II

106TH CONGRESS

1ST SESSION S. 1828

To protect and provide resources for the Social Security System, to reserve

surpluses to protect, strengthen, and modernize the Medicare Program,

and for other purposes.

IN THE SENATE OF THE UNITED STATES

OCTOBER 28, 1999

Mr. MOYNIHAN (by request) introduced the following bill; which was read

twice and referred to the Committee on Finance

A BILL

To protect and provide resources for the Social Security

System, to reserve surpluses to protect, strengthen, and

modernize the Medicare Program, and for other purposes.

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 ‘‘Strengthening Social

5 Security and Medicare Act of 1999’’.

6 SEC. 2. FINDINGS AND PURPOSE.

7 (a) FINDINGS.—The Congress finds that:
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1 (1) The Social Security system is one of the

2 cornerstones of American national policy and has al3 lowed a generation of Americans to retire with dig4 nity. For 30 percent of all senior citizens, Social Se5 curity provides almost 90 percent of their retirement

6 income. For 66 percent of all senior citizens, Social

7 Security benefits provide over half of their retire8 ment income. Poverty rates among the elderly are at

9 the lowest level since the United States began to

10 keep poverty statistics, due in large part to the So11 cial Security system. The Social Security system, to12 gether with the additional protections afforded by

13 the Medicare system, have been an outstanding suc14 cess for past and current retirees and must be pre15 served for future retirees.

16 (2) The long-term solvency of the Social Secu17 rity and Medicare trust funds is not assured. There

18 is an estimated long-range actuarial deficit in the

19 Social Security trust funds. According to the 1999

20 report of the Board of Trustees of the Social Secu21 rity trust funds, the accumulated balances in the

22 Federal Old-Age and Survivors Insurance Trust

23 Fund and the Federal Disability Insurance Trust

24 Fund are currently projected to become unable to

25 pay benefits in full on a timely basis starting in
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1 2034. The Medicare system faces more immediate fi2 nancial shortfalls, with the Hospital Insurance Trust

3 Fund projected to become exhausted in 2015.

4 (3) In addition to preserving Social Security

5 and Medicare, the Congress and the President have

6 a responsibility to future generations to reduce the

7 Federal debt held by the public. Significant debt re8 duction will contribute to the economy and improve

9 the Government’s ability to fulfill its responsibilities

10 and to face future challenges, including preserving

11 and strengthening Social Security and Medicare.

12 (4) The Federal Government is now in sound fi13 nancial condition. The Federal budget is projected to

14 generate significant surpluses. In fiscal years 1998

15 and 1999, there were unified budget surpluses—the

16 first consecutive surpluses in more than 40 years.

17 Over the next 15 years, the Government projects the

18 on-budget surplus, which excludes Social Security, to

19 total $2.9 trillion. The unified budget surplus (in20 cluding Social Security) is projected by the Govern21 ment to total $5.9 trillion over the next 15 years.

22 (5) The surplus, excluding Social Security, of23 fers an unparalleled opportunity to: preserve Social

24 Security; protect, strengthen, and modernize Medi25 care; and significantly reduce the Federal debt held
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1 by the public, for the future benefit of all Ameri2 cans.

3 (b) PURPOSE.—It is the purpose of this Act to pro4 tect Social Security surplus for debt reduction, to extend

5 the solvency of Social Security, and to set aside a reserve

6 to be used to protect, strengthen, and modernize Medicare.

7 SEC. 3. ADDITIONAL APPROPRIATIONS TO FEDERAL OLD8 AGE AND SURVIVORS INSURANCE TRUST

9 FUND AND FEDERAL DISABILITY INSURANCE

10 TRUST FUND.

11 (a) PURPOSE.—The purpose of this section is to as12 sure that the interest savings on the debt held by the pub13 lic achieved as a result of Social Security surpluses from

14 2000 to 2015 are dedicated to Social Security solvency.

15 (b) ADDITIONAL APPROPRIATIONS TO TRUST

16 FUND.—Section 201 of the Social Security Act is amend17 ed by adding at the end the following new subsection:

18 ‘‘(n) ADDITIONAL APPROPRIATIONS TO TRUST

19 FUNDS.—

20 ‘‘(1) In addition to the amounts appropriated to

21 the Trust Funds under subsections (a) and (b),

22 there is hereby appropriated to the Trust Funds, out

23 of any moneys in the Treasury not otherwise

24 appropriated—
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1 ‘‘(A) for the fiscal year ending September

2 30, 2011, and for each fiscal year thereafter

3 through the fiscal year ending September 30,

4 2016, an amount equal to the prescribed

5 amount for the fiscal year; and

6 ‘‘(B) for the fiscal year ending September

7 30, 2017, and for each fiscal year thereafter

8 through the fiscal year ending September 30,

9 2044, an amount equal to the prescribed

10 amount for the fiscal year ending September

11 30, 2016.

12 ‘‘(2) The amount appropriated by paragraph

13 (1) in each fiscal year shall be transferred in equal

14 monthly installments.

15 ‘‘(3) The amount appropriated by paragraph

16 (1) in each fiscal year shall be allocated between the

17 Trust Funds in the same proportion as the taxes im18 posed by chapter 21 (other than sections 3101(b)

19 and 3111(b)) of title 26 with respect to wages (as

20 defined in section 3121 of title 26) reported to the

21 Secretary of the Treasury or his delegate pursuant

22 to subtitle F of title 26, and the taxes imposed by

23 chapter 2 (other than section 1401(b)) of title 26

24 with respect to self-employment income (as defined

25 in section 1402 of title 26) reported to the Secretary
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1 of the Treasury or his delegate pursuant to subtitle

2 F of title 26, are allocated between the Trust Funds

3 in the calendar year that begins in the fiscal year.

4 ‘‘(4) For purposes of this subsection, the ‘pre5 scribed amount’ for any fiscal year shall be deter6 mined by multiplying:

7 ‘‘(A) the excess of:

8 ‘‘(i) the sum of:

9 ‘‘(I) the face amount of all obli10 gations of the United States held by

11 the Trust Funds on the last day of

12 the fiscal year immediately preceding

13 the fiscal year of determination pur14 chased with amounts appropriated or

15 credited to the Trust Funds other

16 than any amount appropriated under

17 paragraph (1); and

18 ‘‘(II) the sum of the amounts ap19 propriated under paragraph (1) and

20 transferred under paragraph (2)

21 through the last day of the fiscal year

22 immediately preceding the fiscal year

23 of determination, and an amount

24 equal to the interest that would have

25 been earned thereon had those
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1 amounts been invested in obligations

2 of the United States issued directly to

3 the Trust Funds under subsections

4 (d) and (f),

5 ‘‘over—

6 ‘‘(ii) the face amount of all obligations

7 of the United States held by the Trust

8 Funds on September 30, 1999,

9 ‘‘times—

10 ‘‘(B) a rate of interest determined by the

11 Secretary of the Treasury, at the beginning of

12 the fiscal year of determination, as follows:

13 ‘‘(i) if there are any marketable inter14 est-bearing obligations of the United

15 States then forming a part of the public

16 debt, a rate of interest determined by tak17 ing into consideration the average market

18 yield (computed on the basis of daily clos19 ing market bid quotations or prices during

20 the calendar month immediately preceding

21 the determination of the rate of interest)

22 or such obligations; and

23 ‘‘(ii) if there are no marketable inter24 est-bearing obligations of the United

25 States then forming a part of the public
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1 debt, a rate of interest determined to be

2 the best approximation of the rate of inter3 est described in clause (i), taking into con4 sideration the average market yield (com5 puted on the basis of daily closing market

6 bid quotations or prices during the cal7 endar month immediately preceding the de8 termination of the rate of interest) on in9 vestment grade corporate obligations se10 lected by the Secretary of the Treasury,

11 less an adjustment made by the Secretary

12 of the Treasury to take into account the

13 difference between the yields on corporate

14 obligations comparable to the obligations

15 selected by the Secretary of the Treasury

16 and yields on obligations of comparable

17 maturities issued by risk-free government

18 issuers selected by the Secretary of the

19 Treasury.’’.

20 SEC. 4. PROTECTION OF SOCIAL SECURITY SURPLUSES.

21 (a) POINTS OF ORDER TO PROTECT SOCIAL SECU22 RITY SURPLUSES.—Section 312 of the Congressional

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

24 following new subsection:
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1 ‘‘(g) POINTS OF ORDER TO PROTECT SOCIAL SECU2 RITY SURPLUSES.—

3 ‘‘(1) CONCURRENT RESOLUTIONS ON THE

4 BUDGET.—It shall not be in order in the House of

5 Representatives or the Senate to consider any con6 current resolution on the budget, or conference re7 port thereon or amendment thereto, that would set

8 forth an on-budget deficit for any fiscal year.

9 ‘‘(2) SUBSEQUENT LEGISLATION.—It shall not

10 be in order in the House of Representatives or the

11 Senate to consider any bill, joint resolution, amend12 ment, motion, or conference report if—

13 ‘‘(A) the enactment of that bill or resolu14 tion as reported;

15 ‘‘(B) the adoption and enactment of that

16 amendment; or

17 ‘‘(C) the enactment of that bill or resolu18 tion in the form recommended in that con19 ference report,

20 would cause or increase an on-budget deficit for any

21 fiscal year.

22 ‘‘(3) BUDGET RESOLUTION BASELINE.—(A)

23 For purposes of this section, ‘set forth an on-budget

24 deficit’, with respect to a budget resolution, means

25 the resolution sets forth an on-budget deficit for a
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1 fiscal year and the baseline budget projection of the

2 surplus or deficit for such fiscal year on which such

3 resolution is based projects an on-budget surplus,

4 on-budget balance, or an on-budget deficit that is

5 less than the deficit set forth in the resolution.

6 ‘‘(B) For purposes of this section ‘cause or in7 crease an on-budget deficit’ with respect to legisla8 tion means causes or increases an on-budget deficit

9 relative to the baseline budget projection.

10 ‘‘(C) For purposes of this section, the term

11 ‘baseline budget projection’ means the projection de12 scribed in section 257 of the Balanced Budget and

13 Emergency Deficit Control Act of 1985 of current

14 year levels of outlays, receipts, and the surplus or

15 deficit into the budget year and future years, except

16 that—

17 ‘‘(i) if outlays for programs subject to dis18 cretionary appropriations are subject to discre19 tionary statutory spending limits, such outlays

20 shall be projected at the level of any applicable

21 current adjusted statutory discretionary spend22 ing limits;

23 ‘‘(ii) if outlays for programs subject to dis24 cretionary appropriations are not subject to dis25 cretionary spending limits, such outlays shall be
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1 projected as required by section 257 beginning

2 in the first fiscal year following the last fiscal

3 year in which such limits applied; and

4 ‘‘(iii) with respect to direct spending or re5 ceipts legislation previously enacted during the

6 current calendar year and after the most recent

7 baseline estimate pursuant to section 257 of the

8 Balanced Budget and Emergency Deficit Con9 trol Act of 1995, the net extent (if any) by

10 which all such legislation is more than fully

11 paid for in one of the applicable time periods

12 shall count as a credit for that time period

13 against increases in direct spending or reduc14 tions in net revenue.’’.

15 (b) CONTENT OF CONCURRENT RESOLUTION ON THE

16 BUDGET.—Section 301(a) of the Congressional Budget

17 Act of 1974 is amended by redesignating paragraphs (6)

18 and (7) as paragraphs (7) and (8), respectively, and by

19 inserting after paragraph (5) the following new paragraph:

20 ‘‘(6) the receipts, outlays, and surplus or deficit

21 in the Federal Old-Age and Survivors Insurance

22 Trust Fund and the Federal Disability Insurance

23 Trust Fund, combined, established by title II of the

24 Social Security Act;’’.

25 (c) SUPER MAJORITY REQUIREMENT.—
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1 (1) Section 904(c)(1) of the Congressional

2 Budget Act of 1974 is amended by inserting

3 ‘‘312(g),’’ after ‘‘310(d)(2),’’.

4 (2) Section 904(d)(2) of the Congressional

5 Budget Act of 1974 is amended by inserting

6 ‘‘312(g),’’ after ‘‘310(d)(2),’’.

7 SEC. 5. PROTECTION OF MEDICARE.

8 (a) POINTS OF ORDER TO PROTECT MEDICARE.—

9 (1) Section 301 of the Congressional Budget

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

11 following:

12 ‘‘(j) POINT OF ORDER TO PROTECT MEDICARE.—

13 ‘‘(1) IN GENERAL.—It shall not be in order in

14 the House of Representatives or the Senate to con15 sider any concurrent resolution on the budget (or

16 amendment, motion, or conference report on the res17 olution) that would decrease the on-budget surplus

18 for the total of the period of fiscal years 2000

19 through 2009 below the level of the Medicare sur20 plus reserve for those fiscal years as calculated in

21 accordance with section 3(11).

22 ‘‘(2) INAPPLICABILITY.—This subsection shall

23 not apply to legislation that—

24 ‘‘(A) appropriates a portion of the Medi25 care reserve for new amounts for prescription
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1 drug benefits under the Medicare program as

2 part of or subsequent to legislation extending

3 the solvency of the Medicare Hospital Insurance

4 Trust Fund; or

5 ‘‘(B) appropriates new amounts from the

6 general fund to the Medicare Hospital Insur7 ance Trust Fund.’’.

8 (2) Section 311(a) of the Congressional Budget

9 Act of 1974 is amended by adding at the end the

10 following:

11 ‘‘(4) ENFORCEMENT OF THE MEDICARE SUR12 PLUS RESERVE.—

13 ‘‘(A) IN GENERAL.—It shall not be in

14 order in the House of Representatives or the

15 Senate to consider any bill, joint resolution,

16 amendment, motion, or conference report that

17 together with associated interest costs would

18 decrease the on-budget surplus for the total of

19 the period of fiscal years 2000 through 2009

20 below the level of the Medicare surplus reserve

21 for those fiscal years as calculated in accord22 ance with section 3(11).’’.

23 ‘‘(B) INAPPLICABILITY.—This paragraph

24 shall not apply to legislation that—
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1 ‘‘(i) appropriates a portion of the

2 Medicare reserve for new amounts for pre3 scription drug benefits under the Medicare

4 program as part of or subsequent to legis5 lation extending the solvency of the Medi6 care Hospital Insurance Trust Fund; or

7 ‘‘(ii) appropriates new amounts from

8 the general fund to the Medicare Hospital

9 Insurance Trust Fund.

10 (b) DEFINITION.—Section 3 of the Congressional

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

12 following:

13 ‘‘(11) The term ‘Medicare surplus reserve’

14 means one-third of any on-budget surplus for the

15 total of the period of the fiscal years 2000 through

16 2009, as estimated by the Congressional Budget Of17 fice in the most recent initial report for a fiscal year

18 pursuant to section 202(e).’’.

19 (c) SUPER MAJORITY REQUIREMENT.—

20 (1) Section 904(c)(2) of the Congressional

21 Budget Act of 1974 is amended by inserting

22 ‘‘301(j),’’ after ‘‘301(i),’’.

23 (2) Section 904(d)(3) of the Congressional

24 Budget Act of 1974 is amended by inserting

25 ‘‘301(j),’’ after ‘‘301(i),’’.
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1 SEC. 6. EXTENSION OF DISCRETIONARY SPENDING LIMITS.

2 (a) EXTENSION OF LIMITS—Section 251(b)(2) of the

3 Balanced Budget and Emergency Deficit Control Act of

4 1985 is amended, in the matter before paragraph (A), by

5 deleting ‘‘2002’’, and inserting ‘‘2014’’.

6 (b) EXTENSION OF AMOUNTS.—Section 251(c) of the

7 Balanced Budget and Emergency Deficit Control Act of

8 1985 is amended by striking paragraphs (4), (5), (6) and

9 (7), and inserting the following:

10 ‘‘(4) With respect to fiscal year 2000,

11 ‘‘(A) for the discretionary category:

12 $535,368,000,000 in new budget authority and

13 $543,257,000,000 in outlays;

14 ‘‘(B) for the highway category:

15 $24,574,000,000 in outlays;

16 ‘‘(C) for the mass transit category:

17 $4,117,000,000 in outlays; and

18 ‘‘(D) for the violent crime reduction cat19 egory: $4,500,000,000 in new budget authority

20 and $5,564,000,000 in outlays;

21 ‘‘(5) With respect to fiscal year 2001,

22 ‘‘(A) for the discretionary category:

23 $573,004,000,000 in new budget authority and

24 $564,931,000,000 in outlays;

25 ‘‘(B) for the highway category:

26 $26,234,000,000 in outlays; and
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1 ‘‘(C) for the mass transit category:

2 $4,888,000,000 in outlays;

3 ‘‘(6) With respect to fiscal year 2002,

4 ‘‘(A) for the discretionary category:

5 $584,754,000,000 in new budget authority and

6 $582,516,000,000 in outlays;

7 ‘‘(B) for the highway category:

8 $26,655,000,000 in outlays; and

9 ‘‘(C) for the mass transit category:

10 $5,384,000,000 in outlays;

11 ‘‘(7) With respect to fiscal year 2003,

12 ‘‘(A) for the discretionary category:

13 $590,800,000,000 in new budget authority and

14 $587,642,000,000 in outlays;

15 ‘‘(B) for the highway category:

16 $27,041,000,000 in outlays; and

17 ‘‘(C) for the mass transit category:

18 $6,124,000,000 in outlays;

19 ‘‘(8) With respect to fiscal year 2004, for the

20 discretionary category: $604,319,000,000 in new

21 budget authority and $634,039,000,000 in outlays;

22 ‘‘(9) With respect to fiscal year 2005, for the

23 discretionary category: $616,496,000,000 in new

24 budget authority and $653,530,000,000 in outlays;
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1 ‘‘(10) With respect to fiscal year 2006, for the

2 discretionary category: $630,722,000,000 in new

3 budget authority and $671,530,000,000 in outlays;

4 ‘‘(11) With respect to fiscal year 2007, for the

5 discretionary category: $644,525,000,000 in new

6 budget authority and $687,532,000,000 in outlays;

7 ‘‘(12) With respect to fiscal year 2008, for the

8 discretionary category: $663,611,000,000 in new

9 budget authority and $704,534,000,000 in outlays;

10 and

11 ‘‘(13) With respect to fiscal year 2009, for the

12 discretionary category: $678,019,000,000 in new

13 budget authority and $721,215,000,000 in outlays,

14 ‘‘as adjusted in strict conformance with subsection

15 (b).

16 ‘‘With respect to fiscal year 2010 and each fiscal year

17 thereafter, the term ‘discretionary spending limit’ means,

18 for the discretionary category, the baseline amount cal19 culated pursuant to the requirements of section 257(c),

20 as adjusted in strict conformance with subsection (b).’’.

21 SEC. 7. EXTENSION AND CLARIFICATION OF PAY-AS-YOU22 GO REQUIREMENT.

23 Section 252 of the Balanced Budget and Emergency

24 Deficit Control Act of 1985 is amended—
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1 (1) in subsection (a), by striking ‘‘October 1,

2 2002’’ and inserting ‘‘October 1, 2014’’ and by add3 ing ‘‘or decreases the surplus’’ after ‘‘increases the

4 deficit’’;

5 (2)(A) in paragraph (1) of subsection (b), by

6 striking ‘‘October 1, 2002’’ and inserting ‘‘October

7 1, 2014’’ and by adding ‘‘or any net surplus de8 crease’’ after ‘‘any net deficit increase’’;

9 (B) in paragraph (2) of subsection (b)—

10 (i) in the header by adding ‘‘or surplus de11 crease’’ after ‘‘deficit increase’’;

12 (ii) in the matter before subparagraph (A),

13 by adding ‘‘or surplus’’ after ‘‘deficit’’; and

14 (iii) in subparagraph (C), by adding ‘‘or

15 surplus’’ after ‘‘net deficit’’; and

16 (C) in the header of subsection (c), by adding

17 ‘‘or surplus decrease’’ after ‘‘deficit increase’’.

18 SEC. 8. EXTENSION OF BALANCED BUDGET AND EMER19 GENCY DEFICIT CONTROL ACT.

20 Section 275(b) of the Balanced Budget and Emer21 gency Deficit Control Act of 1985 is amended by striking

22 ‘‘September 30, 2002’’ and inserting ‘‘September 30,

23 2014’’ and by striking ‘‘September 30, 2006’’ and insert24 ing ‘‘September 30, 2018’’.
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1 SEC. 9. EXTENSION OF SOCIAL SECURITY FIREWALL IN

2 CONGRESSIONAL BUDGET ACT.

3 Section 904(e) of the Congressional Budget Act of

4 1974 is amended by striking ‘‘September 30, 2002’’ and

5 inserting ‘‘September 30, 2014’’.

6 SEC. 10. PROTECTION OF SOCIAL SECURITY INTEREST SAV7 INGS TRANSFERS.

8 (a) DEFINITION OF DEFICIT AND SURPLUS UNDER

9 BUDGET ENFORCEMENT ACT.—Section 250(c) of the Bal10 anced Budget and Emergency Deficit Control Act of 1985

11 is amended in paragraph (1) by adding ‘‘ ‘surplus’,’’ before

12 ‘‘and ‘deficit’ ’’.

13 (b) REDUCTION OR REVERSAL OF SOCIAL SECURITY

14 TRANSFERS NOT TO BE COUNTED AS PAY-AS-YOU-GO

15 OFFSET.—Any legislation that would reduce, reverse or

16 repeal the transfers to the Federal Old-Age and Survivors

17 Insurance Trust Fund and the Federal Disability Insur18 ance Trust Fund made by section 201(n) of the Social

19 Security Act, as added by section 3 of this Act, shall not

20 be counted on the pay-as-you-go scorecard and shall not

21 be included in any pay-as-you-go estimates made by the

22 Congressional Budget Office or the Office of Management

23 and Budget under section 252 of the Balanced Budget

24 and Emergency Deficit Control Act of 1985.
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1 (c) CONFORMING CHANGE.—Section 252 of the Bal2 anced Budget and Emergency Deficit Control Act of 1985

3 is amended, in paragraph (4) of subsection (d), by—

4 (1) striking ‘‘and’’ after subparagraph (A),

5 (2) striking the period after the subparagraph

6 (B) and inserting ‘‘; and’’, and

7 (3) adding the following:

8 ‘‘(C) provisions that reduce, reverse or re9 peal transfers under Section 201(n) of the So10 cial Security Act.’’.

11 SEC. 11. CONFORMING CHANGES.

12 (a) REPORTS.—Section 254 of the Balanced Budget

13 and Emergency Deficit Control Act of 1985 is amended—

14 (1) in paragraph (3) of subsection (c),

15 (A) in subparagraph (A), by adding ‘‘or

16 surplus’’ after ‘‘deficit’’;

17 (B) in subparagraph (B), by adding ‘‘or

18 surplus’’ after ‘‘deficit’’; and

19 (C) in subparagraph (C), by adding ‘‘or

20 surplus decrease’’ after ‘‘deficit increase’’;

21 (2) in paragraph (4) of subsection (f), by add22 ing ‘‘or surplus’’ after ‘‘deficit’’; and

23 (3) in subparagraph (A) of paragraph (2) of

24 subsection (f), by striking ‘‘2002’’ and inserting

25 ‘‘2009’’.
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1 (b) ORDERS.—Section 258A(a) of the Balanced

2 Budget and Emergency Deficit Control Act of 1985 is

3 amended in the first sentence by adding ‘‘or increase the

4 surplus’’ after ‘‘deficit’’.

5 (c) PROCESS.—Section 258(C)(a) of the Balanced

6 Budget and Emergency Deficit Control Act of 1985 is

7 amended—

8 (1) in paragraph (2), by adding ‘‘or surplus in9 crease’’ after ‘‘deficit reduction’’;

10 (2) in paragraph (3), by adding ‘‘or increase in

11 the surplus’’ after ‘‘reduction in the deficit’’; and

12 (3) in paragraph (4), by adding ‘‘or surplus in13 crease’’ after ‘‘deficit reduction’’.

Æ