I 

111TH CONGRESS 

2D SESSION H. R. 5752 

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

budgets more sustainable. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 15, 2010 

Mr. QUIGLEY (for himself, Mr. MINNICK, and Mr. FOSTER) 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. 

4 This Act may be cited as the ‘‘Transparent and Sus5 tainable Budget Act of 2010’’. 

6 SEC. 2. FINDINGS AND PURPOSE. 

7 (a) FINDINGS.—The Congress finds that— 


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1 (1) the public debt as a share of gross domestic 

2 product should be stabilized at not more than 60 

3 percent within 10 fiscal years; 

4 (2) annual deficits as a share of gross domestic 

5 product should be reduced to not more than three 

6 percent within 10 fiscal years; 

7 (3) the Joint Committee on Taxation found 

8 that 247 tax expenditures totaled $1.2 trillion in 

9 2008, greater than all Federal discretionary spend10 ing in that year; and 

11 (4) tax expenditures are analogous to spending 

12 programs, and future budgets and deficit control 

13 measures should reflect this fact. 

14 (b) PURPOSE.—The Congress declares that it is es15 sential— 

16 (1) to establish the sustainability of public debt 

17 and annual deficits as a fundamental objective of the 

18 budget process; 

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

20 States Government is fully transparent, comprehen21 sible, and accurate; 

22 (3) to establish effective controls over tax ex23 penditures and to integrate them into the budget 

24 process; and 


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1 (4) to initiate a public discussion about fiscal 

2 sustainability and budget transparency. 

3 SEC. 3. TABLE OF CONTENTS. 

Sec. 1. Short title. 

Sec. 2. Findings and purpose. 

Sec. 3. Table of contents. 

TITLE I—BUDGET PROCESS REFORMS 

Subtitle A—Reform of the President’s Budget 

Sec. 101. Long-term fiscal responsibility. 

Subtitle B—Reform of the Congressional Budget Resolution 

Sec. 111. Long-term fiscal responsibility. 

Subtitle C—Prompt Consideration of Recommendations of the National 

Commission on Fiscal Responsibility and Reform 

Sec. 121. Prompt consideration of recommendations of the National Commission on Fiscal Responsibility and Reform. 

Subtitle D—Quadrennial Fiscal Sustainability Report 

Sec. 131. OMB quadrennial reports. 

Subtitle E—Presidential Address to Congress on Fiscal Sustainability 

Sec. 141. Presidential address on long-term fiscal sustainability. 

TITLE II—ACCOUNTING AND SCORING REFORMS 

Subtitle A—Discounted Baseline 

Sec. 201. Discounted baseline. 

Subtitle B—Alternative Net Cost Estimate 

Sec. 211. Alternative analysis by Congressional Budget Office. 

Subtitle C—Deficit Control Mechanism 

Sec. 221. Alternative net cost estimate by Congressional Budget Office. 

Subtitle D—Accrual Accounting Report 

Sec. 231. Accrual accounting report. 

Subtitle E—On-Budget Status of Trust Funds and GSEs 

Sec. 241. OMB report respecting budgetary status of trust funds and GSEs. 

TITLE III—TAX EXPENDITURE REFORMS 

Subtitle A—Identification of Tax Expenditures 


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Sec. 301. JCT reports on tax expenditures. 

Sec. 302. Definition of tax subsidy. 

Subtitle B—Enforcement of Tax Expenditure Requirements 

Sec. 311. Tax expenditure points of order. 

Subtitle C—Executive Branch Reporting of Tax Expenditures 

Sec. 331. Executive branch reporting of tax expenditures. 

Subtitle D—Tax Expenditure Data 

Sec. 341. Development of electronic income tax filing system. 

Sec. 342. GAO report on tax expenditures. 

Sec. 343. Treasury report on tax expenditures. 

Subtitle E—Tax Expenditure Performance Reviews 

Sec. 351. CBO tax expenditure performance reviews. 

1 TITLE I—BUDGET PROCESS 

2 REFORMS 

3 Subtitle A—Reform of the 

4 President’s Budget 

5 SEC. 101. LONG-TERM FISCAL RESPONSIBILITY. 

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

7 amended by adding at the end the following new sub8 section: 

9 ‘‘(i)(1) The budget transmitted pursuant to sub10 section (a) for a fiscal year shall include— 

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

12 debt and deficit reduction targets set forth in sub13 paragraph (B); 

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

15 defined as reducing to within 10 fiscal years and 

16 then maintaining a debt to potential gross domestic 

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


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1 the Office of Management and Budget, of not more 

2 than 60 percent and an annual deficit to GDP ratio 

3 of not more than three percent; 

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

5 the Office of Management and Budget of the non6 budgeted fiscal exposures of the Government, which 

7 may be included in the Analytical Perspectives re8 port, and shall include— 

9 ‘‘(i) explicit liabilities and implicit promises 

10 embedded in the structure of current programs, 

11 including Federal credit programs; and 

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

13 information for, such exposures; and 

14 ‘‘(D) explicit goals for carrying out the long15 term fiscal sustainability plan for the first fiscal year 

16 after the fiscal year of the budget submission and 

17 each of the nine ensuing fiscal years. 

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

19 the Analytical Perspectives report referred to in paragraph 

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

21 year, the Director of the Office of Management and Budg22 et shall transmit such report to the President and to Con23 gress. 

24 ‘‘(3) Not later than two months after the supple25 mental report referred to in paragraph (1)(C) is transVerDate Mar 15 2010 03:11 Jul 17, 2010 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5752.IH H5752

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1 mitted to the President and to Congress, the Comptroller 

2 General shall publish a report auditing the supplemental 

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

4 Subtitle B—Reform of the 

5 Congressional Budget Resolution 

6 SEC. 111. LONG-TERM FISCAL RESPONSIBILITY. 

7 (a) CONTENT OF CONGRESSIONAL BUDGET RESOLU8 TION.—Section 301 of the Congressional Budget Act of 

9 1974 is amended by adding at the end the following new 

10 subsection: 

11 ‘‘(j) ADDITIONAL MATTERS IN REPORT ACCOM12 PANYING THE RESOLUTION.—The report accompanying 

13 the resolution shall include— 

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

15 debt and deficit reduction targets set forth in para16 graph (2); and 

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

18 defined as reducing to within 10 fiscal years and 

19 then maintaining a debt to gross domestic product 

20 (GDP) ratio of not more than 60 percent and an an21 nual deficit to GDP ratio of not more than three 

22 percent.’’. 

23 (b) ADDITIONAL MATTERS IN CBO REPORTS TO

24 BUDGET COMMITTEES.—Section 202(e) of the CongresVerDate Mar 15 2010 03:11 Jul 17, 2010 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5752.IH H5752

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1 sional Budget Act of 1974 is amended by adding at the 

2 end the following new paragraph: 

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

4 the Director shall submit to the Committees on the 

5 Budget of the House of Representatives and the 

6 Senate, a report that includes an assessment of the 

7 plan for long-term fiscal sustainability set forth in 

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

9 and include it in the most recent budget submission 

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

11 section. When such plan is submitted to the Com12 mittees on the Budget, the Director shall place it on 

13 the public Web site of the Congressional Budget Of14 fice.’’. 

15 Subtitle C—Prompt Consideration 

16 of Recommendations of the Na17 tional Commission on Fiscal Re18 sponsibility and Reform 

19 SEC. 121. PROMPT CONSIDERATION OF RECOMMENDA20 TIONS OF THE NATIONAL COMMISSION ON 

21 FISCAL RESPONSIBILITY AND REFORM. 

22 It is the sense of Congress that the recommendations 

23 reported to Congress by the National Commission on Fis24 cal Responsibility and Reform should receive prompt con25 sideration, and that neither the House of Representatives 


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1 nor the Senate should obstruct a final roll call vote on 

2 such recommendations. 

3 Subtitle D—Quadrennial Fiscal 

4 Sustainability Report 

5 SEC. 131. OMB QUADRENNIAL REPORTS. 

6 The Director of the Office of Management and Budg7 et, in consultation with the Secretary of the Treasury, 

8 shall publically issue, including by publishing on its Web 

9 site, a Quadrennial Fiscal Sustainability Report not later 

10 than April 1, 2013 and April 1 of every fourth year there11 after. The report shall address the long-term fiscal sus12 tainability of the Government, including its ability to man13 age finances to meet spending commitments, with a de14 tailed analysis of social insurance programs, for the budg15 et year and for the 30-year period commencing with the 

16 budget year. 

17 Subtitle E—Presidential Address to 

18 Congress on Fiscal Sustainability 

19 SEC. 141. PRESIDENTIAL ADDRESS ON LONG-TERM FISCAL 

20 SUSTAINABILITY. 

21 During October 2011 and each October thereafter, 

22 there shall be convened a joint session of Congress at 

23 which the President shall be invited to give an address 

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

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


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1 fiscal sustainability’’ means the ability of the Government 

2 to achieve and then maintain a debt to gross domestic 

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

4 deficit to gross domestic product ratio of not more than 

5 3 percent. 

6 TITLE II—ACCOUNTING AND 

7 SCORING REFORMS 

8 Subtitle A—Discounted Baseline 

9 SEC. 201. DISCOUNTED BASELINE. 

10 Section 257 of the Balanced Budget and Emergency 

11 Deficit Control Act of 1985 is amended as follows: 

12 (1) At the end of subsection (a), insert the fol13 lowing new sentence: ‘‘For any budget year the dis14 counted baseline refers to an alternative projection 

15 of current-year levels of new budget authority, out16 lays, revenues, and the surplus or deficit into the 

17 budget year and the outyears, for a minimum of 30 

18 years, based on laws enacted through the applicable 

19 year, and annually discounted for— 

20 ‘‘(1) the present value of money, set at the pre21 vailing interest rate for 30-year Treasury bonds; and 

22 ‘‘(2) the uncertainty of policies announced for 

23 the outyears, set at 10 percent.’’. 

24 (2) At the end, add the following new sub25 section: 


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1 ‘‘(f) DISCOUNTED BASELINE.—The discounted base2 line shall be computed using the same exceptions, assump3 tions, and other qualifying guidelines applicable to the 

4 baseline under this section.’’. 

5 Subtitle B—Alternative Net Cost 

6 Estimate 

7 SEC. 211. ALTERNATIVE ANALYSIS BY CONGRESSIONAL 

8 BUDGET OFFICE. 

9 (a) IN GENERAL.—Part A of title IV of the Congres10 sional Budget Act of 1974 is amended by adding at the 

11 end the following new section: 

12 ‘‘ALTERNATIVE ANALYSIS BY CONGRESSIONAL BUDGET

13 OFFICE

14 ‘‘SEC. 407. (a) ALTERNATIVE NET COST ESTI15 MATES.—To the extent practicable, the Director of the 

16 Congressional Budget Office shall prepare for each bill or 

17 joint resolution of a public character reported by any com18 mittee of the House of Representatives or the Senate (ex19 cept the Committee on Appropriations of each House) and 

20 for amendments thereto and conference reports thereon an 

21 alternative net cost estimate. 

22 ‘‘(b) CALCULATION.—The alternative net cost esti23 mate of proposed measures shall be calculated by com24 paring the current discounted baseline with an alternative 

25 discounted baseline that accounts for the policy changes 

26 in the proposed measures reported from committee. 


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1 ‘‘(c) PERIOD.—The alternative net cost estimate shall 

2 cover as many years as the Director deems appropriate 

3 for the applicable legislation to have a significant budg4 etary impact, but for not more than 30 fiscal years. 

5 ‘‘(d) SUBMISSIONS.—To the extent practicable, the 

6 alternative net cost estimate shall be submitted— 

7 ‘‘(1) for a reported bill or resolution referred to 

8 in subsection (a), to the House of Representatives or 

9 the Senate, as applicable, at the same time as the 

10 submission under section 402; 

11 ‘‘(2) for any amendment, to the applicable 

12 House of Congress before the amendment is offered; 

13 and 

14 ‘‘(3) for any conference report, to the House of 

15 Representatives and the Senate before the con16 ference report is first considered.’’. 

17 (b) CONFORMING AMENDMENT.—The table of con18 tents set forth in section 1(b) of the Congressional Budget 

19 and Impoundment Control Act of 1974 is amended by in20 serting after the item relating to section 406 the following 

21 new item: 

‘‘Sec. 407. Alternative analysis by Congressional Budget Office.’’. 


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1 Subtitle C—Deficit Control 

2 Mechanism 

3 SEC. 221. ALTERNATIVE NET COST ESTIMATE BY CONGRES4 SIONAL BUDGET OFFICE. 

5 (a) IN GENERAL.—Part A of title IV of the Congres6 sional Budget Act of 1974 (as amended by section 211) 

7 is further amended by adding at the end the following new 

8 section: 

9 ‘‘ALTERNATIVE NET COST ESTIMATE BY CONGRESSIONAL

10 BUDGET OFFICE

11 ‘‘SEC. 408. (a) ALTERNATIVE NET COST ESTI12 MATE.—The Director of the Congressional Budget Office 

13 shall, to the extent practicable, prepare for each bill or 

14 joint resolution of a public character reported by any com15 mittee of the House of Representatives or the Senate (ex16 cept the Committee on Appropriations of each House) and 

17 for amendments thereto and conference reports thereon a 

18 statement of whether the measure’s alternative net cost 

19 would exceed $5 billion. The alternative net cost shall be 

20 obtained by computing the total value of the measure, dis21 counting for the present value of money and the uncer22 tainty of policies announced for future periods, using the 

23 same methodology as in section 407. 

24 ‘‘(b) POINT OF ORDER.—It shall not be in order in 

25 the House of Representatives or the Senate to consider 


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1 any bill, joint resolution, amendment, motion, or con2 ference report for which the Director issues a statement 

3 under the preceding subsection that shows a alternative 

4 net cost exceeding $5 billion, as adjusted annually for in5 flation. 

6 ‘‘(c) EMERGENCY DESIGNATION.—If a measure or 

7 provision is designated as an emergency requirement 

8 under the applicable rules of the House of Representatives 

9 and the Senate, the Director shall not include the cost of 

10 such a provision in the statement of the budgetary effects 

11 of such measure or provision. 

12 ‘‘(d) PUBLIC AVAILABILITY.—Not later than 14 days 

13 (excluding Saturdays, Sundays, and public holidays) after 

14 Congress adjourns to end a session, the Director shall 

15 make publicly available and cause to be printed in the 

16 Federal Register an annual Discounted Score Deficit Con17 trol report. The report shall include up-to-date deficit con18 trol mechanism scorecards, information about emergency 

19 legislation (if any) designated under subsection (c), and 

20 other data and explanations that enhance public under21 standing of this Act and actions taken under it.’’. 

22 (b) CONFORMING AMENDMENTS.—(1) Subsections 

23 (c)(1) and (d)(2) of section 904 of the Congressional 

24 Budget Act of 1974 are amended by inserting ‘‘408(b),’’ 

25 after ‘‘313,’’. 


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1 (2) The table of contents set forth in section 1(b) of 

2 the Congressional Budget and Impoundment Control Act 

3 of 1974 (as amended by section 211) is further amended 

4 by inserting after the item relating to section 407 the fol5 lowing new item: 

‘‘Sec. 408. Alternative net cost estimate by Congressional Budget Office.’’. 

6 Subtitle D—Accrual Accounting 

7 Report 

8 SEC. 231. ACCRUAL ACCOUNTING REPORT. 

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

10 Director of the Office of Management and Budget shall 

11 develop a proposal for the implementation of an accrual12 based accounting system for certain portions of the budg13 et, including— 

14 (1) insurance, including social insurance pro15 grams such as Social Security, Medicare, and Med16 icaid; 

17 (2) environmental liabilities; 

18 (3) Federal employee pensions; 

19 (4) retiree health benefits; and 

20 (5) other budget items where accrual-based ac21 counting would feasibly capture significant future 

22 cash resource requirements that are not reflected in 

23 the cash-based budget; where appropriate and rea24 sonable. 


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1 (b) REPORT.—Within one year of the date of enact2 ment of this Act, the Director of the Office of Manage3 ment and Budget shall submit a report to Congress set4 ting forth the legislation necessary for the implementation 

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

6 budget, along with any recommendations regarding its 

7 proposed legislation. 

8 Subtitle E—On-Budget Status of 

9 Trust Funds and GSEs 

10 SEC. 241. OMB REPORT RESPECTING BUDGETARY STATUS 

11 OF TRUST FUNDS AND GSES. 

12 (a) REPORT.—Within one year after the date of en13 actment of this Act, the Director of the Office of Manage14 ment and Budget shall submit a report to Congress on 

15 the various scenarios by which the receipts and disburse16 ments of the following entities could be counted as new 

17 budget authority, outlays, receipts, or deficit or surplus 

18 for the purposes of the budget of the United States Gov19 ernment as submitted by the President, the congressional 

20 budget, the Balanced Budget and Emergency Deficit Con21 trol Act of 1985, and the Statutory Pay-As-You-Go Act 

22 of 2010: 

23 (1) Government-sponsored enterprises (GSEs), 

24 including the Federal National Mortgage Association 

25 and the Federal Home Loan Mortgage Corporation. 


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1 (2) The various trust funds, including the Fed2 eral Old-Age and Survivors Insurance Trust Fund, 

3 the Federal Disability Insurance Trust Fund, and 

4 the Highway Trust Fund. 

5 (b) SPECIFIC RECOMMENDATIONS.—In the report de6 scribed in subsection (a), the Director of the Office of 

7 Management and Budget shall provide a specific rec8 ommendation for each scenario described in the report, 

9 taking into account at least the following factors: 

10 (1) Whether the reformed budget would more 

11 or less accurately reflect the Government’s finances, 

12 short-, medium-, and long-term. 

13 (2) Challenges associated with implementing 

14 the reformed budget. 

15 (3) Whether the reformed budget would be 

16 more or less useful in enforcing the pay-as-you-go 

17 requirements of the Statutory Pay-As-You-Go Act of 

18 2010 and other deficit control provisions. 

19 (4) Whether the reformed budget could use the 

20 same accounting standard for all budget items. 

21 (5) Whether the reformed budget would have 

22 any impact on the financing of Government-spon23 sored enterprises, trust funds, Social Security, Medi24 care, or Medicaid. 


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1 TITLE III—TAX EXPENDITURE 

2 REFORMS 

3 Subtitle A—Identification of Tax 

4 Expenditures 

5 SEC. 301. JCT REPORTS ON TAX EXPENDITURES. 

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

7 1974 is amended by inserting ‘‘(1)’’ before ‘‘For’’ and by 

8 adding at the end the following new paragraph: 

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

10 Taxation identifying tax expenditures shall also— 

11 ‘‘(A) include an aggregate net cost of tax ex12 penditures that estimates the net impact of all tax 

13 expenditures on tax revenues, taking into account, 

14 where possible, interaction between such tax expend15 itures; and 

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

17 total revenue currently raised by the Internal Rev18 enue Code of 1986.’’. 

19 SEC. 302. DEFINITION OF TAX SUBSIDY. 

20 Section 3 of the Congressional Budget and Impound21 ment Control Act of 1974 is amended by adding at the 

22 end the following new paragraph: 

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

24 expenditures that are deliberately inconsistent with 

25 an identifiable general rule of the present tax law, 


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1 and that collect less revenue than does the general 

2 rule.’’. 

3 Subtitle B—Enforcement of Tax 

4 Expenditure Requirements 

5 SEC. 311. TAX EXPENDITURE POINTS OF ORDER. 

6 (a) POINTS OF ORDER.—Title III of the Congres7 sional Budget Act of 1974 is amended by adding at the 

8 end the following new section: 

9 ‘‘TAX EXPENDITURE POINTS OF ORDER

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

11 ORDER.—(1) It shall not be in order in the House of Rep12 resentatives or the Senate to consider any bill or joint res13 olution reported by the Committee on Ways and Means 

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

15 that proposes to amend the Internal Revenue Code of 

16 1986 to establish a new tax expenditure unless the com17 mittee report includes— 

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

19 expenditure, including a justification of why this 

20 purpose is best achieved through the tax system 

21 rather than as an outlay; 

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

23 will be implemented and integrated with other re24 lated tax expenditures and outlays; 

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


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

2 Taxation explaining why a macroeconomic analysis 

3 is not calculable. 

4 ‘‘(2) As used in paragraph (1), the term ‘macro5 economic impact analysis’ means— 

6 ‘‘(A) an estimate prepared by the Joint Com7 mittee on Taxation of the changes in economic out8 put, employment, capital stock, and tax revenues ex9 pected to result from enactment of the applicable bill 

10 or joint resolution; and 

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

12 Taxation identifying the critical assumptions and the 

13 source of data underlying that estimate. 

14 ‘‘(b) TAX SUBSIDY POINTS OF ORDER.—(1) It shall 

15 not be in order in the House of Representatives or the 

16 Senate to consider any bill, joint resolution, amendment, 

17 motion, or conference report that contains a new tax sub18 sidy, or modifies an existing tax subsidy so that the modi19 fied tax code collects less revenue than the current tax 

20 code for the ten-year period beginning with the fiscal year 

21 in which the modification takes effect, without a provision 

22 terminating it after not more than ten years. 

23 ‘‘(2)(A) It shall not be in order in the House of Rep24 resentatives or the Senate to consider any bill or joint res25 olution reported by the Committee on Ways and Means 


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1 of the House or the Committee on Finance of the Senate, 

2 as applicable, that proposes to amend the Internal Rev3 enue Code of 1986 to establish a new tax subsidy, or to 

4 modify an existing tax subsidy so that the modified tax 

5 code would collect less revenue than the current tax code, 

6 unless— 

7 ‘‘(i) each new tax subsidy or each modification 

8 of an existing tax subsidy is explicitly approved by 

9 the affirmative vote of the applicable committee, 

10 quorum being present; and 

11 ‘‘(ii) the chair of the applicable committee 

12 causes such official statement to be printed in the 

13 Congressional Record before consideration of the ap14 plicable bill or joint resolution; 

15 as determined under paragraph (3). 

16 ‘‘(B) The Speaker of the House and the presiding 

17 officer of the Senate shall determine the applicable com18 mittee by determining the committee of jurisdication of 

19 legislation authorizing comparable spending programs or 

20 by considering the tax subsidy to be a spending program. 

21 For purposes of paragraph (2), the applicable committee 

22 shall be the committee determined under the preceding 

23 sentence.’’. 

24 (b) RULES AMENDMENT.—Clause 6(c) of rule XIII 

25 of the Rules of the House of Representatives, as amended 


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1 by section 221(b), is further amended by adding before 

2 the period at the end thereof the following: ‘‘, or a rule 

3 or order that would waive any point of order set forth in 

4 section 316 of the Congressional Budget Act of 1974’’. 

5 (c) CONFORMING AMENDMENT.—The table of con6 tents set forth in section 1(b) of the Congressional Budget 

7 and Impoundment Control Act of 1974 (as amended by 

8 section 211) is further amended by inserting after the 

9 item relating to section 315 the following new item: 

‘‘Sec. 316. Tax expenditure points of order.’’. 

10 Subtitle C—Executive Branch 

11 Reporting of Tax Expenditures 

12 SEC. 331. EXECUTIVE BRANCH REPORTING OF TAX EX13 PENDITURES. 

14 (a) OMB GUIDANCE REGARDING TAX EXPENDI15 TURES.—The Director of the Office of Management and 

16 Budget shall develop clear and consistent guidance to 

17 agencies on how to incorporate tax expenditures in their 

18 strategic plans, annual performance plans, and perform19 ance and accountability reports, to provide a broader per20 spective and more cohesive plan of the Government’s goals 

21 and strategies. 

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

23 Director of the Office of Management and Budget shall 

24 require agencies to report tax expenditure data related to 

25 their overall mission in their annual financial statements. 


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

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

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

4 5, United States Code; and 

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

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

7 the Congressional Budget and Impoundment Control 

8 Act of 1974. 

9 Subtitle D—Tax Expenditure Data 

10 SEC. 341. DEVELOPMENT OF ELECTRONIC INCOME TAX FIL11 ING SYSTEM. 

12 Not later than one year after the date of enactment 

13 of this Act, the Secretary of the Treasury (or his designee) 

14 shall develop and report to Congress on the legislative 

15 steps necessary to implement an income tax filing system 

16 which— 

17 (1) allows users to save their work; 

18 (2) provides simple instructions for filing; 

19 (3) allows users to file their income tax returns 

20 electronically; and 

21 (4) respects taxpayer privacy and security con22 cerns. 

23 SEC. 342. GAO REPORT ON TAX EXPENDITURES. 

24 Not later than one year after the date of the enact25 ment of this Act, the Government Accountability Office 


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1 shall publish a written report making recommendations 

2 for improving the rules of the Internal Revenue Service 

3 to facilitate the evaluation of tax expenditures. Such re4 port shall include a description of how to implement such 

5 improvements, including a list of the key steps in such 

6 implementation. 

7 SEC. 343. TREASURY REPORT ON TAX EXPENDITURES. 

8 Not later than one year after the date of enactment 

9 of this Act, the Secretary of the Treasury (or his designee) 

10 shall make a written report to Congress which describes 

11 how the Secretary intends to use the Internal Revenue 

12 Service panel data sample which was created to facilitate 

13 the evaluation of savings-related tax expenditures. Such 

14 report shall also include a description of all other efforts 

15 related to tax expenditure data acquisition that the Sec16 retary has taken or plans to undertake. 

17 Subtitle E—Tax Expenditure 

18 Performance Reviews 

19 SEC. 351. CBO TAX EXPENDITURE PERFORMANCE REVIEWS. 

20 (a) CBO PERFORMANCE REVIEW SCHEDULE AND

21 REPORTS.—(1) Title II of the Congressional Budget Act 

22 of 1974 is amended by adding at the end the following 

23 new section: 

24 ‘‘CBO PERFORMANCE REVIEW SCHEDULE AND REPORTS

25 ‘‘SEC. 204. (a) PERFORMANCE REVIEW SCHED26 ULE.— 


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1 ‘‘(1) The Director shall conduct performance 

2 reviews of tax expenditures, as identified by the 

3 Joint Committee on Taxation, on an ongoing basis. 

4 The Director shall develop the schedule for these re5 views, such that each tax expenditure is reviewed at 

6 least once in every four-year period. A four-year 

7 schedule shall be submitted by the Director to Con8 gress, the Secretary of the Treasury, and the Direc9 tor of the Office of Management and Budget during 

10 January of each calendar year. 

11 ‘‘(2) Within three months after the enactment 

12 of any new tax expenditure, the Director shall revise 

13 the most recent four-year schedule of tax expendi14 ture performance reviews and submit them with the 

15 quarterly reports as set forth in section 204(b)(1) of 

16 the Congressional Budget Act of 1974. 

17 ‘‘(3) Not later than one year after the enact18 ment of this Act, the Director shall have submitted 

19 to Congress, the Secretary of the Treasury, and the 

20 Director of the Office of Management and Budget 

21 the first four-year schedule and begin the first per22 formance reviews under paragraph (1). 

23 ‘‘(4) The Director shall endeavor to develop a 

24 four-year schedule that provides for the simultaVerDate Mar 15 2010 03:11 Jul 17, 2010 Jkt 089200 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 E:\BILLS\H5752.IH H5752

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1 neous review of tax expenditures that have similar 

2 policy objectives. 

3 ‘‘(b) REPORTS.— 

4 ‘‘(1) The Director shall report each of its per5 formance reviews of tax expenditures to Congress, 

6 the Secretary of the Treasury, and the Director of 

7 the Office of Management and Budget in quarterly 

8 reports and containing all of the performance re9 views conducted since the preceding report. 

10 ‘‘(2) The Director 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 Secretary of the Treasury requests or the chairs and 

15 ranking minority members of the Committees on the 

16 Budget of the House of Representatives and the 

17 Senate jointly request, 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 

7 further extending the tax expenditure, or mak8 ing it permanent, would contribute to achieving 

9 such purpose. 

10 ‘‘(E) A description of the direct and indi11 rect beneficiaries of the tax expenditure, also 

12 specifying— 

13 ‘‘(i) any unintended beneficiaries of 

14 the tax expenditure; 

15 ‘‘(ii) the classes of individuals, types 

16 of organizations, or types of industries 

17 whose Federal tax liabilities are directly af18 fected 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 ex4 penditure 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 

15 might reduce deadweight losses and im16 prove economic efficiency in the national 

17 economy; 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 ef22 fects of the tax expenditure that is useful in un23 derstanding 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 Director 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 

4 days after the submission of any performance review re5 port under subsection (b), the Committees on Ways and 

6 Means of the House of Representatives and the Committee 

7 on 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 (2) The table of contents set forth in section 1(b) of 

13 the Congressional Budget and Impoundment Control Act 

14 of 1974 is amended by inserting after the item relating 

15 to section 203 the following new item: 

‘‘Sec. 204. CBO performance review schedule and reports.’’. 

16 (b) TREASURY AND OMB COMMENTS.—Not later 

17 than 60 days after submission of a performance review 

18 report pursuant to section 204(b) of the Congressional 

19 Budget Act of 1974, the Secretary of the Treasury and 

20 the Director of the Office of Management and Budget 

21 shall each provide to Congress and to the Director of the 

22 Congressional Budget Office detailed, written comments 

23 on the performance review recommendations, stating 

24 whether the Secretary of the Treasury or the Director of 

25 the Office of Management and Budget, as applicable, 


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1 agrees or disagrees with all or any part of the report or, 

2 if no opinion is given, providing an explanation of why the 

3 Secretary or the Director has no opinion or has not given 

4 one. 

Æ 


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