I

104TH CONGRESS

1ST SESSION H. R. 1516

To achieve a balanced Federal budget by fiscal year 2002 and each year

thereafter, achieve significant deficit reduction in fiscal year 1996 and

each year through 2002, establish a Board of Estimates, require the

President’s budget and the congressional budget process to meet specified

deficit reduction and balance requirements, enforce those requirements

through a multiyear congressional budget process and, if necessary, sequestration, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

APRIL 7, 1995

Mr. VISCLOSKY (for himself, Mr. STENHOLM, Mr. DOOLEY, and Mr. BARRETT

of Wisconsin) introduced the following bill; which was referred to the

Committee on the Budget, and in addition to the Committees on Ways

and Means, Rules, and Government Reform and Oversight, for a period

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

concerned

A BILL

To achieve a balanced Federal budget by fiscal year 2002

and each year thereafter, achieve significant deficit reduction in fiscal year 1996 and each year through 2002,

establish a Board of Estimates, require the President’s

budget and the congressional budget process to meet

specified deficit reduction and balance requirements, enforce those requirements through a multiyear congressional budget process and, if necessary, sequestration,

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

3 TITLE I—BALANCING THE

4 BUDGET

5 PART A—PURPOSE

6 SECTION 1. SHORT TITLES; REPEALERS.

7 (a) SHORT TITLE OF THIS ACT.—This Act may be

8 cited as the ‘‘Balanced Budget Enforcement Act of 1995’’.

9 (b) SHORT TITLE OF PART B.—Part B of this Act

10 may be cited as the ‘‘Deficit Elimination Act of 1995’’.

11 (c) REPEALER.—Parts C, D, and E of the Balanced

12 Budget and Emergency Deficit Control Act of 1985 are

13 repealed.

14 SEC. 2. PURPOSE.

15 The purpose of this Act is—

16 (1) to mandate and achieve enough deficit re17 duction in each year through fiscal year 2002 to

18 eliminate the deficit by that year;

19 (2) from fiscal year 2003 onward, to mandate

20 whatever deficit reduction may be needed to elimi21 nate any deficit that may be projected;

22 (3) to achieve a portion of the mandated deficit

23 reduction by limiting the total level of discretionary

24 funding and the remainder by requiring a fixed
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1 amount of deficit reduction from some combination

2 of entitlement and receipts changes;

3 (4) to establish a Board of Estimates to arbi4 trate between OMB and CBO;

5 (5) to require the figures in the President’s

6 budget and the budget resolution to meet the provi7 sions of this Act;

8 (6) to enforce each year’s discretionary funding

9 limits and entitlement/receipts requirements through

10 the Congressional Budget Act, including multiyear

11 allocations and reconciliation directives;

12 (7) to supplement Congressional Budget Act

13 enforcement with across-the-board cuts or sequestra14 tion whenever the discretionary funding limits or en15 titlement/receipts requirements of this Act are not

16 met;

17 (8) to provide a targeted sequestration that en18 forces the committee targets for entitlement reduc19 tions and receipts increases set forth in budget reso20 lutions;

21 (9) to create a backup comprehensive sequestra22 tion applicable in any fiscal year in which the com23 mittee targets in a budget resolution are not en24 forceable; and
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1 (10) to provide that reconciliation savings and

2 sequestration savings shall be permanent.

3 SEC. 3. TABLE OF CONTENTS.

TITLE I—BALANCING THE BUDGET

PART A—PURPOSE

Sec. 1. Short titles; repealers.

Sec. 2. Purpose.

Sec. 3. Table of contents.

Sec. 4. Effective dates.

PART B—THE DEFICIT ELIMINATION ACT OF 1995

Sec. 100. Definitions and treatments.

Sec. 101. Direct spending and receipts: deficit reduction requirements.

Sec. 102. Discretionary funding limits.

Sec. 103. Balancing the budget in 2002.

Sec. 104. Preventing deficits after 2002.

Sec. 105. Spin-off law.

Sec. 106. Direct spending and receipts scorecard.

Sec. 107. Discretionary scorecard.

Sec. 108. Targeted sequestration.

Sec. 109. Comprehensive sequestration.

Sec. 110. Across-the-board reduction of discretionary programs.

Sec. 111. Exempt programs and activities.

Sec. 112. General and special sequestration rules.

Sec. 113. Sequestration through tax changes.

Sec. 114. Estimating assumptions, reports, and orders.

Sec. 115. The current policy baseline.

Sec. 116. Baseline assuming deficit reduction.

Sec. 117. Stabilization Reserve Fund.

Sec. 118. Modifications if war or low growth.

Sec. 119. Board of estimates.

Sec. 120. Judicial review.

TITLE II—TECHNICAL AND CONFORMING AMENDMENTS

Sec. 201. Amendments to the Congressional Budget and Impoundment Control

Act of 1974.

Sec. 202. Amendments to the Federal Credit Reform Act of 1990.

Sec. 203. Amendments to the Rules of the House of Representatives.

Sec. 204. Amendments to the Standing Rules of the Senate.

Sec. 205. President’s budget and supplemental budget estimates.

Sec. 206. Amendments to other laws.

4 SEC. 4. EFFECTIVE DATES.

5 Except as otherwise specified, this Act and the amend6 ments made by it shall take effect on its date of enactment
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1 and shall apply to fiscal year 1996 and subsequent fiscal

2 years.

3 PART B—THE DEFICIT ELIMINATION ACT OF 1995

4 SEC. 100. DEFINITIONS AND TREATMENTS.

5 As used in this part:

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

7 authority’’, ‘‘entitlement authority’’, ‘‘outlays’’, and

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

9 section 3 of the Congressional Budget and Impound10 ment Control Act of 1974, and the term ‘‘receipts’’

11 shall be treated as a synonym for the term ‘‘reve12 nues’’ as it is used in that Act.

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

14 which appropriations are made in any appropriation

15 Act and, for items not provided for in appropriation

16 Acts, such term means an item for which there is a

17 designated budget account identification code num18 ber in the President’s budget.

19 (3) The term ‘‘aggregate first-year spendout

20 rate’’ means the percent of new budget authority

21 that is expended in the fiscal year for which the

22 budget authority is provided.

23 (4) The term ‘‘Board of Estimates’’ or ‘‘Board’’

24 refers to the entity established by section 119.
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1 (5) The term ‘‘budget year’’ means, with re2 spect to a session of Congress, the fiscal year of the

3 Government that starts on October 1 of the calendar

4 year in which that session begins.

5 (6) The term ‘‘budget-year session’’ means any

6 session of Congress that starts in the calendar year

7 in which that budget year starts.

8 (7) The term ‘‘category’’ refers to all direct

9 spending within the jurisdiction of a standing com10 mittee of the House of Representatives as so des11 ignated in the joint statement of managers accom12 panying the conference report on this Act, as modi13 fied from time to time by the Board of Estimates

14 upon the written recommendation of the Speaker of

15 the House of Representatives.

16 (8) The term ‘‘CBO’’ means the Director of the

17 Congressional Budget Office.

18 (9) The term ‘‘current policy baseline’’ means

19 the projection (described in section 115) of current20 year levels of new budget authority, outlays, receipts,

21 and the surplus or deficit into the budget year and

22 the outyears.

23 (10) The term ‘‘current year’’ means the fiscal

24 year that immediately precedes a budget year.
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1 (11) The term ‘‘deposit insurance’’ refers to the

2 expenses of the Federal Deposit Insurance Corpora3 tion and the funds it incorporates, the Resolution

4 Trust Corporation, the National Credit Union Ad5 ministration and the funds it incorporates, the Of6 fice of Thrift Supervision; the Comptroller of the

7 Currency Assessment Funds, and the RTC Office of

8 the Inspector General.

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

10 (A) budget authority provided by law other

11 than appropriation Acts;

12 (B) entitlement authority; and

13 (C) the food stamp program.

14 If a law other than an appropriation Act alters the

15 level of discretionary appropriations, that effect shall

16 be treated as direct spending. Budget authority pro17 vided from a transportation trust fund in any Act

18 shall not be considered to be provided by a law other

19 than an appropriation Act.

20 (13) The term ‘‘discretionary appropriations’’

21 means new budget authority (except to fund entitle22 ment authority) provided by appropriation Acts and

23 the term ‘‘discretionary programs’’ refers to pro24 grams so financed. New budget authority provided

25 from transportation trust funds by any Act shall be
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1 considered to be provided by an appropriation Act.

2 If an appropriation Act alters the level of direct

3 spending, that effect shall be treated as a discre4 tionary appropriation.

5 (14) The term ‘‘discretionary funding limit’’

6 means the total amount of discretionary new budget

7 authority that, under section 102 or 104, may be en8 acted in any fiscal year.

9 (15) The term ‘‘discretionary regulations’’ re10 fers to regulations issued by the executive branch for

11 which Congress delegates the authority to vary

12 amounts, levels, rates, effective dates, or other fac13 tors.

14 (16) The term ‘‘major estimating assumptions’’

15 refers to the list of items set forth under that head16 ing in the joint explanatory statement of managers

17 accompanying the conference report on this Act as

18 modified by the Board under section 119.

19 (17) The term ‘‘OMB’’ means the Director of

20 the Office of Management and Budget.

21 (18) The term ‘‘outyear’’ means any of the 4

22 fiscal years that follow a budget year.

23 (19) The term ‘‘real economic growth’’ means

24 the growth in the gross domestic product, adjusted
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1 for inflation, consistent with Department of Com2 merce definitions.

3 (20) The terms ‘‘sequester’’ and ‘‘sequestra4 tion’’ refer to or mean the cancellation under section

5 110 of budget authority provided by discretionary

6 appropriations, the cancellation under section 108 or

7 109 of direct spending authority, or the change in

8 taxes under section 113.

9 (21) The term ‘‘sequestrable budget authority’’

10 means, for non-exempt accounts or activities within

11 major functional category 050 (national defense), all

12 budget authority, and for all other non-exempt ac13 counts or activities, new budget authority.

14 (22) The term ‘‘Stabilization Reserve Fund’’ re15 fers to the deposit fund established by section 117.

16 (23)(A) The following shall be treated as posi17 tive numbers:

18 (i) A deficit.

19 (ii) A deficit increase or surplus decrease.

20 (iii) A deficit or surplus change and a defi21 cit or surplus change target when the deficit is

22 increased by, or the surplus is reduced by, the

23 change.

24 (iv) A deficit reduction shortfall.

25 (v) An amount to be sequestered.
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1 (B) The following shall be treated as negative

2 numbers:

3 (i) A surplus.

4 (ii) A deficit reduction or surplus increase.

5 (iii) A deficit or surplus change and a defi6 cit or surplus change target when the deficit is

7 reduced by, or the surplus is increased by, the

8 change.

9 SEC. 101. DIRECT SPENDING AND RECEIPTS: DEFICIT RE10 DUCTION REQUIREMENTS.

11 The deficit reduction targets for direct spending and

12 receipts legislation are as follows:

Fiscal Year Deficit Reduction (in billions of dollars)

1996 ............................... -31.9

1997 ............................... -59.6

1998 ............................... -80.6

1999 ............................... -105.6

2000 ............................... -125.3

2001 ............................... -147.4

2002 ............................... -169.4

13 The deficit reduction target for fiscal year 2002 shall be

14 adjusted, if necessary, as provided by section 103.

15 SEC. 102. DISCRETIONARY FUNDING LIMITS.

16 (a) INITIAL AMOUNTS.—Subject to modifications

17 under subsection (b), discretionary funding limits, meas18 ured in terms of new budget authority, are as follows:

Fiscal Year Limits (in billions of dollars)

1996 ................................................... 540.0

1997 ................................................... 540.0

1998 ................................................... 540.0
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Fiscal Year Limits (in billions of dollars)

1999 ................................................... 540.0

2000 ................................................... 540.0

2001 ................................................... 540.0

2002 ................................................... 540.0

1 (b) ADJUSTMENTS TO FUNDING LIMITS.—Whenever

2 appropriate, adjustments to the discretionary funding lim3 its (and to those limits as cumulatively adjusted) for one

4 or more fiscal years shall be made to reflect the following:

5 (1) CHANGES IN CONCEPTS.—For any fiscal

6 year, the adjustments produced by any change in

7 budget accounting concepts (including scorekeeping

8 conventions, budget classifications, and definitions)

9 shall equal the current-year levels of new budget au10 thority using up-to-date concepts minus those levels

11 using the concepts in effect before the change. Such

12 changes in concepts may only be made in consulta13 tion with the Committees on Appropriations and the

14 Budget of the House of Representatives and Senate,

15 CBO, and OMB. A change in budget classifications

16 includes any change from the assumption that all

17 amounts provided in appropriation Acts are classi18 fied as discretionary except those included under the

19 heading ‘‘Mandatory Appropriations’’ in the joint ex20 planatory statement of managers accompanying the

21 conference report on this Act.
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1 (2) CHANGES IN INFLATION.—(A) For the

2 budget year and each outyear through 2002, the ad3 justments produced by changes in inflation shall

4 equal the discretionary funding limit for each such

5 year multiplied by the inflation adjustment factor

6 (for the fiscal year immediately preceding the cur7 rent year) computed under subparagraph (B).

8 (B) The inflation adjustment factor shall be

9 calculated by subtracting 1 from the ratio of (i) the

10 level of year-over-year inflation measured for the fis11 cal year immediately preceding the current year, and

12 (ii) the applicable estimated level for that year set

13 forth below:

14 For 1995, 1.030

15 For 1996, 1.033.

16 For 1997, 1.034

17 For 1998, 1.034

18 For 1999, 1.034

19 For 2000, 1.034

20 Inflation shall be measured by the average of the es21 timated consumer price index for all urban consum22 ers for a fiscal year divided by the average index for

23 the prior fiscal year.

24 (3) EXPIRING HOUSING CONTRACTS.—For each

25 budget year through 2002, the adjustment shall be
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1 the amount of new budget authority needed to renew

2 expiring multiyear subsidized housing contracts or

3 provide contracts to replace units lost due to prepay4 ments, with the per-contract renewal/replacement

5 cost equal to the average current-year cost of re6 newal or replacement contracts.

7 (4) EMERGENCIES.—If for any fiscal year ap8 propriations for discretionary accounts are enacted

9 that are designated as emergency requirements by

10 statute, the adjustment shall be the amount of those

11 appropriations that the President also designates, in

12 writing, as emergency requirements within 5 days of

13 the enactment of those appropriations. If any

14 amount previously designated as an emergency re15 quirement is rescinded, the adjustment shall be the

16 amount of that rescission.

17 (5) NEW LIMITS FOR 2002 AND THEREAFTER.—

18 The adjustment for fiscal year 2002 shall be the ad19 justment (if any) under section 103, and the limit

20 for any succeeding fiscal year shall be the limit es21 tablished under section 104.

22 (6) TRANSPORTATION TRUST FUNDS.—For any

23 fiscal year, the adjustment produced by the enact24 ment of any law that raises excise taxes dedicated to

25 a transportation trust fund shall be the amount of
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1 the net receipts produced by that tax increase which

2 that law specifically appropriates for that purpose.

3 SEC. 103. BALANCING THE BUDGET IN 2002.

4 If at the start of the 2002 budget-year session the

5 baseline assuming deficit reduction (set forth in section

6 116) projects a deficit (or surplus) for that year, then the

7 direct spending and receipts deficit reduction requirement

8 for that year under section 101 and the discretionary

9 funding limit for that year under section 102 shall each

10 be changed by amounts that, when debt service effects are

11 added, will produce a balanced budget. These changes

12 shall be accomplished by the enactment of a spin-off law

13 described in section 105; or if no spin-off law is enacted,

14 then the direct spending and receipts deficit reduction re15 quirement for fiscal year 2002 under section 101 shall be

16 adjusted by two-thirds of the total required change (ex17 cluding debt service effects) and the discretionary funding

18 limit for fiscal year 2002 under section 102 shall be ad19 justed to produce an outlay change equal to one-third of

20 the total required change (excluding debt service effects).

21 Any adjustment in the discretionary funding limit (wheth22 er in a spin-off law or by application of the above formula)

23 shall be assumed to produce an outlay change equal to

24 the change in new budget authority times the aggregate
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1 first-year spendout rate for fiscal year 2002 chosen by the

2 Board of Estimates.

3 SEC. 104. PREVENTING DEFICITS AFTER 2002.

4 Starting with the 2003 budget-year session, the re5 quired change in the level of direct spending and receipts

6 (relative to the current policy baseline described in section

7 115) for the budget year and a discretionary funding limit

8 for that year shall be established. That change in direct

9 spending and receipts and that discretionary funding limit

10 (plus the associated effect on debt service) shall produce

11 a balanced budget. That change and that limit shall be

12 specified in a spin-off law described in section 105; or if

13 no spin-off law is enacted, then the change in direct spend14 ing and receipts for the budget year shall be two-thirds

15 of the baseline level of deficit or surplus (excluding debt

16 service effects) and the discretionary funding limit for the

17 budget year shall be the baseline level of discretionary new

18 budget authority adjusted to produce an outlay change

19 equal to one-third of the baseline level of deficit or surplus

20 (excluding debt service changes). Any adjustment in the

21 discretionary funding limit relative to the baseline level of

22 discretionary new budget authority (whether in a spin-off

23 law or by application of the above formula) shall be as24 sumed to produce an outlay change equal to the change

25 in new budget authority times the aggregate first-year
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1 spendout rate for budget year chosen by the Board of

2 Estimates.

3 SEC. 105. SPIN-OFF LAW.

4 (a) Through the use of the procedures described in

5 section 301(b)(5) or 310(c) of the Congressional Budget

6 Act of 1974 or by other means, a law to carry out section

7 103 or 104 may be enacted. If required by section 103

8 or 104, that law shall specify a discretionary funding limit

9 for the budget year. That law shall specify the budget10 year amount of direct spending change required of or al11 lowed by each committee of the House of Representatives

12 in laws within that committee’s jurisdiction and the budg13 et-year amount of receipts change required of or allowed

14 by the Committee on Ways and Means of the House of

15 Representatives in laws within that committee’s jurisdic16 tion. A law shall not be considered a spin-off law under

17 this section unless—

18 (1) for each of fiscal years 1996 through 2001,

19 the total of those amounts for the budget year

20 equals the amount specified in section 101 less the

21 amount of deficit reduction achieved for that year

22 measured under section 106; or

23 (2) for fiscal year 2002 and each year there24 after, the targets set by the spin-off bill for the

25 budget year will produce a balanced budget in that
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1 year under the estimates and assumptions chosen by

2 the Board of Estimates for that year.

3 SEC. 106. DIRECT SPENDING AND RECEIPTS SCORECARD.

4 (a) ESTABLISHMENT OF SCORECARD: 1996–2002.—

5 There shall be a scorecard for each fiscal year through

6 2002 upon which shall be entered the estimated increase

7 or decrease in the deficit (relative to the start-of-session

8 current policy baseline described in section 115) for the

9 current year, the budget year, and each fiscal year through

10 2002 due to—

11 (1) the enactment, after August 15, 1995, of

12 any law,

13 (2) the imposition of any sequestration under

14 section 108 or 109, or

15 (3) the change in the baseline from the applica16 tion of section 115(b)(3), which relates to certain ex17 piring provisions of law and to veterans’ compensa18 tion,

19 affecting the level of direct spending or the level of re20 ceipts. Entries under the preceding sentence shall not in21 clude resulting debt service changes or any incidental

22 changes in intragovernmental receipts of Federal trust

23 funds. Amounts shall be entered on the scorecard within

24 10 days after the enactment of each such law or the impo25 sition of any sequestration, and may not thereafter be al-
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1 tered except to reflect decisions made by the Board of Es2 timates or to correct clerical errors or errors in the appli3 cation of this Act.

4 (b) ESTABLISHMENT OF SCORECARD: 2003 AND

5 THEREAFTER.—There shall be a scorecard, created anew

6 for each budget year starting with 2003, upon which shall

7 be entered the estimated increase or decrease in the deficit

8 or surplus (relative to the start-of-session current policy

9 baseline described in section 115) for the budget year, in

10 any amount that would have been entered if subsection

11 (a) applied to budget years after 2002.

12 (c) DEFICIT REDUCTION REQUIREMENTS.—For each

13 fiscal year, the scorecard shall also include, as applicable,

14 the amount of the direct spending and receipts deficit re15 duction target for that year under section 101 or the

16 amount (if any) of the direct spending and receipts deficit

17 change target under section 104. Each such deficit reduc18 tion amount shall be entered as though it were a deficit

19 increase, so that an equal amount of deficit reduction will

20 have to be achieved to forestall a sequestration, and each

21 such surplus decrease amount (if any) shall be entered as

22 though it were a surplus increase, so that the amount of

23 later surplus decreases will be limited.

24 (d) LOOKBACK.—If in any budget-year session a law

25 is enacted affecting the current-year level of direct spend-
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1 ing or receipts, the amount of that current-year effect

2 shall be entered on the scorecard under the column for

3 the budget year. To mandate year-after savings of

4 amounts that would have been saved but for the lower se5 questration rule in that section, entries shall also be made

6 as specified in paragraphs (2) and (3) of section 114(j).

7 (e) DIVISION BETWEEN DIRECT SPENDING AND RE8 CEIPTS.—The scorecard shall be divided between changes

9 in the deficit resulting from direct spending changes and

10 changes in the deficit resulting from changes in receipts.

11 Solely for purposes of this section, any change in the defi12 cit resulting from an alteration of the Federal tax treat13 ment of a direct spending benefit shall be treated as a

14 change in direct spending.

15 (f) EMERGENCIES.—If after the enactment of this

16 Act a provision of direct spending or receipts legislation

17 is enacted that is designated as an emergency requirement

18 by statute and that the President also designates, in writ19 ing, as an emergency requirement within 5 days of the

20 enactment of that legislation, then no entries resulting

21 from that provision shall be made on the scorecard.

22 (g) TREATMENT OF CERTAIN DEDICATED EXCISE

23 TAXES.—For each fiscal year, the scorecard shall also in24 clude only that part of the net increase in receipts result-
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1 ing from an increase in an excise tax dedicated to a trans2 portation trust fund that—

3 (1) was not specifically appropriated (as pro4 vided in section 102(b)(6)); or

5 (2) to the extent specifically appropriated (as

6 provided in section 102(b)(6)), is not estimated to be

7 expended in that fiscal year.

8 SEC. 107. DISCRETIONARY SCORECARD.

9 (a) ESTABLISHMENT OF SCORECARD.—There shall

10 be a scorecard for each fiscal year starting with 1996 upon

11 which shall be entered the amount of discretionary appro12 priations for that fiscal year due to—

13 (1) the enactment of any law in the budget-year

14 session,

15 (2) the enactment of any law in any previous

16 session of Congress, or

17 (3) the imposition of any sequestration under

18 section 110.

19 Amounts shall be entered on the scorecard within 10 days

20 after the enactment of each such law or the imposition

21 of any sequestration, and may not thereafter be altered

22 except to reflect decisions made by the Board of Estimates

23 or to correct clerical errors or errors in the application

24 of this Act.
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1 (b) LOOKBACK.—(1) If in any current-year session

2 any discretionary appropriation is enacted that would

3 cause the discretionary funding limit for the current year

4 to be exceeded, then the amount of that excess shall be

5 entered on the scorecard under the column for the budget

6 year. To mandate year-after savings of amounts that

7 would have been saved but for the lower sequestration rule

8 in that section, entries shall also be made as specified in

9 paragraphs (2) and (3) of section 114(j).

10 (2) If any discretionary appropriation is enacted after

11 June 30, 1995, and before October 1, 1995, that would

12 have caused a look-back sequester under section 251(a)(5)

13 of the Balanced Budget and Emergency Deficit Control

14 Act of 1985 as in effect immediately before the date of

15 enactment of this Act, then the amount that would have

16 been sequestered shall be entered on the scorecard as a

17 cost under the column for the budget year.

18 SEC. 108. TARGETED SEQUESTRATION.

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

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

21 105 is in effect for that year on the date of the final se22 questration report described in section 114.

23 (b) SEQUESTRATION IN EACH CATEGORY BASED ON

24 BUDGET-YEAR SHORTFALL.—(1) The purpose of this

25 subsection is to ensure that the changes achieved during
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1 a session in direct spending for each category and in re2 ceipts are at least as great as those required, or are no

3 more than those allowed, for the budget year.

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

5 from direct spending programs in each category is the

6 amount by which changes in direct spending achieved dur7 ing the budget-year session are estimated under section

8 106 to result in a greater amount of direct spending than

9 allowed in that category in the spin-off law.

10 (3) The amount that receipts are to be increased for

11 the budget year by the imposition of surtaxes is the

12 amount by which changes in receipts achieved during that

13 budget-year session are estimated under section 106 to re14 sult in lower total receipts for that year than allowed in

15 the spin-off law.

16 (c) SEQUESTRATION IN EACH CATEGORY BASED ON

17 OUTYEAR SHORTFALL.—(1) The purpose of this sub18 section is to ensure that the outyear changes in direct

19 spending for each category and the outyear changes in re20 ceipts achieved during a session are, on average, at least

21 as great as those required, or are no more than those al22 lowed, for the budget year.

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

24 in any category under subsection (b)(2), if any, shall be

25 increased whenever the average outyear change in direct
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1 spending in that category achieved during that budget2 year session estimated under section 106 or paragraph (4)

3 would produce higher deficits during the outyears than if

4 that average change had equaled the budget-year target

5 for changes in direct spending in that category. That in6 creased amount to be sequestered (if applicable) shall be—

7 (A) one-quarter of the sum of those changes in

8 direct spending for the 4 outyears; minus

9 (B) the budget-year target for changes in direct

10 spending.

11 (3) The amount that receipts are to be increased for

12 the budget year under subsection (b)(3), if any, shall be

13 increased whenever the average outyear change in receipts

14 achieved during that budget-year session estimated under

15 section 106 or paragraph (4) would produce higher deficits

16 during the outyears than if that average change had

17 equaled the budget-year target for changes in receipts.

18 That additional amount that receipts are to be increased

19 (if applicable) shall be—

20 (A) one-quarter of the sum of those changes in

21 receipts for the four outyears achieved; minus

22 (B) the budget-year target for changes in re23 ceipts.

24 (4) For any outyear after 2002, CBO and OMB shall

25 make cost estimates within 10 days after the enactment
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1 of any direct spending or receipts legislation of the outyear

2 effects of that legislation that would have gone on the di3 rect spending and receipts scorecard under section 106(a)

4 if the scorecard had covered that outyear.

5 (d) FINGERPRINT RULE.—For purposes of this sec6 tion, the category to which a change in direct spending

7 is attributed shall be the category of the committee that

8 authored the change or reported the legislation to which

9 the change was offered as an amendment. If it is impos10 sible to tell which committee authored a change, the cat11 egory to which such a change is attributed shall be the

12 category of the committee with jurisdiction over the pro13 gram that was changed, as defined under section 100(9).

14 (e) SEQUESTRATION.—Within 15 days after Con15 gress adjourns to end a session and on the same day as

16 a sequestration, if any, under section 110, there shall be

17 a sequestration—

18 (1) to reduce the amount of direct spending in

19 the current policy baseline in any category by the

20 sum of the amounts specified in subsections (b)(2)

21 and (c)(2) unless that sum is less than $50,000,000;

22 and

23 (2) to increase the amount of receipts in the

24 current policy baseline by the sum of the amounts
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1 specified in subsections (b)(3) and (c)(3) unless that

2 sum is less than $250,000,000.

3 The amount required to be sequestered from direct spend4 ing in a category shall be achieved by reducing each non5 exempt direct spending account (or activity within an ac6 count) within that category by the uniform percentage

7 necessary to achieve 80 percent of that amount, and in8 creasing receipts to achieve the other 20 percent of that

9 amount as specified in sections 59B, 59C, and 59D of the

10 Internal Revenue Code of 1986, necessary to achieve that

11 amount.

12 SEC. 109. COMPREHENSIVE SEQUESTRATION.

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

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

15 105 is in effect for that year on the date of the final se16 questration report described in section 114.

17 (b) SEQUESTRATION BASED ON BUDGET-YEAR

18 SHORTFALL.—The amount to be sequestered for the

19 budget year is the amount (if any) by which the sum of

20 all budget-year entries on the direct spending and receipts

21 scorecard under section 106 is greater than zero.

22 (c) SEQUESTRATION BASED ON OUTYEAR SHORT23 FALL.—(1) The purpose of this subsection is to ensure

24 that the outyear changes in direct spending and in receipts

25 achieved during a session are, on average, at least as great
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1 as those required, or are no more than those allowed, for

2 the budget year.

3 (2) The amount to be sequestered under subsection

4 (b), if any, shall be increased whenever the average out5 year change in direct spending and receipts, combined,

6 achieved during that budget-year session would result in

7 higher deficits than if that average change had equaled

8 the amount targeted for the budget year, with that budg9 et-year target being the amount that the sequestration

10 preview report for the budget year shows was needed to

11 bring the budget-year entries on the direct spending and

12 receipts scorecard to zero. That increased amount to be

13 sequestered shall be—

14 (A) one-quarter of the sum of those achieved

15 changes in direct spending and receipts, combined,

16 for the 4 outyears; minus

17 (B) the budget-year target for changes in direct

18 spending and receipts, combined.

19 (d) SEQUESTRATION.—Within 15 days after Con20 gress adjourns to end a session and on the same day as

21 a sequestration, if any, under section 110, there shall be

22 a sequestration to reduce the amount of direct spending

23 and increase the amount of receipts in the current policy

24 baseline by the sum of the amounts specified in sub25 sections (b) and (c) unless that sum is less than
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1 $500,000,000. The amount required to be sequestered

2 shall be achieved by reducing each non-exempt direct

3 spending account (or activity within an account) by the

4 uniform percentage necessary to achieve 80 percent of

5 that sum, and increasing receipts to achieve the other 20

6 percent of that sum as specified in sections 59B, 59C, and

7 59D of the Internal Revenue Code of 1986, necessary to

8 achieve that amount.

9 SEC. 110. ACROSS-THE-BOARD REDUCTION OF DISCRE10 TIONARY PROGRAMS.

11 (a) SEQUESTRATION.—Within 15 days after Con12 gress adjourns to end a session, and on the same day as

13 a sequestration (if any) under section 108 or 109, there

14 shall be a sequestration to reduce the amount of discre15 tionary sequestrable budget authority in the current policy

16 baseline for the budget year by the amount (if any) needed

17 to eliminate any excess of new budget authority for that

18 year over the discretionary funding limit for that year as

19 measured under section 107, unless that excess is less

20 than $250,000,000.

21 (b) UNIFORM REDUCTION.—Each nonexempt ac22 count (or activity within an account) shall be reduced by

23 a dollar amount calculated by multiplying the level of

24 sequestrable budget authority in the baseline for that ac25 count or activity by the uniform percentage necessary to
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1 reduce new budget authority by the amount in subsection

2 (a).

3 (c) FEDERAL PERSONNEL.—If the President uses

4 the authority under section 111(b) to exempt any amounts

5 appropriated for military personnel from sequestration, all

6 remaining sequestrable budget authority within

7 subfunction 051 shall be further reduced by the uniform

8 percentage needed to fully offset the reduction in the

9 amount sequestered resulting from that exemption.

10 (d) PART-YEAR APPROPRIATIONS.—If, on the date

11 specified in subsection (a), there is in effect an Act making

12 or continuing appropriations for part of a fiscal year for

13 any budget account, then the dollar reduction calculated

14 for that account under subsections (b) and (c) shall be

15 applied to—

16 (1) the annualized amount otherwise available

17 by law in that account under that or a subsequent

18 part-year appropriation; and

19 (2) when a full-year appropriation for that ac20 count is enacted, from the amount otherwise pro21 vided by that appropriation.

22 SEC. 111. EXEMPT PROGRAMS AND ACTIVITIES.

23 (a) DESCRIPTIONS AND LISTS.—Except as provided

24 in subsection (c), the following budget accounts, activities
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1 within accounts, or income shall be exempt from seques2 tration—

3 (1) net interest;

4 (2) deposit insurance and pension benefit guar5 antees;

6 (3) all payments to trust funds from excise

7 taxes or other receipts or collections properly cred8 itable to those trust funds;

9 (4) offsetting receipts and collections;

10 (5) all payments from one Federal direct spend11 ing budget account to another Federal budget ac12 count; all intragovernmental funds including those

13 from which funding is derived primarily from other

14 Government accounts, except to the extent that such

15 funds are augmented by direct appropriations for

16 the fiscal year for which the order is in effect; and

17 those obligations of discretionary accounts or activi18 ties that are financed by intragovernmental pay19 ments from another discretionary account or activ20 ity;

21 (6) expenses to the extent they result from pri22 vate donations, bequests, or voluntary contributions

23 to the Government;

24 (7) nonbudgetary activities, including but not

25 limited to—
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1 (A) credit liquidating and financing ac2 counts;

3 (B) the Pension Benefit Guarantee Cor4 poration Trust Funds;

5 (C) the Thrift Savings Fund;

6 (D) the Federal Reserve System; and

7 (E) appropriations for the District of Co8 lumbia to the extent they are appropriations of

9 locally raised funds;

10 (8) payments resulting from Government insur11 ance, Government guarantees, or any other form of

12 contingent liability, to the extent those payments re13 sult from contractual or other legally binding com14 mitments of the Government at the time of any se15 questration;

16 (9) the following accounts, which largely fulfill

17 requirements of the Constitution or otherwise make

18 payments to which the Government is committed—

19 Administration of Territories, Northern Mari20 ana Islands Covenant grants (14–0412–0–1–806);

21 Bureau of Indian Affairs, miscellaneous pay22 ments to Indians (14–2303–0–1–452);

23 Bureau of Indian Affairs, miscellaneous trust

24 funds, tribal trust funds (14–9973–0–7–999);

25 Claims, defense;
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1 Claims, judgments, and relief act (20–1895–0–

2 1–806);

3 Compact of Free Association, economic assist4 ance pursuant to Public Law 99–658 (14–0415–0–

5 1–806);

6 Compensation of the President (11–0001–0–1–

7 802);

8 Customs Service, miscellaneous permanent ap9 propriations (20–9992–0–2–852);

10 Eastern Indian land claims settlement fund

11 (14–2202–0–1–806)

12 Farm Credit System Financial Assistance Cor13 poration, interest payments (20–1850–0–1–351);

14 Internal Revenue collections of Puerto Rico

15 (20–5737–0–2–852);

16 Panama Canal Commission, operating expenses

17 and capital outlay (95–5190–0–2–403);

18 Payments of Vietnam and USS Pueblo pris19 oner-of-war claims (15–0104–0–1–153);

20 Payments to copyright owners (03–5175–0–2–

21 376);

22 Payments to the United States territories, fiscal

23 assistance (14–0418–0–1–801);

24 Salaries of Article III judges;
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1 Soldier’s and Airmen’s Home, payment of

2 claims (84–8930–0–7–705);

3 Washington Metropolitan Area Transit Author4 ity, interest payments (46–0300–0–1–401).

5 (10) the following noncredit special, revolving,

6 or trust-revolving funds—

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

8 Exchange Stabilization Fund (20–4444–0–3–

9 155);

10 Foreign Military Sales trust fund (11–82232–

11 0–7–155);

12 (11)(A) any amount paid as regular unemploy13 ment compensation by a State from its account in

14 the Unemployment Trust Fund (established by sec15 tion 904(a) of the Social Security Act);

16 (B) any advance made to a State from the Fed17 eral unemployment account (established by section

18 904(g) of such Act) under title XII of such Act and

19 any advance appropriated to the Federal unemploy20 ment account pursuant to section 1203 of such Act;

21 and

22 (C) any payment made from the Federal Em23 ployees Compensation Account (as established under

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

25 out chapter 85 of title 5, United States Code, and
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1 funds appropriated or transferred to or otherwise

2 deposited in such Account;

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

4 individuals pursuant to section 32 of the Internal

5 Revenue Code of 1986).

6 (b) OPTIONAL EXEMPTIONS OF MILITARY PERSON7 NEL.—(1) The President may exempt some or all of the

8 budgetary resources of any military personnel account

9 from sequestration under section 109.

10 (2) The President may not use the authority under

11 paragraph (1) unless he notifies the Congress of the extent

12 to which such authority will be exercised for the budget

13 year on or before the preceding August 29.

14 (c) FEDERAL ADMINISTRATIVE EXPENSES.—

15 (1) Notwithstanding any provision of law other

16 than paragraph (3), administrative expenses in17 curred by the departments and agencies, including

18 independent agencies, of the Federal Government in

19 connection with any program, project, activity, or ac20 count shall be subject to reduction pursuant to any

21 sequestration order, without regard to the exemp22 tions under subsection (a) and regardless of whether

23 the program, project, activity, or account is self-sup24 porting and does not receive appropriations.
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1 (2) Payments made by the Federal Government

2 to reimburse or match administrative costs incurred

3 by a State or political subdivision under or in con4 nection with any program, project, activity, or ac5 count shall not be considered administrative ex6 penses of the Federal Government for purposes of

7 this section, and shall be subject to sequestration to

8 the extent (and only to the extent) that other pay9 ments made by the Federal Government under or in

10 connection with that program, project, activity, or

11 account are subject to that reduction or sequestra12 tion; except that Federal payments made to a State

13 as reimbursement of administrative costs incurred

14 by that State under or in connection with the unem15 ployment compensation programs specified in sub16 section (a)(11) shall be subject to reduction or se17 questration under this part notwithstanding the ex18 emption otherwise granted to such programs under

19 that subsection.

20 (3) Notwithstanding any other provision of law,

21 the administrative expenses of the following pro22 grams shall be exempt from sequestration:

23 (A) Deposit insurance.

24 (B) The Federal Retirement Thrift Invest25 ment Board.
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1 (C) The Federal Reserve System.

2 SEC. 112. GENERAL AND SPECIAL SEQUESTRATION RULES.

3 (a) PERMANENT SEQUESTRATION OF DIRECT

4 SPENDING AND RECEIPTS.—

5 (1) The purpose of any direct spending or re6 ceipts sequestration under this Act is to ensure defi7 cit reduction in the budget year and all subsequent

8 fiscal years, so that the budget-year deficit reduction

9 target in section 101 is met and so that it will be

10 feasible to meet the increasingly ambitious targets

11 for the subsequent years.

12 (2) Obligations in sequestered direct spending

13 accounts shall be reduced in the fiscal year in which

14 a sequestration occurs and in all succeeding fiscal

15 years. Notwithstanding any other provision of this

16 section, after the first direct spending sequestration

17 or receipts sequestration, any later sequestration

18 shall reduce direct spending or increase receipts (as

19 the case may be) by an amount in addition to, rath20 er than in lieu of, the reduction in direct spending

21 or the increase in receipts in place under the exist22 ing sequestration or sequestrations.

23 (b) UNIFORM PERCENTAGES.—

24 (1) In calculating the uniform percentage appli25 cable to the sequestration of all nonexempt direct
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1 spending programs or activities and receipts under

2 section 109, or the uniform percentage applicable to

3 the sequestration of nonexempt direct spending pro4 grams or activities within a category under section

5 108, the sequestrable base for direct spending rules

6 and activities is the total budget-year level of outlays

7 for those programs or activities in the current policy

8 baseline minus—

9 (A) those budget-year outlays resulting

10 from obligations incurred in the current or

11 prior fiscal years, and

12 (B) those budget-year outlays resulting

13 from exemptions under section 111.

14 (2) For any direct spending program in

15 which—

16 (A) outlays pay for entitlement benefits,

17 (B) a budget-year sequestration takes ef18 fect after the 1st day of the budget year, and

19 (C) that delay reduces the amount of enti20 tlement authority that is subject to sequestra21 tion in the budget year,

22 the uniform percentage otherwise applicable to the

23 sequestration of that program in the budget year

24 shall be increased as necessary to achieve the same
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1 budget-year outlay reduction in that program as

2 would have been achieved had there been no delay.

3 (3) If the uniform percentage otherwise applica4 ble to the budget-year sequestration of a program or

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

6 shall revert to the uniform percentage calculated

7 under paragraph (1) when the budget year is com8 pleted.

9 (c) GENERAL RULES FOR SEQUESTRATION.—

10 (1) INDEFINITE AUTHORITY.—Except as other11 wise provided, sequestration in accounts for which

12 obligations are indefinite shall be taken in a manner

13 to ensure that obligations in the fiscal year of a se14 questration and succeeding fiscal years are reduced,

15 from the level that would actually have occurred, by

16 the applicable sequestration percentage or percent17 ages.

18 (2) CANCELLATION OF BUDGETARY RE19 SOURCES.—Budgetary resources sequestered from

20 any account other than an entitlement trust, special,

21 or revolving fund account shall revert to the Treas22 ury and be permanently canceled or repealed.

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

24 any entitlement program—
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1 (A) benefit payments are made to persons

2 or governments more frequently than once a

3 year, and

4 (B) the amount of entitlement authority is

5 periodically adjusted under existing law to re6 flect changes in a price index,

7 then for the first fiscal year to which a sequestration

8 order applies, the benefit reductions in that program

9 accomplished by the order shall take effect starting

10 with the payment made at the beginning of January

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

12 later. For the purposes of this subsection, Veterans

13 Compensation shall be considered a program that

14 meets the conditions of the preceding sentence.

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

16 Except as otherwise provided, the same percentage

17 sequestration shall apply to all programs, projects,

18 and activities within a budget account (with pro19 grams, projects, and activities as delineated in the

20 appropriation Act or accompanying report for the

21 relevant fiscal year covering that account, or for ac22 counts not included in appropriation Acts, as delin23 eated in the most recently submitted President’s

24 budget).
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1 (5) IMPLEMENTING REGULATIONS.—Adminis2 trative regulations or similar actions implementing

3 the sequestration of a program or activity shall be

4 made within 120 days of the effective date of the se5 questration of that program or activity.

6 (6) DISTRIBUTION FORMULAS.—To the extent

7 that distribution or allocation formulas differ at dif8 ferent levels of budgetary resources within an ac9 count, program, project, or activity, a sequestration

10 shall be interpreted as producing a lower total ap11 propriation, with that lower appropriation being obli12 gated as though it had been the pre-sequestration

13 appropriation and no sequestration had occurred.

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

15 which fees charged to the public are legally deter16 mined by the level of appropriations, fees shall be

17 charged on the basis of the presequestration level of

18 appropriations.

19 (d) NON-JOBS PORTION OF AFDC.—Any sequestra20 tion order shall accomplish the full amount of any required

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

22 to families with dependant children program under the So23 cial Security Act by reducing the Federal reimbursement

24 percentage (for the fiscal year involved) by multiplying

25 that reimbursement percentage, on a State-by-State basis,
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1 by the uniform percentage applicable to the sequestration

2 of nonexempt direct spending programs or activities.

3 (e) JOBS PORTION OF AFDC.—

4 (1) FULL AMOUNT OF SEQUESTRATION RE5 QUIRED.—Any sequestration order shall accomplish

6 the full amount of any required reduction of the job

7 opportunities and basic skills training program

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

9 the Social Security Act, in the manner specified in

10 this subsection. Such an order may not reduce any

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

12 the Social Security Act.

13 (2) NEW ALLOTMENT FORMULA.—

14 (A) GENERAL RULE.—Notwithstanding

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

16 State’s percentage share of the amount avail17 able after sequestration for direct spending pur18 suant to section 403(l) of such Act shall be

19 equal to that percentage of the total amount

20 paid to the States pursuant to such section

21 403(l) for the prior fiscal year that is rep22 resented by the amount paid to such State pur23 suant to such section 403(l) for the prior fiscal

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

25 amount under this subparagraph that exceeds
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1 the amount that would have been allotted to

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

3 the sequestration not been in effect.

4 (B) REALLOTMENT OF AMOUNTS REMAIN5 ING UNALLOTTED AFTER APPLICATION OF GEN6 ERAL RULE.—Any amount made available after

7 sequestration for direct spending pursuant to

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

9 remains unallotted as a result of subparagraph

10 (A) of this paragraph shall be allotted among

11 the States in proportion to the absolute dif12 ference between the amount allotted, respec13 tively, to each State as a result of such sub14 paragraph and the amount that would have

15 been allotted to such State pursuant to section

16 403(k) of such Act had the sequestration not

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

18 allotted an amount under this subparagraph

19 that results in a total allotment to the State

20 under this paragraph of more than the amount

21 that would have been allotted to such State

22 pursuant to such section 403(k) had the seques23 tration not been in effect.

24 (f) CHILD SUPPORT ENFORCEMENT PROGRAM.—Any

25 sequestration order shall accomplish the full amount of
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1 any required reduction in payments under sections 455

2 and 458 of the Social Security Act by reducing the Fed3 eral matching rate for State administrative costs under

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

5 section 455(a) of such Act, to the extent necessary to re6 duce such expenditures by that amount.

7 (g) COMMODITY CREDIT CORPORATION.—

8 (1) EFFECTIVE DATE.—For the Commodity

9 Credit Corporation, the date on which a sequestra10 tion order takes effect in a fiscal year shall vary for

11 each crop of a commodity. In general, the sequestra12 tion order shall take effect when issued, but for each

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

14 issued as an entitlement, the sequestration order

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

16 for that crop that begins after the sequestration

17 order is issued. Payments for each contract in such

18 a crop shall be reduced under the same terms and

19 conditions.

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

21 achieving any reduction in outlays under the milk

22 price-support program, the Secretary of Agriculture

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

24 received by producers for all milk produced in the

25 United States and marketed by producers for com-
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1 mercial use. That price reduction (measured in cents

2 per hundredweight of milk marketed) shall occur

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

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

5 shall begin on the day any sequestration order is is6 sued, and shall not exceed the aggregate amount of

7 the reduction in outlays under the milk price-support

8 program, that otherwise would have been achieved

9 by reducing payments made for the purchase of milk

10 or the products of milk under this subsection during

11 that fiscal year.

12 (3) EFFECT OF DELAY.—For purposes of sub13 section (b)(1), the sequestrable base for the Com14 modity Credit Corporation is the budget-year level of

15 gross outlays resulting from new budget authority

16 that is subject to reduction under paragraphs (1)

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

18 (4) CERTAIN AUTHORITY NOT TO BE LIM19 ITED.—Nothing in this Act shall restrict the Cor20 poration in the discharge of its authority and re21 sponsibility as a corporation to buy and sell com22 modities in world trade, or limit or reduce in any

23 way any appropriation that provides the Corporation

24 with funds to cover its net realized losses.
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1 (h) CONSERVATION RESERVE PROGRAM.—Multiyear

2 contracts under the conservation reserve program shall be

3 considered binding and not subject to sequestration, but

4 any contract entered into after a sequestration applicable

5 to that program takes effect shall provide for payments

6 reduced by the uniform percentage or percentages applica7 ble to that sequestration.

8 (i) EXTENDED UNEMPLOYMENT COMPENSATION.—

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

10 under the Federal-State Extended Unemployment Com11 pensation Act of 1970 for any week of unemployment oc12 curring during any period with respect to which payments

13 are reduced under any sequestration order by a percentage

14 not to exceed the percentage by which the Federal pay15 ment to the State under section 204 of such Act is to be

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

17 (2) A reduction by a State in accordance with sub18 paragraph (A) shall not be considered as a failure to fulfill

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

20 Revenue Code of 1986.

21 (j) FEDERAL EMPLOYEES HEALTH BENEFITS

22 FUND.—For the Federal Employees Health Benefits

23 Fund, a sequestration order shall take effect with the next

24 open season. The sequestration shall be accomplished by

25 annual payments from that Fund to the General Fund of
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1 the Treasury. Those annual payments shall be financed

2 solely by charging higher premiums. For purposes of sub3 section (b)(1), the sequestrable base for the Fund is the

4 budget-year level of gross outlays resulting from claims

5 paid after the sequestration order takes effect, and sub6 section (b)(2) shall not apply.

7 (k) FEDERAL HOUSING FINANCE BOARD.—Any se8 questration of the Federal Housing Finance Board shall

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

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

11 Treasury, in amounts equal to the uniform sequestration

12 percentage for that year times the gross obligations of the

13 Board in that year.

14 (l) FEDERAL PAY.—

15 (1) IN GENERAL.—Except as provided in sec16 tion 111(b)(3), new budget authority to pay Federal

17 personnel shall be reduced by the uniform percent18 age calculated under section 108, 109, or 110, as

19 applicable, but no sequestration order may reduce or

20 have the effect of reducing the rate of pay to which

21 any individual is entitled under any statutory pay

22 system (as increased by any amount payable under

23 section 5304 of title 5, United States Code, or sec24 tion 302 of the Federal Employees Pay Comparabil25 ity Act of 1990) or the rate of any element of mili-
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1 tary pay to which any individual is entitled under

2 title 37, United States Code, or any increase in rates

3 of pay which is scheduled to take effect under sec4 tion 5303 of title 5, United States Code, section

5 1009 of title 37, United States Code, or any other

6 provision of law.

7 (2) DEFINITIONS.—For purposes of this sub8 section:

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

10 have the meaning given that term in section

11 5302(1) of title 5, United States Code.

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

13 means—

14 (i) the elements of compensation of

15 members of the uniformed services speci16 fied in section 1009 of title 37, United

17 States Code,

18 (ii) allowances provided members of

19 the uniformed services under sections 403a

20 and 405 of such title, and

21 (iii) cadet pay and midshipman pay

22 under section 203(c) of such title.

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

24 have the meaning given that term in section

25 101(3) of title 37, United States Code.
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1 (m) GUARANTEED STUDENT LOANS.—(A) For all

2 student loans under parts B and D of title IV of the High3 er Education Act of 1965 made on or after the date of

4 a sequestration, the origination fees shall be increased by

5 a uniform percentage sufficient to produce the dollar sav6 ings in student loan programs for the fiscal year of the

7 sequestration required by section 108 or 109, and all sub8 sequent origination fees shall be increased by the same

9 percentage, notwithstanding any other provision of law.

10 (B) The origination fees to which paragraph (A) ap11 plies are those specified in sections 428H(f)(1), 438(c),

12 and 455(c) of that Act.

13 (n) INSURANCE PROGRAMS.—Any sequestration in a

14 Federal program that sells insurance contracts to the pub15 lic (including the Federal Crop Insurance Fund, the Na16 tional Insurance Development Fund, the National Flood

17 Insurance Fund, insurance activities of the Overseas Pri18 vate Insurance Corporation, and Veterans’ life insurance

19 programs) shall be accomplished by annual payments from

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

21 Treasury. The amount of each annual payment by each

22 such fund or account shall be the amount received by the

23 fund or account by increasing premiums on contracts en24 tered into after the date a sequestration order takes effect
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1 by the uniform sequestration percentage, and premiums

2 shall be increased accordingly.

3 (o) MEDICAID.—The November 15th estimate of

4 medicaid spending by States shall be the base estimate

5 from which the uniform percentage reduction under any

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

7 made. Succeeding Federal payments to States shall reflect

8 that reduction. The Health Care Financing Administra9 tion shall reconcile actual medicaid spending for each fis10 cal year with the base estimate as reduced by the uniform

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

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

13 the fiscal year to which the base estimate applied, to com14 ply with the sequestration order.

15 (p) MEDICARE.—

16 (1) TIMING OF APPLICATION OF REDUC17 TIONS.—

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

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

20 payment amounts pursuant to a sequestration

21 order, the reduction shall be applied to payment

22 for services furnished after the effective date of

23 the order. For purposes of the previous sen24 tence, in the case of inpatient services furnished

25 for an individual, the services shall be consid-
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1 ered to be furnished on the date of the individ2 ual’s discharge from the inpatient facility.

3 (B) PAYMENT ON THE BASIS OF COST RE4 PORTING PERIODS.—In the case in which pay5 ment for services of a provider of services is

6 made under title XVIII of the Social Security

7 Act on a basis relating to the reasonable cost

8 incurred for the services during a cost reporting

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

10 payment amounts pursuant to a sequestration

11 order, the reduction shall be applied to payment

12 for costs for such services incurred at any time

13 during each cost reporting period of the pro14 vider any part of which occurs after the effec15 tive date of the order, but only (for each such

16 cost reporting period) in the same proportion as

17 the fraction of the cost reporting period that oc18 curs after the effective date of the order.

19 (2) NO INCREASE IN BENEFICIARY CHARGES IN

20 ASSIGNMENT-RELATED CASES.—If a reduction in

21 payment amounts is made pursuant to a sequestra22 tion order for services for which payment under part

23 B of title XVIII of the Social Security Act is made

24 on the basis of an assignment described in section

25 1842(b)(3)(B)(ii), in accordance with section
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1 1842(b)(6)(B), or under the procedure described in

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

3 the services shall be considered to have accepted

4 payment of the reasonable charge for the services,

5 less any reduction in payment amount made pursu6 ant to a sequestration order, as payment in full.

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

8 In computing the adjusted average per capita cost

9 for purposes of section 1876(a)(4) of the Social Se10 curity Act, the Secretary of Health and Human

11 Services shall not take into account any reductions

12 in payment amounts which have been or may be ef13 fected under this part.

14 (q) POSTAL SERVICE FUND.—Any sequestration of

15 the Postal Service Fund shall be accomplished by annual

16 payments from that Fund to the General Fund of the

17 Treasury, and the Postmaster General of the United

18 States shall have the duty to make those payments during

19 the fiscal year to which the sequestration order applies

20 and each succeeding fiscal year. The amount of each an21 nual payment shall be—

22 (1) the uniform sequestration percentage, times

23 (2) the estimated gross obligations of the Postal

24 Service Fund in that year other than those obliga-
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1 tions financed with an appropriation for revenue

2 foregone for that year.

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

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

5 made in installments within that year if the payment

6 schedule is approved by the Secretary of the Treasury.

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

8 Postmaster General shall submit to the Postal Rate Com9 mission a plan for financing the annual payment for that

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

11 The plan may assume efficiencies in the operation of the

12 Postal Service, reductions in capital expenditures, in13 creases in the prices of services, or any combination, but

14 may not assume a lower Fund surplus or higher Fund

15 deficit and must follow the requirements of existing law

16 governing the Postal Service in all other respects. Within

17 30 days of the receipt of that plan, the Postal Rate Com18 mission shall approve the plan or modify it in the manner

19 that modifications are allowed under current law. If the

20 Postal Rate Commission does not respond to the plan

21 within 30 days, the plan submitted by the Postmaster

22 General shall go into effect. Any plan may be later revised

23 by the submission of a new plan to the Postal Rate Com24 mission, which may approve or modify it.
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1 (r) POWER MARKETING ADMINISTRATIONS AND

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

3 power marketing administration funds or the Tennessee

4 Valley Authority fund shall be accomplished by annual

5 payments from those funds to the General Fund of the

6 Treasury, and the administrators of those funds shall have

7 the duty to make those payments during the fiscal year

8 to which the sequestration order applies and each succeed9 ing fiscal year. The amount of each annual payment by

10 a fund shall be—

11 (1) the direct spending uniform sequestration

12 percentage, times

13 (2) the estimated gross obligations of the fund

14 in that year other than those obligations financed

15 from discretionary appropriations for that year.

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

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

18 made in installments within that year if the payment

19 schedule is approved by the Secretary of the Treasury. An20 nual payments by a fund may be financed by reductions

21 in costs required to produce the presequester amount of

22 power (but those reductions shall not include reductions

23 in the amount of power supplied by the fund), by reduc24 tions in capital expenditures, by increases in rates, or by

25 any combination, but may not be financed by a lower fund
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1 surplus or a higher fund deficit and must follow the re2 quirements of existing law governing the fund in all other

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

4 is authorized to take the actions specified above in order

5 to make the annual payments to the Treasury.

6 (s) VETERANS’ HOUSING LOANS.—(1) For all hous7 ing loans guaranteed, insured, or made under chapter 37

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

9 a sequestration, the origination fees shall be increased by

10 a uniform percentage sufficient to produce the dollar sav11 ings in veterans’ housing programs for the fiscal year of

12 the sequestration required by section 108 or 109, and all

13 subsequent origination fees shall be increased by the same

14 percentage, notwithstanding any other provision of law.

15 (2) The origination fees to which paragraph (1) ap16 plies are those referred to in section 3729 of title 38,

17 United States Code.

18 SEC. 113. SEQUESTRATION THROUGH SURTAXES.

19 (a) GENERAL RULE.—Subchapter A of chapter 1 of

20 the Internal Revenue Code of 1986 (relating to determina21 tion of tax liability) is amended by adding at the end

22 thereof the following new part:

23 ‘‘PART VIII—TAX SEQUESTRATION SURTAXES

‘‘Sec. 59B. Imposition of surtax on individuals.

‘‘Sec. 59C. Imposition of surtax on corporations.

‘‘Sec. 59D. Definitions and special rules.
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1 ‘‘SEC. 59B. IMPOSITION OF SURTAX ON INDIVIDUALS.

2 ‘‘(a) SECTION 1.—In the case of an individual, the

3 amount of the tax imposed under section 1 for any taxable

4 year shall be increased by the applicable surtax percentage

5 of the tax imposed under section 1 for such taxable year

6 (determined without regard to this section).

7 ‘‘(b) MINIMUM TAX.—In the case of an individual,

8 the amount of the tentative minimum tax determined

9 under section 55 for any taxable year shall be increased

10 by the applicable surtax percentage of the amount of the

11 tentative minimum tax for such taxable year (determined

12 without regard to this section).

13 ‘‘(c) SURTAX TO APPLY TO ESTATES AND TRUSTS.—

14 For purposes of this section, the term ‘individual’ includes

15 any estate or trust taxable under section 1.

16 ‘‘(d) COORDINATION WITH OTHER PROVISIONS.—

17 The provisions of this section—

18 ‘‘(1) shall be applied after section 1(h), but

19 ‘‘(2) before the application of any other provi20 sion of this title which refers to the amount of the

21 tax imposed by section 1 or 55, as the case may be.

22 ‘‘SEC. 59C. IMPOSITION OF SURTAX ON CORPORATIONS.

23 ‘‘(a) NORMAL CORPORATE TAX.—

24 ‘‘(1) IN GENERAL.—In the case of a corpora25 tion, the amount of the tax imposed under section

26 11 for any taxable year shall be increased by the ap-
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1 plicable surtax percentage of the amount of the tax

2 imposed under section 11 for such taxable year (de3 termined without regard to this section).

4 ‘‘(2) TREATMENT OF CERTAIN TAXES.—For

5 purposes of paragraph (1), a tax shall be treated as

6 imposed under section 11 if the amount of such tax

7 is determined by reference to the provisions of sec8 tion 11 (or by reference to any rate contained there9 in).

10 ‘‘(b) MINIMUM TAX.—In the case of a corporation,

11 the amount of the tentative minimum tax determined

12 under section 55 for any taxable year shall be increased

13 by the applicable surtax percentage of the amount of the

14 tentative minimum tax for such taxable year (determined

15 without regard to this section).

16 ‘‘(c) COORDINATION WITH OTHER PROVISIONS.—

17 The provisions of this section shall be applied—

18 ‘‘(1) after the application of section 1201 and

19 801(a)(2), but

20 ‘‘(2) before the application of any other provi21 sion of this title which refers to the amount of tax

22 imposed by section 11 or 55, as the case may be.

23 ‘‘SEC. 59D. DEFINITIONS AND SPECIAL RULES.

24 ‘‘(a) APPLICABLE SURTAX PERCENTAGE.—For pur25 poses of this subpart—
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1 ‘‘(1) IN GENERAL.—The term ‘applicable surtax

2 percentage’ means, with respect to a taxable year be3 ginning in a calendar year, the sum, rounded up to

4 the nearest 0.5 percentage point, of—

5 ‘‘(A) the surtax percentage (if any) deter6 mined under paragraph (2) for such calendar

7 year, plus

8 ‘‘(B) the sum of the surtax percentages (if

9 any) for all preceding calendar years.

10 ‘‘(2) SURTAX PERCENTAGE.—The surtax per11 centage for a calendar year is the surtax percentage

12 included in the final sequestration report effectuated

13 by the sequestration order under section 114 of the

14 Deficit Elimination Act of 1995 for the fiscal year

15 in which the calendar year begins.

16 ‘‘(b) SECTION 15 NOT TO APPLY.—Section 15 shall

17 not apply to any change in rates under this part.

18 ‘‘(c) ADJUSTMENT TO APPLICATION OF CERTAIN

19 PROVISIONS.—

20 ‘‘(1) DIVIDENDS PAID ON CERTAIN PREFERRED

21 STOCK.—In computing for a taxable year of a cor22 poration the fractions described in sections

23 244(a)(2) and 247(a)(2), the denominator shall,

24 under regulations prescribed by the Secretary, be in25 creased to reflect the provisions of this part.
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1 ‘‘(2) SHAREHOLDERS OF REGULATED INVEST2 MENT COMPANIES.—In computing the adjustment to

3 basis described in section 852(b)(3)(D)(iii), the per4 centage set forth therein shall be adjusted, under

5 regulations prescribed by the Secretary, to reflect

6 the provisions of this part.’’

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

8 subchapter A of chapter 1 of such Code is amended by

9 adding at the end thereof the following new item:

‘‘Part VIII. Tax sequestration surtaxes.’’

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

11 this section shall apply to taxable years beginning after

12 December 31, 1995.

13 SEC. 114. ESTIMATING ASSUMPTIONS, REPORTS, AND OR14 DERS.

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

16 part for any budget year is as follows:

Date: Action to be completed:

Dec. 31 .......................................... OMB and CBO sequestration preview

reports submitted to Board.

Jan. 15 .......................................... Board selects sequestration preview

report.

The President’s budget submission OMB publishes sequestration preview

report.

August 29: ..................................... President’s midsession review; notification regarding military personnel.

Within 10 days after end of session.OMB and CBO final budget year sequestration reports submitted to

Board.

5 days later .................................... Board selects final sequestration report; President issues sequestration

order.
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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, OMB, and the Board and, in the case of OMB,

5 to the House of Representatives, the Senate, the Presi6 dent, and the Board on the day it is issued. On the follow7 ing day a notice of the report shall be printed in the Fed8 eral Register.

9 (c) EXCHANGE OF PRELIMINARY CURRENT POLICY

10 BASELINES.—On December 15 or 3 weeks after Congress

11 adjourns to end a session, whichever is later, OMB and

12 CBO shall exchange their preliminary current policy base13 lines for the budget-year session starting in January.

14 (d) SEQUESTRATION PREVIEW REPORTS.—

15 (1) REPORTING REQUIREMENT.—On December

16 31 or 2 weeks after exchanging preliminary current

17 policy baselines, whichever is later, OMB and CBO

18 shall each submit a sequestration preview report.

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

20 forth the following:

21 (A) MAJOR ESTIMATING ASSUMPTIONS.—

22 The major estimating assumptions for the cur23 rent year, the budget year, and the outyears,

24 and an explanation of them.
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1 (B) CURRENT POLICY BASELINE.—A de2 tailed display of the current policy baseline for

3 the current year, the budget year, and the out4 years, with an explanation of changes in the

5 baseline since it was last issued that includes

6 the effect of policy decisions made during the

7 intervening period and an explanation of the

8 differences between OMB and CBO for each

9 item set forth in the report.

10 (C) DEFICITS ASSUMING COMPLIANCE.—

11 Estimates for the budget year and each subse12 quent year through fiscal year 2002 of the defi13 cits or surpluses in the current policy baseline

14 assuming deficit reduction specified in section

15 116.

16 (D) DISCRETIONARY FUNDING LIMITS.—

17 (i) estimates for the current year, the budget

18 year, and each outyear through 2002 of the dis19 cretionary funding limits and an explanation of

20 each adjustment made to those limits under

21 section 102(b), (ii) starting with fiscal year

22 2002, an estimate of the aggregate first-year

23 spendout rate for the budget year for discre24 tionary programs, (iii) starting with budget

25 year 2002, an estimate for the current year and
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1 for the budget year of the discretionary funding

2 limits under the spinoff law under section 105,

3 or if no such law exists for a fiscal year, for

4 those limits established under the automatic ap5 plication of section 103 or 104.

6 (E) SEQUESTRATION OF DISCRETIONARY

7 ACCOUNTS.—Estimates of the uniform percent8 age and the amount of budgetary resources to

9 be sequestered from discretionary programs

10 given the baseline level of appropriations, and if

11 the President chooses to exempt some or all

12 military personnel from sequestration, the effect

13 of that decision on the percentage and amounts.

14 (F) DEFICIT REDUCTION REQUIREMENTS

15 FOR DIRECT SPENDING AND RECEIPTS.—An es16 timate for direct spending and receipts of the

17 deficit reduction remaining to be achieved for

18 the budget year under section 101 or 104 or of

19 the decrease in the surplus allowed for that

20 year under section 104 (given the amount al21 ready achieved as measured under section 106).

22 (G) DIRECT SPENDING SEQUESTRATION.—

23 Estimates of the uniform percentage and the

24 amount of targeted sequestration under section

25 108 that will be necessary in each direct spend-
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1 ing category to meet the direct spending targets

2 for the budget year in the spin-off law under

3 section 105, or if no such law has been enacted

4 for the budget year, the uniform percentage and

5 the amount of comprehensive sequestration of

6 direct spending programs that will be necessary

7 under section 109.

8 (H) RECEIPTS SEQUESTRATION.—Esti9 mates of the increase in receipts under section

10 108 that will be necessary to meet the receipts

11 targets for the budget year in the spin-off law

12 under section 105, or if no such law has been

13 enacted for the budget year, the increase in re14 ceipts that will be necessary under section 109;

15 including the surtax percentage needed to

16 achieve the increase in receipts required under

17 section 108 or the uniform percentage under

18 section 109.

19 (e) SELECTION OF OFFICIAL SEQUESTRATION PRE20 VIEW REPORT.—On January 15 or 2 weeks after receiving

21 the OMB and CBO sequestration preview reports, which22 ever is later, the Board shall choose either the OMB or

23 CBO sequestration preview report as the official report for

24 purposes of this Act. The Board shall add to the chosen

25 report an analysis of which reports submitted in previous
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1 years have proven to be more accurate and recommenda2 tions about methods of improving the accuracy of future

3 reports. That report shall be set forth, without change,

4 in the budget submitted by the President under section

5 1105(a) of title 31, United States Code, for the budget

6 year.

7 (f) AGREEING ON EARLIER DATES.—The Chairman

8 of the Board may set earlier dates for subsections (c), (d),

9 and (e) if OMB and CBO concur.

10 (g) NOTIFICATION REGARDING MILITARY PERSON11 NEL.—On or before August 29, the President shall notify

12 the Congress of the manner in which he intends to exercise

13 flexibility with respect to military personnel accounts

14 under section 111(b).

15 (h) FINAL SEQUESTRATION REPORTS.—

16 (1) REPORTING REQUIREMENT.—Not later than

17 10 days following the end of a budget-year session,

18 OMB and CBO shall each submit a final sequestra19 tion report.

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

21 upon laws enacted through the date of the report

22 and shall set forth all the information and estimates

23 required of a sequestration preview report required

24 by subsections (d)(2)(D) through (H). In addition,

25 that report shall include—
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1 (A) for each account to be sequestered, the

2 baseline level of sequestrable budgetary re3 sources and the resulting reductions in new

4 budget authority and outlays;

5 (B) the effects of sequestration on the level

6 of direct spending outlays for each fiscal year

7 through 2002; and

8 (C) the effects of sequestration on the level

9 of receipts for each fiscal year through 2002.

10 (i) SELECTION OF OFFICIAL FINAL SEQUESTRATION

11 REPORT.—Not later than 5 days after receiving the final

12 OMB and CBO sequestration reports, the Board shall

13 choose either the OMB or CBO final sequestration report

14 as the official report for purposes of this Act, and shall

15 issue a report stating that decision and making any com16 ments that the Board chooses.

17 (j) PRESIDENTIAL ORDER.—(1) On the day that the

18 Board chooses a final sequestration report, the President

19 shall issue an order fully implementing without change all

20 sequestrations and tax actions required by—

21 (A) the final sequestration report that requires

22 the lesser amount of discretionary sequestration

23 under section 110; and

24 (B) the final sequestration report that requires

25 the lesser total amount of direct spending and re-
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1 ceipts sequestration under section 108 or 109 (as

2 applicable).

3 The order shall be effective on issuance and shall be issued

4 only if sequestration is required.

5 (2)(A) If both the CBO and OMB final sequestration

6 reports require a sequestration of discretionary programs,

7 and the Board chooses the report requiring the greater

8 sequestration, then a positive amount equal to the dif9 ference between the CBO and OMB estimates of discre10 tionary new budget authority for the budget year shall be

11 subtracted from the budget-year column and added to the

12 column for the first outyear of the discretionary scorecard

13 under section 107 as though that amount had been en14 acted in the next session of Congress.

15 (B) If one final sequestration report requires a se16 questration of discretionary programs and the Board

17 chooses that report, then an amount equal to the dif18 ference between that report’s estimate of discretionary

19 new budget authority for the budget year and the discre20 tionary funding limit for that year shall be subtracted

21 from the budget-year column and added to column for the

22 first outyear of the discretionary scorecard under section

23 107 as though that amount had been enacted in the next

24 session of Congress.
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1 (3)(A) If both the CBO and OMB final sequestration

2 reports require a sequestration of direct spending or re3 ceipts, and the Board chooses the report requiring the

4 greater sequestration, then a positive amount equal to the

5 difference between the total CBO and OMB estimates of

6 required budget-year direct spending and receipts seques7 trations shall be subtracted from the budget-year column

8 and added to the column for the first outyear of the direct

9 spending and receipts scorecard under section 106 as

10 though that amount had been enacted in the next session

11 of Congress.

12 (B) If one final sequestration report requires a se13 questration of direct spending or receipts and the Board

14 chooses that report, then the estimate of total required

15 budget-year direct spending and receipts sequestrations

16 shall be subtracted from the budget-year column and

17 added to column for the first outyear of the direct spend18 ing and receipts scorecard under section 106 as though

19 that amount had been enacted in the next session of

20 Congress.

21 (k) LOW-GROWTH REPORT.—At any time until the

22 end of fiscal year 1997, the Director of the Board shall

23 notify the Congress if—

24 (1) during the period consisting of the quarter

25 during which such notification is given, the quarter
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1 preceding that notification, and the 4 quarters fol2 lowing that notification, CBO or OMB has deter3 mined that real economic growth is projected or esti4 mated to be less than zero for each of any 2 con5 secutive quarters within that period; or

6 (2) the most recent of the Department of Com7 merce’s advance, preliminary, or final reports of ac8 tual real economic growth for each of the most re9 cently reported quarter and the immediately preced10 ing quarter is less than 1 percent.

11 (l) USE OF MAJOR ESTIMATING ASSUMPTIONS AND

12 SCOREKEEPING CONVENTIONS.—In the estimates, projec13 tions, and reports under subsections (c) and (d), CBO and

14 OMB shall use the best and most recent estimating as15 sumptions available. In all other reports required by this

16 section and in all estimates or calculations required by this

17 Act, CBO and OMB shall use—

18 (1) current-year and budget-year discretionary

19 funding limits chosen by the Board and the esti20 mates chosen by the Board of the deficit reduction

21 (or decrease in the surplus) through changes in di22 rect spending and receipts required (or allowed) in

23 the budget year;

24 (2) in estimating the effects of bills and discre25 tionary regulations, the major estimating assump-
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1 tions most recently chosen by the Board, except to

2 the extent that they must be altered to reflect actual

3 results occurring or measured after the Board’s

4 choice; and

5 (3) scorekeeping conventions determined after

6 consultation among the House and Senate Commit7 tees on the Budget, CBO, and OMB.

8 In applying the two previous sentences, the major estimat9 ing assumptions and other calculations required by this

10 Act that are included in the statement of managers accom11 panying the conference report on this Act shall be consid12 ered, for all purposes of this Act, to be the report of the

13 Board chosen under subsection (e) for fiscal year 1993.

14 (m) BILL COST ESTIMATES.—Within 10 days after

15 the enactment of any discretionary appropriations, direct

16 spending, or receipts legislation, CBO and OMB shall

17 transmit to each other, the Board, and to the Congress

18 an estimate of the budgetary effects of that law, following

19 the estimating requirements of this section. Those esti20 mates may not change after the 10-day period except—

21 (1) to the extent those estimates are subsumed

22 within (and implicitly changed by) the estimates

23 made in preparation of a new baseline under sub24 sections (c), (d), and (h);
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1 (2) to reflect a choice of the Board regarding

2 an official set of estimates under subsections (l) and

3 (n); and

4 (3) to correct clerical errors or errors in the ap5 plication of this Act.

6 SEC. 115. THE CURRENT POLICY BASELINE.

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

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

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

10 the budget year and the outyears based on laws enacted

11 through, and discretionary regulations promulgated as

12 final by, the applicable date.

13 (b) DIRECT SPENDING AND RECEIPTS.—For the cur14 rent year, the budget year, and each outyear, the baseline

15 shall be calculated using the following assumptions:

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

17 direct spending and receipts are assumed to operate

18 in the manner specified in those laws for each such

19 year, funding for entitlement authority is assumed

20 to be adequate to make all payments required by

21 those entitlements, and funding for deposit insur22 ance is assumed to be adequate to meet the costs of

23 the Financial Institutions Reform, Recovery, and

24 Enforcement Act of 1989 or successor laws.
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1 (2) EXCEPTIONS.—Except as provided in para2 graph (3):

3 (A) No program with estimated current4 year gross new budget authority greater than

5 $100 million is assumed to expire in the budget

6 year or outyears. In carrying out the preceding

7 sentence, expiring entitlement programs and

8 programs financed by indefinite budget author9 ity are assumed to continue as in effect just

10 prior to their expiration, and other expiring

11 programs are assumed to continue with new

12 budget authority projected as under subsection

13 (c)(4).

14 (B) The percentage increase for veterans’

15 compensation for a fiscal year is assumed to be

16 the same as that required by law for veterans’

17 pensions unless otherwise provided by a law en18 acted in that session.

19 (C) Excise taxes dedicated to a trust fund,

20 if expiring, are assumed to continue at the rates

21 in effect immediately prior to their expiration.

22 (3) CUTOFF DATE.—Programs or taxes that ex23 pire on or before December 31 and that have not

24 been reauthorized by the date of the final sequestra25 tion report are assumed to expire. If an increase in
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1 veterans compensation has not been enacted by the

2 date of the final sequestration report, it is not

3 assumed.

4 (c) DISCRETIONARY APPROPRIATIONS.—For the cur5 rent year, the budget year, and each outyear, the baseline

6 shall be calculated using the following assumptions regard7 ing discretionary programs:

8 (1) INFLATION OF CURRENT-YEAR APPROPRIA9 TIONS.—New budget authority shall be at the level

10 provided for that fiscal year in appropriation Acts.

11 If for any account an appropriation has not yet been

12 enacted, new budget authority is assumed to be at

13 the level available in the current year, adjusted se14 quentially and cumulatively for expiring housing con15 tracts as specified in paragraph (2), for inflation as

16 specified in paragraph (3), and to account for

17 changes required by law in the level of agency pay18 ments for personnel benefits other than pay.

19 (2) EXPIRING HOUSING CONTRACTS.—New

20 budget authority to renew expiring multiyear sub21 sidized housing contracts or provide contracts to re22 place units lost due to prepayments shall be adjusted

23 to reflect the difference in the number of such con24 tracts that are estimated to expire or be prepaid in

25 that fiscal year and the number expiring or being
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1 prepaid in the current year, with the per-contract re2 newal/replacement cost equal to the average current3 year cost of renewal or replacement contracts.

4 (3) INFLATORS.—The inflator to adjust new

5 budget authority relating to personnel is the percent

6 by which the average rate of basic pay for statutory

7 pay systems, computed as specified in section

8 5303(a) of title 5, United States Code, for that fis9 cal year exceeds the average rate of pay for the cur10 rent year. The inflator to adjust all other budgetary

11 resources is the percent by which the average of the

12 estimated gross domestic product fixed-weight price

13 index for that fiscal year differs from the average of

14 such estimated index for the current year.

15 (4) PART-YEAR APPROPRIATIONS; PERMISSIVE

16 TRANSFERS.—If, for any account, a continuing ap17 propriation is in effect for less than an entire fiscal

18 year, then the amount available for that fiscal year

19 is assumed to equal the amount that would be avail20 able if that continuing appropriation covered the en21 tire fiscal year. If law permits the transfer of budget

22 authority among budget accounts in the current

23 year, the current-year level for an account shall re24 flect transfers accomplished by the applicable date

25 or assumed for the current year in the President’s
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1 original budget or midsession review for the budget

2 year.

3 (d) UP-TO-DATE CONCEPTS.—In deriving the base4 line for any budget year or outyear, current-year amounts

5 shall be calculated using the concepts and definitions that

6 are required for that budget year.

7 SEC. 116. BASELINE ASSUMING DEFICIT REDUCTION.

8 For any budget year, a baseline assuming deficit re9 duction refers to a projection of current policy baseline

10 surpluses or deficits into the budget year and the outyears

11 that is adjusted in aggregate by—

12 (1) assuming compliance with the deficit reduc13 tion targets for direct spending and receipts legisla14 tion under section 101 without any adjustment pur15 suant to section 103;

16 (2) assuming compliance with the discretionary

17 funding limits under section 102 without any adjust18 ment pursuant to section 103; and

19 (3) excluding amounts resulting from legislation

20 that has been designated as an emergency require21 ment under section 102(b)(4) or 106(f).

22 SEC. 117. STABILIZATION RESERVE FUND.

23 (a) ESTABLISHMENT AND PURPOSE.—There is here24 by established as a deposit fund in the Treasury a Sta25 bilization Reserve Fund (‘‘Fund’’), to be administered by
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1 the Secretary of the Treasury. The purpose of that Fund

2 is to accumulate balances during years of comparative

3 prosperity, which balances may later be used to cover the

4 loss of receipts and the increase in outlays that occur dur5 ing times of comparative economic distress.

6 (b) AMOUNTS PAID TO THE FUND.—On the last day

7 of any fiscal year for which an actual surplus has oc8 curred, the amount of that surplus shall be paid to the

9 Fund. In fiscal year 2003, the Secretary of the Treasury

10 shall pay an additional $10 billion from the general fund

11 of the Treasury to the Fund. In each fiscal year starting

12 with 2000, the Secretary of the Treasury shall pay an ad13 ditional $20 billion to the Fund from the general fund of

14 the Treasury. Balances in the Fund shall not receive inter15 est.

16 (c) TRANSFER OF FUND BALANCES.—At any time

17 starting with the fiscal year 2003 session, a law may be

18 enacted withdrawing some or all of the current balance

19 of the Stabilization Reserve Fund and paying that

20 amount, as a receipt, to the General Fund of the Treas21 ury. That law may also provide for the later transfer to

22 the Treasury (as a receipt) of some or all of the current23 year estimated surplus (if any), to be paid into the Sta24 bilization Reserve Fund at the end of the current year

25 under subsection (b). Except for transfers to the General
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1 Fund of the Treasury, no law reducing the balances of

2 the Stabilization Reserve Fund may be enacted in any

3 year.

4 SEC. 118. MODIFICATIONS IF WAR OR LOW GROWTH.

5 (a) WAR.—Upon the enactment of a declaration of

6 war—

7 (1) the subsequent issuance of any sequestra8 tion report or any sequestration order is precluded;

9 (2) sections 302(f), 310(d), and 311 of the

10 Congressional Budget Act of 1974 are suspended;

11 and

12 (3) sections 1105(f) and 1103 of title 31, Unit13 ed States Code, are suspended.

14 (b) PEACE.—In the event of a suspension of seques15 tration procedures due to a declaration of war, then, effec16 tive with the first fiscal year that begins in the session

17 after the state of war is concluded by Senate ratification

18 of the necessary treaties, the provisions of subsection (a)

19 triggered by that declaration of war are no longer effec20 tive. The provisions of this Act that would have applied

21 to the fiscal year that started in the calendar year in which

22 the declaration of war was enacted shall instead apply to

23 the first fiscal year that begins in the session after the

24 state of was is concluded. The preceding sentence shall

25 apply in the same manner to each succeeding fiscal year.
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1 If the implementation of this subsection requires adding

2 entries to the direct spending and receipts scorecard under

3 section 106, CBO and OMB shall submit estimates of

4 those entries as part of their next sequestration preview

5 report under section 114.

6 (c) LOW GROWTH.—

7 (1) TRIGGER.—Within 20 days after the Board

8 issues a low-growth report under section 114(k), the

9 majority leader of the House of Representatives

10 may, and the majority leader of the Senate shall, in11 troduce a joint resolution in the form set forth in

12 paragraph (2).

13 (2) FORM OF JOINT RESOLUTION.—

14 (A) The matter after the resolving clause

15 in any joint resolution introduced pursuant to

16 paragraph (1) shall be as follows: ‘‘That the

17 conditions specified in section 114(k) of the

18 Deficit Elimination Act of 1995 are met. The

19 implementation of the Congressional Budget

20 Act of 1974, chapter 11 of title 31, United

21 States Code, and the Deficit Elimination Act of

22 1995 are modified as follows:

23 (1) the subsequent issuance of any se24 questration report or any sequestration

25 order is precluded;
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1 (2) sections 302(f), 310(d), and 311

2 of the Congressional Budget Act of 1974

3 are suspended; and

4 (3) sections 1105(f) and 1103 of title

5 31, United States Code, are suspended.

6 The provisions of this joint resolution shall

7 cease to be effective with respect to the first fis8 cal year beginning at least 12 months after its

9 enactment.’’.

10 (B) The title of the joint resolution shall

11 be ‘‘Joint resolution modifying certain provi12 sions of law pursuant to section 118(c) of the

13 Deficit Elimination Act of 1995.’’; and the joint

14 resolution shall not contain any preamble.

15 (3) COMMITTEE ACTION.—Each joint resolution

16 introduced pursuant to paragraph (1) shall be re17 ferred to the Committees on Rules, Government Op18 erations, and Budget of the House of Representa19 tives or to the Committee on the Budget of the Sen20 ate, as the case may be.

21 (4) SENATE BUDGET COMITTEE CONSIDER22 ATION.—The Committee on the Budget of the Sen23 ate shall report the joint resolution with or without

24 amendment on or before the 20th day after the date

25 on which the joint resolution is introduced. If any
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1 committee fails to report the joint resolution within

2 that 20-day period, it shall be automatically dis3 charged from further consideration of the joint reso4 lution, and the joint resolution shall be placed on the

5 appropriate calendar.

6 (5) COMMITTEE AMENDMENTS.—Amendments

7 reported by any committee under paragraph (3)

8 shall only strike the second and third sentences of

9 the joint resolution as introduced and insert matter

10 providing—

11 (A) changes to the budget targets or dates

12 under sections 101 through 104 to allow higher

13 discretionary funding limits or lower direct

14 spending and receipts deficit reduction require15 ments for any fiscal year or years;

16 (B) conforming amendments that may be

17 needed to chapter 11 of title 31, United States

18 Code; and

19 (C) conforming amendments that may be

20 needed to the Congressional Budget Act of

21 1974 or the rules of the House of Representa22 tives or the Senate.

23 (6) CONSIDERATION OF JOINT RESOLUTION.—

24 (A) A vote on final passage of a joint reso25 lution reported to the Senate or discharged pur-
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1 suant to paragraph (3) shall be taken on or be2 fore the close of the 10th calendar day of ses3 sion after the date on which the joint resolution

4 is reported or after the Committee has been dis5 charged from further consideration of the joint

6 resolution.

7 (B)(i) In the Senate, a joint resolution

8 under this paragraph shall be privileged. It

9 shall not be in order to move to reconsider the

10 vote by which the motion is agreed to or dis11 agreed to.

12 (ii) Debate in the Senate on a joint resolu13 tion under this paragraph, and all debatable

14 motions and appeals in connection therewith,

15 shall be limited to not more than five hours.

16 The time shall be equally divided between, and

17 controlled by, the majority leader and the mi18 nority leader or their designees.

19 (iii) Debate in the Senate on any debatable

20 motion or appeal in connection with a joint res21 olution under this paragraph shall be limited to

22 not more than one hour, to be equally divided

23 between, and controlled by, the mover and the

24 manager of the joint resolution, except that in

25 the event the manager of the joint resolution is
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1 in favor of any such motion or appeal, the time

2 in opposition thereto shall be controlled by the

3 minority leader or his designee.

4 (iv) A motion in the Senate to further limit

5 debate on a joint resolution under this para6 graph is not debatable. A motion to table or to

7 recommit a joint resolution under this para8 graph is not in order.

9 (C) If, after a joint resolution has been re10 ported to one House and prior to its passage by

11 that House, an identical joint resolution is re12 ceived from the other House, then—

13 (i) the procedure in that House shall

14 be the same as if no such joint resolution

15 had been received from the other House,

16 but

17 (ii) the vote on final passage shall be

18 on the joint resolution of the other House,

19 and

20 when the joint resolution is agreed to, the Clerk

21 of the House of Representatives (in the case of

22 a House joint resolution agreed to in the House

23 of Representatives) or the Secretary of the Sen24 ate (in the case of a Senate joint resolution

25 agreed to in the Senate) shall cause the joint
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1 resolution to be engrossed, certified, and trans2 mitted to the other House of the Congress as

3 soon as practicable.

4 (D) Amendments to a joint resolution con5 sidered under this paragraph shall be in order

6 in the Senate only if germane to that resolution

7 in the form in which it was reported or dis8 charged.

9 (7) CONSIDERATION OF A CONFERENCE RE10 PORT.—Consideration of a conference report on a

11 joint resolution under this subsection shall be gov12 erned by the Standing Rules of the Senate, and by

13 provisions of paragraph (5)(a) and (B) as if those

14 provisions applied to conference reports.

15 SEC. 119. BOARD OF ESTIMATES.

16 (a) ESTABLISHMENT.—There is established a Board

17 of Estimates.

18 (b) DUTIES OF THE BOARD.—(1) On the dates speci19 fied in section 114, the Board shall issue a report to the

20 President and the Congress which states whether it has

21 chosen (with no modification)—

22 (A) the sequestration preview report for the

23 budget year submitted by OMB under section

24 114(d) or the report for that year submitted by

25 CBO under section 114(d); and
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1 (B) the final sequestration report for the budg2 et year submitted by OMB under section 114(h) or

3 the report for that year submitted by CBO under

4 section 114(h);

5 that shall be used for purposes of this Act, chapter 11

6 of title 31, United States Code, and section 403 of the

7 Congressional Budget Act of 1974. In making its choice,

8 the Board shall choose the report that, in its opinion, is

9 the more accurate.

10 (2) At any time the Board may change the list of

11 major estimating assumptions to be used by OMB and

12 CBO in preparing their sequestration preview reports.

13 (3) At any time the Board may approve a revision

14 to the list of the direct spending jurisdiction of the stand15 ing committees of the House of Representatives to be used

16 for implementing targeted sequestration under section

17 108. Each such revision must be requested in writing by

18 the Speaker of the House of Representatives and may be

19 approved or disapproved, but may not be modified.

20 (c) MEMBERSHIP.—

21 (1) NUMBER AND APPOINTMENT.—The Board

22 shall be composed of 5 members, the chairman of

23 the Board of Governors of the Federal Reserve Sys24 tem and 4 other members to be appointed by the

25 President as follows:
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1 (A) One from a list of at least 5 individ2 uals nominated for such appointment by the

3 Speaker of the House of Representatives.

4 (B) One from a list of at least 5 individ5 uals nominated for such appointment by the

6 majority leader of the Senate.

7 (C) One from a list of at least 5 individ8 uals nominated for such appointment by the mi9 nority leader of the House of Representatives.

10 (D) One from a list of at least 5 individ11 uals nominated for such appointment by the mi12 nority leader of the Senate.

13 No member appointed by the President may be an

14 officer or employee of any government. A vacancy in

15 the Board shall be filled in the manner in which the

16 original appointment was made.

17 (2) CONTINUATION OF MEMBERSHIP.—If any

18 member of the Board appointed by the President be19 comes an officer or employee of a government, he

20 may continue as a member of the Board for not

21 longer than the 30-day period beginning on the date

22 he becomes such an officer or employee.

23 (3) TERMS.—(A) Members shall be appointed

24 for terms of 4 years.
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1 (B) Any member appointed to fill a vacancy oc2 curring before the expiration of the term for which

3 his predecessor was appointed shall be appointed

4 only for the remainder of such term. A member may

5 serve after the expiration of his term until his suc6 cessor has taken office.

7 (4) BASIC PAY.—Members of the Board shall

8 serve without pay.

9 (5) QUORUM.—Three members of the Board

10 shall constitute a quorum but a lesser number may

11 hold hearings.

12 (6) CHAIRMAN.—The Chairman of the Board

13 shall be chosen annually by its members.

14 (7) MEETINGS.—The Board shall meet at the

15 call of the Chairman or a majority of its members.

16 (d) DIRECTOR AND STAFF.—

17 (1) APPOINTMENT.—The Board shall have a

18 Director who shall be appointed by the members of

19 the Board. Subject to such rules as may be pre20 scribed by the Board, the Director may appoint and

21 fix the pay of such personnel as the Director consid22 ers appropriate.

23 (2) APPLICABILITY OF CERTAIN CIVIL SERVICE

24 LAWS.—The Director and staff of the Board may be

25 appointed without regard to the provisions of title 5,
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1 United States Code, governing appointments in the

2 competitive service, and may be paid without regard

3 to the provisions of chapter 51 and subchapter III

4 of chapter 53 of such title relating to classification

5 and General Schedule pay rates, except that no indi6 vidual so appointed may receive pay in excess of the

7 annual rate of basic pay payable for GS–18 of the

8 General Schedule.

9 (3) STAFF OF FEDERAL AGENCIES.—Upon re10 quest of the Board, the head of any Federal agency

11 is authorized to detail, on a reimbursable basis, any

12 of the personnel of such agency to the Board to as13 sist the Board in carrying out its duties, notwith14 standing section 202(a) of the Legislative Reorga15 nization Act of 1946 (2 U.S.C. 72a(a)).

16 (e) POWERS.—

17 (1) HEARINGS AND SESSIONS.—The Board

18 may, for the purpose of carrying out its duties, hold

19 such hearings, sit and act at such times and places,

20 take such testimony, and receive such evidence, as it

21 considers appropriate.

22 (2) OBTAINING OFFICIAL DATA.—The Board

23 may secure directly from any department or agency

24 of the United States information necessary to enable

25 it to carry out its duties. Upon request of the Chair-
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1 man of the Board, the head of such department or

2 agency shall furnish such information to the Board.

3 (3) ADMINISTRATIVE SUPPORT SERVICES.—The

4 Administrator of General Services shall provide to

5 the Board on a reimbursable basis such administra6 tive support services as the Board may request.

7 SEC. 120. JUDICIAL REVIEW.

8 (a) EXPEDITED REVIEW.—

9 (1) Any Member of Congress may bring an ac10 tion, in the United States District Court for the Dis11 trict of Columbia, for declaratory judgment and in12 junctive relief on the ground that any order that

13 might be issued pursuant to section 114 violates the

14 Constitution.

15 (2) Any Member of Congress, or any other per16 son adversely affected by any action taken under

17 this title, may bring an action, in the United States

18 District Court for the District of Columbia, for de19 claratory judgment and injunctive relief concerning

20 the constitutionality of this title.

21 (3) Any Member of Congress may bring an ac22 tion, in the United States District Court for the Dis23 trict of Columbia, for declaratory and injunctive re24 lief on the ground that the terms of an order issued
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1 under section 114 do not comply with the require2 ments of this title.

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

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

5 promptly delivered to the Secretary of the Senate

6 and the Clerk of the House of Representatives, and

7 each House of Congress shall have the right to inter8 vene in such action.

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

10 (2), or (3) shall be heard and determined by a three11 judge court in accordance with section 2284 of title

12 28, United States Code.

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

14 upon the right of the House of Representatives to inter15 vene in an action brought under paragraph (1), (2), or

16 (3) without the necessity of adopting a resolution to au17 thorize such intervention.

18 (b) APPEAL TO SUPREME COURT.—Notwithstanding

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

20 District Court for the District of Columbia which is issued

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

22 or (3) of subsection (a) shall be reviewable by appeal di23 rectly to the Supreme Court of the United States. Any

24 such appeal shall be taken by a notice of appeal filed with25 in 10 days after such order is entered; and the jurisdic-
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1 tional statement shall be filed within 30 days after such

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

3 an action brought under paragraph (1), (2), or (3) of sub4 section (a) shall be issued by a single Justice of the Su5 preme Court.

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

7 duty of the District Court for the District of Columbia

8 and the Supreme Court of the United States to advance

9 on the docket and to expedite to the greatest possible ex10 tent the disposition of any matter brought under sub11 section (a).

12 (d) NONCOMPLIANCE WITH SEQUESTRATION PROCE13 DURES.—

14 (1) If it is finally determined by a court of com15 petent jurisdiction that an order issued by the Presi16 dent under section 114 for any fiscal year does not

17 fully implement without change all sequestrations re18 quired by the appropriate Office of Management and

19 Budget or Congressional Budget Office report cho20 sen by the Board to be the basis for the order, the

21 President shall, within 20 days after such deter22 mination is made, revise the order in accordance

23 with such determination.

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

25 section 114 for any fiscal year does not fully imple-
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1 ment without change all sequestrations required by

2 the appropriate OMB or CBO report chosen by the

3 Board to be the basis for the order on the claim or

4 defense that the constitutional powers of the Presi5 dent prevent such sequestration or reduction or per6 mit the avoidance of such sequestration or reduction,

7 and such claim or defense is finally determined by

8 the Supreme Court of the United States to be valid,

9 then the entire order issued pursuant to section 114

10 for such fiscal year shall be null and void.

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

12 granting declaratory or injunctive relief from the order of

13 the President issued under section 114, including relief

14 permitting or requiring the expenditure of funds seques15 tered by such order, shall take effect during the pendency

16 of the action before such court, during the time appeal

17 may be taken, or, if appeal is taken, during the period

18 before the court to which such appeal is taken has entered

19 its final order disposing of such action.

20 (f) ALTERNATIVE PROCEDURES.—(1) If any order is

21 invalidated because of the manner of appointment of mem22 bers of the Board, then section 120(c)(1) is amended to

23 read as follows:

24 ‘‘(1) NUMBER AND APPOINTMENT.—The Board shall

25 be composed of 5 members, the Chairman of the Board
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1 of Governors of the Federal Reserve System and 4 other

2 members to be appointed by the President. No member

3 appointed by the President may be an officer or employee

4 of any government.’’;

5 and any reports upon which such order was based shall

6 be transmitted to the newly constituted Board.

7 (2) No later than 5 days after the receipt of the re8 ports, the Board shall choose the report upon which the

9 order is to be based.

10 (3) This report shall be deemed to be the report re11 ceived by the President under section 114.

12 (g) PRESERVATION OF OTHER RIGHTS.—The rights

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

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

15 (h) ECONOMIC DATA, ASSUMPTIONS, AND METH16 ODOLOGIES.—The economic data and economic and tech17 nical assumptions and estimation of methodologies used

18 by OMB or CBO in preparing any report issued under

19 section 114 shall not be subject to review in any judicial

20 or administrative proceeding, and any choice made by the

21 Board under section 114 shall not be subject to any such

22 review.
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1 TITLE II—TECHNICAL AND

2 CONFORMING AMENDMENTS

3 SEC. 201. AMENDMENTS TO THE CONGRESSIONAL BUDGET

4 AND IMPOUNDMENT CONTROL ACT OF 1974.

5 (a) REPEALER.—Paragraph (2) of section 3 of the

6 Congressional Budget and Impoundment Control Act of

7 1974, the first time it appears, is repealed.

8 (b) DEFINITION OF BUDGET AUTHORITY.—Para9 graph (2) of section 3 of the Congressional Budget and

10 Impoundment Control Act of 1974, the second time it ap11 pears, is amended by inserting ‘‘in any form’’ after ‘‘prom12 issory notes’’, by inserting at the end of subparagraph (A)

13 the following new sentence: ‘‘Such term excludes trans14 actions classified as means of financing.’’, and by striking

15 ‘‘With respect to’’ and all that follows through ‘‘retirement

16 account, any’’ and inserting ‘‘Any’’, by inserting after sub17 paragraph (B) the following:

18 ‘‘(C) RELATIONSHIP TO ENTITLEMENT AU19 THORITY.—For purposes of titles III and IV,

20 all references to budget authority shall be con21 sidered to include the amount of budget author22 ity estimated to be needed to fund entitlement

23 provisions under existing or proposed law, and

24 all legislation increasing (or decreasing) the

25 level of entitlement authority under existing law
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1 shall be considered to provide (or decrease) new

2 budget authority in that amount.’’,

3 and by redesignating the next subparagraph accordingly.

4 (c) DEFINITION OF ENTITLEMENT AUTHORITY.—

5 Paragraph (9) of section 3 of the Congressional Budget

6 and Impoundment Control Act of 1974 is amended by

7 striking ‘‘spending authority described by section

8 401(c)(2)(C)’’ and inserting the following: ‘‘, and the term

9 ‘entitlement program’ refers to, any provision of law that

10 has the effect of requiring the Government to make net

11 payments (including intragovernmental payments) regard12 less of the amount of budget authority that may be avail13 able to make those payments. Those terms shall include

14 amounts estimated to be required under provisions of law

15 that depend on the fulfillment of non-legislative conditions

16 or are indefinite as to amount or timing. Except as pro17 vided in the next sentence, if a provision of law that other18 wise requires the Government to make net payments is

19 directly or indirectly limited by any other provision of law

20 to an amount of available budget authority, then entitle21 ment authority does not exist. Subchapter II of chapter

22 13 of title 31, United States Code, and the sequestration

23 provisions of the Deficit Elimination Act of 1995 shall not

24 be considered provisions of law that limit entitlement au25 thority to the amount of available budget authority.’’
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1 (d) DEFINITION OF MEANS OF FINANCING.—Section

2 3 of the Congressional Budget and Impoundment Control

3 Act of 1974 is amended by adding at the end the following

4 new paragraph:

5 ‘‘(11) The term ‘means of financing’ means the

6 financial transactions of the Government that con7 sist of exchanges of money or monetary proxies of

8 equal value and therefore are not counted as obliga9 tions, outlays, or revenues, such as net Federal bor10 rowing from the public in any form, debt redemp11 tion, seignorage on coins and profits from the sale

12 of gold, and changes in outstanding check or other

13 monetary credits, including write-offs.’’.

14 (e) CBO STUDIES.—Section 202(h) of the Congres15 sional Budget Act of 1974 is amended by striking ‘‘out16 lays, credit authority,’’ and inserting ‘‘outlays’’.

17 (f) TIMETABLE.—Section 300 of the Congressional

18 Budget Act of 1974 is amended by striking ‘‘February

19 25’’ and inserting ‘‘Six weeks after the President’s budget

20 submission’’.

21 (g) REQUIRED CONTENTS OF BUDGET RESOLU22 TION.—Section 301(a) of the Congressional Budget Act

23 of 1974 is amended by striking ‘‘planning levels’’, by strik24 ing ‘‘two’’ and inserting ‘‘four’’, by striking ‘‘, budget out25 lays, direct loan obligations, and primary loan guarantee
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1 commitments’’ both places it appears and inserting ‘‘and

2 outlays’’, by striking paragraphs (5), (6) and (7), by strik3 ing the semicolon at the end of paragraph (4) and insert4 ing a period, by inserting ‘‘and’’ after the semicolon at

5 the end of paragraph (3), and by striking the last sen6 tence.

7 (h) DELAYED ENROLLMENT.—Section 301(b)(3) of

8 the Congressional Budget Act of 1974 is amended by

9 striking ‘‘or new entitlement authority’’.

10 (i) SPIN-OFF BILL.—(1) Paragraphs (5), (6), (7),

11 and (8) of section 301(b) of the Congressional Budget Act

12 of 1974 are amended to read as follows:

13 ‘‘(5) set forth in a separate section—

14 ‘‘(A) the appropriate level of the debt held

15 by the public;

16 ‘‘(B) the discretionary funding limit for

17 the fiscal year, but only if and to the extent re18 quired by section 103 or 104 of the Deficit

19 Elimination Act of 1995;

20 ‘‘(C) the amount of direct spending change

21 required of or allowed by each committee of the

22 House of Representatives in laws within that

23 committee’s jurisdiction and the amount of re24 ceipts change required of or allowed by the

25 Committee on Ways and Means of the House of
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1 Representatives in laws within that committee’s

2 jurisdiction, but only to the extent specified in

3 section 105 of that Act; and

4 ‘‘(D) the amount, if any, to be withdrawn

5 from the Stabilization Reserve Fund and paid

6 to the General Fund of the Treasury during the

7 fiscal year under section 117 of that Act.’’.

8 (2) Paragraph (4) of section 301(b) of the Congres9 sional Budget Act of 1974 is amended by inserting ‘‘and’’

10 after the semicolon.

11 (j) TECHNICAL CORRECTION TO SECTION 301(e).—

12 Section 301(e) of the Congressional Budget Act of 1974

13 is amended by inserting ‘‘new’’ before ‘‘budget authority’’

14 in the second sentence.

15 (k) SECTION 301(i) POINT OF ORDER.—Section

16 301(i) of the Congressional Budget Act of 1974 is amend17 ed to read as follows:

18 ‘‘(i) It shall not be in order in the House of Rep19 resentatives or the Senate to consider any concurrent reso20 lution on the budget for a fiscal year beginning on October

21 1 of the year in which the resolution is considered (or

22 amendment to, motion regarding, or conference report on

23 such a resolution) unless—

24 ‘‘(1) it does not exceed the discretionary fund25 ing limit, and
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1 ‘‘(2) it fully meets the direct spending and re2 ceipts deficit reduction requirement,

3 for that fiscal year under sections 101 through 104 of the

4 Deficit Elimination Act of 1995, using estimates of that

5 limit and that requirement chosen by the Board of Esti6 mates.’’.

7 (l) COMMITTEE ALLOCATIONS AND SUBALLO8 CATIONS.—Section 602 of the Congressional Budget Act

9 of 1974 is amended—

10 (1) by striking ‘‘of—’’ and all that follows

11 through ‘‘outlays;’’ both places it appears and insert12 ing ‘‘of total new budget authority and outlays’’;

13 (2) in subsection (a)(1)(B), by striking ‘‘com14 mittee.’’ and inserting ‘‘committee, except that new

15 budget authority and outlays for entitlement pro16 grams funded through annual appropriations shall

17 be allocated and scored both to the Committee on

18 Appropriations and to the committee that authorized

19 such programs.’’; and

20 (3) in subsection (a)(3), by striking ‘‘, entitle21 ment authority,’’ both times it appears and by strik22 ing ‘‘, outlays, or social security outlays’’ both times

23 it appears and inserting ‘‘or outlays’’.

24 (m) REDESIGNATION OF COMMITTEE ALLOCA25 TIONS.—Subsections (a) and (b) of section 302 of the
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1 Congressional Budget Act of 1974 are repealed and sub2 sections (a) and (b) of section 602 of that Act (as amend3 ed by subsection (g)) are redesignated as subsections (a)

4 and (b) of section 302, respectively.

5 (n) CONSIDERATION OF APPROPRIATION BILLS.—

6 Section 302(c) of the Congressional Budget Act of 1974

7 is amended by striking ‘‘—(1)’’ and everything that fol8 lows through ‘‘401(c)(2) for a fiscal year;’’ and inserting

9 ‘‘new budget authority for a fiscal year’’.

10 (o) POINTS OF ORDER UNDER SECTION 302(f).—(1)

11 Section 302(f)(1) of the Congressional Budget Act of

12 1974 is amended to read as follows:

13 ‘‘(1) IN THE HOUSE OF REPRESENTATIVES.—It

14 shall not be in order in the House of Representatives

15 to consider any bill, joint resolution, or amendment

16 providing new budget authority, or any conference

17 report on any such bill or joint resolution, if—

18 ‘‘(A) the enactment of the bill or resolution

19 as reported or in the form recommended in the

20 conference report, or

21 ‘‘(B) the adoption of the amendment,

22 when added to existing levels of new budget author23 ity, would cause the level of new budget authority

24 for the fiscal year starting in the year in which the

25 most recent concurrent resolution on the budget was
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1 agreed to, or for the sum of that fiscal year and the

2 next 4 fiscal years, to exceed an allocation to a com3 mittee made under subsection (a) for either period,

4 or to exceed a suballocation made under subsection

5 (b) for that fiscal year.’’.

6 (2) Section 302(f)(2) of that Act is amended—

7 (A) in the first sentence, by striking ‘‘for budg8 et outlays,’’, by striking ‘‘new budget authority, or

9 new spending authority (as defined in section

10 401(c)(2))’’ and inserting ‘‘new budget authority’’,

11 by striking ‘‘outlays or’’ both places it appears, and

12 by striking ‘‘or provides for social security outlays in

13 excess of the appropriate allocation of social security

14 outlays under subsection (a)’’; and

15 (B) by striking the third sentence.

16 (3) Section 302(g) of that Act is amended by striking

17 ‘‘budget authority’’ and all that follows through ‘‘credit

18 authority’’ and inserting ‘‘budget authority and outlays’’.

19 (p) SECTION 303.—Section 303 of the Congressional

20 Budget Act of 1974 is amended—

21 (1) in its title by striking ‘‘, New Spending Au22 thority, New Credit Authority,’’;

23 (2) in subsection (a) by striking ‘‘either the

24 House of Representatives or’’, by inserting ‘‘or’’ at

25 the end of paragraph (2), by striking ‘‘paragraphs
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1 (4), (5), and (6), and after paragraph (6) by strik2 ing ‘‘for’’ and inserting ‘‘covering’’ and by striking

3 ‘‘(or, in the Senate, a concurrent resolution on the

4 budget covering such fiscal year)’’;

5 (3) in subsection (b) by repealing paragraph (1)

6 and by striking ‘‘(2)’’; and

7 (4) by adding at the end the following new sub8 section:

9 ‘‘(d) POINT OF ORDER IN THE HOUSE OF REP10 RESENTATIVES.—It shall not be in order in the House of

11 Representatives to consider any bill, joint resolution,

12 amendment, or conference report if that legislation, as re13 ported, includes any provision—

14 ‘‘(1) providing new budget authority;

15 ‘‘(2) reducing the level of revenues; or

16 ‘‘(3) altering the limit on the debt held by the

17 public;

18 that is first effective in the last fiscal year covered by the

19 most recently agreed to concurrent resolution on the budg20 et or any subsequent fiscal year.’’.

21 (q) CONSIDERATION OF SPIN-OFF LEGISLATION.—

22 Section 305 of the Congressional Budget Act of 1974 is

23 amended by adding at the end the following new sub24 section:
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1 ‘‘(e) CONFERENCE REPORTS.—Conference reports on

2 concurrent resolutions on the budget that contain addi3 tional matter under section 301(b)(5) shall be considered

4 first in the House of Representatives.’’.

5 (r) COST ESTIMATES AND SCOREKEEPING RE6 PORTS.—Section 308 of the Congressional Budget Act of

7 1974 is amended—

8 (1) in its title, by striking ‘‘, NEW SPENDING

9 AUTHORITY, OR NEW CREDIT AUTHORITY,’’;

10 (2) by striking ‘‘, new spending authority de11 scribed in section 401(c)(2), or new credit author12 ity,’’ the 3 times it appears;

13 (3) in subsection (a), by striking ‘‘in the reports

14 submitted’’, by inserting ‘‘302(a) or’’ before

15 ‘‘302(b)’’, in paragraph (1)(B) by striking ‘‘spending

16 authority’’ and everything that follows through

17 ‘‘401(c)(2) which is’’ and inserting ‘‘budget author18 ity’’ and by striking ‘‘annual appropriations’’ and in19 serting ‘‘annual discretionary appropriations’’, and

20 in paragraph (1)(C) by striking ‘‘such budget au21 thority’’ and all that follows through ‘‘loan guaran22 tee commitments’’ and inserting ‘‘new budget au23 thority, outlays, or revenues’’; and

24 (4) in subsection (c), by adding ‘‘and’’ at the

25 end of paragraph (1), by striking ‘‘period;’’ and in-
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1 serting ‘‘period.’’ at the end of paragraph (2), and

2 by striking paragraphs (3), (4), and (5).

3 (s) RECONCILIATION.—Section 310 of the Congres4 sional Budget Act of 1974 is amended—

5 (1) in subsection (a), by striking ‘‘which—(A)’’

6 and all that follows through ‘‘fiscal year, contained

7 in’’ and inserting the following: ‘‘which outlays re8 sulting from’’ and by striking ‘‘jurisdiction of a com9 mittee is’’ and inserting ‘‘jurisdiction of a committee

10 other than the Committee on Appropriations of ei11 ther House are’’;

12 (2) by repealing subsection (c) and inserting

13 the following new subsection:

14 ‘‘(c) INCLUSION OF SPIN-OFF BILL IN RECONCILI15 ATION LEGISLATION.—Reconciliation legislation may in16 clude a separate title to be inserted by the Committee on

17 the Budget consisting of a spin-off bill (containing the

18 matter described in section 301(b)(5)), if such bill has not

19 been enacted for the first fiscal year covered by that legis20 lation. The targets for each category contained in this title

21 shall be identical to the reconciliation directive contained

22 in the most recently agreed to concurrent resolution on

23 the budget.’’;

24 (3) in subsection (d)(1), by striking ‘‘or new en25 titlement authority’’; and
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1 (4) by repealing subsection (g).

2 (t) REVISION OF SECTION 311.—(1) Section 311 of

3 the Congressional Budget Act of 1974 is amended to read

4 as follows:

5 ‘‘ENFORCING THE REVENUE FLOOR

6 ‘‘SEC. 311. (a) POINT OF ORDER.—It shall not be

7 in order in either the House of Representatives or the Sen8 ate to consider any bill, joint resolution, amendment, mo9 tion, or conference report if, as proposed to be adopted

10 and when added to existing revenue levels, it would cause

11 the level of revenues for the fiscal year starting in the year

12 in which the most recent concurrent resolution on the

13 budget was agreed to, or for the sum of that fiscal year

14 and the 4 succeeding fiscal years, to be lower than the

15 appropriate level of revenues for either period set forth

16 in that concurrent resolution.

17 ‘‘(b) DETERMINATION OF REVENUE LEVELS.—For

18 purposes of this section, the levels of revenues for a fiscal

19 year shall be determined on the basis of estimates made

20 by the Committee on the Budget of the House of Rep21 resentatives or of the Senate, as the case may be.’’.

22 (2) CONFORMING AMENDMENT.—The item relating

23 to section 311 in the table of contents set forth in section

24 1(b) is amended to read as follows:

‘‘SEC. 311. Enforcing the revenue floor.’’.
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1 (u) TECHNICAL CORRECTION TO SECTION 312.—

2 Section 312 of the Congressional Budget Act of 1974 is

3 amended by inserting ‘‘(a)’’ after ‘‘312.’’.

4 (v) CONSIDERATION OF LEGISLATION THAT HAS

5 NOT BEEN REPORTED.—Section 312 of the Congres6 sional Budget Act of 1974 is amended by inserting at the

7 end the following:

8 ‘‘(c) CONSIDERATION OF LEGISLATION THAT HAS

9 NOT BEEN REPORTED.—In the House of Representatives,

10 any point of order under title III or IV that would lie

11 against consideration of a bill or joint resolution as re12 ported by a committee shall also lie against a motion to

13 consider legislation respecting which no report has been

14 filed.’’

15 (w) CONFORMING AMENDMENTS TO SECTION 313.—

16 Section 313 of the Congressional Budget Act of 1974 is

17 amended by striking ‘‘or section 258C’’ and everything

18 that follows through ‘‘Deficit Control Act of 1985’’, by

19 striking ‘‘; and (F)’’ and everything that follows through

20 ‘‘310(g)’’, by redesignating the second subsection (c) and

21 subsection (d) as subsections (d) and (e), respectively, and

22 by striking ‘‘or (b)(1)(F),’’.

23 (x) BORROWING AND CONTRACT AUTHORITY.—Sec24 tion 401 of the Congressional Budget Act of 1974 is

25 amended
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1 (1) in subsection (a), by striking ‘‘new spending

2 authority described in subsection (c)(2)(A) or (B)’’

3 both times it appears and inserting ‘‘borrowing au4 thority or contract authority’’;

5 (2) by repealing subsections (b) and (c) and by

6 redesignating subsection (d) as subsection (b); and

7 (3) in subsection (b) (as redesignated), by strik8 ing ‘‘Subsections (a) and (b)’’ and inserting ‘‘Sub9 section (a)’’, by inserting ‘‘non-interest’’ before ‘‘re10 ceipts’’ in paragraph (1)(B), by repealing paragraph

11 (2), and by redesignating paragraph (3) as para12 graph (2).

13 (y) CREDIT AUTHORITY.—Section 402(a) of the Con14 gressional Budget Act of 1974 is amended by inserting

15 before the period the following: ‘‘, except that this provi16 sion shall not apply with respect to programs that, as of

17 August 15, 1992, provide credit authority as an entitle18 ment’’.

19 (z) COSTS OF FEDERAL MANDATES; CONFORMING

20 CHANGE TO SECTION 403.—Section 403 of the Congres21 sional Budget Act of 1974 is amended

22 (1) by adding at the end the following new sub23 section:

24 ‘‘(d) In fulfilling the requirements of subsection

25 (a)(2), the Director shall place special emphasis on costs
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1 imposed on State or local governments by the enactment

2 or expansion of Federal mandates, and shall estimate both

3 the costs of those mandates and the degree, if any, to

4 which Federal financing is provided to State or local gov5 ernments to cover those costs.’’; and

6 (2) in subsection (a), by striking ‘‘of a public

7 character’’.

8 (aa) CONFORMING CHANGE TO SECTION 405.—Sec9 tion 405 of the Congressional Budget Act of 1974 is

10 amended by striking ‘‘spending authority’’ and all that fol11 lows through ‘‘permanent appropriations’’ and inserting

12 ‘‘new budget authority (other than through appropriations

13 Acts) or entitlement authority’’.

14 (bb) OFF-BUDGET AGENCIES.—Section 406(a) of the

15 Congressional Budget Act of 1974 is amended by striking

16 ‘‘credit authority, and estimates of outlays’’ and inserting

17 ‘‘outlays,’’, by striking ‘‘the date of enactment’’ and all

18 that follows through ‘‘Trust Funds,’’ and inserting ‘‘Au19 gust 15, 1992,’’, and by striking ‘‘, outlays, and spending

20 authority’’ and inserting ‘‘and outlays’’.

21 (cc) REPEAL OF TITLE VI.—Title VI of the Congres22 sional Budget Act of 1974 is repealed.
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1 SEC. 202. AMENDMENTS TO THE FEDERAL CREDIT REFORM

2 ACT OF 1990.

3 (a) DEFERRED COST SHARING.—The second sen4 tence of section 502(1) of the Congressional Budget Act

5 of 1974 is amended by inserting before the period the fol6 lowing: , and Federal payments for the construction of a

7 Federal project to the extent those payments must, by law

8 or contract, be repaid to the Government’’.

9 (b) LOAN MODIFICATIONS.—Section 502(5) of the

10 Congressional Budget Act of 1974 is amended—

11 (1) in subparagraph (A), by inserting ‘‘or a

12 modification thereof’’ after ‘‘guarantee’’;

13 (2) in subparagraph (B), by striking ‘recover14 ies.’’ and inserting ‘‘recoveries, and routine work15 outs of loans in imminent danger of default when

16 those work-outs are to maximize repayments to the

17 Government.’’;

18 (3) in subparagraph (C), by striking ‘‘and’’ at

19 the end of clause (i), by striking the period at the

20 end of clause (ii) and inserting a comma, and by

21 adding at the end the following:

22 ‘‘(iii) routine work-outs of loans in immi23 nent danger of default when those work-outs

24 are to minimize claims against the Govern25 ment.’’; and
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1 (4) by striking subparagraph (D) and inserting

2 the following new subparagraph:

3 ‘‘(D) The cost of a modification of a direct

4 loan, a direct loan obligation, a loan guarantee, or

5 a loan guarantee commitment shall be the net

6 present value, at the time of the modification, of the

7 change in cash flows estimated to occur as a result

8 of that modification. OMB shall measure that

9 change in relation to the current policy baseline in

10 the most recent budget under section 1105(a) of

11 title 31, United States Code. A modification may re12 sult either from the enactment of legislation that di13 rectly or indirectly alters the expected cash flows, or

14 from the exercise of administrative discretion under

15 existing law, and includes the sale (with or without

16 recourse) of loan assets by the Government. Modi17 fications do not include changes in loan terms result18 ing from the exercise by the borrower of an option

19 included in the loan contract.’’.

20 (c) CREDIT REFORM ACT CLARIFICATION.—Section

21 504 of the Congressional Budget Act of 1974 is amend22 ed—

23 (1) in subsection (b)(1), by striking ‘‘appropria24 tions of’’ and inserting ‘‘new’’, by striking ‘‘are
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1 made’’ and inserting ‘‘is provided’’, and by inserting

2 ‘‘in appropriation Acts’’ before the semicolon;

3 (2) in subsection (b)(2), by striking ‘‘enacted’’

4 and inserting ‘‘provided in an appropriation Act’’;

5 (3) in subsection (d)(1) by striking ‘‘costs of

6 outstanding direct loans and loan guarantees’’ and

7 inserting ‘‘costs of outstanding direct loans (or di8 rect loan obligations) or loan guarantees (or loan

9 guarantee commitments)’’; and

10 (4) in subsection (e), by striking ‘‘A direct

11 loan’’ and all that follows through ‘‘comitment’’ and

12 inserting ‘‘An outstanding direct loan (or direct loan

13 obligation) or loan guarantee (or loan guarantee

14 commitment)’’.

15 (d) CREDIT REFORM ACT CORRECTION.—(1) Section

16 506 of the Congressional Budget Act of 1974 is repealed.

17 (2) Section 507 of the Congressional Budget Act of

18 1974 is redesignated as section 506, and the table of con19 tents in section 1(b) of the Congressional Budget and Im20 poundment Control Act of 1974 is amended by striking

21 the item relating to section 506 and striking ‘‘Sec. 507.’’

22 and inserting ‘‘Sec. 506.’’.

23 (e) EXISTING RIGHTS NOT IMPAIRED.—Section 506

24 of the Congressional Budget Act of 1974 (as redesignated)

25 is amended by striking ‘‘title. Nothing’’ and inserting
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1 ‘‘title, except that nothing’’ and by inserting after ‘‘con2 strued’’ the following ‘‘(1) to alter the terms or conditions

3 authorized to be included in loan or guarantee contracts

4 or the rights and responsibilities of the government and

5 the recipients of loans or guarantees under those contracts

6 or the laws that authorize them, or (2)’’.

7 (f) CREDIT REFORM LIQUIDATING ACCOUNTS.—(1)

8 Section 502(8) of the Congressional Budget Act of 1974

9 is amended by striking ‘‘budget account’’ and inserting

10 ‘‘nonbudget account’’ and by striking the last sentence

11 and inserting ‘‘Transactions between the Treasury or the

12 Federal Financing Bank and any liquidating account shall

13 be considered non-budgetary.’’.

14 (2) Section 505(d) of the Congressional Budget Act

15 of 1974 is amended by striking ‘‘If funds’’ and all that

16 follows through ‘‘accounts, there’’ and inserting ‘‘There’’

17 and by striking ‘‘such obligations and commitments’’ and

18 inserting ‘‘the obligations and commitments of liquidating

19 accounts’’.

20 (3) Section 506(b) of the Congressional Budget Act

21 of 1974 (as redesignated) is amended by striking ‘‘be

22 available, to’’ and all that follows through the end of that

23 section, and inserting ‘‘immediately be transferred to the

24 Federal Financing Bank to repay those debt obligations

25 held by the Bank that were created to finance the loan
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1 being repaid, and all amounts not transferred to the Bank

2 shall immediately be paid to the general fund of the Treas3 ury. All debt owed to the Treasury as a result of agency

4 borrowing authority used before October 1, 1991, for

5 loans or guarantees is hereby cancelled. The provisions of

6 this subsection shall not diminish any rights or respon7 sibilities guaranteed by subsection (a).’’.

8 SEC. 203. AMENDMENTS TO THE RULES OF THE HOUSE OF

9 REPRESENTATIVES.

10 (a) BUDGET COMMITTEE JURISDICTION.—Clause

11 1(e)(2) of rule X of the Rules of the House of Representa12 tives is amended by inserting ‘‘(A)’’ after ‘‘(2)’’ and by

13 inserting at the end the following:

14 ‘‘(B) Budget targets contained in any joint resolution

15 described in section 118 of the Deficit Elimination Act of

16 1995 (relating to low growth).’’.

17 (b) MISCELLANEOUS CONFORMING AMENDMENTS.—

18 Clause 4 of rule X of the Rules of the House of Represent19 atives is amended—

20 (1) by repealing subparagraph (2) of paragraph

21 (a) and by redesignating subparagraph (3) as sub22 paragraph (2);

23 (2) in paragraph (g), by striking ‘‘February 25

24 of each year’’ and inserting ‘‘within 6 weeks after

25 the President’s budget submission’’; and
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1 (3) in paragraph (h), by striking ‘‘or section

2 602 (in the case of fiscal years 1991 through

3 1995)’’.

4 (c) EMERGENCY DESIGNATIONS.—Clause 2(b) of rule

5 XXI of the Rules of the House of Representatives is

6 amended by striking ‘‘and’’ and by inserting before the

7 period the following: ‘‘, and except emergency designations

8 under section 102(b)(4) of the Deficit Elimination Act of

9 1995’’.

10 (d) REPEALER.—Clause 8 of rule XXI of the Rules

11 of the House of Representatives is repealed.

12 (e) SPIN-OFF LEGISLATION.—Rule XLIX of the

13 Rules of the House of Representatives is amended—

14 (1) by changing the name of that rule to ‘‘En15 actment of Spin-Off Legislation under the Congres16 sional Budget Act’’;

17 (2) in clause 2 by striking ‘‘section 301, 304,

18 or 310’’ and inserting ‘‘section 301 or 304’’;

19 (3) in clause 1 by striking ‘‘adoption by the

20 Congress’’ and all that follows through ‘‘for such pe21 riod’’ and inserting ‘‘passage by the House of Rep22 resentatives (under section 301 or 304 of the Con23 gressional Budget Act of 1974) of a conference re24 port or final agreement on any concurrent resolution
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1 on the budget containing any matter under section

2 301(b)(5) of that Act’’;

3 (4) in clause 1 by striking ‘‘, increasing or de4 creasing the statutory limit on the public debt’’;

5 (5) in the last sentence of clause 1 by inserting

6 ‘‘at the same time the engrossed copy of the concur7 rent resolution on the budget is transmitted to the

8 Senate’’ after ‘‘transmitted to the Senate for further

9 legislative action’’;

10 (6) in the first sentence of clause 2 by striking

11 ‘‘be as follows’’ and all that follows through the pe12 riod and inserting the following: ‘‘be the text of the

13 section in the concurrent resolution on the budget

14 included under section 301(b)(5) of the Congres15 sional Budget Act of 1974, without change.’’, and in

16 the second sentence by striking ‘‘budget;’’ and all

17 that follows through the period and inserting ‘‘budg18 et.’’; and

19 (7) in clause 3 by striking ‘‘301(d)’’ and insert20 ing ‘‘301(e)’’, and by striking ‘‘upon the statutory

21 limit on the public debt’’.

22 SEC. 204. AMENDMENTS TO THE STANDING RULES OF THE

23 SENATE.

24 The Standing Rules of the Senate are amended by

25 adding at the end the following:
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1 ‘‘Rule ——

2 ‘‘SPIN-OFF LEGISLATION

3 ‘‘Upon passage of a conference report on any concur4 rent resolution on the budget containing additional matter

5 under section 301(b)(5) of the Congressional Budget Act

6 of 1974, the joint resolution passed by the House of Rep7 resentatives under rule XLIX of the Rules of the House

8 of Representatives shall be deemed to have been passed

9 by the Senate, and shall be prepared for transmittal to

10 the President under the applicable rules of the Senate and

11 the House of Representatives. The vote by which the con12 ference report on the concurrent resolution on the budget

13 was agreed to in the Senate shall be deemed to have been

14 a vote in favor of such joint resolution upon final passage

15 in the Senate.’’.

16 SEC. 205. PRESIDENT’S BUDGET AND SUPPLEMENTAL

17 BUDGET ESTIMATES.

18 (a) DEFINITIONS.—Section 1101 of title 31, United

19 States Code, is amended by adding at the end the follow20 ing:

21 ‘‘(3) ‘Expenditures’ has the same meaning as

22 the term ‘outlays’ in the Deficit Elimination Act of

23 1995.
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1 ‘‘(4) All other terms used herein or in the docu2 ments prepared hereunder shall have the meanings

3 set forth in the Deficit Elimination Act of 1995.’’.

4 (b) BYRD AMENDMENT.—Section 1103 of title 31,

5 United States Code, is amended by striking ‘‘commitment

6 that budget’’ and inserting ‘‘commitment that, starting

7 with fiscal year 2002,’’.

8 (c) PRESIDENT’S BUDGET SUBMISSION.—Section

9 1105(a) of title 31, United States Code, is amended—

10 (1) in the first sentence by striking ‘‘On or

11 after the first Monday in January but not later than

12 the first Monday in February of each year’’ and in13 serting ‘‘On or before the first Monday in February

14 or the 21st calendar day beginning after the date

15 the Board of Estimates issues a report to the Presi16 dent under section 114 of the Deficit Elimination

17 Act of 1995’’;

18 (2) in paragraph (15) by striking ‘‘section

19 301(a)(1)–(5)’’ and inserting ‘‘section 301(a)(1)–

20 (4);

21 (3) in paragraph (16) by striking ‘‘section

22 3(a)(3)’’ and inserting ‘‘section 3(3)’’; and

23 (4) by adding at the end the following new

24 paragraph:
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1 ‘‘(32) an analysis of the financial condition of

2 Government-sponsored enterprises and the financial

3 exposure of the Government, if any, posed by

4 them.’’.

5 (d) USE OF OFFICIAL ESTIMATES.—Section 1105(f)

6 of title 31, United States Code, is amended by striking

7 ‘‘Balanced Budget and Emergency Deficit Control Act of

8 1985’’ and inserting ‘‘Deficit Elimination Act of 1995’’

9 and by inserting at the end the following new sentence:

10 ‘‘That budget shall be consistent with the discretionary

11 funding limit and the direct spending and receipts deficit

12 reduction requirement for that year chosen by the Board

13 of Estimates and shall be based upon the major estimating

14 assumptions chosen by that Board.’’.

15 (e) MIDSESSION REVIEW.—Section 1106(a) of title

16 31, United States Code, is amended by striking ‘‘July 16

17 of each year’’ and inserting ‘‘August 30 of each year’’ and

18 by striking ‘‘submitted before July 16’’.

19 (f) CURRENT POLICY BASELINE.—(1) The first sen20 tence of section 1109 of title 31, United States Code, is

21 amended to read as follows: ‘‘In the budget submitted

22 under section 1105(a) or 1106(a), the President shall in23 clude a current policy baseline (as defined in section 116

24 of the Deficit Elimination Act of 1995) for the current

25 year, the budget year, and the outyears, including a de-
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1 tailed comparison of that baseline with his proposed budg2 et for those years.’’.

3 (2) Subsection (b) of that section 1109 is amended

4 to read as follows:

5 ‘‘(b) The baseline referred to in subsection (a) shall

6 be calculated using the major estimating assumptions cho7 sen by the Board of Estimates under section 114 of the

8 Deficit Elimination Act of 1995.’’.

9 (g) GLOSSARY OF TERMS.—Section 1112(c) of title

10 31, United States Code, is amended by striking ‘‘The

11 Comptroller General—’’ and inserting ‘‘The Directors of

12 CBO and OMB, jointly—’’.

13 SEC. 206. AMENDMENTS TO OTHER LAWS.

14 (a) REPEALERS.—The following provisions of law are

15 repealed:

16 (1) Section 710 of the Social Security Act.

17 (2) Section 201 (relating to 2-year appropria18 tions) of Public Law 100–119 (2 U.S.C. 621 note).

19 (3) Section 203 (relating to financial manage20 ment reform) of Public Law 100–119 (2 U.S.C. 621

21 note).

22 (4) The first subparagraph (F) of section

23 201(d)(2) of the Agricultural Act of 1949 (7 U.S.C.

24 1446(d)(2)(F)).
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1 (b) ANTIDEFICIENCY ACT.—Section 1341(a)(1) of

2 title 31, United States Code, is amended by striking ‘‘sec3 tion 252 of the Balanced Budget and Emergency Deficit

4 Control Act of 1985’’ both times it appears and inserting

5 ‘‘the Deficit Elimination Act of 1995’’.

6 (c) DEBT HELD BY THE PUBLIC.—(1) Section 3101

7 of title 31, United States Code, is amended to read as

8 follows:

9 ‘‘SEC. 3101. PUBLIC DEBT LIMIT.

10 ‘‘(a) The amount of public debt obligations issued

11 under this chapter, and the amount of debt issued by

12 agencies other than the Treasury under separate statutory

13 authority, may be not more than $4,900,000,000,000 out14 standing at one time, subject to changes periodically made

15 in that amount as provided by law through the congres16 sional budget process described in rule XLIX of the Rules

17 of the House of Representatives or otherwise.

18 ‘‘(b) Debt issued to United States Government trust

19 funds or to other agencies or accounts of the United

20 States Government (except the Federal Reserve System)

21 shall be excluded from the amount of debt taken into ac22 count in deciding whether the limit of subsection (a) has

23 been exceeded.
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1 ‘‘(c) The limit in subsection (a) shall be applied to

2 the face amount of securities except for securities issued

3 on a discount basis:

4 ‘‘(1) Securities issued on a discount basis that

5 are redeemable before maturity at the option of their

6 holders shall be included in the total subject to sub7 section (a) at their current redemption values.

8 ‘‘(2) Securities issued on a discount basis that

9 are not redeemable before maturity at the option of

10 their holders shall be included in the total subject to

11 subsection (a) in an amount equal to the sum of—

12 ‘‘(A) the original purchase price of the ob13 ligation, plus

14 ‘‘(B) the portion of the discount on the ob15 ligation attributable to periods before the begin16 ning of such month (as determined under the

17 principles of section 1272(a) of the Internal

18 Revenue Code of 1986 without regard to any

19 exceptions contained in paragraph (2) of such

20 section).’’.

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