I

106TH CONGRESS

1ST SESSION H. R. 2293

To reform the budget process.

IN THE HOUSE OF REPRESENTATIVES

JUNE 22, 1999

Mr. BARTON of Texas (for himself and Mr. STENHOLM) introduced the following bill; which was referred to the Committee on the Budget, and in

addition to the Committees on Rules, and Appropriations, 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 reform the budget process.

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 AND TABLE OF CONTENTS.

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

5 ‘‘Budget Enforcement Act of 1999’’.

6 (b) TABLE OF CONTENTS.—

Sec. 1. Short title and table of contents.

Sec. 2. Definitions.

TITLE I—A SINGLE BUDGET FOR THE UNITED STATES

GOVERNMENT

Sec. 101. Statement of purpose.

Sec. 102. Safeguards against delay.
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Sec. 103. Binding budget law.

Sec. 104. Budget required before spending bills may be considered.

Sec. 105. Lock box amendment.

Sec. 106. Technical amendments.

Sec. 107. Timetable.

Sec. 108. Procedures to avoid sequestration.

Sec. 109. Effect on Presidents’ budget submissions; point of order.

Sec. 110. Direct Spending Caps.

Sec. 111. Economic assumptions.

Sec. 112. Revisions to the caps for entitlements and other mandatory spending.

TITLE II—ENFORCEMENT PROVISIONS

Sec. 201. Reporting excess spending.

Sec. 202. Enforcing direct spending caps.

Sec. 203. Sequestration rules.

Sec. 204. Exempt programs and activities.

Sec. 205. Special rules.

Sec. 206. The current law baseline.

Sec. 207. Limitations on emergency spending.

Sec. 208. Ten-year congressional review requirement of permanent budget authority.

1 SEC. 2. DEFINITIONS.

2 For purposes of this Act:

3 (1) ELIGIBLE POPULATION.—The term ‘‘eligible

4 population’’ shall mean those individuals to whom

5 the United States is obligated to make a payment

6 under the provisions of a law creating entitlement

7 authority. Such term shall not include States, local8 ities, corporations or other nonliving entities.

9 (2) SEQUESTER AND SEQUESTRATION.—The

10 terms ‘‘sequester’’ and ‘‘sequestration’’ refer to or

11 mean the cancellation of budgetary resources pro12 vided by discretionary appropriations or direct

13 spending law.

14 (3) BREACH.—The term ‘‘breach’’ means, for

15 any fiscal year, the amount (if any) by which outlays
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1 for that year (within a category of direct spending)

2 is above that category’s direct spending cap for that

3 year.

4 (4) BASELINE.—The term ‘‘baseline’’ means

5 the projection (described in section 206) of current

6 levels of new budget authority, outlays, receipts, and

7 the surplus or deficit into the budget year and the

8 outyears.

9 (5) BUDGETARY RESOURCES.—The term

10 ‘‘budgetary resources’’ means new budget authority,

11 unobligated balances, direct spending authority, and

12 obligation limitations.

13 (6) DISCRETIONARY APPROPRIATIONS.—The

14 term ‘‘discretionary appropriations’’ means budg15 etary resources (except to fund direct spending pro16 grams) provided in appropriation Acts. If an appro17 priation Act alters the level of direct spending or off18 setting collections, that effect shall be treated as di19 rect spending. Classifications of new accounts or ac20 tivities and changes in classifications shall be made

21 in consultation with the Committees on Appropria22 tions and the Budget of the House of Representa23 tives and the Senate and with CBO and OMB.

24 (7) DIRECT SPENDING.—The term ‘‘direct

25 spending’’ means—
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1 (A) budget authority provided by law other

2 than appropriation Acts, including entitlement

3 authority;

4 (B) entitlement authority; and

5 (C) the food stamp program.

6 If a law other than an appropriation Act alters the

7 level of discretionary appropriations or offsetting col8 lections, that effect shall be treated as direct spend9 ing.

10 (8) ENTITLEMENT AUTHORITY.—The term ‘‘en11 titlement authority’’ means authority (whether tem12 porary or permanent) to make payments (including

13 loans and grants), the budget authority for which is

14 not provided for in advance by appropriation Acts,

15 to any person or government if, under the provisions

16 of the law containing such authority, the United

17 States is obligated to make such payments to per18 sons or governments who meet the requirements es19 tablished by such law.

20 (9) CURRENT.—The term ‘‘current’’ means,

21 with respect to OMB estimates included with a

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

23 United States Code, the estimates consistent with

24 the economic and technical assumptions underlying

25 that budget.
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1 (10) ACCOUNT.—The term ‘‘account’’ means an

2 item for which there is a designated budget account

3 designation number in the President’s budget.

4 (11) BUDGET YEAR.—The term ‘‘budget year’’

5 means the fiscal year of the Government that starts

6 on the next October 1.

7 (12) CURRENT YEAR.—The term ‘‘current

8 year’’ means, with respect to a budget year, the fis9 cal year that immediately precedes that budget year.

10 (13) OUTYEAR.—The term ‘‘outyear’’ means,

11 with respect to a budget year, any of the fiscal years

12 that follow the budget year.

13 (14) OMB.—The term ‘‘OMB’’ means the Di14 rector of the Office of Management and Budget.

15 (15) CBO.—The term ‘‘CBO’’ means the Di16 rector of the Congressional Budget Office.

17 (16) BUDGET OUTLAYS AND OUTLAYS.—The

18 terms ‘‘budget outlays’’ and ‘‘outlays’’ mean, with

19 respect to any fiscal year, expenditures of funds

20 under budget authority during such year.

21 (17) BUDGET AUTHORITY AND NEW BUDGET

22 AUTHORITY.—The terms ‘‘budget authority’’ and

23 ‘‘new budget authority’’ have the meanings given to

24 them in section 3 of the Congressional Budget and

25 Impoundment Control Act of 1974.
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1 (18) APPROPRIATION ACT.—The term ‘‘appro2 priation Act’’ means an Act referred to in section

3 105 of title 1, United States Code.

4 (19) DEFICIT.—The term ‘‘deficit’’ means, with

5 respect to a fiscal year, the amount by which total

6 outlays exceed total receipts during that year.

7 (20) SURPLUS.—The term ‘‘surplus’’ means,

8 with respect to a fiscal year, the amount by which

9 total receipts exceed total outlays during that year.

10 (21) DIRECT SPENDING CAPS.—The term ‘‘di11 rect spending caps’’ means the nominal dollar limits

12 for entitlements and other mandatory spending pur13 suant to section 110, as adjusted pursuant to section

14 112.

15 TITLE I—A SINGLE BUDGET FOR

16 THE UNITED STATES GOV17 ERNMENT

18 SEC. 101. STATEMENT OF PURPOSE.

19 (a) The Federal budget process is the principal vehi20 cle by which many of the most fundamental policy choices

21 in Government are made. The purpose of this Act is to

22 facilitate rational, informed, and timely decisions and to

23 enforce the expenditure levels contained in the budget.

24 (b) The Federal budget process should focus atten25 tion on the aggregate impact of Federal fiscal policy on
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1 the economy, on public priorities, and on the tradeoffs that

2 must be made among priorities to control overall levels of

3 spending. To this end the Act is intended to establish a

4 budget process that, in each fiscal period—

5 (1) requires adoption of a budget before Con6 gress considers expenditures for individual pro7 grams, activities and functions of government;

8 (2) encourages agreement between Congress

9 and the President, with regard to broad fiscal policy

10 objectives and the allocation of public resources

11 among broad categories of expenditure;

12 (3) ties subsequent spending decisions to bind13 ing budget limits;

14 (4) holds Congress and the President account15 able for expenditure limits contained in the budget

16 until and unless they change the law to change the

17 limits; and

18 (5) produces a bias in favor of fiscal responsi19 bility that can be overcome only if Congress and the

20 President act constructively to do so.

21 SEC. 102. SAFEGUARDS AGAINST DELAY.

22 (a) To avoid temporary shutdowns of the Federal

23 Government, chapter 13 of title 31, United States Code,

24 is amended by inserting after section 1310 the following

25 new section:
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1 ‘‘§ 1311. Automatic continuing resolution

2 ‘‘(a) If any appropriation Act as defined in section

3 105 of title 1 has not become law by the beginning of a

4 fiscal period, the automatic continuing resolution provided

5 for in this section shall take effect immediately. The auto6 matic continuing resolution shall remain in effect for the

7 entirety of the fiscal period, unless amended in whole or

8 in part, by enactment of an appropriation Act or Acts.

9 If the automatic continuing resolution shall take effect,

10 then there is hereby appropriated out of any moneys in

11 the Treasury not otherwise appropriated, an amount equal

12 to 95 percent of budget authority for each program,

13 project or activity regularly provided for under that appro14 priation bill in the most recent fiscal period. In no case

15 shall the total dollar amount of appropriations for any pro16 gram, project or activity pursuant to an automatic con17 tinuing resolution exceed 95 percent of the fixed dollar ap18 propriation for such program, project or activity in the

19 most recent appropriation Act, determined on a fiscal year

20 basis. Budget authority and outlays provided subject to

21 any automatic continuing resolution shall be subject to all

22 expenditure limits and enforcement provisions contained

23 in all laws in effect for the fiscal period.

24 ‘‘(b) Any automatic continuing resolution enacted

25 pursuant to this section shall be subject to the same ap-
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1 portionment and other rules as apply to any other con2 tinuing resolution making appropriations.’’.

3 SEC. 103. BINDING BUDGET LAW.

4 (a) To encourage early consultation and cooperation

5 between Congress and the President on decisions con6 cerning overall spending levels for all Federal programs,

7 projects, and activities and to provide for one budget for

8 the Government of the United States, Congress shall

9 enact, and the President shall sign, a binding budget law,

10 in the form of a joint resolution, by May 15 of the cal11 endar year in which the beginning of a new fiscal period

12 commences. The budget law shall fit on one page. It shall

13 set—

14 (1) budget authority and outlays for the major

15 functional categories for the budget year and 5 sub16 sequent years, except for disbursements of the old

17 age, survivors, and disability insurance program es18 tablished under title II of the Social Security Act;

19 (2) annual limits for budget authority an out20 lays for discretionary and mandatory programs, ac21 tivities, and accounts, with the exception of social se22 curity program disbursements and interest, for the

23 budget year and 5 subsequent years;

24 (3) appropriate levels for receipts and surpluses

25 or deficits for the budget year and 5 subsequent
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1 years, not including receipts and disbursements of

2 the old age, survivors, and disability insurance pro3 gram established under title II of the Social Security

4 Act and related provisions of the Internal Revenue

5 Code of 1986;

6 (4) nonsocial security budget totals for the

7 budget year and for 5 subsequent years, including—

8 (A) budget authority and outlays;

9 (B) receipts; and

10 (C) surpluses, deficits, debt held by the

11 public; debt subject to limitation, and changes

12 in debt subject to limitation;

13 (5) for Social Security, which is by law ‘‘off14 budget’’, the budget shall identify separately annual

15 estimates for disbursements, receipts, and surpluses

16 or deficits for the budget year, and for 5 subsequent

17 years; and

18 (6) unified budget totals for the budget year

19 and for 5 subsequent years for budget authority and

20 outlays; receipts; and surpluses or deficits.

21 (b) The expenditure limits contained in the one-page

22 budget pursuant to this section shall include direct spend23 ing caps pursuant to section 110 of this Act and discre24 tionary spending limits pursuant to the most recently en25 acted legislation containing statutory spending limits. If
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1 the one-page budget changes any expenditure limit for any

2 year, contained in any law in force for the fiscal period

3 covered by that budget, any Member of the House or Sen4 ate may, as a matter of the highest privilege, demand a

5 separate vote on the question of whether to change the

6 limit.

7 SEC. 104. BUDGET REQUIRED BEFORE SPENDING BILLS

8 MAY BE CONSIDERED.

9 (a) Section 303 of the Congressional Budget Act of

10 1974 is amended by striking ‘‘concurrent resolution on the

11 budget’’ and inserting ‘‘joint budget resolution enacted

12 pursuant to section 103 of the Budget Enforcement Act

13 of 1999’’ wherever it appears.

14 (b) Section 303 of the Congressional Budget Act of

15 1974 is amended by striking subsections (b) and (c) and

16 inserting the following new subsection:

17 ‘‘(b) EXCEPTION.—Consideration in the House or the

18 Senate of any bill, resolution, amendment or conference

19 report making available budget authority, entitlement au20 thority, direct spending authority, contract authority, di21 rect or guaranteed lending authority effective in that fiscal

22 period in the absence of an enacted joint budget resolution

23 shall only be in order upon a two-thirds vote of the Mem24 bers voting, a quorum being present, to waive subsection

25 (a).
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1 SEC. 105. LOCK BOX AMENDMENT.

2 Notwithstanding any other law or any rule of the

3 House of Representatives or the Senate, it shall always

4 be in order to offer an amendment to a bill providing dis5 cretionary budget authority or budget outlays that

6 would—

7 (1) only reduce such budget authority or budget

8 outlays; and

9 (2) reduce the appropriate caps in the most re10 cently enacted joint budget resolution for such budg11 et authority or budget outlays by an amount less

12 than or equal to the amount of the reduction in the

13 amendment.

14 SEC. 106. TECHNICAL AMENDMENTS.

15 The Congressional Budget Act of 1974, the Rules of

16 the House of Representatives, the Standing Rules of the

17 United States, and the Balanced Budget and Emergency

18 Deficit Control Act of 1985 are amended by striking ‘‘con19 current resolution on the budget’’ and inserting ‘‘joint res20 olution on the budget’’, by striking ‘‘concurrent resolu21 tions on the budget’’ and inserting ‘‘joint resolutions on

22 the budget’’, by striking ‘‘concurrent resolution’’ or ‘‘con23 current resolutions’’ (if the reference is to a budget resolu24 tion) and inserting ‘‘joint resolution’’ or ‘‘joint resolu25 tions’’, as the case may be.
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1 SEC. 107. TIMETABLE.

On or before: Action to be completed:

January 15 .................................... CBO economic and budget update.

First Monday in February ............ President’s budget update based on

new assumptions.

April l5 .......................................... House and Senate complete action on

the Budget.

May l0 ............................................ House and Senate complete action on

the Conference Agreement on the

Budget.

May l5 ............................................ President signs or vetos the Conference Agreement on the Budget.

August l ......................................... CBO and OMB updates.

August l5 ....................................... Preview report.

Not later than November 1 (and

as soon as practical after the

end of the fiscal year).

OMB and CBO Analyses of Deficits,

Revenues and Spending Levels and

Projections for the Upcoming Year.

November 1–December l5 ............. Congressional action to avoid sequestration.

December 15 .................................. OMB issues final (look back) report

for prior year and preview for current year.

December 15 .................................. Presidential sequester order or order.

2 SEC. 108. PROCEDURES TO AVOID SEQUESTRATION.

3 (a) SPECIAL MESSAGE.—If the OMB Analysis of Ac4 tual Spending Levels and Projections for the Upcoming

5 Year, issued pursuant to section 201, indicates that out6 lays in the most recently completed fiscal year exceeded,

7 or outlays in the current year are projected to exceed, the

8 caps in section 110, as adjusted pursuant to section 112,

9 the President shall submit to Congress with the OMB

10 Analysis of Actual Spending Levels and Projections for

11 the Upcoming Year a special message that includes pro12 posed legislative changes to—

13 (1) offset all or part of outlay excess; or

14 (2) revise the outlay caps contained in this Act.
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1 (b) INTRODUCTION OF THE PRESIDENT’S PACK2 AGE.—Not later than November 15, the message from the

3 President required pursuant to subsection (a) shall be in4 troduced as a joint resolution in the House of Representa5 tives or the Senate by the chairman of its Committee on

6 the Budget. If the chairman fails to do so, after November

7 15, the joint resolution may be introduced by any Member

8 of that House of Congress and shall be referred to the

9 Committee on the Budget of that House.

10 (c) HOUSE COMMITTEE ACTION.—The Committee on

11 the Budget, in consultation with the committees of juris12 diction, shall, by November 15, report a joint resolution

13 containing—

14 (1) the recommendations in the President’s

15 message, or different policies and proposed legisla16 tive changes than those contained in the message of

17 the President, to ameliorate or eliminate any excess

18 expenditures, or

19 (2) any changes to expenditure caps contained

20 in this Act, except that any changes to the expendi21 ture caps cannot be greater than the changes rec22 ommended in the message submitted by the Presi23 dent.
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1 (d) PROCEDURE IF THE APPROPRIATE COMMITTEE

2 OF THE HOUSE OF REPRESENTATIVES FAILS TO REPORT

3 REQUIRED RESOLUTION.—

4 (1) AUTOMATIC DISCHARGE OF COMMITTEES

5 ON THE BUDGET OF THE HOUSE.—If the Committee

6 on the Budget of the House of Representatives fails,

7 by November 20, to report a resolution meeting the

8 requirements of subsection (c), the committee shall

9 be automatically discharged from further consider10 ation of the joint resolution reflecting the Presi11 dent’s recommendations introduced pursuant to sub12 section (a), and the joint resolution shall be placed

13 on the appropriate calendar.

14 (2) CONSIDERATION OF DISCHARGE RESOLU15 TION IN THE HOUSE.—If the Committee has been

16 discharged under paragraph (1) above, any Member

17 may move that the House of Representatives con18 sider the resolution. Such motion shall be highly

19 privileged and not debatable. It shall not be in order

20 to consider any amendment to the resolution except

21 amendments which are germane and which do not

22 change the net outlay impact of the resolution.

23 (e) CONSIDERATION OF JOINT RESOLUTIONS IN THE

24 HOUSE.—Consideration of resolutions reported pursuant

25 to subsection (c) or (d) shall be pursuant to the procedures
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1 set forth in section 305 of the Congressional Budget Act

2 of 1974 and subsection (d). Notwithstanding subsection

3 (d) and any other rule or order of the House of Represent4 atives or the Senate, it shall be in order to consider

5 amendments to ameliorate any excess spending through

6 different policies and proposed legislation and which do

7 not change the net outlay impact of the resolution.

8 (f) TRANSMITTAL TO SENATE.—If a joint resolution

9 passes the House of Representatives pursuant to sub10 section (e), the Clerk of the House of Representatives shall

11 cause the resolution to be engrossed, certified, and trans12 mitted to the Senate within 1 calendar day of the day on

13 which the resolution is passed. The resolution shall be re14 ferred to the Senate Committee on the Budget.

15 (g) REQUIREMENTS FOR SPECIAL JOINT RESOLU16 TION IN THE SENATE.—The Committee on the Budget,

17 in consultation with the committees of jurisdiction shall

18 report not later than December 1—

19 (1) a joint resolution reflecting the message of

20 the President; or

21 (2) the joint resolution passed by the House of

22 Representatives, with or without amendment; or

23 (3) a joint resolution containing different poli24 cies and proposed legislative changes than those con25 tained in either the message of the President or the
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1 resolution passed by the House of Representatives,

2 to eliminate all or part of any excess expenditures,

3 or

4 (4) any changes to the expenditure caps con5 tained in this Act, except that any changes to the

6 expenditure caps cannot be greater than the changes

7 recommended in the message submitted by the

8 President.

9 (h) PROCEDURE IF THE APPROPRIATE COMMITTEE

10 OF THE SENATE FAILS TO REPORT REQUIRED RESOLU11 TION.—(1) In the event that the Committee on the Budget

12 of the Senate fails, by December 1, to report a resolution

13 meeting the requirements of subsection (g), the committee

14 shall be automatically discharged from further consider15 ation of the joint resolution reflecting the President’s rec16 ommendations introduced pursuant to subsection (a) and

17 of the resolution passed by the House of Representatives,

18 and both joint resolutions shall be placed on the appro19 priate calendar.

20 (2) Any member may move that the Senate consider

21 the resolution passed by the House of Representatives or

22 the resolution introduced pursuant to subsection (b).

23 (i) CONSIDERATION OF JOINT RESOLUTION IN THE

24 SENATE.—Consideration of resolutions reported pursuant

25 to subsections (c) or (d) shall be pursuant to the proce-
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1 dures set forth in section 305 of the Congressional Budget

2 Act of 1974 and subsection (d).

3 (j) PROCEDURE IF JOINT RESOLUTION DOES NOT

4 ELIMINATE EXCESS.—If the joint resolution reported by

5 the Committee on the Budget pursuant to subsection (c)

6 or (g) or a joint resolution discharged in the House of

7 Representatives or the Senate pursuant to subsection

8 (d)(1) or (h) would eliminate less than the entire amount

9 by which actual or projected outlays exceed the caps con10 tained in this Act;

11 then the Committee on the Budget of the Senate shall re12 port a joint resolution, raising the outlay caps, for any

13 year in which actual or projected spending would not con14 form to the expenditure caps in section 110.

15 (k) CONFERENCE REPORTS SHALL FULLY ADDRESS

16 EXCESS.—It shall not be in order in the House of Rep17 resentatives or the Senate to consider a conference report

18 on a joint resolution to eliminate all or part of any excess

19 outlays compared to the expenditure caps contained in sec20 tion 110, unless—

21 (1) the joint resolution offsets the entire

22 amount of any overage; or

23 (2) the House of Representatives and Senate

24 both pass the joint resolution reported pursuant to

25 subsection (j).
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1 The vote on any resolution reported pursuant to sub2 section (j) shall be solely on the subject of changing the

3 expenditure limits in section 110.

4 SEC. 109. EFFECT ON PRESIDENTS’ BUDGET SUBMISSIONS;

5 POINT OF ORDER.

6 (a) BUDGET SUBMISSION.—Any budget submitted by

7 the President pursuant to section 1105(a) of title 31,

8 United States Code, for each of fiscal years 1999 through

9 2003 shall be consistent with the spending levels estab10 lished in section 110, as adjusted pursuant to section 112,

11 or it shall recommend changes to those levels.

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

13 the House of Representatives or the Senate to consider

14 any concurrent resolution on the budget unless it is con15 sistent with the spending levels established in section 110,

16 as adjusted pursuant to section 112.

17 SEC. 110. DIRECT SPENDING CAPS.

18 (a) IN GENERAL.—Effective upon submission of the

19 report by OMB pursuant to subsection (c), direct spending

20 caps shall apply to all entitlement authority except for un21 distributed offsetting receipts and net interest outlays,

22 subject to adjustments for changes in eligible populations

23 and inflation pursuant to section 112. For purposes of en24 forcing direct spending caps under this Act, each separate
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1 program shown in the table set forth in subsection (d)

2 shall be deemed to be a category.

3 (b) BUDGET COMMITTEE REPORTS.—Within 30 days

4 after enactment of this Act, the Budget Committees of

5 the House of Representatives and the Senate shall file

6 with their respective Houses identical reports containing

7 account numbers and spending levels for each specific cat8 egory.

9 (c) REPORT BY OMB.—Within 30 days after enact10 ment of this Act, OMB shall submit to the President and

11 each House of Congress a report identical to the reports

12 in subsection (b) containing account numbers and spend13 ing limits for each specific category.

14 (d) CONTENTS OF REPORTS.—All direct spending ac15 counts not included in these reports under separate cat16 egories shall be included under the heading ‘‘Other Enti17 tlements and Mandatory Spending’’. These reports may

18 include adjustments among the caps set forth in this Act

19 as required below, however the aggregate amount available

20 under the ‘‘Total Entitlements and Other Mandatory

21 Spending’’ cap shall be identical in each such report and

22 in this Act and shall be deemed to have been adopted as

23 part of this Act. Each such report shall include the actual

24 amounts of the caps for each year of fiscal years 2001

25 through 2006 consistent with the concurrent resolution on
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1 the budget for fiscal year 1999 for each of the following

2 categories:

3 Earned Income Tax Credit,

4 Family Support,

5 Civilian and other Federal retirement:

6 Military retirement,

7 Food stamps,

8 Medicaid,

9 Medicare,

10 Social Security,

11 Supplemental security income,

12 Unemployment compensation,

13 Veterans’ benefits,

14 Other entitlements and mandatory spending,

15 and

16 Aggregate entitlements and other mandatory

17 spending.

18 (e) ADDITIONAL SPENDING LIMITS.—Legislation en19 acted subsequent to this Act may include additional caps

20 to limit spending for specific programs, activities, or ac21 counts with these categories. Those additional caps (if

22 any) shall be enforced in the same manner as the limits

23 set forth in such joint explanatory statement.
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1 SEC. 111. ECONOMIC ASSUMPTIONS.

2 Subject to periodic reestimation based on changed

3 economic conditions or changes in eligible population, de4 terminations of the direct spending caps under section

5 110, any breaches of such caps, and actions necessary to

6 remedy such breaches shall be based upon the economic

7 assumptions set forth in the joint explanatory statement

8 of managers accompanying the most recently enacted joint

9 resolution on the budget. At the same time as the submis10 sion of the report by OMB pursuant to section 110(c),

11 OMB shall submit to the President and Congress a report

12 setting forth the economic assumptions in the joint explan13 atory statement of managers accompanying the joint reso14 lution on the budget for fiscal year 2001 and the assump15 tions regarding eligible populations used in preparing the

16 report submitted pursuant to section 110(c).

17 SEC. 112. REVISIONS TO THE CAPS FOR ENTITLEMENTS

18 AND OTHER MANDATORY SPENDING.

19 (a) AUTOMATIC ADJUSTMENTS TO CAPS FOR ENTI20 TLEMENTS AND OTHER MANDATORY SPENDING.—When

21 the President submits the budget under section 1105(a)

22 of title 31, United States Code, and upon submission of

23 the OMB report pursuant to section 201(a) for any year,

24 OMB shall calculate (in the order set forth below), and

25 the budget and reports shall include, adjustments to the

26 direct spending caps (and those limits as cumulatively ad-
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1 justed) for the current year, the budget year, and each

2 outyear, to reflect the following:

3 (1) ADJUSTMENTS TO DIRECT SPENDING

4 CAPS.—

5 (A) CHANGES IN CONCEPTS AND DEFINI6 TIONS.—The adjustments produced by changes

7 in concepts and definitions shall equal the base8 line levels of new budget authority and outlays

9 using up-to-date concepts and definitions minus

10 those levels using the concepts and definitions

11 in effect before such changes. Such changes in

12 concepts and definitions may only be made in

13 consultation with the Committees on Appropria14 tions, the Budget, and Government Reform and

15 Oversight and Governmental Affairs of the

16 House of Representatives and the Senate.

17 (B) CHANGES IN NET OUTLAYS.—Changes

18 in net outlays for all programs and activities ex19 empt from sequestration under section 204.

20 (C) CHANGES IN INFLATION.—For direct

21 spending under laws and policies enacted or ef22 fective on or before July 1, 2000, inflation ad23 justment factors shall equal the ratio between

24 the level of year-over-year change in the Con25 sumer Price Index measured for the fiscal year
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1 most recently completed and the applicable esti2 mated level for that year as described in section

3 111 (relating to economic assumptions). For di4 rect spending under laws and policies enacted

5 or effective after July 1, 2000, there shall be no

6 adjustment to the direct spending caps (for

7 changes in economic conditions including infla8 tion, nor for changes in numbers of eligible

9 beneficiaries) unless—

10 (i) the Act or the joint explanatory

11 statement of managers accompanying such

12 Act providing new direct spending includes

13 economic projections and projections of

14 numbers of beneficiaries; and

15 (ii) such Act specifically provides for

16 automatic adjustments to the direct spend17 ing caps in section 110 based on those pro18 jections.

19 (D) CHANGES IN ELIGIBLE POPU20 LATIONS.—For direct spending under laws and

21 policies enacted or effective on or before July 1,

22 2000, the direct spending caps shall be adjusted

23 to reflect changes in eligible populations, based

24 on the assumptions set forth in the OMB report

25 submitted pursuant to section 111. In making
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1 such adjustments, OMB shall estimate the

2 changes in spending resulting from the change

3 in eligible populations. For direct spending

4 under laws and policies enacted or effective

5 after July 1, 1998, there shall be no adjustment

6 to the direct spending caps for changes in num7 bers of eligible beneficiaries unless—

8 (i) the Act or the joint explanatory

9 statement of managers accompanying such

10 Act providing new direct spending includes

11 economic projections and projections of

12 numbers of beneficiaries; and

13 (ii) such Act specifically provides for

14 automatic adjustments to the direct spend15 ing caps in section 110 based on those pro16 jections.

17 (E) INTRA-BUDGETARY PAYMENTS.—From

18 discretionary accounts to mandatory accounts.

19 The baseline and the discretionary spending

20 caps shall be adjusted to reflect those changes.

21 (b) PERMISSIBLE REVISIONS TO DIRECT SPENDING

22 CAPS.—Direct spending caps as enacted pursuant to sec23 tion 110 may be revised as follows: Except as required

24 pursuant to subsection (a), direct spending caps may only

25 be adjusted by recorded vote. It shall be a matter of high-
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1 est privilege in the House of Representatives and the Sen2 ate for a Member of the House of Representatives or the

3 Senate to insist on a recorded vote solely on the question

4 of amending such caps. It shall not be in order for the

5 Committee on Rules of the House of Representatives to

6 report a resolution waiving the provisions of this sub7 section. This subsection may be waived in the Senate only

8 by an affirmative vote of three-fifths of the Members duly

9 chosen and sworn.

10 TITLE II—ENFORCEMENT

11 PROVISIONS

12 SEC. 201. REPORTING EXCESS SPENDING.

13 (a) ANALYSIS OF ACTUAL DEFICIT, REVENUE, AND

14 SPENDING LEVELS.—As soon as practicable after any fis15 cal year, OMB shall compile a statement of actual and

16 projected deficits, revenues, and direct spending for that

17 year and the current fiscal year. The statement shall iden18 tify such spending by categories contained in section 110.

19 (b) ESTIMATE OF NECESSARY SPENDING REDUC20 TION.—Based on the statement provided under subsection

21 (a), the OMB shall issue a report to the President and

22 the Congress on December 15 of any year in which such

23 statement identifies actual or projected deficits, revenues,

24 or spending in the current or immediately preceding fiscal

25 years in violation of the direct spending caps in section
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1 110, as adjusted pursuant to section 112, by more than

2 one-tenth of one percent of the applicable direct spending

3 for such year. The report shall include:

4 (1) The amount, if any, that total direct spend5 ing exceeded, or is projected to exceed, the aggregate

6 direct spending cap in section 110, as adjusted pur7 suant to section 112.

8 (2) All instances in which actual direct spend9 ing has exceeded the applicable direct spending cap.

10 (3) The difference between the amount of

11 spending available under the direct spending caps

12 for the current year and estimated actual spending

13 for the categories associated with such caps.

14 (4) The amounts by which direct spending shall

15 be reduced in the current fiscal year to offset the net

16 amount that actual direct spending in the preceding

17 fiscal year and projected direct spending in the cur18 rent fiscal year exceeds the amounts available for

19 each cap category.

20 SEC. 202. ENFORCING DIRECT SPENDING CAPS.

21 (a) PURPOSE.—This subtitle provides enforcement of

22 the direct spending caps on categories of spending estab23 lished pursuant to section 110. This section shall apply

24 for any fiscal year in which the statement provided under

25 section 201 identifies actual direct spending in the pre-
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1 ceding fiscal year or projected direct spending in the cur2 rent year in excess of the aggregate direct spending cap,

3 as adjusted pursuant to section 112.

4 (b) GENERAL RULES.—

5 (1) ELIMINATING A BREACH.—Each non-ex6 empt account within a category shall be reduced by

7 a dollar amount calculated by multiplying the base8 line level of sequestrable budgetary resources in that

9 account at that time by the uniform percentage nec10 essary to eliminate a breach within that category.

11 (2) PROGRAMS, PROJECTS, OR ACTIVITIES.—

12 Except as otherwise provided, the same percentage

13 sequestration shall apply to all programs, projects

14 and activities within a budget account.

15 (3) INDEFINITE AUTHORITY.—Except as other16 wise provided, sequestration in accounts for which

17 obligations are indefinite shall be taken in a manner

18 to ensure that obligations in the fiscal year of a se19 questration and succeeding fiscal years are reduced,

20 from the level that would actually have occurred, by

21 the applicable sequestration percentage or percent22 ages.

23 (4) CANCELLATION OF BUDGETARY RE24 SOURCES.—Budgetary resources sequestered from

25 any account other than a trust, special or revolving
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1 fund shall revert to the Treasury and be perma2 nently canceled.

3 (5) IMPLEMENTING REGULATIONS.—Notwith4 standing any other provision of law, administrative

5 rules or similar actions implementing any sequestra6 tion shall take effect within 30 days after that se7 questration.

8 SEC. 203. SEQUESTRATION RULES.

9 (a) GENERAL RULES.—For programs subject to di10 rect spending caps:

11 (1) TRIGGERING OF SEQUESTRATION.—Seques12 tration is triggered if total direct spending subject to

13 the caps in the preceding fiscal year and projected

14 direct spending subject to the caps in the current

15 fiscal year exceeds the total of aggregate caps for di16 rect spending for the current and immediately pre17 ceding fiscal year.

18 (2) CALCULATION OF REDUCTIONS.—The

19 amount to be sequestered from direct spending pro20 grams under each separate cap shall be determined

21 by multiplying the total amount that direct spending

22 in that category exceeded or is projected to exceed

23 the direct spending cap for that category by—

24 (A) the net amount that total direct spend25 ing exceeded, or is projected to exceed, the ag-
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•HR 2293 IH

1 gregate spending caps, as identified pursuant to

2 paragraph 201(b)(1); multiplied by

3 (B) the net amount that direct spending by

4 which the category exceeded and is projected to

5 exceed the direct spending cap for that cat6 egory, divided by the net amount that total

7 spending exceeded and is projected to exceed

8 the applicable direct spending cap for all cat9 egories in which spending exceeds the applicable

10 direct spending caps.

11 (3) UNIFORM PERCENTAGES.—In calculating

12 the uniform percentage applicable to the sequestra13 tion of all spending programs or activities within

14 each category, or the uniform percentage applicable

15 to the sequestration of nonexempt direct spending

16 programs or activities, the sequestrable base for di17 rect spending programs and activities is the total

18 level of outlays for the fiscal year for those programs

19 or activities in the current law baseline.

20 (4) PERMANENT SEQUESTRATION OF DIRECT

21 SPENDING.—Obligations in sequestered direct spend22 ing accounts shall be reduced in the fiscal year in

23 which a sequestration occurs and in all succeeding

24 fiscal years. Notwithstanding any other provision of

25 this section, after the first direct spending seques-
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1 tration, any later sequestration shall reduce direct

2 spending by an amount in addition to, rather than

3 in lieu of, the reduction in direct spending in place

4 under the existing sequestration or sequestrations.

5 (5) SPECIAL RULE.—For any direct spending

6 program in which—

7 (A) outlays pay for entitlement benefits;

8 (B) a current-year sequestration takes ef9 fect after the 1st day of the budget year;

10 (C) that delay reduces the amount of enti11 tlement authority that is subject to sequestra12 tion in the budget; and

13 (D) the uniform percentage otherwise ap14 plicable to the budget-year sequestration of a

15 program or activity is increased due to the

16 delay;

17 then the uniform percentage shall revert to the uni18 form percentage calculated under paragraph (3)

19 when the budget year is completed.

20 (6) INDEXED BENEFIT PAYMENTS.—If, under

21 any entitlement program—

22 (A) benefit payments are made to persons

23 or governments more frequently than once a

24 year; and
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1 (B) the amount of entitlement authority is

2 periodically adjusted under existing law to re3 flect changes in a price index (commonly called

4 ‘‘cost of living adjustments’’);

5 sequestration shall first be applied to the cost of liv6 ing adjustment before reductions are made to the

7 base benefit. For the first fiscal year to which a se8 questration applies, the benefit payment reductions

9 in such programs accomplished by the order shall

10 take effect starting with the payment made at the

11 beginning of January following a final sequester.

12 For the purposes of this subsection, veterans’ com13 pensation shall be considered a program that meets

14 the conditions of the preceding sentence.

15 (7) LOAN PROGRAMS.—For all loans made, ex16 tended, or otherwise modified on or after any se17 questration under loan programs subject to direct

18 spending caps—

19 (A) the sequestrable base shall be total

20 fees associated with all loans made, extended or

21 otherwise modified on or after the date of se22 questration; and

23 (B) the fees paid by borrowers shall be in24 creased by a uniform percentage sufficient to

25 produce the dollar savings in such loan pro-
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•HR 2293 IH

1 grams for the fiscal year or years of the seques2 trations required by this section.

3 Notwithstanding any other provision of law, in any

4 year in which a sequestration is in effect, all subse5 quent fees shall be increased by the uniform percent6 age and all proceeds from such fees shall be paid

7 into the general fund of the Treasury.

8 (8) INSURANCE PROGRAMS.—Any sequestration

9 of a Federal program that sells insurance contracts

10 to the public (including the Federal Crop Insurance

11 Fund, the National Insurance Development Fund,

12 the National Flood Insurance fund, insurance activi13 ties of the Overseas Private Insurance Corporation,

14 and Veterans’ Life insurance programs) shall be ac15 complished by increasing premiums on contracts en16 tered into, extended or otherwise modified, after the

17 date a sequestration order takes effect by the uni18 form sequestration percentage. Notwithstanding any

19 other provision of law, for any year in which a se20 questration affecting such programs is in effect, sub21 sequent premiums shall be increased by the uniform

22 percentage and all proceeds from the premium in23 crease shall be paid from the insurance fund or ac24 count to the general fund of the Treasury.
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1 (9) STATE GRANT FORMULAS.—For all State

2 grant programs subject to direct spending caps—

3 (A) the total amount of funds available for

4 all States shall be reduced by the amount re5 quired to be sequestered; and

6 (B) if States are projected to receive in7 creased funding in the budget year compared to

8 the immediately preceding fiscal year, seques9 tration shall first be applied to the estimated

10 increases before reductions are made compared

11 to actual payments to States in the previous

12 year—

13 (i) the reductions shall be applied first

14 to the total estimated increases for all

15 States; then

16 (ii) the uniform reduction shall be

17 made from each State’s grant; and

18 (iii) the uniform reduction shall apply

19 to the base funding levels available to

20 states in the immediately preceding fiscal

21 year only to the extent necessary to elimi22 nate any remaining excess over the appli23 cable direct spending cap.

24 (10) SPECIAL RULE FOR CERTAIN PRO25 GRAMS.—Except matters exempted under sec-
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•HR 2293 IH

1 tion 205 and programs subject to special rules

2 set forth under section 206 and notwith3 standing any other provisions of law, any se4 questration required under this Act shall reduce

5 benefit levels by an amount sufficient to elimi6 nate all excess spending identified in the report

7 issued pursuant to section 201, while maintain8 ing the same uniform percentage reduction in

9 the monetary value of benefits subject to reduc10 tion under this subsection.

11 (b) WITHIN-SESSION SEQUESTER.—If a bill or reso12 lution providing direct spending for the current year is en13 acted before July 1 of that fiscal year and causes a breach

14 within any direct spending cap for that fiscal year, 15 days

15 later there shall be a sequestration to eliminate that

16 breach within that cap.

17 SEC. 204. EXEMPT PROGRAMS AND ACTIVITIES.

18 The following budget accounts, activities within ac19 counts, or income shall be exempt from sequestration—

20 (1) net interest;

21 (2) all payments to trust funds from excise

22 taxes or other receipts or collections properly cred23 itable to those trust funds;

24 (3) offsetting receipts and collections;
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1 (4) all payments from one Federal direct spend2 ing budget account to another Federal budget ac3 count;

4 (5) all intragovernmental funds including those

5 from which funding is derived primarily from other

6 Government accounts;

7 (6) expenses to the extent they result from pri8 vate donations, bequests, or voluntary contributions

9 to the Government;

10 (7) nonbudgetary activities, including but not

11 limited to—

12 (A) credit liquidating and financing ac13 counts;

14 (B) the Pension Benefit Guarantee Cor15 poration Trust Funds;

16 (C) the Thrift Savings Fund;

17 (D) the Federal Reserve System; and

18 (E) appropriations for the District of Co19 lumbia to the extent they are appropriations of

20 locally raised funds;

21 (8) payments resulting from Government insur22 ance, Government guarantees, or any other form of

23 contingent liability, to the extent those payments re24 sult from contractual or other legally binding com-
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1 mitments of the Government at the time of any se2 questration;

3 (9) the following accounts, which largely fulfill

4 requirements of the Constitution or otherwise make

5 payments to which the Government is committed—

6 Bureau of Indian Affairs, miscellaneous

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

8 999);

9 Claims, defense;

10 Claims, judgments and relief act (20–

11 1895–0–1–806);

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

14 0415–0–1–806);

15 Compensation of the President (11–0001–

16 0–1–802);

17 Customs Service, miscellaneous permanent

18 appropriations (20–9992–0–2–852);

19 Eastern Indian land claims settlement

20 fund (14–2202–0–1–806);

21 Farm Credit System Financial Assistance

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

23 351);

24 Internal Revenue collections of Puerto Rico

25 (20–5737–0–2–852);
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1 Payments of Vietnam and USS Pueblo

2 prisoner-of-war claims (15–0104–0–1–153):

3 Payments to copyright owners (03–5175–

4 0–2–376);

5 Salaries of Article III judges (not including

6 cost of living adjustments);

7 Soldier’s and Airman’s Home, payment of

8 claims (84–8930–0–7–705);

9 Washington Metropolitan Area Transit Au10 thority, interest payments (46–0300–0–1–401);

11 (10) the following noncredit special, revolving,

12 or trust-revolving funds—

13 Exchange Stabilization Fund (20–4444–0–

14 3–155); and

15 Foreign Military Sales trust fund (11–

16 82232–0–7–155).

17 SEC. 205. SPECIAL RULES.

18 (a) CHILD SUPPORT ENFORCEMENT PROGRAM.—

19 Any sequestration order shall accomplish the full amount

20 of any required reduction in payments under sections 455

21 and 458 of the Social Security Act by reducing the Fed22 eral matching rate for State administrative costs under

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

24 section 455(a) of such Act, to the extent necessary to re25 duce such expenditures by that amount.
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1 (b) COMMODITY CREDIT CORPORATION.—

2 (1) EFFECTIVE DATE.—For the Commodity

3 Credit Corporation, the date on which a sequestra4 tion order takes effect in a fiscal year shall vary for

5 each crop of a commodity. In general, the sequestra6 tion order shall take effect when issued, but for each

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

8 issued as an entitlement, the sequestration order

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

10 for that crop that begins after the sequestration

11 order is issued. Payments for each contract in such

12 a crop shall be reduced under the same terms and

13 conditions.

14 (2) DAIRY PROGRAM.—

15 (A) As the sole means of achieving any re16 duction in outlays under the milk price-support

17 program, the Secretary of Agriculture shall pro18 vide for a reduction to be made in the price re19 ceived by producers for all milk in the United

20 States and marketed by producers for commer21 cial use.

22 (B) That price reduction (measured in

23 cents per hundred-weight of milk marketed)

24 shall occur under subparagraph (A) of section

25 201(d)(2) of the Agricultural Act of 1949 (7
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•HR 2293 IH

1 U.S.C. 1446(d)(2)(A)), shall begin on the day

2 any sequestration order is issued, and shall not

3 exceed the aggregate amount of the reduction

4 in outlays under the milk price-support pro5 gram, that otherwise would have been achieved

6 by reducing payments made for the purchase of

7 milk or the products of milk under this sub8 section during that fiscal year.

9 (3) CERTAIN AUTHORITY NOT TO BE LIM10 ITED.—Nothing in this Act shall restrict the Cor11 poration in the discharge of its authority and re12 sponsibility as a corporation to buy and sell com13 modities in international trade, or limit or reduce in

14 any way any appropriation that provides the Cor15 poration with funds to cover its realized losses.

16 (c) EARNED INCOME TAX CREDIT.—

17 (1) The sequestrable base for earned income

18 tax credit program is the dollar value of all current

19 year benefits to the entire eligible population.

20 (2) In the event sequestration is triggered to re21 duce earned income tax credits, all earned income

22 tax credits shall be reduced, whether or not such

23 credits otherwise would result in cash payments to

24 beneficiaries, by a uniform percentage sufficient to
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1 produce the dollar savings required by the sequestra2 tion.

3 (d) REGULAR AND EXTENDED UNEMPLOYMENT

4 COMPENSATION.—

5 (1) A State may reduce each weekly benefit

6 payment made under the regular and extended un7 employment benefit programs for any week of unem8 ployment occurring during any period with respect

9 to which payments are reduced under any sequestra10 tion order by a percentage not to exceed the percent11 age by which the Federal payment to the State is to

12 be reduced for such week as a result of such order.

13 (2) A reduction by a State in accordance with

14 paragraph (1) shall not be considered as a failure to

15 fulfill the requirements of section 3304(a)(11) of the

16 Internal Revenue Code of 1986.

17 (e) FEDERAL EMPLOYEES HEALTH BENEFITS

18 FUND.— For the Federal Employees Health Benefits

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

20 open season. The sequestration shall be accomplished by

21 annual payments from that Fund to the General Fund of

22 the Treasury. Those annual payments shall be financed

23 solely by charging higher premiums. The sequestrable base

24 for the Fund is the current-year level of gross outlays re-
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1 sulting from claims paid after the sequestration order

2 takes effect.

3 (f) FEDERAL HOUSING FINANCE BOARD.— Any se4 questration of the Federal Housing Board shall be accom5 plished by annual payments (by the end of each fiscal

6 year) from that Board to the general fund of the Treasury,

7 in amounts equal to the uniform sequestration percentage

8 for that year times the gross obligations of the Board in

9 that year.

10 (g) FEDERAL PAY.—

11 (1) IN GENERAL.— New budget authority to

12 pay Federal personnel from direct spending accounts

13 shall be reduced by the uniform percentage cal14 culated under section 203(c)(3), as applicable, but

15 no sequestration order may reduce or have the effect

16 of reducing the rate of pay to which any individual

17 is entitled under any statutory pay system as in18 creased by any amount payable under section 5304

19 of title 5, United States Code, or any increase in

20 rates of pay which is scheduled to take effect under

21 section 5303 of title 5, United States Code, section

22 1109 of title 37, United States Code, or any other

23 provision of law.

24 (2) DEFINITIONS.—For purposes of this

25 subsection—
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1 (A) the term ‘‘statutory pay system’’ shall

2 have the meaning given that term in section

3 5302(1) of title 5, United States Code;

4 term ‘‘elements of military pay’’ means—

5 (i) the elements of compensation of

6 members of the uniformed services speci7 fied in section 1009 of title 37, United

8 States Code;

9 (ii) allowances provided members of

10 the uniformed services under sections

11 403(a) and 405 of such title; and

12 (iii) cadet pay and midshipman pay

13 under section 203(c) of such title; and

14 (C) the term ‘‘uniformed services’’ shall

15 have the same meaning given that term in sec16 tion 101(3) of title 37, United States Code.

17 (h) MEDICARE.—

18 (1) IN GENERAL.—Any sequestration shall ac19 complish 90 percent of the required reduction by re20 ductions in payments for services under title XVIII

21 of the Social Security Act and 10 percent of the re22 quired reduction through increases in beneficiary

23 premiums under part B of title XVIII of the Social

24 Security Act.
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1 (2) TIMING OF APPLICATION OF REDUC2 TIONS.—

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

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

5 payment amounts pursuant to sequestration

6 order, the reduction shall be applied to payment

7 for services furnished after the effective date of

8 the order. For purposes of the previous sen9 tence, in the case of inpatient services furnished

10 for an individual, the services shall be consid11 ered to be furnished on the date of the individ12 ual’s discharge from the inpatient facility.

13 (B) PAYMENT ON THE BASIS OF COST RE14 PORTING PERIODS.—In the case in which pay15 ment for services of a provider of services is

16 made under title XVIII of the Social Security

17 Act on a basis relating to the reasonable cost

18 incurred for the services during a cost reporting

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

20 payment amounts pursuant to a sequestration

21 order, the reduction shall be applied to payment

22 for costs for such services incurred at any time

23 during each cost reporting period of the pro24 vider any part of which occurs after the effec25 tive date of order, but only (for each such cost
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1 reporting period) in the same proportion as the

2 fraction of the cost reporting period that occurs

3 after the effective date of the order.

4 (3) NO INCREASE IN BENEFICIARY CHARGES IN

5 ASSIGNMENT-RELATED CASES.—If a reduction in

6 payment amounts is made pursuant to a sequestra7 tion order for services for which payment under part

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

9 on the basis of an assignment described in section

10 1842(b)(3)(B)(ii), in accordance with section

11 1842(b)(6)(B), or under the procedure described in

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

13 the services shall be considered to have accepted

14 payment of the reasonable charge for the services,

15 less any reduction in payment amount made pursu16 ant to a sequestration order, as payment in full.

17 (4) PART B PREMIUMS.—In computing the

18 amount and method, part B premiums shall be in19 creased by a percentage to be determined by dividing

20 10 percent of the amount that medicare spending

21 exceeds the applicable cap by the total amount of all

22 premium collections. All beneficiary premiums shall

23 be increased by the percentage calculated pursuant

24 to the preceding sentence, except that no increase in
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1 the premium shall result in a reduction in social se2 curity benefit payments to any beneficiary.

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

4 In computing the adjusted average per capita cost

5 for purposes of section 1876(a)(4) of the Social Se6 curity Act, the Secretary of Health and Human

7 Services shall not take into account any reductions

8 in payment amounts which have been or may be ef9 fected under this part.

10 (i) POSTAL SERVICE FUND.—Any sequestration of

11 the Postal Service Fund shall be accomplished by annual

12 payments from that Fund to the General Fund of the

13 Treasury, and the Postmaster General of the United

14 States and shall have the duty to make those payments

15 during the first fiscal year to which the sequestration

16 order applies and each succeeding fiscal year. The amount

17 of each annual payment shall be—

18 (1) the uniform sequestration percentage, times

19 (2) the estimated gross obligations of the Postal

20 Service Fund in that year other than those obliga21 tions financed with an appropriation for revenue for22 gone that year.

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

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

25 made in installments within that year if the payment
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1 schedule is approved by the Secretary of the Treasury.

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

3 Postmaster General shall submit to the Postal Rate Com4 mission a plan for financing the annual payment for that

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

6 The plan may assume efficiencies in the operation of the

7 Postal Service, reductions in capital expenditures, in8 creases in the prices of services, or any combination, but

9 may not assume a lower Fund surplus or higher Fund

10 deficit and shall follow the requirements of existing law

11 governing the Postal Service in all other respects. Within

12 30 days of the receipt of that plan, the Postal Rate Com13 mission shall approve the plan or modify it in the manner

14 that modifications are allowed under current law. If the

15 Postal Rate Commission does not respond to the plan

16 within 30 days, the plan submitted by the Postmaster

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

18 by the submission of a new plan to the Postal Rate Com19 mission, which may approve or modify it.

20 (j) POWER MARKETING ADMINISTRATIONS AND

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

22 power marketing administration funds or the Tennessee

23 Valley Authority fund shall be accomplished by annual

24 payments from those funds to the General Fund of the

25 Treasury, and the administrators of those funds shall have
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1 the duty to make those payments during the fiscal year

2 to which the sequestration order applies and each suc3 ceeding fiscal year. The amount of each payment by a

4 fund shall be—

5 (1) the direct spending uniform sequestration

6 percentage, times

7 (2) the estimated gross obligations of the fund

8 in that year other than those obligations financed

9 from discretionary appropriations for that year.

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

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

12 made in installments within that year if the payment

13 schedule is approved by the Secretary of the Treasury. An14 nual payments by a fund may be financed by reductions

15 in costs required to produce the pre-sequester amount of

16 power (but those reductions shall not include reductions

17 in the amount of power supplied by the fund), by reduc18 tions in capital expenditures, by increases in tax rates, or

19 by any combination, but may not be financed by a lower

20 fund surplus, a higher fund deficit, additional borrowing,

21 delay in repayment of principal on outstanding debt and

22 shall follow the requirements of existing law governing the

23 fund in all other respects. The administrator of a fund

24 or the TVA Board is authorized to take the actions speci-
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1 fied in this subsection in order to make the annual pay2 ments to the Treasury.

3 (k) BUSINESS-LIKE TRANSACTIONS.—Notwith4 standing any other provision of law, for programs which

5 provide a business-like service in exchange for a fee, se6 questration shall be accomplished through a uniform in7 crease in fees (sufficient to produce the dollar savings in

8 such programs for the fiscal year of the sequestration re9 quired by section 201(a)(2), all subsequent fees shall be

10 increased by the same percentage, and all proceeds from

11 such fees shall be paid into the general fund of the Treas12 ury, in any year for which a sequester affecting such pro13 grams are in effect.

14 SEC. 206. THE CURRENT LAW BASELINE.

15 (a) SUBMISSION OF REPORTS.—CBO and OMB shall

16 submit to the President and the Congress reports setting

17 forth the budget baselines for the budget year and the next

18 nine fiscal years. The CBO report shall be submitted on

19 or before January 15. The OMB report shall accompany

20 the President’s budget.

21 (b) DETERMINATION OF THE BUDGET BASELINE.—

22 (1) The budget baseline shall be based on the common

23 economic assumptions set forth in section 111, adjusted

24 to reflect revisions pursuant to subsection (c).
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1 (2) The budget baseline shall consist of a projection

2 of current year levels of budget authority, outlays, reve3 nues and the surplus or deficit into the budget year and

4 the relevant outyears based on current enacted laws as

5 of the date of the projection.

6 (3) For discretionary spending items, the baseline

7 shall be the spending caps in effect pursuant to section

8 251(c) of the Balanced Budget and Emergency Deficit

9 Control Act of 1985. For years for which there are no

10 caps, the baseline for discretionary spending shall be the

11 same as the last year for which there were statutory caps.

12 (4) For all other expenditures and for revenues, the

13 baseline shall be adjusted by comparing unemployment,

14 inflation, interest rates, growth and eligible population for

15 the most recent period for which actual data are available,

16 compared to the assumptions contained in section 113.

17 (c) REVISIONS TO THE BASELINE.—The baseline

18 shall be adjusted for up-to-date economic assumptions for

19 all reports issued pursuant to section 112 of this Act and

20 section 254 of the Balanced Budget and Emergency Def21 icit Control Act of 1985.

22 SEC. 207. LIMITATIONS ON EMERGENCY SPENDING.

23 (a) IN GENERAL.—(1) Within the discretionary caps

24 for each fiscal year contained in this Act, an amount shall

25 be withheld from allocation to the appropriate committees
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1 of the House of Representatives and of the Senate and

2 reserved for natural disasters and other emergency pur3 poses.

4 (2) Such amount for each such fiscal year shall not

5 be less than 1 percent of total budget authority and out6 lays available within those caps for that fiscal year.

7 (3) No adjustments shall be made to the discre8 tionary spending limits under section 251(b)(2)(A) of the

9 Balanced Budget and Emergency Deficit Control Act of

10 1985 unless the amount appropriated for discretionary ac11 counts that have been designated as emergency require12 ments exceed the amount reserved pursuant to paragraph

13 (1). Any adjustment shall be limited to the amount that

14 total appropriations designated as emergency require15 ments for the fiscal year exceeds the amount reserved pur16 suant to paragraph (1).

17 (4) The amounts reserved pursuant to this subsection

18 shall be made available for allocation to such committees

19 only if—

20 (A) the President has made a request for such

21 disaster funds;

22 (B) the programs to be funded are included in

23 such request; and

24 (C) the projected obligations for unforeseen

25 emergency needs exceed the 10-year rolling average
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1 annual expenditures for existing programs included

2 in the Presidential request for the applicable fiscal

3 year.

4 (5) Notwithstanding any other provision of law—

5 (A) States and localities shall be required to

6 maintain effort and ensure that Federal assistance

7 payments do not replace, subvert or otherwise have

8 the effect of reducing regularly budgeted State and

9 local expenditures for law enforcement, firefighting,

10 road construction and maintenance, building con11 struction and maintenance or any other category of

12 regular government expenditure (to ensure that Fed13 eral disaster payments are made only for incre14 mental costs directly attributable to unforeseen dis15 asters, and do not replace or reduce regular State

16 and local expenditures for the same purposes);

17 (B) the President may not take administrative

18 action to waive any requirement for States or local19 ities to make minimum matching payments as a con20 dition or receiving Federal disaster assistance or

21 take administrative action to waive all or part of any

22 repayment of Federal loans for the State or local

23 matching share required as a condition of receiving

24 Federal disaster assistance. This clause shall apply

25 to all matching share requirements and loans to
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1 meet matching share requirements under the Robert

2 T. Stafford Disaster Relief and Emergency Assist3 ance Act (42 U.S.C. 5121 et seq.) and any other

4 Acts pursuant to which the President may declare

5 a disaster or disasters and States and localities oth6 erwise qualify for Federal disaster assistance; and

7 (C) a two-thirds vote in each House of Congress

8 shall be required for each emergency to reduce or

9 waive the State matching requirement or to forgive

10 all or part of loans for the State matching share as

11 required under the Robert T. Stafford Disaster Re12 lief and Emergency Assistance Act.

13 (b) EFFECT ON BUDGET RESOLUTIONS.—(1) All

14 concurrent resolutions on the budget (including revisions)

15 shall specify the amount of new budget authority and out16 lays within the discretionary spending cap that shall be

17 withheld from allocation to the committees and reserved

18 for natural disasters, and a procedure for releasing such

19 funds for allocation to the appropriate committee. The

20 amount withheld shall be equal to 1 percent of the total

21 discretionary spending cap for fiscal year covered by the

22 resolution, unless additional amounts are specified.

23 (2) The procedure for allocation of the amounts pur24 suant to paragraph (1) shall ensure that the funds are
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1 released for allocation only pursuant to the conditions con2 tained in subsection (a)(3)(A) through (C).

3 (c) RESTRICTION ON USE OF FUNDS.—Notwith4 standing any other provision of law, the amount reserved

5 pursuant to subsection (a) shall not be available for other

6 than emergency funding requirements for particular nat7 ural disasters or national security emergencies so des8 ignated by Acts of Congress.

9 (d) NEW POINT OF ORDER.—(1) Title IV of the Con10 gressional Budget Act of 1974 is amended by adding at

11 the end the following new section:

12 ‘‘POINT OF ORDER REGARDING EMERGENCIES

13 ‘‘SEC. 408. It shall not be in order in the House of

14 Representatives or the Senate to consider any bill or joint

15 resolution, or amendment thereto or conference report

16 thereon, containing an emergency designation for purposes

17 of section 251(b)(2)(A) or 252(e) of the Balanced Budget

18 and Emergency Deficit Control Act of 1985 or of section

19 207 of the Budget Enforcement Act of 1999 if it also pro20 vides an appropriation or direct spending for any other

21 item or contains any other matter, but that bill or joint

22 resolution, amendment, or conference report may contain

23 rescissions of budget authority or reductions of direct

24 spending, or that amendment may reduce amounts for

25 that emergency.’’.
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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 is amended by inserting after the item relating

4 to section 407 the following new item:

‘‘Sec. 408. Point of order regarding emergencies.’’.

5 SEC. 208. TEN-YEAR CONGRESSIONAL REVIEW REQUIRE6 MENT OF PERMANENT BUDGET AUTHORITY.

7 (a) TIMETABLE FOR REVIEW.—Clause 2(d)(1) of

8 rule X of the Rules of the House of Representatives is

9 amended by striking subdivisions (B) and (C) and insert10 ing the following new subdivision:

11 ‘‘(B) provide in its plans a specific timetable for

12 its review of those laws, programs, or agencies with13 in its jurisdiction, including those that operate under

14 permanent budget authority or permanent statutory

15 authority.’’.

16 (b) REVIEW OF PERMANENT BUDGET AUTHORITY

17 BY THE COMMITTEE ON APPROPRIATIONS.—Clause 4(a)

18 of rule X of the Rules of the House of Representatives

19 is amended—

20 (1) by striking subparagraph (2); and

21 (2) by redesignating subparagraph (3) as sub22 paragraph (2) and by striking ‘‘from time to time’’

23 and inserting ‘‘at least once each Congress’’ in sub24 paragraph (2) (as redesignated).
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1 (c) CONFORMING AMENDMENT.—Clause 4(e)(2) of

2 rule X of the Rules of the House of Representatives is

3 amended by striking ‘‘from time to time’’ and inserting

4 ‘‘at least once every ten years’’.

Æ