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[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1302 Introduced in House (IH)]

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.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Transparent and 
Sustainable Budget Act of 2011''.
    (b) Table of Contents.--

Sec. 1. Short title; table of contents.
Sec. 2. Purpose.
                     TITLE I--RECEIPT FOR TAXPAYERS

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.
            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.

SEC. 2. PURPOSE.

    The Congress declares that it is essential--
            (1) to establish the sustainability of public debt and 
        annual deficits as a fundamental objective of the budget 
        process;
            (2) to ensure that the budget of the United States 
        Government is fully transparent, comprehensible, and accurate;
            (3) to establish effective controls over tax expenditures 
        and to integrate them into the budget process; and
            (4) to initiate a public discussion about fiscal 
        sustainability and budget transparency.

                     TITLE I--RECEIPT FOR TAXPAYERS

SEC. 101. PROVISION OF TAXPAYER RECEIPT.

    (a) In General.--Chapter 77 of the Internal Revenue Code of 1986 
(relating to miscellaneous provisions) is amended by adding at the end 
the following new section:

``SEC. 7529. TAXPAYER RECEIPT.

    ``(a) In General.--Not later than October 15, 2012, and annually 
thereafter, the Secretary shall provide via United States mail a Tax 
Receipt to each taxpayer (other than a trust, estate, partnership, or 
corporation) who made a return with respect to income taxes under 
chapter 1 for the preceding taxable year and for whom a current mailing 
address can be determined through such methods as the Secretary 
determines to be appropriate.
    ``(b) Tax Receipt.--For purposes of this section, each Tax Receipt 
shall--
            ``(1) state the amount of taxes paid (even if $0) and 
        refund made to the taxpayer and state (by each filing status 
        specified in subsections (a) through (d) of section 1) the 
        average amount of tax paid by taxpayers in each tax bracket, 
        and
            ``(2) contain a table listing--
                    ``(A) each of the spending categories described in 
                subsection (c),
                    ``(B) with respect to each spending category 
                described in subsection (c)--
                            ``(i) the ratio (expressed as a percentage) 
                        which bears the same percentage of the 
                        taxpayer's income tax liability for the 
                        preceding taxable year to such category as the 
                        ratio that such category bears to the total of 
                        the spending categories described in subsection 
                        (c) for the fiscal year ending in the preceding 
                        taxable year, and
                            ``(ii) the proportional amount (expressed 
                        in dollars) of the taxpayer's income tax 
                        liability spent on that category, and
                    ``(C) the percentage change the results under 
                clauses (i) and (ii) of subparagraph (B) are from the 
                preceding year (expressed in positives and negatives),
            ``(3) contain a table listing--
                    ``(A) each of the spending categories described in 
                subsection (c),
                    ``(B) the percentage each such category is of the 
                total Federal outlays for the fiscal year ending in the 
                preceding taxable year and the dollar amount of each 
                such category, and
                    ``(C) the percentage change the results under 
                subparagraph (B) are from the preceding year (expressed 
                in positives and negatives),
            ``(4) contain a table of the 10 most costly tax 
        expenditures, and the cost of such expenditures, with respect 
        to individuals (not corporations) for the fiscal year ending in 
        the preceding taxable year,
            ``(5) contain the annual budget review described in 
        subsection (e),
            ``(6) contain the graphs described in paragraphs (1) and 
        (2) of section 7523(a) for the fiscal year ending in the 
        preceding taxable year,
            ``(7) be not more than 4 pages in length, and
            ``(8) contain the Internet address of the website of the 
        Department of the Treasury described in subsection (f).
    ``(c) Spending Category.--
            ``(1) In general.--A spending category referred to in this 
        subsection is one of the following:
                    ``(A) Administration of Justice.
                    ``(B) Agriculture.
                    ``(C) Allowances.
                    ``(D) Commerce and Housing Credit.
                    ``(E) Community and Regional Development.
                    ``(F) Education, Training, Employment, and Social 
                Services.
                    ``(G) Energy.
                    ``(H) General Science, Space, and Technology.
                    ``(I) General Government.
                    ``(J) Health.
                    ``(K) Income Security.
                    ``(L) International Affairs.
                    ``(M) International Development and Humanitarian 
                Assistance.
                    ``(N) Medicare.
                    ``(O) Medicaid.
                    ``(P) National Defense.
                    ``(Q) Natural Resources and Environment.
                    ``(R) Net Interest on the National Debt.
                    ``(S) Ongoing military operation authorized under a 
                formal declaration of war by Congress or resolution 
                passed by the United Nations Security Council, 
                including Operation New Dawn, Operation Iraqi Freedom, 
                and Operation Enduring Freedom, with each such military 
                operation listed as a separate spending category.
                    ``(T) Salaries and Benefits for Members of 
                Congress.
                    ``(U) Social Security.
                    ``(V) Transportation.
                    ``(W) Undistributed Offsetting Receipts.
                    ``(X) Veterans Benefits and Services.
            ``(2) Rules relating to appropriate spending categories.--
                    ``(A) In general.--For purposes of paragraph (1)--
                            ``(i) the spending categories shall be set 
                        forth in order of cost, with the greatest 
                        expense stated first, and
                            ``(ii) each spending category shall have a 
                        one sentence, general description of the 
                        programs, projects, and activities comprising 
                        that spending category.
                    ``(B) Programs, projects, and activities.--The 
                Secretary shall assign each Federal program, project, 
                or activity to one of the categories described in 
                paragraph (1). Once assigned, the program, project, or 
                activity cannot be moved to a different spending 
                category in subsequent years. If a program, project, or 
                activity changes in material substance, the Secretary 
                may, in consultation with Congress, move the program, 
                project, or activity to the appropriate spending 
                category.
    ``(d) Tax Expenditures.--For purposes of this section, the term 
`tax expenditure' shall have the meaning given such term by section 
3(3) of the Congressional Budget and Impoundment Control Act of 1974 (2 
U.S.C. 621).
    ``(e) Annual Budget Review.--The annual budget review described in 
this subsection with respect to a fiscal year shall be prepared by the 
Secretary in consultation with the Congressional Budget Office and 
shall--
            ``(1) use the budget projections prepared by the 
        Congressional Budget Office, and
            ``(2) include--
                    ``(A) an estimate of total Federal receipts and 
                outlays for the current fiscal year,
                    ``(B) actual Federal receipts and outlays for the 
                preceding 5 fiscal years, and
                    ``(C) projections of Federal receipts and outlays 
                for the succeeding 10 fiscal years.
    ``(f) Rule Relating to Nonresident Aliens.--Subsection (a) shall 
not apply to an individual who is a nonresident alien (within the 
meaning of section 7701(b)(1)(B)).
    ``(g) Website.--
            ``(1) In general.--The website referred to in this 
        subsection is a website on which a taxpayer can input his 
        Federal income tax liability and see more detailed information 
        concerning each of the categories contained in his Tax Receipt.
            ``(2) Period for maintaining tax receipts.--The website 
        shall maintain a copy of the receipt for each taxpayer for the 
        previous 5 years.
            ``(3) Protection of taxpayer information.--In making 
        information available on a website pursuant to this section, 
        the Secretary shall ensure proper access to online taxpayer 
        records and shall protect the security and privacy of taxpayer 
        information online.''.
    (b) Clerical Amendment.--The table of sections for chapter 77 of 
such Code is amended by adding at the end the following new item:

``Sec. 7529. Taxpayer receipt.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to returns for taxable years beginning after December 31, 2010.

              TITLE II--RETURN TO RESPONSIBLE BUDGET RULES

SEC. 201. RESTORING HOUSE PAYGO RULE.

    Clause 10 of rule XXI of the Rules of the House of Representatives 
is amended to read as follows:
    ``10.(a)(1) Except as provided in paragraphs (b) and (c), it shall 
not be in order to consider any bill, joint resolution, amendment, or 
conference report if the provisions of such measure affecting direct 
spending and revenues have the net effect of increasing the on-budget 
deficit or reducing the on-budget surplus for the period comprising 
either--
            ``(A) the current year, the budget year, and the four years 
        following that budget year; or
            ``(B) the current year, the budget year, and the nine years 
        following that budget year.
    ``(2) The effect of such measure on the deficit or surplus shall be 
determined on the basis of estimates made by the Committee on the 
Budget relative to baseline estimates supplied by the Congressional 
Budget Office consistent with section 257 of the Balanced Budget and 
Emergency Deficit Control Act of 1985 and consistent with sections 
3(4), 3(8), and 4(c) of the Statutory Pay-As-You-Go Act of 2010.
    ``(3) For the purpose of this clause, the terms `budget year', 
`current year', and `direct spending' have the meanings specified in 
section 250 of the Balanced Budget and Emergency Deficit Control Act of 
1985, except that the term `direct spending' shall also include 
provisions in appropriation Acts that make outyear modifications to 
substantive law as described in section 3(4)(C) of the Statutory Pay-
As-You-Go Act of 2010.
    ``(b) If a bill, joint resolution, or amendment is considered 
pursuant to a special order of the House directing the Clerk to add as 
new matter at the end of such measure the provisions of a separate 
measure as passed by the House, the provisions of such separate measure 
as passed by the House shall be included in the evaluation under 
paragraph (a) of the bill, joint resolution, or amendment.
    ``(c)(1) Except as provided in subparagraph (2), the evaluation 
under paragraph (a) shall exclude a provision expressly designated as 
an emergency for purposes of pay-as-you-go principles in the case of a 
point of order under this clause against consideration of--
            ``(A) a bill or joint resolution;
            ``(B) an amendment made in order as original text by a 
        special order of business;
            ``(C) a conference report; or
            ``(D) an amendment between the Houses.
    ``(2) In the case of an amendment (other than one specified in 
subparagraph (1)) to a bill or joint resolution, the evaluation under 
paragraph (a) shall give no cognizance to any designation of emergency.
    ``(3) If a bill, a joint resolution, an amendment made in order as 
original text by a special order of business, a conference report, or 
an amendment between the Houses includes a provision expressly 
designated as an emergency for purposes of pay-as-you-go principles, 
the Chair shall put the question of consideration with respect 
thereto.''.

SEC. 202. REMOVING AUTHORITY OF BUDGET CHAIRMAN TO UNILATERALLY SET 
              SPENDING LIMITS.

    Section 3(b) of H. Res. 5 (relating to budget enforcement powers of 
chair of the Committee on the Budget) shall have no force or effect 
during the remainder of the 112th Congress.

   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.

    (a) CBO.--Section 402 of the Congressional Budget Act of 1974 is 
amended by inserting ``(a)'' after ``402.'', by striking the last 
sentence, and by adding at the end the following new subsections:
    ``(b) Whenever the Director of the Congressional Budget Office 
submits a cost estimate under subsection (a) of a bill or resolution, 
the Director shall also provide a descriptive analysis for the second 
decade budget impact of such bill or resolution.
    ``(c) The estimates, comparison, and description so submitted shall 
be included in the report accompanying such bill or resolution if 
timely submitted to such committee before such report is filed.''.
    (b) JCT.--Section 202(f) of the Congressional Budget Act of 1974 is 
amended by inserting ``(1)'' after ``Revenue Estimates.--'' and by 
adding at the end the following new paragraph:
    ``(2) Whenever the Joint Committee on Taxation provides revenue 
estimates to the Congressional Budget Office under paragraph (1), the 
Joint Committee on Taxation shall also provide a descriptive analysis 
for the second decade budget impact.''.

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

    (a) CBO.--Section 402 of the Congressional Budget Act of 1974 (as 
amended by section 301) is further amended by adding at the end the 
following new subsection:
    ``(d) Whenever the Director of the Congressional Budget Office 
submits a cost estimate under subsection (a) of a bill or resolution, 
the Director shall also provide a net present value estimate for costs 
outside the first 10-year budget window of such bill or resolution.''.
    (b) JCT.--Section 202(f) of the Congressional Budget Act of 1974 
(as amended by section 301) is further amended by adding at the end the 
following new paragraph:
    ``(3) Whenever the Joint Committee on Taxation provides revenue 
estimates to the Congressional Budget Office under paragraph (1), the 
Joint Committee on Taxation shall also provide a net present value 
estimate for costs outside the first 10-year budget window.''.

         Subtitle B--OMB Reports on Unbudgeted Fiscal Exposures

SEC. 311. OMB REPORTS ON UNBUDGETED FISCAL EXPOSURES.

    Not later than July 1 of each year, the Director of the Office of 
Management and Budget, in conjunction with the Secretary of the 
Treasury, shall publish a report on the size, scope, risk, and cost of 
the contingent liabilities of the Government, including the implicit 
guarantees to government sponsored enterprises such as the Federal 
National Mortgage Association and the Federal Home Loan Mortgage 
Corporation.

                 Subtitle C--Accrual Accounting Report

SEC. 321. ACCRUAL ACCOUNTING REPORT.

    (a) Accrual-Based Accounting System.--The Director of the Office of 
Management and Budget shall develop a proposal for the implementation 
of an accrual-based accounting system for certain portions of the 
budget, excluding--
            (1) insurance;
            (2) environmental liabilities;
            (3) Federal employee pensions;
            (4) retiree health benefits; and
            (5) other budget items where accrual-based accounting would 
        feasibly capture significant future cash resource requirements 
        that are not reflected in the cash-based budget; where 
        appropriate and reasonable.
    (b) Report.--Within one year of the date of enactment of this Act, 
the Director of the Office of Management and Budget shall submit a 
report to Congress setting forth the legislation necessary for the 
implementation of an accrual-based accounting system for part of the 
budget, along with any recommendations regarding its proposed 
legislation.

   TITLE IV--RENEWED BUDGET PROCESS EMPHASIS ON FISCAL SUSTAINABILITY

              Subtitle A--Reform of the President's Budget

SEC. 401. LONG-TERM FISCAL RESPONSIBILITY.

    Section 1105 of title 31, United States Code, is amended by adding 
at the end the following new subsection:
    ``(i)(1) The budget transmitted pursuant to subsection (a) for a 
fiscal year shall include--
            ``(A) a scorecard of progress in meeting the debt and 
        deficit reduction targets set forth in subparagraph (B);
            ``(B) a plan for long-term fiscal sustainability, defined 
        as reducing to within 10 fiscal years and then maintaining a 
        debt to potential gross domestic product (GDP) ratio, as 
        defined by the Director of the Office of Management and Budget, 
        of not more than 60 percent and an annual deficit to GDP ratio 
        of not more than three percent;
            ``(C) a supplemental report from the Director of the Office 
        of Management and Budget of the nonbudgeted fiscal exposures of 
        the Government, which may be included in the Analytical 
        Perspectives report, and shall include--
                    ``(i) explicit liabilities and implicit promises 
                embedded in the structure of current programs, 
                including Federal credit programs; and
                    ``(ii) a concise description of, including cost 
                information for, such exposures; and
            ``(D) explicit goals for carrying out the long-term fiscal 
        sustainability plan for the first fiscal year after the fiscal 
        year of the budget submission and each of the nine ensuing 
        fiscal years.
    ``(2) Unless the supplemental report is included in the Analytical 
Perspectives report referred to in paragraph (1)(C), then not later 
than March 15 of each calendar year, the Director of the Office of 
Management and Budget shall transmit such report to the President and 
to Congress.
    ``(3) Not later than two months after the supplemental report 
referred to in paragraph (1)(C) is transmitted to the President and to 
Congress, the Comptroller General shall publish a report auditing the 
supplemental report referred to in paragraph (1)(C).''.

       Subtitle B--Reform of the Congressional Budget Resolution

SEC. 411. LONG-TERM FISCAL RESPONSIBILITY.

    (a) Content of Congressional Budget Resolution.--Section 301 of the 
Congressional Budget Act of 1974 is amended by adding at the end the 
following new subsection:
    ``(j) Additional Matters in Report Accompanying the Resolution.--
The report accompanying the resolution shall include--
            ``(1) a scorecard of progress in meeting the debt and 
        deficit reduction targets set forth in paragraph (2); and
            ``(2) a plan for long-term fiscal sustainability, defined 
        as reducing to within 10 fiscal years and then maintaining a 
        debt to gross domestic product (GDP) ratio of not more than 60 
        percent and an annual deficit to GDP ratio of not more than 
        three percent.''.
    (b) Additional Matters in CBO Reports to Budget Committees.--
Section 202(e) of the Congressional Budget Act of 1974 is amended by 
adding at the end the following new paragraph:
            ``(4) On or before February 15 of each year, the Director 
        shall submit to the Committees on the Budget of the House of 
        Representatives and the Senate, a report that includes an 
        assessment of the plan for long-term fiscal sustainability set 
        forth in section 1105(i)(1) of title 31, United States Code, 
        and include it in the most recent budget submission of the 
        President, pursuant to subsection (a) of that section. When 
        such plan is submitted to the Committees on the Budget, the 
        Director shall place it on the public Web site of the 
        Congressional Budget Office.''.

          Subtitle C--Quadrennial Fiscal Sustainability Report

SEC. 421. OMB QUADRENNIAL REPORTS.

    The Director of the Office of Management and Budget, in 
consultation with the Secretary of the Treasury, shall publically 
issue, including by publishing on its Web site, a Quadrennial Fiscal 
Sustainability Report not later than April 1, 2013, and April 1 of 
every fourth year thereafter. The report shall address the long-term 
fiscal sustainability of the Government, including its ability to 
manage finances to meet spending commitments, with a detailed analysis 
of social insurance programs, for the budget year and for the 30-year 
period commencing with the budget year.

 Subtitle D--Presidential Address to Congress on Fiscal Sustainability

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

    During October 2011 and each October thereafter, there shall be 
convened a joint session of Congress at which the President shall be 
invited to give an address on the long-term fiscal sustainability of 
the Government. As used in the preceding sentence, the term ``long-term 
fiscal sustainability'' means the ability of the Government to achieve 
and then maintain a debt to gross domestic product ratio of not more 
than 60 percent and an annual deficit to gross domestic product ratio 
of not more than 3 percent.

              TITLE V--MORE OVERSIGHT OF TAX EXPENDITURES

             Subtitle A--Identification of Tax Expenditures

SEC. 501. JCT REPORTS ON TAX EXPENDITURES.

    Section 202(f) of the Congressional Budget Act of 1974 is amended 
by inserting ``(1)'' before ``For'' and by adding at the end the 
following new paragraph:
    ``(2) Reports to Congress by the Joint Committee on Taxation 
identifying tax expenditures shall also--
            ``(A) include an aggregate net cost of tax expenditures 
        that estimates the net impact of all tax expenditures on tax 
        revenues, taking into account, where possible, interaction 
        between such tax expenditures; and
            ``(B) compare this aggregate net cost with the total 
        revenue currently raised by the Internal Revenue Code of 
        1986.''.

SEC. 502. DEFINITION OF TAX SUBSIDY.

    Section 3 of the Congressional Budget and Impoundment Control Act 
of 1974 is amended by adding at the end the following new paragraph:
            ``(11) The term `tax subsidy' means those tax expenditures 
        that are deliberately inconsistent with an identifiable general 
        rule of the present tax law, and that collect less revenue than 
        does the general rule.''.

        Subtitle B--Enforcement of Tax Expenditure Requirements

SEC. 511. TAX EXPENDITURE POINTS OF ORDER.

    Title III of the Congressional Budget Act of 1974 is amended by 
adding at the end the following new section:

                   ``tax expenditure points of order

    ``Sec. 316.  (a) Tax Expenditure Point of Order.--(1) It shall not 
be in order in the House of Representatives or the Senate to consider 
any bill or joint resolution reported by the Committee on Ways and 
Means of the House or the Committee on Finance of the Senate that 
proposes to amend the Internal Revenue Code of 1986 to establish a new 
tax expenditure unless the committee report includes--
            ``(A) a clear statement of the purpose of the tax 
        expenditure, including a justification of why this purpose is 
        best achieved through the tax system rather than as an outlay;
            ``(B) an explanation of how the tax expenditure will be 
        implemented and integrated with other related tax expenditures 
        and outlays;
            ``(C) a macroeconomic impact analysis; and
            ``(D) a statement from the Joint Committee on Taxation 
        explaining why a macroeconomic analysis is not calculable.
    ``(2) As used in paragraph (1), the term `macroeconomic impact 
analysis' means--
            ``(A) an estimate prepared by the Joint Committee on 
        Taxation of the changes in economic output, employment, capital 
        stock, and tax revenues expected to result from enactment of 
        the applicable bill or joint resolution; and
            ``(B) a statement from the Joint Committee on Taxation 
        identifying the critical assumptions and the source of data 
        underlying that estimate.''.

Subtitle C--Point of Order Against Tax Expenditures Unless They Sunset 
                            Within Ten Years

SEC. 521. POINT OF ORDER REGARDING TAX EXPENDITURES.

    (a) In General.--Section 312 of the Congressional Budget Act of 
1974 is amended by adding at the end the following new subsection:
    ``(g) Tax Expenditures Point of Order.--It shall not be in order in 
the House of Representatives or the Senate to consider any bill or 
joint resolution, or amendment thereto or conference report thereon, or 
motion--
            ``(1) establishing a new tax expenditure unless that tax 
        expenditure terminates within ten years; or
            ``(2) extending an existing tax expenditure for more than 
        ten years.''.
    (b) Conforming Amendment.--Subsections (c)(1) and (d)(2) of section 
904 of the Congressional Budget Act of 1974 are each amended by 
inserting ``312(g),'' after ``310(d)(2),''.

            Subtitle D--Tax Expenditure Performance Reviews

SEC. 531. TAX EXPENDITURE PERFORMANCE REVIEWS.

    (a) Performance Review Schedule and Reports.--(1) The Secretary of 
the Treasury (hereinafter in this section referred to as the 
``Secretary''), in conjunction with the Director of the Office of 
Management and Budget (hereinafter in this section referred to as the 
``Director''), shall conduct performance reviews of tax expenditures, 
as identified by the Joint Committee on Taxation, on an ongoing basis. 
The Secretary shall develop the schedule for these reviews, such that 
each tax expenditure is reviewed at least once in every four-year 
period. A four-year schedule shall be submitted by the Secretary to 
Congress and to the Director during January of each calendar year.
    (2) Within three months after the enactment of any new tax 
expenditure, the Secretary shall revise the most recent four-year 
schedule of tax expenditure performance reviews and submit them to 
Congress and to the Director.
    (3) Not later than one year after the enactment of this Act, the 
Secretary shall have submitted to Congress and to the Director the 
first four-year schedule and begin the first performance reviews under 
paragraph (1).
    (4) The Secretary shall endeavor to develop a four-year schedule 
that provides for the simultaneous review of tax expenditures that have 
similar policy objectives.
    (b) Reports.--
            (1) The Secretary shall report each of its performance 
        reviews of tax expenditures to Congress and to the Director in 
        quarterly reports and containing all of the performance reviews 
        conducted since the preceding report.
            (2) The Secretary may conduct expedited performance reviews 
        for any tax expenditure that has an estimated annual fiscal 
        impact of less than $1 billion, annually adjusted for 
        inflation, unless the Director requests or the chairs and 
        ranking minority members of the Committees on the Budget of the 
        House of Representatives and the Senate jointly request, in 
        writing, a full review.
            (3) Each performance review, except for expedited 
        performance reviews, shall include the following explanations, 
        descriptions, estimates, analyses, and recommendations:
                    (A) An explanation of the tax expenditure and any 
                relevant economic, social, or other context under which 
                it was first enacted.
                    (B) A description of the intended purpose of the 
                tax expenditure.
                    (C) An analysis of the overall success of the tax 
                expenditure in achieving such purpose, and evidence 
                supporting such analysis.
                    (D) An analysis of the extent to which further 
                extending the tax expenditure, or making it permanent, 
                would contribute to achieving such purpose.
                    (E) A description of the direct and indirect 
                beneficiaries of the tax expenditure, also specifying--
                            (i) any unintended beneficiaries of the tax 
                        expenditure;
                            (ii) the classes of individuals, types of 
                        organizations, or types of industries whose 
                        Federal tax liabilities are directly affected 
                        by the tax expenditure;
                            (iii) the extent to which terminating the 
                        tax expenditure may have negative effects on 
                        the category of taxpayers that currently 
                        benefit from the tax preference and on the 
                        economy; and
                            (iv) the extent to which the termination of 
                        the tax expenditure would affect the 
                        distribution of liability for payments of 
                        Federal taxes.
                    (F) An analysis of whether the tax expenditure is 
                the most cost-effective method for achieving the 
                purpose for which it was intended, and a description of 
                any more cost-effective methods through which such 
                purpose could be accomplished, and in particular the 
                extent to which a direct spending program might be 
                preferable to a tax expenditure, including--
                            (i) whether an outlay program might achieve 
                        the same policy objectives as a tax 
                        expenditure;
                            (ii) whether an outlay program might reduce 
                        deadweight losses and improve economic 
                        efficiency in the national economy; and
                            (iii) whether a direct spending program 
                        might be more or less expense to administer.
                    (G) A description of any unintended effects of the 
                tax expenditure that is useful in understanding the tax 
                expenditure's overall value.
                    (H) A description of any interactions (actual or 
                potential) with other tax expenditures or direct 
                spending programs in the same or related budget 
                function that should be studied further.
                    (I) An estimate of the annual cost in forgone 
                revenues of the tax expenditure, as well as a 
                projection of the cost in foregone revenues for the 
                ensuing ten fiscal years.
                    (J) A description of any further information needed 
                to complete a more thorough examination and analysis of 
                the tax expenditure, and what is necessary to make such 
                information available.
                    (K) A specific recommendation, based on analysis 
                conducted in the performance review, as to whether the 
                tax expenditure should be continued without 
                modification, modified (including converted fully or 
                partly into a direct spending program), scheduled for 
                sunset, reviewed at a later date, or terminated 
                immediately. The Secretary may decline to provide a 
                specific recommendation, but in each such case shall 
                provide an explanation of why a recommendation has not 
                been given.
            (4) An expedited performance review shall include at least 
        the explanations, descriptions, estimates, analyses, and 
        recommendations as listed in subparagraphs (A), (B), (C), (D), 
        (I), (J), and (K) of paragraph (3).
    (c) Committee Hearings.--Not later than 60 days after the 
submission of any performance review report under subsection (b), the 
Committees on Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate shall hold public hearings to 
consider the performance review recommendations contained in that 
report. The Committees on the Budget of the House of Representatives 
and the Senate may also hold hearings on such performance review 
recommendations.
    (d) CBO Comments.--Not later than 60 days after submission of a 
performance review report pursuant to section 204(b) of the 
Congressional Budget Act of 1974, the Director of the Congressional 
Budget Office shall provide to Congress, the Secretary, and the 
Director detailed, written comments on the performance review 
recommendations, stating whether the Director of the Congressional 
Budget Office agrees or disagrees with all or any part of the report 
or, if no opinion is given, providing an explanation of why he has no 
opinion or has not given one.

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

SEC. 541. GAO REPORT ON TAX EXPENDITURES.

    (a) Report Required.--Not later than one year after the date of the 
enactment of this Act, the Comptroller General shall submit to Congress 
and publish a written report that assesses improvements the Internal 
Revenue Service could make to facilitate the evaluation of tax 
expenditures, including a description of how the improvements could be 
implemented and the potential effects of such improvements on the 
Internal Revenue Service, taxpayers, and other relevant parties 
determined by the Comptroller General.
    (b) Tax Expenditures Defined.--The term ``tax expenditures'' has 
the meaning given that term in section 3(3) of the Congressional Budget 
and Impoundment Control Act of 1974 (2 U.S.C. 622(3)).

       Subtitle F--Executive Branch Reporting of Tax Expenditures

SEC. 551. EXECUTIVE BRANCH REPORTING OF TAX EXPENDITURES.

    (a) OMB Guidance Regarding Tax Expenditures.--The Director of the 
Office of Management and Budget shall develop clear and consistent 
guidance to agencies on how to incorporate tax expenditures in their 
strategic plans, annual performance plans, and performance and 
accountability reports, to provide a broader perspective and more 
cohesive plan of the Government's goals and strategies.
    (b) Reporting of Tax Expenditure Data.--The Director of the Office 
of Management and Budget shall require agencies to report tax 
expenditure data related to their overall mission in their annual 
financial statements.
    (c) Definitions.--As used in this section--
            (1) the term ``agency'' has the meaning given to such term 
        in paragraph (1) of section 551 of title 5, United States Code; 
        and
            (2) the term ``tax expenditure'' has the meaning given to 
        such term in paragraph (3) of section 3 of the Congressional 
        Budget and Impoundment Control Act of 1974.
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