I 

112TH CONGRESS 

1ST SESSION H. R. 1302 

To make the Federal budget process more transparent and to make future 

budgets more sustainable. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 31, 2011 

Mr. QUIGLEY (for himself, Mr. PETERS, Mr. HIMES, and Mr. POLIS) introduced the following bill; which was referred to the Committee on the 

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

Means, 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 make the Federal budget process more transparent and 

to make future budgets more sustainable. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘Transparent and Sustainable Budget Act of 2011’’. 

6 (b) TABLE OF CONTENTS.— 

Sec. 1. Short title; table of contents. 

Sec. 2. Purpose. 

TITLE I—RECEIPT FOR TAXPAYERS 


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Sec. 101. Provision of taxpayer receipt. 

TITLE II—RETURN TO RESPONSIBLE BUDGET RULES 

Sec. 201. Restoring House PAYGO rule. 

Sec. 202. Removing authority of Budget Chairman to unilaterally set spending 

limits. 

TITLE III—MORE TRANSPARENCY AND BETTER ACCOUNTING 

FOR LONG-TERM SPENDING 

Subtitle A—CBO and JCT Descriptive Analyses for Second Decade Budget 

Impact and Net Present Value Estimates for Any Costs Escalate Outside 

10-Year Budget Window 

Sec. 301. CBO and JCT descriptive analyses for second decade budget impact. 

Sec. 302. CBO and JCT net present value estimates. 

Subtitle B—OMB Reports on Unbudgeted Fiscal Exposures 

Sec. 311. OMB reports on unbudgeted fiscal exposures. 

Subtitle C—Accrual Accounting Report 

Sec. 321. Accrual accounting report. 

TITLE IV—RENEWED BUDGET PROCESS EMPHASIS ON FISCAL 

SUSTAINABILITY 

Subtitle A—Reform of the President’s Budget 

Sec. 401. Long-term fiscal responsibility. 

Subtitle B—Reform of the Congressional Budget Resolution 

Sec. 411. Long-term fiscal responsibility. 

Subtitle C—Quadrennial Fiscal Sustainability Report 

Sec. 421. OMB quadrennial reports. 

Subtitle D—Presidential Address to Congress on Fiscal Sustainability 

Sec. 431. Presidential address on long-term fiscal sustainability. 

TITLE V—MORE OVERSIGHT OF TAX EXPENDITURES 

Subtitle A—Identification of Tax Expenditures 

Sec. 501. JCT reports on tax expenditures. 

Sec. 502. Definition of tax subsidy. 

Subtitle B—Enforcement of Tax Expenditure Requirements 

Sec. 511. Tax expenditure points of order. 

Subtitle C—Point of Order Against Tax Expenditures Unless They Sunset 

Within Ten Years 

Sec. 521. Point of order regarding tax expenditures. 


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Subtitle D—Tax Expenditure Performance Reviews 

Sec. 531. Tax expenditure performance reviews. 

Subtitle E—Studies To Improve the Use of IRS Data in Evaluating Tax 

Expenditures 

Sec. 541. GAO report on tax expenditures. 

Subtitle F—Executive Branch Reporting of Tax Expenditures 

Sec. 551. Executive branch reporting of tax expenditures. 

1 SEC. 2. PURPOSE. 

2 The Congress declares that it is essential— 

3 (1) to establish the sustainability of public debt 

4 and annual deficits as a fundamental objective of the 

5 budget process; 

6 (2) to ensure that the budget of the United 

7 States Government is fully transparent, comprehen8 sible, and accurate; 

9 (3) to establish effective controls over tax ex10 penditures and to integrate them into the budget 

11 process; and 

12 (4) to initiate a public discussion about fiscal 

13 sustainability and budget transparency. 

14 TITLE I—RECEIPT FOR 

15 TAXPAYERS 

16 SEC. 101. PROVISION OF TAXPAYER RECEIPT. 

17 (a) IN GENERAL.—Chapter 77 of the Internal Rev18 enue Code of 1986 (relating to miscellaneous provisions) 

19 is amended by adding at the end the following new section: 


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1 ‘‘SEC. 7529. TAXPAYER RECEIPT. 

2 ‘‘(a) IN GENERAL.—Not later than October 15, 

3 2012, and annually thereafter, the Secretary shall provide 

4 via United States mail a Tax Receipt to each taxpayer 

5 (other than a trust, estate, partnership, or corporation) 

6 who made a return with respect to income taxes under 

7 chapter 1 for the preceding taxable year and for whom 

8 a current mailing address can be determined through such 

9 methods as the Secretary determines to be appropriate. 

10 ‘‘(b) TAX RECEIPT.—For purposes of this section, 

11 each Tax Receipt shall— 

12 ‘‘(1) state the amount of taxes paid (even if $0) 

13 and refund made to the taxpayer and state (by each 

14 filing status specified in subsections (a) through (d) 

15 of section 1) the average amount of tax paid by tax16 payers in each tax bracket, and 

17 ‘‘(2) contain a table listing— 

18 ‘‘(A) each of the spending categories de19 scribed in subsection (c), 

20 ‘‘(B) with respect to each spending cat21 egory described in subsection (c)— 

22 ‘‘(i) the ratio (expressed as a percent23 age) which bears the same percentage of 

24 the taxpayer’s income tax liability for the 

25 preceding taxable year to such category as 

26 the ratio that such category bears to the 


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1 total of the spending categories described 

2 in subsection (c) for the fiscal year ending 

3 in the preceding taxable year, and 

4 ‘‘(ii) the proportional amount (ex5 pressed in dollars) of the taxpayer’s income 

6 tax liability spent on that category, and 

7 ‘‘(C) the percentage change the results 

8 under clauses (i) and (ii) of subparagraph (B) 

9 are from the preceding year (expressed in 

10 positives and negatives), 

11 ‘‘(3) contain a table listing— 

12 ‘‘(A) each of the spending categories de13 scribed in subsection (c), 

14 ‘‘(B) the percentage each such category is 

15 of the total Federal outlays for the fiscal year 

16 ending in the preceding taxable year and the 

17 dollar amount of each such category, and 

18 ‘‘(C) the percentage change the results 

19 under subparagraph (B) are from the preceding 

20 year (expressed in positives and negatives), 

21 ‘‘(4) contain a table of the 10 most costly tax 

22 expenditures, and the cost of such expenditures, with 

23 respect to individuals (not corporations) for the fis24 cal year ending in the preceding taxable year, 


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1 ‘‘(5) contain the annual budget review described 

2 in subsection (e), 

3 ‘‘(6) contain the graphs described in para4 graphs (1) and (2) of section 7523(a) for the fiscal 

5 year ending in the preceding taxable year, 

6 ‘‘(7) be not more than 4 pages in length, and 

7 ‘‘(8) contain the Internet address of the website 

8 of the Department of the Treasury described in sub9 section (f). 

10 ‘‘(c) SPENDING CATEGORY.— 

11 ‘‘(1) IN GENERAL.—A spending category re12 ferred to in this subsection is one of the following: 

13 ‘‘(A) Administration of Justice. 

14 ‘‘(B) Agriculture. 

15 ‘‘(C) Allowances. 

16 ‘‘(D) Commerce and Housing Credit. 

17 ‘‘(E) Community and Regional Develop18 ment. 

19 ‘‘(F) Education, Training, Employment, 

20 and Social Services. 

21 ‘‘(G) Energy. 

22 ‘‘(H) General Science, Space, and Tech23 nology. 

24 ‘‘(I) General Government. 

25 ‘‘(J) Health. 


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1 ‘‘(K) Income Security. 

2 ‘‘(L) International Affairs. 

3 ‘‘(M) International Development and Hu4 manitarian Assistance. 

5 ‘‘(N) Medicare. 

6 ‘‘(O) Medicaid. 

7 ‘‘(P) National Defense. 

8 ‘‘(Q) Natural Resources and Environment. 

9 ‘‘(R) Net Interest on the National Debt. 

10 ‘‘(S) Ongoing military operation authorized 

11 under a formal declaration of war by Congress 

12 or resolution passed by the United Nations Se13 curity Council, including Operation New Dawn, 

14 Operation Iraqi Freedom, and Operation En15 during Freedom, with each such military oper16 ation listed as a separate spending category. 

17 ‘‘(T) Salaries and Benefits for Members of 

18 Congress. 

19 ‘‘(U) Social Security. 

20 ‘‘(V) Transportation. 

21 ‘‘(W) Undistributed Offsetting Receipts. 

22 ‘‘(X) Veterans Benefits and Services. 

23 ‘‘(2) RULES RELATING TO APPROPRIATE

24 SPENDING CATEGORIES.— 


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1 ‘‘(A) IN GENERAL.—For purposes of para2 graph (1)— 

3 ‘‘(i) the spending categories shall be 

4 set forth in order of cost, with the greatest 

5 expense stated first, and 

6 ‘‘(ii) each spending category shall 

7 have a one sentence, general description of 

8 the programs, projects, and activities com9 prising that spending category. 

10 ‘‘(B) PROGRAMS, PROJECTS, AND ACTIVI11 TIES.—The Secretary shall assign each Federal 

12 program, project, or activity to one of the cat13 egories described in paragraph (1). Once as14 signed, the program, project, or activity cannot 

15 be moved to a different spending category in 

16 subsequent years. If a program, project, or ac17 tivity changes in material substance, the Sec18 retary may, in consultation with Congress, 

19 move the program, project, or activity to the 

20 appropriate spending category. 

21 ‘‘(d) TAX EXPENDITURES.—For purposes of this sec22 tion, the term ‘tax expenditure’ shall have the meaning 

23 given such term by section 3(3) of the Congressional 

24 Budget and Impoundment Control Act of 1974 (2 U.S.C. 

25 621). 


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1 ‘‘(e) ANNUAL BUDGET REVIEW.—The annual budget 

2 review described in this subsection with respect to a fiscal 

3 year shall be prepared by the Secretary in consultation 

4 with the Congressional Budget Office and shall— 

5 ‘‘(1) use the budget projections prepared by the 

6 Congressional Budget Office, and 

7 ‘‘(2) include— 

8 ‘‘(A) an estimate of total Federal receipts 

9 and outlays for the current fiscal year, 

10 ‘‘(B) actual Federal receipts and outlays 

11 for the preceding 5 fiscal years, and 

12 ‘‘(C) projections of Federal receipts and 

13 outlays for the succeeding 10 fiscal years. 

14 ‘‘(f) RULE RELATING TO NONRESIDENT ALIENS.— 

15 Subsection (a) shall not apply to an individual who is a 

16 nonresident alien (within the meaning of section 

17 7701(b)(1)(B)). 

18 ‘‘(g) WEBSITE.— 

19 ‘‘(1) IN GENERAL.—The website referred to in 

20 this subsection is a website on which a taxpayer can 

21 input his Federal income tax liability and see more 

22 detailed information concerning each of the cat23 egories contained in his Tax Receipt. 


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1 ‘‘(2) PERIOD FOR MAINTAINING TAX RE2 CEIPTS.—The website shall maintain a copy of the 

3 receipt for each taxpayer for the previous 5 years. 

4 ‘‘(3) PROTECTION OF TAXPAYER INFORMA5 TION.—In making information available on a website 

6 pursuant to this section, the Secretary shall ensure 

7 proper access to online taxpayer records and shall 

8 protect the security and privacy of taxpayer informa9 tion online.’’. 

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

11 for chapter 77 of such Code is amended by adding at the 

12 end the following new item: 

‘‘Sec. 7529. Taxpayer receipt.’’. 

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

14 this section shall apply to returns for taxable years begin15 ning after December 31, 2010. 

16 TITLE II—RETURN TO 

17 RESPONSIBLE BUDGET RULES 

18 SEC. 201. RESTORING HOUSE PAYGO RULE. 

19 Clause 10 of rule XXI of the Rules of the House of 

20 Representatives is amended to read as follows: 

21 ‘‘10.(a)(1) Except as provided in paragraphs (b) and 

22 (c), it shall not be in order to consider any bill, joint reso23 lution, amendment, or conference report if the provisions 

24 of such measure affecting direct spending and revenues 

25 have the net effect of increasing the on-budget deficit or 


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1 reducing the on-budget surplus for the period comprising 

2 either— 

3 ‘‘(A) the current year, the budget year, and the 

4 four years following that budget year; or 

5 ‘‘(B) the current year, the budget year, and the 

6 nine years following that budget year. 

7 ‘‘(2) The effect of such measure on the deficit or sur8 plus shall be determined on the basis of estimates made 

9 by the Committee on the Budget relative to baseline esti10 mates supplied by the Congressional Budget Office con11 sistent with section 257 of the Balanced Budget and 

12 Emergency Deficit Control Act of 1985 and consistent 

13 with sections 3(4), 3(8), and 4(c) of the Statutory Pay14 As-You-Go Act of 2010. 

15 ‘‘(3) For the purpose of this clause, the terms ‘budget 

16 year’, ‘current year’, and ‘direct spending’ have the mean17 ings specified in section 250 of the Balanced Budget and 

18 Emergency Deficit Control Act of 1985, except that the 

19 term ‘direct spending’ shall also include provisions in ap20 propriation Acts that make outyear modifications to sub21 stantive law as described in section 3(4)(C) of the Statu22 tory Pay-As-You-Go Act of 2010. 

23 ‘‘(b) If a bill, joint resolution, or amendment is con24 sidered pursuant to a special order of the House directing 

25 the Clerk to add as new matter at the end of such measure 


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1 the provisions of a separate measure as passed by the 

2 House, the provisions of such separate measure as passed 

3 by the House shall be included in the evaluation under 

4 paragraph (a) of the bill, joint resolution, or amendment. 

5 ‘‘(c)(1) Except as provided in subparagraph (2), the 

6 evaluation under paragraph (a) shall exclude a provision 

7 expressly designated as an emergency for purposes of pay8 as-you-go principles in the case of a point of order under 

9 this clause against consideration of— 

10 ‘‘(A) a bill or joint resolution; 

11 ‘‘(B) an amendment made in order as original 

12 text by a special order of business; 

13 ‘‘(C) a conference report; or 

14 ‘‘(D) an amendment between the Houses. 

15 ‘‘(2) In the case of an amendment (other than one 

16 specified in subparagraph (1)) to a bill or joint resolution, 

17 the evaluation under paragraph (a) shall give no cog18 nizance to any designation of emergency. 

19 ‘‘(3) If a bill, a joint resolution, an amendment made 

20 in order as original text by a special order of business, 

21 a conference report, or an amendment between the Houses 

22 includes a provision expressly designated as an emergency 

23 for purposes of pay-as-you-go principles, the Chair shall 

24 put the question of consideration with respect thereto.’’. 


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1 SEC. 202. REMOVING AUTHORITY OF BUDGET CHAIRMAN 

2 TO UNILATERALLY SET SPENDING LIMITS. 

3 Section 3(b) of H. Res. 5 (relating to budget enforce4 ment powers of chair of the Committee on the Budget) 

5 shall have no force or effect during the remainder of the 

6 112th Congress. 

7 TITLE III—MORE TRANS8 PARENCY AND BETTER AC9 COUNTING FOR LONG-TERM 

10 SPENDING 

11 Subtitle A—CBO and JCT Descrip12 tive Analyses for Second Decade 

13 Budget Impact and Net Present 

14 Value Estimates for Any Costs 

15 Escalate Outside 10-Year Budget 

16 Window 

17 SEC. 301. CBO AND JCT DESCRIPTIVE ANALYSES FOR SEC18 OND DECADE BUDGET IMPACT. 

19 (a) CBO.—Section 402 of the Congressional Budget 

20 Act of 1974 is amended by inserting ‘‘(a)’’ after ‘‘402.’’, 

21 by striking the last sentence, and by adding at the end 

22 the following new subsections: 

23 ‘‘(b) Whenever the Director of the Congressional 

24 Budget Office submits a cost estimate under subsection 

25 (a) of a bill or resolution, the Director shall also provide 


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1 a descriptive analysis for the second decade budget impact 

2 of such bill or resolution. 

3 ‘‘(c) The estimates, comparison, and description so 

4 submitted shall be included in the report accompanying 

5 such bill or resolution if timely submitted to such com6 mittee before such report is filed.’’. 

7 (b) JCT.—Section 202(f) of the Congressional Budg8 et Act of 1974 is amended by inserting ‘‘(1)’’ after ‘‘REV9 ENUE ESTIMATES.—’’ and by adding at the end the fol10 lowing new paragraph: 

11 ‘‘(2) Whenever the Joint Committee on Taxation pro12 vides revenue estimates to the Congressional Budget Of13 fice under paragraph (1), the Joint Committee on Tax14 ation shall also provide a descriptive analysis for the sec15 ond decade budget impact.’’. 

16 SEC. 302. CBO AND JCT NET PRESENT VALUE ESTIMATES. 

17 (a) CBO.—Section 402 of the Congressional Budget 

18 Act of 1974 (as amended by section 301) is further 

19 amended by adding at the end the following new sub20 section: 

21 ‘‘(d) Whenever the Director of the Congressional 

22 Budget Office submits a cost estimate under subsection 

23 (a) of a bill or resolution, the Director shall also provide 

24 a net present value estimate for costs outside the first 10- 

25 year budget window of such bill or resolution.’’. 


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1 (b) JCT.—Section 202(f) of the Congressional Budg2 et Act of 1974 (as amended by section 301) is further 

3 amended by adding at the end the following new para4 graph: 

5 ‘‘(3) Whenever the Joint Committee on Taxation pro6 vides revenue estimates to the Congressional Budget Of7 fice under paragraph (1), the Joint Committee on Tax8 ation shall also provide a net present value estimate for 

9 costs outside the first 10-year budget window.’’. 

10 Subtitle B—OMB Reports on 

11 Unbudgeted Fiscal Exposures 

12 SEC. 311. OMB REPORTS ON UNBUDGETED FISCAL EXPO13 SURES. 

14 Not later than July 1 of each year, the Director of 

15 the Office of Management and Budget, in conjunction 

16 with the Secretary of the Treasury, shall publish a report 

17 on the size, scope, risk, and cost of the contingent liabil18 ities of the Government, including the implicit guarantees 

19 to government sponsored enterprises such as the Federal 

20 National Mortgage Association and the Federal Home 

21 Loan Mortgage Corporation. 


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1 Subtitle C—Accrual Accounting 

2 Report 

3 SEC. 321. ACCRUAL ACCOUNTING REPORT. 

4 (a) ACCRUAL-BASED ACCOUNTING SYSTEM.—The 

5 Director of the Office of Management and Budget shall 

6 develop a proposal for the implementation of an accrual7 based accounting system for certain portions of the budg8 et, excluding— 

9 (1) insurance; 

10 (2) environmental liabilities; 

11 (3) Federal employee pensions; 

12 (4) retiree health benefits; and 

13 (5) other budget items where accrual-based ac14 counting would feasibly capture significant future 

15 cash resource requirements that are not reflected in 

16 the cash-based budget; where appropriate and rea17 sonable. 

18 (b) REPORT.—Within one year of the date of enact19 ment of this Act, the Director of the Office of Manage20 ment and Budget shall submit a report to Congress set21 ting forth the legislation necessary for the implementation 

22 of an accrual-based accounting system for part of the 

23 budget, along with any recommendations regarding its 

24 proposed legislation. 


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1 TITLE IV—RENEWED BUDGET 

2 PROCESS EMPHASIS ON FIS3 CAL SUSTAINABILITY 

4 Subtitle A—Reform of the 

5 President’s Budget 

6 SEC. 401. LONG-TERM FISCAL RESPONSIBILITY. 

7 Section 1105 of title 31, United States Code, is 

8 amended by adding at the end the following new sub9 section: 

10 ‘‘(i)(1) The budget transmitted pursuant to sub11 section (a) for a fiscal year shall include— 

12 ‘‘(A) a scorecard of progress in meeting the 

13 debt and deficit reduction targets set forth in sub14 paragraph (B); 

15 ‘‘(B) a plan for long-term fiscal sustainability, 

16 defined as reducing to within 10 fiscal years and 

17 then maintaining a debt to potential gross domestic 

18 product (GDP) ratio, as defined by the Director of 

19 the Office of Management and Budget, of not more 

20 than 60 percent and an annual deficit to GDP ratio 

21 of not more than three percent; 

22 ‘‘(C) a supplemental report from the Director of 

23 the Office of Management and Budget of the non24 budgeted fiscal exposures of the Government, which 


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1 may be included in the Analytical Perspectives re2 port, and shall include— 

3 ‘‘(i) explicit liabilities and implicit promises 

4 embedded in the structure of current programs, 

5 including Federal credit programs; and 

6 ‘‘(ii) a concise description of, including cost 

7 information for, such exposures; and 

8 ‘‘(D) explicit goals for carrying out the long9 term fiscal sustainability plan for the first fiscal year 

10 after the fiscal year of the budget submission and 

11 each of the nine ensuing fiscal years. 

12 ‘‘(2) Unless the supplemental report is included in 

13 the Analytical Perspectives report referred to in paragraph 

14 (1)(C), then not later than March 15 of each calendar 

15 year, the Director of the Office of Management and Budg16 et shall transmit such report to the President and to Con17 gress. 

18 ‘‘(3) Not later than two months after the supple19 mental report referred to in paragraph (1)(C) is trans20 mitted to the President and to Congress, the Comptroller 

21 General shall publish a report auditing the supplemental 

22 report referred to in paragraph (1)(C).’’. 


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1 Subtitle B—Reform of the 

2 Congressional Budget Resolution 

3 SEC. 411. LONG-TERM FISCAL RESPONSIBILITY. 

4 (a) CONTENT OF CONGRESSIONAL BUDGET RESOLU5 TION.—Section 301 of the Congressional Budget Act of 

6 1974 is amended by adding at the end the following new 

7 subsection: 

8 ‘‘(j) ADDITIONAL MATTERS IN REPORT ACCOM9 PANYING THE RESOLUTION.—The report accompanying 

10 the resolution shall include— 

11 ‘‘(1) a scorecard of progress in meeting the 

12 debt and deficit reduction targets set forth in para13 graph (2); and 

14 ‘‘(2) a plan for long-term fiscal sustainability, 

15 defined as reducing to within 10 fiscal years and 

16 then maintaining a debt to gross domestic product 

17 (GDP) ratio of not more than 60 percent and an an18 nual deficit to GDP ratio of not more than three 

19 percent.’’. 

20 (b) ADDITIONAL MATTERS IN CBO REPORTS TO

21 BUDGET COMMITTEES.—Section 202(e) of the Congres22 sional Budget Act of 1974 is amended by adding at the 

23 end the following new paragraph: 

24 ‘‘(4) On or before February 15 of each year, 

25 the Director shall submit to the Committees on the 


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1 Budget of the House of Representatives and the 

2 Senate, a report that includes an assessment of the 

3 plan for long-term fiscal sustainability set forth in 

4 section 1105(i)(1) of title 31, United States Code, 

5 and include it in the most recent budget submission 

6 of the President, pursuant to subsection (a) of that 

7 section. When such plan is submitted to the Com8 mittees on the Budget, the Director shall place it on 

9 the public Web site of the Congressional Budget Of10 fice.’’. 

11 Subtitle C—Quadrennial Fiscal 

12 Sustainability Report 

13 SEC. 421. OMB QUADRENNIAL REPORTS. 

14 The Director of the Office of Management and Budg15 et, in consultation with the Secretary of the Treasury, 

16 shall publically issue, including by publishing on its Web 

17 site, a Quadrennial Fiscal Sustainability Report not later 

18 than April 1, 2013, and April 1 of every fourth year there19 after. The report shall address the long-term fiscal sus20 tainability of the Government, including its ability to man21 age finances to meet spending commitments, with a de22 tailed analysis of social insurance programs, for the budg23 et year and for the 30-year period commencing with the 

24 budget year. 


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1 Subtitle D—Presidential Address to 

2 Congress on Fiscal Sustainability 

3 SEC. 431. PRESIDENTIAL ADDRESS ON LONG-TERM FISCAL 

4 SUSTAINABILITY. 

5 During October 2011 and each October thereafter, 

6 there shall be convened a joint session of Congress at 

7 which the President shall be invited to give an address 

8 on the long-term fiscal sustainability of the Government. 

9 As used in the preceding sentence, the term ‘‘long-term 

10 fiscal sustainability’’ means the ability of the Government 

11 to achieve and then maintain a debt to gross domestic 

12 product ratio of not more than 60 percent and an annual 

13 deficit to gross domestic product ratio of not more than 

14 3 percent. 

15 TITLE V—MORE OVERSIGHT OF 

16 TAX EXPENDITURES 

17 Subtitle A—Identification of Tax 

18 Expenditures 

19 SEC. 501. JCT REPORTS ON TAX EXPENDITURES. 

20 Section 202(f) of the Congressional Budget Act of 

21 1974 is amended by inserting ‘‘(1)’’ before ‘‘For’’ and by 

22 adding at the end the following new paragraph: 

23 ‘‘(2) Reports to Congress by the Joint Committee on 

24 Taxation identifying tax expenditures shall also— 


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1 ‘‘(A) include an aggregate net cost of tax ex2 penditures that estimates the net impact of all tax 

3 expenditures on tax revenues, taking into account, 

4 where possible, interaction between such tax expend5 itures; and 

6 ‘‘(B) compare this aggregate net cost with the 

7 total revenue currently raised by the Internal Rev8 enue Code of 1986.’’. 

9 SEC. 502. DEFINITION OF TAX SUBSIDY. 

10 Section 3 of the Congressional Budget and Impound11 ment Control Act of 1974 is amended by adding at the 

12 end the following new paragraph: 

13 ‘‘(11) The term ‘tax subsidy’ means those tax 

14 expenditures that are deliberately inconsistent with 

15 an identifiable general rule of the present tax law, 

16 and that collect less revenue than does the general 

17 rule.’’. 

18 Subtitle B—Enforcement of Tax 

19 Expenditure Requirements 

20 SEC. 511. TAX EXPENDITURE POINTS OF ORDER. 

21 Title III of the Congressional Budget Act of 1974 

22 is amended by adding at the end the following new section: 

23 ‘‘TAX EXPENDITURE POINTS OF ORDER

24 ‘‘SEC. 316. (a) TAX EXPENDITURE POINT OF

25 ORDER.—(1) It shall not be in order in the House of Rep26 resentatives or the Senate to consider any bill or joint resVerDate Mar 15 2010 04:53 Apr 02, 2011 Jkt 099200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6201 E:\BILLS\H1302.IH H1302

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1 olution reported by the Committee on Ways and Means 

2 of the House or the Committee on Finance of the Senate 

3 that proposes to amend the Internal Revenue Code of 

4 1986 to establish a new tax expenditure unless the com5 mittee report includes— 

6 ‘‘(A) a clear statement of the purpose of the tax 

7 expenditure, including a justification of why this 

8 purpose is best achieved through the tax system 

9 rather than as an outlay; 

10 ‘‘(B) an explanation of how the tax expenditure 

11 will be implemented and integrated with other re12 lated tax expenditures and outlays; 

13 ‘‘(C) a macroeconomic impact analysis; and 

14 ‘‘(D) a statement from the Joint Committee on 

15 Taxation explaining why a macroeconomic analysis 

16 is not calculable. 

17 ‘‘(2) As used in paragraph (1), the term ‘macro18 economic impact analysis’ means— 

19 ‘‘(A) an estimate prepared by the Joint Com20 mittee on Taxation of the changes in economic out21 put, employment, capital stock, and tax revenues ex22 pected to result from enactment of the applicable bill 

23 or joint resolution; and 


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1 ‘‘(B) a statement from the Joint Committee on 

2 Taxation identifying the critical assumptions and the 

3 source of data underlying that estimate.’’. 

4 Subtitle C—Point of Order Against 

5 Tax Expenditures Unless They 

6 Sunset Within Ten Years 

7 SEC. 521. POINT OF ORDER REGARDING TAX EXPENDI8 TURES. 

9 (a) IN GENERAL.—Section 312 of the Congressional 

10 Budget Act of 1974 is amended by adding at the end the 

11 following new subsection: 

12 ‘‘(g) TAX EXPENDITURES POINT OF ORDER.—It 

13 shall not be in order in the House of Representatives or 

14 the Senate to consider any bill or joint resolution, or 

15 amendment thereto or conference report thereon, or mo16 tion— 

17 ‘‘(1) establishing a new tax expenditure unless 

18 that tax expenditure terminates within ten years; or 

19 ‘‘(2) extending an existing tax expenditure for 

20 more than ten years.’’. 

21 (b) CONFORMING AMENDMENT.—Subsections (c)(1) 

22 and (d)(2) of section 904 of the Congressional Budget Act 

23 of 1974 are each amended by inserting ‘‘312(g),’’ after 

24 ‘‘310(d)(2),’’. 


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1 Subtitle D—Tax Expenditure 

2 Performance Reviews 

3 SEC. 531. TAX EXPENDITURE PERFORMANCE REVIEWS. 

4 (a) PERFORMANCE REVIEW SCHEDULE AND RE5 PORTS.—(1) The Secretary of the Treasury (hereinafter 

6 in this section referred to as the ‘‘Secretary’’), in conjunc7 tion with the Director of the Office of Management and 

8 Budget (hereinafter in this section referred to as the ‘‘Di9 rector’’), shall conduct performance reviews of tax expend10 itures, as identified by the Joint Committee on Taxation, 

11 on an ongoing basis. The Secretary shall develop the 

12 schedule for these reviews, such that each tax expenditure 

13 is reviewed at least once in every four-year period. A four14 year schedule shall be submitted by the Secretary to Con15 gress and to the Director during January of each calendar 

16 year. 

17 (2) Within three months after the enactment of any 

18 new tax expenditure, the Secretary shall revise the most 

19 recent four-year schedule of tax expenditure performance 

20 reviews and submit them to Congress and to the Director. 

21 (3) Not later than one year after the enactment of 

22 this Act, the Secretary shall have submitted to Congress 

23 and to the Director the first four-year schedule and begin 

24 the first performance reviews under paragraph (1). 


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1 (4) The Secretary shall endeavor to develop a four2 year schedule that provides for the simultaneous review 

3 of tax expenditures that have similar policy objectives. 

4 (b) REPORTS.— 

5 (1) The Secretary shall report each of its per6 formance reviews of tax expenditures to Congress 

7 and to the Director in quarterly reports and con8 taining all of the performance reviews conducted 

9 since the preceding report. 

10 (2) The Secretary may conduct expedited per11 formance reviews for any tax expenditure that has 

12 an estimated annual fiscal impact of less than $1 

13 billion, annually adjusted for inflation, unless the 

14 Director requests or the chairs and ranking minority 

15 members of the Committees on the Budget of the 

16 House of Representatives and the Senate jointly re17 quest, in writing, a full review. 

18 (3) Each performance review, except for expe19 dited performance reviews, shall include the fol20 lowing explanations, descriptions, estimates, anal21 yses, and recommendations: 

22 (A) An explanation of the tax expenditure 

23 and any relevant economic, social, or other con24 text under which it was first enacted. 


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1 (B) A description of the intended purpose 

2 of the tax expenditure. 

3 (C) An analysis of the overall success of 

4 the tax expenditure in achieving such purpose, 

5 and evidence supporting such analysis. 

6 (D) An analysis of the extent to which fur7 ther extending the tax expenditure, or making 

8 it permanent, would contribute to achieving 

9 such purpose. 

10 (E) A description of the direct and indirect 

11 beneficiaries of the tax expenditure, also speci12 fying— 

13 (i) any unintended beneficiaries of the 

14 tax expenditure; 

15 (ii) the classes of individuals, types of 

16 organizations, or types of industries whose 

17 Federal tax liabilities are directly affected 

18 by the tax expenditure; 

19 (iii) the extent to which terminating 

20 the tax expenditure may have negative ef21 fects on the category of taxpayers that cur22 rently benefit from the tax preference and 

23 on the economy; and 

24 (iv) the extent to which the termi25 nation of the tax expenditure would affect 


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1 the distribution of liability for payments of 

2 Federal taxes. 

3 (F) An analysis of whether the tax expend4 iture is the most cost-effective method for 

5 achieving the purpose for which it was intended, 

6 and a description of any more cost-effective 

7 methods through which such purpose could be 

8 accomplished, and in particular the extent to 

9 which a direct spending program might be pref10 erable to a tax expenditure, including— 

11 (i) whether an outlay program might 

12 achieve the same policy objectives as a tax 

13 expenditure; 

14 (ii) whether an outlay program might 

15 reduce deadweight losses and improve eco16 nomic efficiency in the national economy; 

17 and 

18 (iii) whether a direct spending pro19 gram might be more or less expense to ad20 minister. 

21 (G) A description of any unintended effects 

22 of the tax expenditure that is useful in under23 standing the tax expenditure’s overall value. 

24 (H) A description of any interactions (ac25 tual or potential) with other tax expenditures or 


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1 direct spending programs in the same or related 

2 budget function that should be studied further. 

3 (I) An estimate of the annual cost in for4 gone revenues of the tax expenditure, as well as 

5 a projection of the cost in foregone revenues for 

6 the ensuing ten fiscal years. 

7 (J) A description of any further informa8 tion needed to complete a more thorough exam9 ination and analysis of the tax expenditure, and 

10 what is necessary to make such information 

11 available. 

12 (K) A specific recommendation, based on 

13 analysis conducted in the performance review, 

14 as to whether the tax expenditure should be 

15 continued without modification, modified (in16 cluding converted fully or partly into a direct 

17 spending program), scheduled for sunset, re18 viewed at a later date, or terminated imme19 diately. The Secretary may decline to provide a 

20 specific recommendation, but in each such case 

21 shall provide an explanation of why a rec22 ommendation has not been given. 

23 (4) An expedited performance review shall in24 clude at least the explanations, descriptions, esti25 mates, analyses, and recommendations as listed in 


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1 subparagraphs (A), (B), (C), (D), (I), (J), and (K) 

2 of paragraph (3). 

3 (c) COMMITTEE HEARINGS.—Not later than 60 days 

4 after the submission of any performance review report 

5 under subsection (b), the Committees on Ways and Means 

6 of the House of Representatives and the Committee on 

7 Finance of the Senate shall hold public hearings to con8 sider the performance review recommendations contained 

9 in that report. The Committees on the Budget of the 

10 House of Representatives and the Senate may also hold 

11 hearings on such performance review recommendations. 

12 (d) CBO COMMENTS.—Not later than 60 days after 

13 submission of a performance review report pursuant to 

14 section 204(b) of the Congressional Budget Act of 1974, 

15 the Director of the Congressional Budget Office shall pro16 vide to Congress, the Secretary, and the Director detailed, 

17 written comments on the performance review rec18 ommendations, stating whether the Director of the Con19 gressional Budget Office agrees or disagrees with all or 

20 any part of the report or, if no opinion is given, providing 

21 an explanation of why he has no opinion or has not given 

22 one. 


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1 Subtitle E—Studies To Improve the 

2 Use of IRS Data in Evaluating 

3 Tax Expenditures 

4 SEC. 541. GAO REPORT ON TAX EXPENDITURES. 

5 (a) REPORT REQUIRED.—Not later than one year 

6 after the date of the enactment of this Act, the Comp7 troller General shall submit to Congress and publish a 

8 written report that assesses improvements the Internal 

9 Revenue Service could make to facilitate the evaluation of 

10 tax expenditures, including a description of how the im11 provements could be implemented and the potential effects 

12 of such improvements on the Internal Revenue Service, 

13 taxpayers, and other relevant parties determined by the 

14 Comptroller General. 

15 (b) TAX EXPENDITURES DEFINED.—The term ‘‘tax 

16 expenditures’’ has the meaning given that term in section 

17 3(3) of the Congressional Budget and Impoundment Con18 trol Act of 1974 (2 U.S.C. 622(3)). 

19 Subtitle F—Executive Branch 

20 Reporting of Tax Expenditures 

21 SEC. 551. EXECUTIVE BRANCH REPORTING OF TAX EX22 PENDITURES. 

23 (a) OMB GUIDANCE REGARDING TAX EXPENDI24 TURES.—The Director of the Office of Management and 

25 Budget shall develop clear and consistent guidance to 


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1 agencies on how to incorporate tax expenditures in their 

2 strategic plans, annual performance plans, and perform3 ance and accountability reports, to provide a broader per4 spective and more cohesive plan of the Government’s goals 

5 and strategies. 

6 (b) REPORTING OF TAX EXPENDITURE DATA.—The 

7 Director of the Office of Management and Budget shall 

8 require agencies to report tax expenditure data related to 

9 their overall mission in their annual financial statements. 

10 (c) DEFINITIONS.—As used in this section— 

11 (1) the term ‘‘agency’’ has the meaning given to 

12 such term in paragraph (1) of section 551 of title 

13 5, United States Code; and 

14 (2) the term ‘‘tax expenditure’’ has the meaning 

15 given to such term in paragraph (3) of section 3 of 

16 the Congressional Budget and Impoundment Control 

17 Act of 1974. 

Æ 


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