8 (b) UNIFORM PERCENTAGES.—

9 (1) In calculating the uniform percentage appli10 cable to the sequestration of all direct spending pro11 grams or activities under section 9, or the uniform

12 percentage applicable to the sequestration of

13 nonexempt direct spending programs or activities

14 within a functional category under section 8, the

15 sequestrable base for direct spending programs and

16 activities is the total budget-year level of outlays for

17 those programs or activities in the current policy

18 baseline minus—

19 (A) those budget-year outlays resulting

20 from obligations incurred in the current or

21 prior fiscal years, and

22 (B) those budget-year outlays resulting

23 from exemptions under section 10.

24 (2) For any direct spending program in

25 which—
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1 (A) outlays pay for entitlement benefits,

2 (B) a budget-year sequestration takes ef3 fect after the 1st day of the budget year, and

4 (C) that delay reduces the amount of enti5 tlement authority that is subject to sequestra6 tion in the budget year,

7 the uniform percentage otherwise applicable to the

8 sequestration of that program in the budget year

9 shall be increased as necessary to achieve the same

10 budget-year outlay reduction in that program as

11 would have been achieved had there been no delay.

12 (3) If the uniform percentage otherwise applica13 ble to the budget-year sequestration of a program or

14 activity is increased under paragraph (2), then it

15 shall revert to the uniform percentage calculated

16 under paragraph (1) when the budget year is com17 pleted.

18 (c) GENERAL RULES FOR SEQUESTRATION.—

19 (1) INDEFINITE AUTHORITY.—Except as other20 wise provided, sequestration in accounts for which

21 obligations are indefinite shall be taken in a manner

22 to ensure that obligations in the fiscal year of a se23 questration and succeeding fiscal years are reduced,

24 from the level that would actually have occurred, by
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•HR 4593 IH

1 the applicable sequestration percentage or percent2 ages.

3 (2) CANCELLATION OF BUDGETARY RE4 SOURCES.—Budgetary resources sequestered from

5 any account other than an entitlement trust, special,

6 or revolving fund account shall revert to the Treas7 ury and be permanently canceled or repealed.

8 (3) INDEXED BENEFIT PAYMENTS.—If, under

9 any entitlement program—

10 (A) benefit payments are made to persons

11 or governments more frequently than once a

12 year, and

13 (B) the amount of entitlement authority is

14 periodically adjusted under existing law to re15 flect changes in a price index,

16 then for the first fiscal year to which a sequestration

17 order applies, the benefit reductions in that program

18 accomplished by the order shall take effect starting

19 with the payment made at the beginning of January

20 or 7 weeks after the order is issued, whichever is

21 later. For the purposes of this subsection, Veterans

22 Compensation shall be considered a program that

23 meets the conditions of the preceding sentence.

24 (4) PROGRAMS, PROJECTS, OR ACTIVITIES.—

25 Except as otherwise provided, the same percentage
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•HR 4593 IH

1 sequestration shall apply to all programs, projects,

2 and activities within a budget account (with pro3 grams, projects, and activities as delineated in the

4 appropriation Act or accompanying report for the

5 relevant fiscal year covering that account, or for ac6 counts not included in appropriation Acts, as delin7 eated in the most recently submitted President’s

8 budget).

9 (5) IMPLEMENTING REGULATIONS.—Adminis10 trative regulations or similar actions implementing

11 the sequestration of a program or activity shall be

12 made within 120 days of the effective date of the se13 questration of that program or activity.

14 (6) DISTRIBUTION FORMULAS.—To the extent

15 that distribution or allocation formulas differ at dif16 ferent levels of budgetary resources within an ac17 count, program, project, or activity, a sequestration

18 shall be interpreted as producing a lower total ap19 propriation, with that lower appropriation being obli20 gated as though it had been the pre-sequestration

21 appropriation and no sequestration had occurred.

22 (7) CONTINGENT FEES.—In any account for

23 which fees charged to the public are legally deter24 mined by the level of appropriations, fees shall be
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•HR 4593 IH

1 charged on the basis of the presequestration level of

2 appropriations.

3 (d) NON-JOBS PORTION OF AFDC.—Any sequestra4 tion order shall accomplish the full amount of any required

5 reduction in payments for the non-jobs portion of the aid

6 to families with dependant children program under the So7 cial Security Act by reducing the Federal reimbursement

8 percentage (for the fiscal year involved) by multiplying

9 that reimbursement percentage, on a State-by-State basis,

10 by the uniform percentage applicable to the sequestration

11 of nonexempt direct spending programs or activities.

12 (e) JOBS PORTION OF AFDC.—

13 (1) FULL AMOUNT OF SEQUESTRATION RE14 QUIRED.—Any sequestration order shall accomplish

15 the full amount of any required reduction of the job

16 opportunities and basic skills training program

17 under section 402(a)(19), and part F of title VI, of

18 the Social Security Act, in the manner specified in

19 this subsection. Such an order may not reduce any

20 Federal matching rate pursuant to section 403(l) of

21 the Social Security Act.

22 (2) NEW ALLOTMENT FORMULA.—

23 (A) GENERAL RULE.—Notwithstanding

24 section 403(k) of the Social Security Act, each

25 State’s percentage share of the amount avail-
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•HR 4593 IH

1 able after sequestration for direct spending pur2 suant to section 403(l) of such Act shall be

3 equal to that percentage of the total amount

4 paid to the States pursuant to such section

5 403(l) for the prior fiscal year that is rep6 resented by the amount paid to such State pur7 suant to such section 403(l) for the prior fiscal

8 year, except that a State may not be allotted an

9 amount under this subparagraph that exceeds

10 the amount that would have been allotted to

11 such State pursuant to such section 403(k) had

12 the sequestration not been in effect.

13 (B) REALLOTMENT OF AMOUNTS REMAIN14 ING UNALLOTTED AFTER APPLICATION OF GEN15 ERAL RULE.—Any amount made available after

16 sequestration for direct spending pursuant to

17 section 403(l) of the Social Security Act that

18 remains unallotted as a result of subparagraph

19 (A) of this paragraph shall be allotted among

20 the States in proportion to the absolute dif21 ference between the amount allotted, respec22 tively, to each State as a result of such sub23 paragraph and the amount that would have

24 been allotted to such State pursuant to section

25 403(k) of such Act had the sequestration not
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•HR 4593 IH

1 been in effect, except that a State may not be

2 allotted an amount under this subparagraph

3 that results in a total allotment to the State

4 under this paragraph of more than the amount

5 that would have been allotted to such State

6 pursuant to such section 403(k) had the seques7 tration not been in effect.

8 (f) CHILD SUPPORT ENFORCEMENT PROGRAM.—Any

9 sequestration order shall accomplish the full amount of

10 any required reduction in payments under sections 455

11 and 458 of the Social Security Act by reducing the Fed12 eral matching rate for State administrative costs under

13 the program, as specified (for the fiscal year involved) in

14 section 455(a) of such Act, to the extent necessary to re15 duce such expenditures by that amount.

16 (g) COMMODITY CREDIT CORPORATION.—

17 (1) EFFECTIVE DATE.—For the Commodity

18 Credit Corporation, the date on which a sequestra19 tion order takes effect in a fiscal year shall vary for

20 each crop of a commodity. In general, the sequestra21 tion order shall take effect when issued, but for each

22 crop of a commodity for which 1-year contracts are

23 issued as an entitlement, the sequestration order

24 shall take effect with the start of the sign-up period

25 for that crop that begins after the sequestration
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•HR 4593 IH

1 order is issued. Payments for each contract in such

2 a crop shall be reduced under the same terms and

3 conditions.

4 (2) DAIRY PROGRAM.—As the sole means of

5 achieving any reduction in outlays under the milk

6 price-support program, the Secretary of Agriculture

7 shall provide for a reduction to be made in the price

8 received by producers for all milk produced in the

9 United States and marketed by producers for com10 mercial use. That price reduction (measured in cents

11 per hundredweight of milk marketed) shall occur

12 under subparagraph (A) of section 201(d)(2) of the

13 Agricultural Act of 1949 (7 U.S.C. 1446(d)(2)(A)),

14 shall begin on the day any sequestration order is is15 sued, and shall not exceed the aggregate amount of

16 the reduction in outlays under the milk price-support

17 program, that otherwise would have been achieved

18 by reducing payments made for the purchase of milk

19 or the products of milk under this subsection during

20 that fiscal year.

21 (3) EFFECT OF DELAY.—For purposes of sub22 section (b)(1), the sequestrable base for the Com23 modity Credit Corporation is the budget-year level of

24 gross outlays resulting from new budget authority
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•HR 4593 IH

1 that is subject to reduction under paragraphs (1)

2 and (2), and subsection (b)(2) shall not apply.

3 (4) CERTAIN AUTHORITY NOT TO BE LIM4 ITED.—Nothing in this Act shall restrict the Cor5 poration in the discharge of its authority and re6 sponsibility as a corporation to buy and sell com7 modities in world trade, or limit or reduce in any

8 way any appropriation that provides the Corporation

9 with funds to cover its net realized losses.

10 (h) EXTENDED UNEMPLOYMENT COMPENSATION.—

11 (1) A State may reduce each weekly benefit payment made

12 under the Federal-State Extended Unemployment Com13 pensation Act of 1970 for any week of unemployment oc14 curring during any period with respect to which payments

15 are reduced under any sequestration order by a percentage

16 not to exceed the percentage by which the Federal pay17 ment to the State under section 204 of such Act is to be

18 reduced for such week as a result of such order.

19 (2) A reduction by a State in accordance with sub20 paragraph (A) shall not be considered as a failure to fulfill

21 the requirements of section 3304(a)(11) of the Internal

22 Revenue Code of 1986.

23 (i) FEDERAL EMPLOYEES HEALTH BENEFITS

24 FUND.—For the Federal Employees Health Benefits

25 Fund, a sequestration order shall take effect with the next
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•HR 4593 IH

1 open season. The sequestration shall be accomplished by

2 annual payments from that Fund to the General Fund of

3 the Treasury. Those annual payments shall be financed

4 solely by charging higher premiums. For purposes of sub5 section (b)(1), the sequestrable base for the Fund is the

6 budget-year level of gross outlays resulting from claims

7 paid after the sequestration order takes effect, and sub8 section (b)(2) shall not apply.

9 (j) FEDERAL HOUSING FINANCE BOARD.—Any se10 questration of the Federal Housing Finance Board shall

11 be accomplished by annual payments (by the end of each

12 fiscal year) from that Board to the general fund of the

13 Treasury, in amounts equal to the uniform sequestration

14 percentage for that year times the gross obligations of the

15 Board in that year.

16 (k) FEDERAL PAY.—

17 (1) IN GENERAL.—Except as provided in sec18 tion 10(b)(3), new budget authority to pay Federal

19 personnel from direct spending accounts shall be re20 duced by the uniform percentage calculated under

21 section 8 or 9, as applicable, but no sequestration

22 order may reduce or have the effect of reducing the

23 rate of pay to which any individual is entitled under

24 any statutory pay system (as increased by any

25 amount payable under section 5304 of title 5, Unit-
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•HR 4593 IH

1 ed States Code, or section 302 of the Federal Em2 ployees Pay Comparability Act of 1990) or the rate

3 of any element of military pay to which any individ4 ual is entitled under title 37, United States Code, or

5 any increase in rates of pay which is scheduled to

6 take effect under section 5303 of title 5, United

7 States Code, section 1009 of title 37, United States

8 Code, or any other provision of law.

9 (2) DEFINITIONS.—For purposes of this sub10 section:

11 (A) The term ‘‘statutory pay system’’ shall

12 have the meaning given that term in section

13 5302(1) of title 5, United States Code.

14 (B) The term ‘‘elements of military pay’’

15 means—

16 (i) the elements of compensation of

17 members of the uniformed services speci18 fied in section 1009 of title 37, United

19 States Code,

20 (ii) allowances provided members of

21 the uniformed services under sections 403a

22 and 405 of such title, and

23 (iii) cadet pay and midshipman pay

24 under section 203(c) of such title.
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•HR 4593 IH

1 (C) The term ‘‘uniformed services’’ shall

2 have the meaning given that term in section

3 101(3) of title 37, United States Code.

4 (l) GUARANTEED STUDENT LOANS.—(A) For all stu5 dent loans under part B of title IV of the Higher Edu6 cation Act of 1965 made on or after the date of a seques7 tration, the origination fees shall be increased by a uni8 form percentage sufficient to produce the dollar savings

9 in student loan programs for the fiscal year of the seques10 tration required by section 8 or 9, and all subsequent

11 origination fees shall be increased by the same percentage,

12 notwithstanding any other provision of law.

13 (B) The origination fees to which paragraph (A) ap14 plies are those specified in sections 428H(f)(1) and 438(c)

15 of that Act.

16 (m) INSURANCE PROGRAMS.—Any sequestration in a

17 Federal program that sells insurance contracts to the pub18 lic (including the Federal Crop Insurance Fund, the Na19 tional Insurance Development Fund, the National Flood

20 Insurance Fund, insurance activities of the Overseas Pri21 vate Insurance Corporation, and Veterans’ life insurance

22 programs) shall be accomplished by annual payments from

23 the insurance fund or account to the general fund of the

24 Treasury. The amount of each annual payment by each

25 such fund or account shall be the amount received by the
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•HR 4593 IH

1 fund or account by increasing premiums on contracts en2 tered into after the date a sequestration order takes effect

3 by the uniform sequestration percentage, and premiums

4 shall be increased accordingly.

5 (n) MEDICAID.—The November 15th estimate of

6 medicaid spending by States shall be the base estimate

7 from which the uniform percentage reduction under any

8 sequestration, applied across-the-board by State, shall be

9 made. Succeeding Federal payments to States shall reflect

10 that reduction. The Health Care Financing Administra11 tion shall reconcile actual medicaid spending for each fis12 cal year with the base estimate as reduced by the uniform

13 percentage, and adjust each State’s grants as soon as

14 practicable, but no later than 100 days after the end of

15 the fiscal year to which the base estimate applied, to com16 ply with the sequestration order.

17 (o) MEDICARE.—

18 (1) TIMING OF APPLICATION OF REDUC19 TIONS.—

20 (A) IN GENERAL.—Except as provided in

21 subparagraph (B), if a reduction is made in

22 payment amounts pursuant to a sequestration

23 order, the reduction shall be applied to payment

24 for services furnished after the effective date of

25 the order. For purposes of the previous sen-
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•HR 4593 IH

1 tence, in the case of inpatient services furnished

2 for an individual, the services shall be consid3 ered to be furnished on the date of the individ4 ual’s discharge from the inpatient facility.

5 (B) PAYMENT ON THE BASIS OF COST RE6 PORTING PERIODS.—In the case in which pay7 ment for services of a provider of services is

8 made under title XVIII of the Social Security

9 Act on a basis relating to the reasonable cost

10 incurred for the services during a cost reporting

11 period of the provider, if a reduction is made in

12 payment amounts pursuant to a sequestration

13 order, the reduction shall be applied to payment

14 for costs for such services incurred at any time

15 during each cost reporting period of the pro16 vider any part of which occurs after the effec17 tive date of the order, but only (for each such

18 cost reporting period) in the same proportion as

19 the fraction of the cost reporting period that oc20 curs after the effective date of the order.

21 (2) NO INCREASE IN BENEFICIARY CHARGES IN

22 ASSIGNMENT-RELATED CASES.—If a reduction in

23 payment amounts is made pursuant to a sequestra24 tion order for services for which payment under part

25 B of title XVIII of the Social Security Act is made
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1 on the basis of an assignment described in section

2 1842(b)(3)(B)(ii), in accordance with section

3 1842(b)(6)(B), or under the procedure described in

4 section 1870(f)(1) of such Act, the person furnishing

5 the services shall be considered to have accepted

6 payment of the reasonable charge for the services,

7 less any reduction in payment amount made pursu8 ant to a sequestration order, as payment in full.

9 (3) NO EFFECT ON COMPUTATION OF AAPCC.—

10 In computing the adjusted average per capita cost

11 for purposes of section 1876(a)(4) of the Social Se12 curity Act, the Secretary of Health and Human

13 Services shall not take into account any reductions

14 in payment amounts which have been or may be ef15 fected under this part.

16 (p) POSTAL SERVICE FUND.—Any sequestration of

17 the Postal Service Fund shall be accomplished by annual

18 payments from that Fund to the General Fund of the

19 Treasury, and the Postmaster General of the United

20 States shall have the duty to make those payments during

21 the fiscal year to which the sequestration order applies

22 and each succeeding fiscal year. The amount of each an23 nual payment shall be—

24 (1) the uniform sequestration percentage, times
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1 (2) the estimated gross obligations of the Postal

2 Service Fund in that year other than those obliga3 tions financed with an appropriation for revenue

4 foregone for that year.

5 Any such payment for a fiscal year shall be made as soon

6 as possible during the fiscal year, except that it may be

7 made in installments within that year if the payment

8 schedule is approved by the Secretary of the Treasury.

9 Within 30 days after the sequestration order is issued, the

10 Postmaster General shall submit to the Postal Rate Com11 mission a plan for financing the annual payment for that

12 fiscal year and publish that plan in the Federal Register.

13 The plan may assume efficiencies in the operation of the

14 Postal Service, reductions in capital expenditures, in15 creases in the prices of services, or any combination, but

16 may not assume a lower Fund surplus or higher Fund

17 deficit and must follow the requirements of existing law

18 governing the Postal Service in all other respects. Within

19 30 days of the receipt of that plan, the Postal Rate Com20 mission shall approve the plan or modify it in the manner

21 that modifications are allowed under current law. If the

22 Postal Rate Commission does not respond to the plan

23 within 30 days, the plan submitted by the Postmaster

24 General shall go into effect. Any plan may be later revised
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•HR 4593 IH

1 by the submission of a new plan to the Postal Rate Com2 mission, which may approve or modify it.

3 (q) POWER MARKETING ADMINISTRATIONS AND

4 T.V.A.—Any sequestration of the Department of Energy

5 power marketing administration funds or the Tennessee

6 Valley Authority fund shall be accomplished by annual

7 payments from those funds to the General Fund of the

8 Treasury, and the administrators of those funds shall have

9 the duty to make those payments during the fiscal year

10 to which the sequestration order applies and each succeed11 ing fiscal year. The amount of each annual payment by

12 a fund shall be—

13 (1) the direct spending uniform sequestration

14 percentage, times

15 (2) the estimated gross obligations of the fund

16 in that year other than those obligations financed

17 from discretionary appropriations for that year.

18 Any such payment for a fiscal year shall be made as soon

19 as possible during the fiscal year, except that it may be

20 made in installments within that year if the payment

21 schedule is approved by the Secretary of the Treasury. An22 nual payments by a fund may be financed by reductions

23 in costs required to produce the presequester amount of

24 power (but those reductions shall not include reductions

25 in the amount of power supplied by the fund), by reduc-
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•HR 4593 IH

1 tions in capital expenditures, by increases in rates, or by

2 any combination, but may not be financed by a lower fund

3 surplus or a higher fund deficit and must follow the re4 quirements of existing law governing the fund in all other

5 respects. The administrator of a fund or the TVA Board

6 is authorized to take the actions specified above in order

7 to make the annual payments to the Treasury.

8 (r) VETERANS’ HOUSING LOANS.—(1) For all hous9 ing loans guaranteed, insured, or made under chapter 37

10 of title 38, United States Code, on or after the date of

11 a sequestration, the origination fees shall be increased by

12 a uniform percentage sufficient to produce the dollar sav13 ings in veterans’ housing programs for the fiscal year of

14 the sequestration required by section 8 or 9, and all subse15 quent origination fees shall be increased by the same per16 centage, notwithstanding any other provision of law.

17 (2) The origination fees to which paragraph (1) ap18 plies are those referred to in section 3729 of title 38,

19 United States Code.

20 SEC. 12. ESTIMATING ASSUMPTIONS, REPORTS, AND OR21 DERS.

22 (a) TIMETABLE.—The timetable with respect to this

23 part for any budget year is as follows:

Date: Action to be completed:

The President’s budget submission OMB publishes sequestration preview

report.

Within 10 days after end of session.OMB and CBO issue final budget

year sequestration reports.
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Date: Action to be completed:

5 days later .................................... President issues sequestration order.

1 (b) SUBMISSION AND AVAILABILITY OF REPORTS.—

2 Each report required by this section shall be submitted,

3 in the case of CBO, to the House of Representatives, the

4 Senate, and OMB, and, in the case of OMB, to the House

5 of Representatives, the Senate, and the President on the

6 day it is issued. On the following day a notice of the report

7 shall be printed in the Federal Register.

8 (c) EXCHANGE OF PRELIMINARY CURRENT POLICY

9 BASELINES.—On January 15, OMB and CBO shall ex10 change their preliminary current policy baselines for the

11 budget-year session starting in January.

12 (d) SEQUESTRATION PREVIEW REPORTS.—

13 (1) REPORTING REQUIREMENT.—On January

14 31, whichever is later, OMB and CBO shall each

15 submit a sequestration preview report.

16 (2) CONTENTS.—Each preview report shall set

17 forth the following:

18 (A) MAJOR ESTIMATING ASSUMPTIONS.—

19 The major estimating assumptions for the cur20 rent year, the budget year, and the outyears,

21 and an explanation of them.

22 (B) CURRENT POLICY BASELINE.—A de23 tailed display of the current policy baseline for

24 the current year, the budget year, and the out-
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•HR 4593 IH

1 years, with an explanation of changes in the

2 baseline since it was last issued that includes

3 the effect of policy decisions made during the

4 intervening period and an explanation of the

5 differences between OMB and CBO for each

6 item set forth in the report.

7 (C) ADJUSTING DIRECT SPENDING TAR8 GETS.—A determination of any adjustments to

9 the direct spending targets under section 4 and

10 an explanation of any adjustments.

11 (D) REQUIREMENTS FOR DIRECT SPEND12 ING.—An estimate of the reductions in direct

13 spending to be achieved for the budget year

14 necessary to comply with the direct spending

15 targets.

16 (E) DIRECT SPENDING SEQUESTRATION.—

17 Estimates of the uniform percentage and the

18 amount of comprehensive sequestration of di19 rect spending programs that will be necessary

20 under section 9.

21 (e) OFFICIAL SEQUESTRATION PREVIEW REPORT.—

22 The OMB sequestration preview report shall be the official

23 report for purposes of this Act. That report shall be set

24 forth, without change, in the budget submitted by the
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•HR 4593 IH

1 President under section 1105(a) of title 31, United States

2 Code, for the budget year.

3 (f) FINAL SEQUESTRATION REPORTS.—

4 (1) REPORTING REQUIREMENT.—Not later than

5 10 days following the end of a budget-year session,

6 OMB and CBO shall each submit a final sequestra7 tion report.

8 (2) CONTENTS.—That report shall be based

9 upon laws enacted through the date of the report

10 and shall set forth all the information and estimates

11 required of a sequestration preview report required

12 by subsections (d)(2)(C) through (E). In addition,

13 that report shall include for each account to be se14 questered, the baseline level of sequestrable budg15 etary resources and the resulting reductions in new

16 budget authority and outlays.

17 (g) PRESIDENTIAL ORDER.—On the day that OMB

18 issues a final sequestration report, the President shall

19 issue an order fully implementing without change all se20 questrations actions required by the final sequestration re21 port that requires the lesser total amount of direct spend22 ing sequestration under section 8 or 9 (as applicable). The

23 order shall be effective on issuance and shall be issued

24 only if sequestration is required.
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•HR 4593 IH

1 (h) USE OF MAJOR ESTIMATING ASSUMPTIONS AND

2 SCOREKEEPING CONVENTIONS.—In the estimates, projec3 tions, and reports under this subtitle, OMB shall use the

4 same economic and technical assumptions as used in the

5 most recent budget submitted by the President under sec6 tion 1105(a) of title 31, United States Code. CBO shall

7 use the same economic and technical assumptions as used

8 in the most recent report submitted by CBO under section

9 202(f)(1) of the Congressional Budget Act of 1974.

10 SEC. 13. THE CURRENT POLICY BASELINE.

11 (a) IN GENERAL.—For any budget year, the baseline

12 refers to a projection of current-year levels of new budget

13 authority, outlays, revenues, and the surplus or deficit into

14 the budget year and the outyears based on laws enacted

15 through, and discretionary regulations promulgated as

16 final by, the applicable date.

17 (b) DIRECT SPENDING.—For the current year, the

18 budget year, and each outyear, the baseline shall be cal19 culated using the following assumptions:

20 (1) IN GENERAL.—Laws providing or creating

21 direct spending are assumed to operate in the man22 ner specified in those laws for each such year, fund23 ing for entitlement authority is assumed to be ade24 quate to make all payments required by those enti25 tlements, and funding for deposit insurance is as-
47

•HR 4593 IH

1 sumed to be adequate to meet the costs of the Fi2 nancial Institutions Reform, Recovery, and Enforce3 ment Act of 1989 or successor laws.

4 (2) EXCEPTIONS.—Except as provided in para5 graph (3):

6 (A) No program with estimated current7 year gross new budget authority greater than

8 $100 million is assumed to expire in the budget

9 year or outyears. In carrying out the preceding

10 sentence, expiring entitlement programs and

11 programs financed by indefinite budget author12 ity are assumed to continue as in effect just

13 prior to their expiration, and other expiring

14 programs are assumed to continue with new

15 budget authority projected as equal to budget

16 authority in the last year for which budget au17 thority is enacted.

18 (B) The percentage increase for veterans’

19 compensation for a fiscal year is assumed to be

20 the same as that required by law for veterans’

21 pensions unless otherwise provided by a law en22 acted in that session.

23 (3) CUTOFF DATE.—Programs that expire on

24 or before December 31 and that have not been reau25 thorized by the date of the final sequestration report
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•HR 4593 IH

1 are assumed to expire. If an increase in veterans

2 compensation has not been enacted by the date of

3 the final sequestration report, it is not assumed.

4 (c) UP-TO-DATE CONCEPTS.—In deriving the base5 line for any budget year or outyear, current-year amounts

6 shall be calculated using the concepts and definitions that

7 are required for that budget year.

8 SEC. 14. RELATIONSHIP TO PAY-AS-YOU-GO.

9 Reductions in outlays resulting in legislation enacted

10 pursuant to section 6 shall not be taken into account for

11 purposes of section 252 of the Balanced Budget and

12 Emergency Deficit Control Act of 1985, except to the ex13 tent necessary to achieve a balance in the paygo scorecard

14 under such section 252(d).

15 SEC. 15. JUDICIAL REVIEW.

16 (a) EXPEDITED REVIEW.—

17 (1) Any Member of Congress may bring an ac18 tion, in the United States District Court for the Dis19 trict of Columbia, for declaratory judgment and in20 junctive relief on the ground that any order that

21 might be issued pursuant to section 12 violates the

22 Constitution.

23 (2) Any Member of Congress, or any other per24 son adversely affected by any action taken under

25 this Act, may bring an action, in the United States
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•HR 4593 IH

1 District Court for the District of Columbia, for de2 claratory judgment and injunctive relief concerning

3 the constitutionality of this Act.

4 (3) Any Member of Congress may bring an ac5 tion, in the United States District Court for the Dis6 trict of Columbia, for declaratory and injunctive re7 lief on the ground that the terms of an order issued

8 under section 12 do not comply with the require9 ments of this Act.

10 (4) A copy of any complaint in an action

11 brought under paragraph (1), (2), or (3) shall be

12 promptly delivered to the Secretary of the Senate

13 and the Clerk of the House of Representatives, and

14 each House of Congress shall have the right to inter15 vene in such action.

16 (5) Any action brought under paragraph (1),

17 (2), or (3) shall be heard and determined by a three18 judge court in accordance with section 2284 of title

19 28, United States Code.

20 Nothing in this section or in any other law shall infringe

21 upon the right of the House of Representatives to inter22 vene in an action brought under paragraph (1), (2), or

23 (3) without the necessity of adopting a resolution to au24 thorize such intervention.
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•HR 4593 IH

1 (b) APPEAL TO SUPREME COURT.—Notwithstanding

2 any other provision of law, any order of the United States

3 District Court for the District of Columbia which is issued

4 pursuant to an action brought under paragraph (1), (2),

5 or (3) of subsection (a) shall be reviewable by appeal di6 rectly to the Supreme Court of the United States. Any

7 such appeal shall be taken by a notice of appeal filed with8 in 10 days after such order is entered; and the jurisdic9 tional statement shall be filed within 30 days after such

10 order is entered. No stay of an order issued pursuant to

11 an action brought under paragraph (1), (2), or (3) of sub12 section (a) shall be issued by a single Justice of the Su13 preme Court.

14 (c) EXPEDITED CONSIDERATION.—It shall be the

15 duty of the District Court for the District of Columbia

16 and the Supreme Court of the United States to advance

17 on the docket and to expedite to the greatest possible ex18 tent the disposition of any matter brought under sub19 section (a).

20 (d) NONCOMPLIANCE WITH SEQUESTRATION PROCE21 DURES.—

22 (1) If it is finally determined by a court of com23 petent jurisdiction that an order issued by the Presi24 dent under section 12 for any fiscal year does not

25 fully implement without change all sequestrations re-
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1 quired by the OMB report, the President shall, with2 in 20 days after such determination is made, revise

3 the order in accordance with such determination.

4 (2) If the order issued by the President under

5 section 12 for any fiscal year does not fully imple6 ment without change all sequestrations required by

7 the OMB report which is the basis for the order on

8 the claim or defense that the constitutional powers

9 of the President prevent such sequestration or re10 duction or permit the avoidance of such sequestra11 tion or reduction, and such claim or defense is fi12 nally determined by the Supreme Court of the Unit13 ed States to be valid, then the entire order issued

14 pursuant to section 12 for such fiscal year shall be

15 null and void.

16 (e) TIMING OF RELIEF.—No order of any court

17 granting declaratory or injunctive relief from the order of

18 the President issued under section 12, including relief per19 mitting or requiring the expenditure of funds sequestered

20 by such order, shall take effect during the pendency of

21 the action before such court, during the time appeal may

22 be taken, or, if appeal is taken, during the period before

23 the court to which such appeal is taken has entered its

24 final order disposing of such action.
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1 (f) PRESERVATION OF OTHER RIGHTS.—The rights

2 created by this section are in addition to the rights of any

3 person under law, subject to subsection (e).

4 (g) ECONOMIC DATA, ASSUMPTIONS, AND METH5 ODOLOGIES.—The economic data and economic and tech6 nical assumptions and estimation of methodologies used

7 by OMB or CBO in preparing any report issued under

8 section 12 shall not be subject to review in any judicial

9 or administrative proceeding.

10 SEC. 16. APPLICATION.

11 The application of provisions, procedures, and points

12 of order under House Resolution 235, One Hundred Third

13 Congress, agreed to August 5, 1993, shall not be effective

14 for fiscal year 1995 or any later fiscal year.

15 SEC. 17. EFFECTIVE DATE.

16 Except as otherwise specified, this Act and the

17 amendments made by it shall take effect on the date of

18 its enactment and shall apply to fiscal years 1995 and sub19 sequent fiscal years.

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