I

105TH CONGRESS

1ST SESSION H. R. 898

To achieve a balanced Federal budget by fiscal year 2002 and each year

thereafter, achieve significant deficit reduction in fiscal year 1998 and

each year through 2002, establish a Board of Estimates, require the

President’s budget and the congressional budget process to meet specified

deficit reduction and balance requirements, enforce those requirements

through a multiyear congressional budget process and, if necessary, sequestration, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 27, 1997

Mr. VISCLOSKY (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 Ways and Means and Rules, 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 achieve a balanced Federal budget by fiscal year 2002

and each year thereafter, achieve significant deficit reduction in fiscal year 1998 and each year through 2002,

establish a Board of Estimates, require the President’s

budget and the congressional budget process to meet

specified deficit reduction and balance requirements, enforce those requirements through a multiyear congressional budget process and, if necessary, sequestration,

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

3 TITLE I—BALANCING THE

4 BUDGET

5 PART A—PURPOSE

6 SECTION 1. SHORT TITLES; REPEALERS.

7 (a) SHORT TITLE OF THIS ACT.—This Act may be

8 cited as the ‘‘Balanced Budget Enforcement Act of 1997’’.

9 (b) SHORT TITLE OF PART B.—Part B of this Act

10 may be cited as the ‘‘Deficit Elimination Act of 1997’’.

11 (c) REPEALER.—Parts C, D, and E of the Balanced

12 Budget and Emergency Deficit Control Act of 1985 are

13 repealed.

14 SEC. 2. PURPOSE.

15 The purpose of this Act is—

16 (1) to mandate and achieve enough deficit re17 duction in each year through fiscal year 2002 to

18 eliminate the deficit by that year;

19 (2) from fiscal year 2003 onward, to mandate

20 whatever deficit reduction may be needed to elimi21 nate any deficit that may be projected;

22 (3) to achieve a portion of the mandated deficit

23 reduction by limiting the total level of discretionary

24 funding and the remainder by requiring a fixed
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1 amount of deficit reduction from some combination

2 of entitlement and receipts changes;

3 (4) to establish a Board of Estimates to arbi4 trate between OMB and CBO;

5 (5) to require the figures in the President’s

6 budget and the budget resolution to meet the provi7 sions of this Act;

8 (6) to enforce each year’s discretionary funding

9 limits and entitlement/receipts requirements through

10 the Congressional Budget Act, including multiyear

11 allocations and reconciliation directives;

12 (7) to supplement Congressional Budget Act

13 enforcement with across-the-board cuts or sequestra14 tion whenever the discretionary funding limits or en15 titlement/receipts requirements of this Act are not

16 met;

17 (8) to provide a targeted sequestration that en18 forces the committee targets for entitlement reduc19 tions and receipts increases set forth in budget reso20 lutions;

21 (9) to create a backup comprehensive sequestra22 tion applicable in any fiscal year in which the com23 mittee targets in a budget resolution are not en24 forceable; and
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1 (10) to provide that reconciliation savings and

2 sequestration savings shall be permanent.

3 SEC. 3. TABLE OF CONTENTS.

TITLE I—BALANCING THE BUDGET

PART A—PURPOSE

Sec. 1. Short titles; repealers.

Sec. 2. Purpose.

Sec. 3. Table of contents.

Sec. 4. Effective dates.

PART B—THE DEFICIT ELIMINATION ACT OF 1997

Sec. 100. Definitions and treatments.

Sec. 101. Direct spending and receipts: deficit reduction requirements.

Sec. 102. Discretionary funding limits.

Sec. 103. Balancing the budget in 2002.

Sec. 104. Preventing deficits after 2002.

Sec. 105. Spin-off law.

Sec. 106. Direct spending and receipts scorecard.

Sec. 107. Discretionary scorecard.

Sec. 108. Targeted sequestration.

Sec. 109. Comprehensive sequestration.

Sec. 110. Across-the-board reduction of discretionary programs.

Sec. 111. Exempt programs and activities.

Sec. 112. General and special sequestration rules.

Sec. 113. Sequestration through tax changes.

Sec. 114. Estimating assumptions, reports, and orders.

Sec. 115. The current policy baseline.

Sec. 116. Baseline assuming deficit reduction.

Sec. 117. Stabilization Reserve Fund.

Sec. 118. Modifications if war or low growth.

Sec. 119. Board of estimates.

Sec. 120. Judicial review.

TITLE II—TECHNICAL AND CONFORMING AMENDMENTS

Sec. 201. Amendments to the Congressional Budget and Impoundment Control

Act of 1974.

Sec. 202. Amendments to the Federal Credit Reform Act of 1990.

Sec. 203. Amendments to the Rules of the House of Representatives.

Sec. 204. Amendments to the Standing Rules of the Senate.

Sec. 205. President’s budget and supplemental budget estimates.

Sec. 206. Amendments to other laws.

4 SEC. 4. EFFECTIVE DATES.

5 Except as otherwise specified, this Act and the

6 amendments made by it shall take effect on its date of
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1 enactment and shall apply to fiscal year 1998 and subse2 quent fiscal years.

3 PART B—THE DEFICIT ELIMINATION ACT OF 1997

4 SEC. 100. DEFINITIONS AND TREATMENTS.

5 As used in this part:

6 (1) The terms ‘‘budget authority’’, ‘‘new budget

7 authority’’, ‘‘entitlement authority’’, ‘‘outlays’’, and

8 ‘‘deficit’’ have the meanings given to such terms in

9 section 3 of the Congressional Budget and Impound10 ment Control Act of 1974, and the term ‘‘receipts’’

11 shall be treated as a synonym for the term ‘‘reve12 nues’’ as it is used in that Act.

13 (2) The term ‘‘account’’ means an item for

14 which appropriations are made in any appropriation

15 Act and, for items not provided for in appropriation

16 Acts, such term means an item for which there is a

17 designated budget account identification code num18 ber in the President’s budget.

19 (3) The term ‘‘aggregate first-year spendout

20 rate’’ means the percent of new budget authority

21 that is expended in the fiscal year for which the

22 budget authority is provided.

23 (4) The term ‘‘Board of Estimates’’ or ‘‘Board’’

24 refers to the entity established by section 119.
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1 (5) The term ‘‘budget year’’ means, with re2 spect to a session of Congress, the fiscal year of the

3 Government that starts on October 1 of the calendar

4 year in which that session begins.

5 (6) The term ‘‘budget-year session’’ means any

6 session of Congress that starts in the calendar year

7 in which that budget year starts.

8 (7) The term ‘‘category’’ refers to all direct

9 spending within the jurisdiction of a standing com10 mittee of the House of Representatives as so des11 ignated in the joint statement of managers accom12 panying the conference report on this Act, as modi13 fied from time to time by the Board of Estimates

14 upon the written recommendation of the Speaker of

15 the House of Representatives.

16 (8) The term ‘‘CBO’’ means the Director of the

17 Congressional Budget Office.

18 (9) The term ‘‘current policy baseline’’ means

19 the projection (described in section 115) of current20 year levels of new budget authority, outlays, receipts,

21 and the surplus or deficit into the budget year and

22 the outyears.

23 (10) The term ‘‘current year’’ means the fiscal

24 year that immediately precedes a budget year.
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1 (11) The term ‘‘deposit insurance’’ refers to the

2 expenses of the Federal Deposit Insurance Corpora3 tion and the funds it incorporates, the Resolution

4 Trust Corporation, the National Credit Union Ad5 ministration and the funds it incorporates, the Of6 fice of Thrift Supervision; the Comptroller of the

7 Currency Assessment Funds, and the RTC Office of

8 the Inspector General.

9 (12) The term ‘‘direct spending’’ means—

10 (A) budget authority provided by law other

11 than appropriation Acts;

12 (B) entitlement authority; and

13 (C) the food stamp program.

14 If a law other than an appropriation Act alters the

15 level of discretionary appropriations, that effect shall

16 be treated as direct spending. Budget authority pro17 vided from a transportation trust fund in any Act

18 shall not be considered to be provided by a law other

19 than an appropriation Act.

20 (13) The term ‘‘discretionary appropriations’’

21 means new budget authority (except to fund entitle22 ment authority) provided by appropriation Acts and

23 the term ‘‘discretionary programs’’ refers to pro24 grams so financed. New budget authority provided

25 from transportation trust funds by any Act shall be
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1 considered to be provided by an appropriation Act.

2 If an appropriation Act alters the level of direct

3 spending, that effect shall be treated as a discre4 tionary appropriation.

5 (14) The term ‘‘discretionary funding limit’’

6 means the total amount of discretionary new budget

7 authority that, under section 102 or 104, may be en8 acted in any fiscal year.

9 (15) The term ‘‘discretionary regulations’’ re10 fers to regulations issued by the executive branch for

11 which Congress delegates the authority to vary

12 amounts, levels, rates, effective dates, or other fac13 tors.

14 (16) The term ‘‘major estimating assumptions’’

15 refers to the list of items set forth under that head16 ing in the joint explanatory statement of managers

17 accompanying the conference report on this Act as

18 modified by the Board under section 119.

19 (17) The term ‘‘OMB’’ means the Director of

20 the Office of Management and Budget.

21 (18) The term ‘‘outyear’’ means any of the 4

22 fiscal years that follow a budget year.

23 (19) The term ‘‘real economic growth’’ means

24 the growth in the gross domestic product, adjusted
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1 for inflation, consistent with Department of Com2 merce definitions.

3 (20) The terms ‘‘sequester’’ and ‘‘sequestra4 tion’’ refer to or mean the cancellation under section

5 110 of budget authority provided by discretionary

6 appropriations, the cancellation under section 108 or

7 109 of direct spending authority, or the change in

8 taxes under section 113.

9 (21) The term ‘‘sequestrable budget authority’’

10 means, for non-exempt accounts or activities within

11 major functional category 050 (national defense), all

12 budget authority, and for all other non-exempt ac13 counts or activities, new budget authority.

14 (22) The term ‘‘Stabilization Reserve Fund’’ re15 fers to the deposit fund established by section 117.

16 (23)(A) The following shall be treated as posi17 tive numbers:

18 (i) A deficit.

19 (ii) A deficit increase or surplus decrease.

20 (iii) A deficit or surplus change and a defi21 cit or surplus change target when the deficit is

22 increased by, or the surplus is reduced by, the

23 change.

24 (iv) A deficit reduction shortfall.

25 (v) An amount to be sequestered.
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1 (B) The following shall be treated as negative

2 numbers:

3 (i) A surplus.

4 (ii) A deficit reduction or surplus increase.

5 (iii) A deficit or surplus change and a defi6 cit or surplus change target when the deficit is

7 reduced by, or the surplus is increased by, the

8 change.

9 SEC. 101. DIRECT SPENDING AND RECEIPTS: DEFICIT RE10 DUCTION REQUIREMENTS.

11 The deficit reduction targets for direct spending and

12 receipts legislation are as follows:

Fiscal Year Deficit Reduction (in billions of dollars)

1998 .......................................... -19.903

1999 .......................................... -40.491

2000 .......................................... -55.685

2001 .......................................... -69.731

2002 .......................................... -85.227

13 The deficit reduction target for fiscal year 2002 shall be

14 adjusted, if necessary, as provided by section 103.

15 SEC. 102. DISCRETIONARY FUNDING LIMITS.

16 (a) INITIAL AMOUNTS.—Subject to modifications

17 under subsection (b), discretionary funding limits, meas18 ured in terms of new budget authority, are as follows:

Fiscal Year Limits (in billions of dollars)

1998 .............................................................. 540.0

1999 .............................................................. 545.4

2000 .............................................................. 540.854

2001 .............................................................. 556.363
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Fiscal Year Limits (in billions of dollars)

2002 .............................................................. 561.926

1 (b) ADJUSTMENTS TO FUNDING LIMITS.—Whenever

2 appropriate, adjustments to the discretionary funding lim3 its (and to those limits as cumulatively adjusted) for one

4 or more fiscal years shall be made to reflect the following:

5 (1) CHANGES IN CONCEPTS.—For any fiscal

6 year, the adjustments produced by any change in

7 budget accounting concepts (including scorekeeping

8 conventions, budget classifications, and definitions)

9 shall equal the current-year levels of new budget au10 thority using up-to-date concepts minus those levels

11 using the concepts in effect before the change. Such

12 changes in concepts may only be made in consulta13 tion with the Committees on Appropriations and the

14 Budget of the House of Representatives and Senate,

15 CBO, and OMB. A change in budget classifications

16 includes any change from the assumption that all

17 amounts provided in appropriation Acts are classi18 fied as discretionary except those included under the

19 heading ‘‘Mandatory Appropriations’’ in the joint ex20 planatory statement of managers accompanying the

21 conference report on this Act.
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1 (2) CHANGES IN INFLATION.—(A) For the

2 budget year and each outyear through 2002, the ad3 justments produced by changes in inflation shall

4 equal the discretionary funding limit for each such

5 year multiplied by the inflation adjustment factor

6 (for the fiscal year immediately preceding the cur7 rent year) computed under subparagraph (B).

8 (B) The inflation adjustment factor shall be

9 calculated by subtracting 1 from the ratio of (i) the

10 level of year-over-year inflation measured for the fis11 cal year immediately preceding the current year, and

12 (ii) the applicable estimated level for that year set

13 forth below:

14 For 1997, 1.029

15 For 1998, 1.029

16 For 1999, 1.030

17 For 2000, 1.030

18 For 2001, 1.030

19 For 2002, 1.030

20 Inflation shall be measured by the average of the es21 timated consumer price index for all urban consum22 ers for a fiscal year divided by the average index for

23 the prior fiscal year.

24 (3) EXPIRING HOUSING CONTRACTS.—For each

25 budget year through 2002, the adjustment shall be
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1 the amount of new budget authority needed to renew

2 expiring multiyear subsidized housing contracts or

3 provide contracts to replace units lost due to prepay4 ments, with the per-contract renewal/replacement

5 cost equal to the average current-year cost of re6 newal or replacement contracts.

7 (4) EMERGENCIES.—If for any fiscal year ap8 propriations for discretionary accounts are enacted

9 that are designated as emergency requirements by

10 statute, the adjustment shall be the amount of those

11 appropriations that the President also designates, in

12 writing, as emergency requirements within 5 days of

13 the enactment of those appropriations. If any

14 amount previously designated as an emergency re15 quirement is rescinded, the adjustment shall be the

16 amount of that rescission.

17 (5) NEW LIMITS FOR 2002 AND THEREAFTER.—

18 The adjustment for fiscal year 2002 shall be the ad19 justment (if any) under section 103, and the limit

20 for any succeeding fiscal year shall be the limit es21 tablished under section 104.

22 (6) TRANSPORTATION TRUST FUNDS.—For any

23 fiscal year, the adjustment produced by the enact24 ment of any law that raises excise taxes dedicated to

25 a transportation trust fund shall be the amount of
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1 the net receipts produced by that tax increase which

2 that law specifically appropriates for that purpose.

3 SEC. 103. BALANCING THE BUDGET IN 2002.

4 If at the start of the 2002 budget-year session the

5 baseline assuming deficit reduction (set forth in section

6 116) projects a deficit (or surplus) for that year, then the

7 direct spending and receipts deficit reduction requirement

8 for that year under section 101 and the discretionary

9 funding limit for that year under section 102 shall each

10 be changed by amounts that, when debt service effects are

11 added, will produce a balanced budget. These changes

12 shall be accomplished by the enactment of a spin-off law

13 described in section 105; or if no spin-off law is enacted,

14 then the direct spending and receipts deficit reduction re15 quirement for fiscal year 2002 under section 101 shall be

16 adjusted by two-thirds of the total required change (ex17 cluding debt service effects) and the discretionary funding

18 limit for fiscal year 2002 under section 102 shall be ad19 justed to produce an outlay change equal to one-third of

20 the total required change (excluding debt service effects).

21 Any adjustment in the discretionary funding limit (wheth22 er in a spin-off law or by application of the above formula)

23 shall be assumed to produce an outlay change equal to

24 the change in new budget authority times the aggregate
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1 first-year spendout rate for fiscal year 2002 chosen by the

2 Board of Estimates.

3 SEC. 104. PREVENTING DEFICITS AFTER 2002.

4 Starting with the 2003 budget-year session, the re5 quired change in the level of direct spending and receipts

6 (relative to the current policy baseline described in section

7 115) for the budget year and a discretionary funding limit

8 for that year shall be established. That change in direct

9 spending and receipts and that discretionary funding limit

10 (plus the associated effect on debt service) shall produce

11 a balanced budget. That change and that limit shall be

12 specified in a spin-off law described in section 105; or if

13 no spin-off law is enacted, then the change in direct spend14 ing and receipts for the budget year shall be two-thirds

15 of the baseline level of deficit or surplus (excluding debt

16 service effects) and the discretionary funding limit for the

17 budget year shall be the baseline level of discretionary new

18 budget authority adjusted to produce an outlay change

19 equal to one-third of the baseline level of deficit or surplus

20 (excluding debt service changes). Any adjustment in the

21 discretionary funding limit relative to the baseline level of

22 discretionary new budget authority (whether in a spin-off

23 law or by application of the above formula) shall be as24 sumed to produce an outlay change equal to the change

25 in new budget authority times the aggregate first-year
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1 spendout rate for budget year chosen by the Board of

2 Estimates.

3 SEC. 105. SPIN-OFF LAW.

4 (a) Through the use of the procedures described in

5 section 301(b)(5) or 310(c) of the Congressional Budget

6 Act of 1974 or by other means, a law to carry out section

7 103 or 104 may be enacted. If required by section 103

8 or 104, that law shall specify a discretionary funding limit

9 for the budget year. That law shall specify the budget10 year amount of direct spending change required of or al11 lowed by each committee of the House of Representatives

12 in laws within that committee’s jurisdiction and the

13 budget-year amount of receipts change required of or al14 lowed by the Committee on Ways and Means of the House

15 of Representatives in laws within that committee’s juris16 diction. A law shall not be considered a spin-off law under

17 this section unless—

18 (1) for each of fiscal years 1998 through 2001,

19 the total of those amounts for the budget year

20 equals the amount specified in section 101 less the

21 amount of deficit reduction achieved for that year

22 measured under section 106; or

23 (2) for fiscal year 2002 and each year there24 after, the targets set by the spin-off bill for the

25 budget year will produce a balanced budget in that
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1 year under the estimates and assumptions chosen by

2 the Board of Estimates for that year.

3 SEC. 106. DIRECT SPENDING AND RECEIPTS SCORECARD.

4 (a) ESTABLISHMENT OF SCORECARD: 1998–2002.—

5 There shall be a scorecard for each fiscal year through

6 2002 upon which shall be entered the estimated increase

7 or decrease in the deficit (relative to the start-of-session

8 current policy baseline described in section 115) for the

9 current year, the budget year, and each fiscal year through

10 2002 due to—

11 (1) the enactment, after August 15, 1997, of

12 any law,

13 (2) the imposition of any sequestration under

14 section 108 or 109, or

15 (3) the change in the baseline from the applica16 tion of section 115(b)(3), which relates to certain ex17 piring provisions of law and to veterans’ compensa18 tion,

19 affecting the level of direct spending or the level of re20 ceipts. Entries under the preceding sentence shall not in21 clude resulting debt service changes or any incidental

22 changes in intragovernmental receipts of Federal trust

23 funds. Amounts shall be entered on the scorecard within
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1 10 days after the enactment of each such law or the impo2 sition of any sequestration, and may not thereafter be al3 tered except to reflect decisions made by the Board of Es4 timates or to correct clerical errors or errors in the appli5 cation of this Act.

6 (b) ESTABLISHMENT OF SCORECARD: 2003 AND

7 THEREAFTER.—There shall be a scorecard, created anew

8 for each budget year starting with 2003, upon which shall

9 be entered the estimated increase or decrease in the deficit

10 or surplus (relative to the start-of-session current policy

11 baseline described in section 115) for the budget year, in

12 any amount that would have been entered if subsection

13 (a) applied to budget years after 2002.

14 (c) DEFICIT REDUCTION REQUIREMENTS.—For each

15 fiscal year, the scorecard shall also include, as applicable,

16 the amount of the direct spending and receipts deficit re17 duction target for that year under section 101 or the

18 amount (if any) of the direct spending and receipts deficit

19 change target under section 104. Each such deficit reduc20 tion amount shall be entered as though it were a deficit

21 increase, so that an equal amount of deficit reduction will

22 have to be achieved to forestall a sequestration, and each

23 such surplus decrease amount (if any) shall be entered as

24 though it were a surplus increase, so that the amount of

25 later surplus decreases will be limited.
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1 (d) LOOKBACK.—If in any budget-year session a law

2 is enacted affecting the current-year level of direct spend3 ing or receipts, the amount of that current-year effect

4 shall be entered on the scorecard under the column for

5 the budget year. To mandate year-after savings of

6 amounts that would have been saved but for the lower se7 questration rule in that section, entries shall also be made

8 as specified in paragraphs (2) and (3) of section 114(j).

9 (e) DIVISION BETWEEN DIRECT SPENDING AND RE10 CEIPTS.—The scorecard shall be divided between changes

11 in the deficit resulting from direct spending changes and

12 changes in the deficit resulting from changes in receipts.

13 Solely for purposes of this section, any change in the defi14 cit resulting from an alteration of the Federal tax treat15 ment of a direct spending benefit shall be treated as a

16 change in direct spending.

17 (f) EMERGENCIES.—If after the enactment of this

18 Act a provision of direct spending or receipts legislation

19 is enacted that is designated as an emergency requirement

20 by statute and that the President also designates, in writ21 ing, as an emergency requirement within 5 days of the

22 enactment of that legislation, then no entries resulting

23 from that provision shall be made on the scorecard.
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1 (g) TREATMENT OF CERTAIN DEDICATED EXCISE

2 TAXES.—For each fiscal year, the scorecard shall also in3 clude only that part of the net increase in receipts result4 ing from an increase in an excise tax dedicated to a trans5 portation trust fund that—

6 (1) was not specifically appropriated (as pro7 vided in section 102(b)(6)); or

8 (2) to the extent specifically appropriated (as

9 provided in section 102(b)(6)), is not estimated to be

10 expended in that fiscal year.

11 SEC. 107. DISCRETIONARY SCORECARD.

12 (a) ESTABLISHMENT OF SCORECARD.—There shall

13 be a scorecard for each fiscal year starting with 1998 upon

14 which shall be entered the amount of discretionary appro15 priations for that fiscal year due to—

16 (1) the enactment of any law in the budget-year

17 session,

18 (2) the enactment of any law in any previous

19 session of Congress, or

20 (3) the imposition of any sequestration under

21 section 110.

22 Amounts shall be entered on the scorecard within 10 days

23 after the enactment of each such law or the imposition

24 of any sequestration, and may not thereafter be altered

25 except to reflect decisions made by the Board of Estimates
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1 or to correct clerical errors or errors in the application

2 of this Act.

3 (b) LOOKBACK.—(1) If in any current-year session

4 any discretionary appropriation is enacted that would

5 cause the discretionary funding limit for the current year

6 to be exceeded, then the amount of that excess shall be

7 entered on the scorecard under the column for the budget

8 year. To mandate year-after savings of amounts that

9 would have been saved but for the lower sequestration rule

10 in that section, entries shall also be made as specified in

11 paragraphs (2) and (3) of section 114(j).

12 (2) If any discretionary appropriation is enacted after

13 June 30, 1997, and before October 1, 1997, that would

14 have caused a look-back sequester under section 251(a)(5)

15 of the Balanced Budget and Emergency Deficit Control

16 Act of 1985 as in effect immediately before the date of

17 enactment of this Act, then the amount that would have

18 been sequestered shall be entered on the scorecard as a

19 cost under the column for the budget year.

20 SEC. 108. TARGETED SEQUESTRATION.

21 (a) APPLICATION.—This section shall apply for any

22 budget year only if a spin-off law as described in section

23 105 is in effect for that year on the date of the final se24 questration report described in section 114.
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1 (b) SEQUESTRATION IN EACH CATEGORY BASED ON

2 BUDGET-YEAR SHORTFALL.—(1) The purpose of this

3 subsection is to ensure that the changes achieved during

4 a session in direct spending for each category and in re5 ceipts are at least as great as those required, or are no

6 more than those allowed, for the budget year.

7 (2) The amount to be sequestered for the budget year

8 from direct spending programs in each category is the

9 amount by which changes in direct spending achieved dur10 ing the budget-year session are estimated under section

11 106 to result in a greater amount of direct spending than

12 allowed in that category in the spin-off law.

13 (3) The amount that receipts are to be increased for

14 the budget year by the imposition of surtaxes is the

15 amount by which changes in receipts achieved during that

16 budget-year session are estimated under section 106 to re17 sult in lower total receipts for that year than allowed in

18 the spin-off law.

19 (c) SEQUESTRATION IN EACH CATEGORY BASED ON

20 OUTYEAR SHORTFALL.—(1) The purpose of this sub21 section is to ensure that the outyear changes in direct

22 spending for each category and the outyear changes in re23 ceipts achieved during a session are, on average, at least

24 as great as those required, or are no more than those al25 lowed, for the budget year.
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1 (2) The amount to be sequestered for the budget year

2 in any category under subsection (b)(2), if any, shall be

3 increased whenever the average outyear change in direct

4 spending in that category achieved during that budget5 year session estimated under section 106 or paragraph (4)

6 would produce higher deficits during the outyears than if

7 that average change had equaled the budget-year target

8 for changes in direct spending in that category. That in9 creased amount to be sequestered (if applicable) shall be—

10 (A) one-quarter of the sum of those changes in

11 direct spending for the 4 outyears; minus

12 (B) the budget-year target for changes in direct

13 spending.

14 (3) The amount that receipts are to be increased for

15 the budget year under subsection (b)(3), if any, shall be

16 increased whenever the average outyear change in receipts

17 achieved during that budget-year session estimated under

18 section 106 or paragraph (4) would produce higher deficits

19 during the outyears than if that average change had

20 equaled the budget-year target for changes in receipts.

21 That additional amount that receipts are to be increased

22 (if applicable) shall be—

23 (A) one-quarter of the sum of those changes in

24 receipts for the four outyears achieved; minus
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1 (B) the budget-year target for changes in re2 ceipts.

3 (4) For any outyear after 2002, CBO and OMB shall

4 make cost estimates within 10 days after the enactment

5 of any direct spending or receipts legislation of the outyear

6 effects of that legislation that would have gone on the di7 rect spending and receipts scorecard under section 106(a)

8 if the scorecard had covered that outyear.

9 (d) FINGERPRINT RULE.—For purposes of this sec10 tion, the category to which a change in direct spending

11 is attributed shall be the category of the committee that

12 authored the change or reported the legislation to which

13 the change was offered as an amendment. If it is impos14 sible to tell which committee authored a change, the cat15 egory to which such a change is attributed shall be the

16 category of the committee with jurisdiction over the pro17 gram that was changed, as defined under section 100(9).

18 (e) SEQUESTRATION.—Within 15 days after Con19 gress adjourns to end a session and on the same day as

20 a sequestration, if any, under section 110, there shall be

21 a sequestration—

22 (1) to reduce the amount of direct spending in

23 the current policy baseline in any category by the

24 sum of the amounts specified in subsections (b)(2)
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1 and (c)(2) unless that sum is less than $50,000,000;

2 and

3 (2) to increase the amount of receipts in the

4 current policy baseline by the sum of the amounts

5 specified in subsections (b)(3) and (c)(3) unless that

6 sum is less than $250,000,000.

7 The amount required to be sequestered from direct spend8 ing in a category shall be achieved by reducing each non9 exempt direct spending account (or activity within an ac10 count) within that category by the uniform percentage

11 necessary to achieve 80 percent of that amount, and in12 creasing receipts to achieve the other 20 percent of that

13 amount as specified in sections 59B, 59C, and 59D of the

14 Internal Revenue Code of 1986, necessary to achieve that

15 amount.

16 SEC. 109. COMPREHENSIVE SEQUESTRATION.

17 (a) APPLICATION.—This section shall apply for any

18 budget year unless a spin-off law as described in section

19 105 is in effect for that year on the date of the final se20 questration report described in section 114.

21 (b) SEQUESTRATION BASED ON BUDGET-YEAR

22 SHORTFALL.—The amount to be sequestered for the

23 budget year is the amount (if any) by which the sum of

24 all budget-year entries on the direct spending and receipts

25 scorecard under section 106 is greater than zero.
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1 (c) SEQUESTRATION BASED ON OUTYEAR SHORT2 FALL.—(1) The purpose of this subsection is to ensure

3 that the outyear changes in direct spending and in receipts

4 achieved during a session are, on average, at least as great

5 as those required, or are no more than those allowed, for

6 the budget year.

7 (2) The amount to be sequestered under subsection

8 (b), if any, shall be increased whenever the average out9 year change in direct spending and receipts, combined,

10 achieved during that budget-year session would result in

11 higher deficits than if that average change had equaled

12 the amount targeted for the budget year, with that budg13 et-year target being the amount that the sequestration

14 preview report for the budget year shows was needed to

15 bring the budget-year entries on the direct spending and

16 receipts scorecard to zero. That increased amount to be

17 sequestered shall be—

18 (A) one-quarter of the sum of those achieved

19 changes in direct spending and receipts, combined,

20 for the 4 outyears; minus

21 (B) the budget-year target for changes in direct

22 spending and receipts, combined.

23 (d) SEQUESTRATION.—Within 15 days after Con24 gress adjourns to end a session and on the same day as

25 a sequestration, if any, under section 110, there shall be
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1 a sequestration to reduce the amount of direct spending

2 and increase the amount of receipts in the current policy

3 baseline by the sum of the amounts specified in sub4 sections (b) and (c) unless that sum is less than

5 $500,000,000. The amount required to be sequestered

6 shall be achieved by reducing each non-exempt direct

7 spending account (or activity within an account) by the

8 uniform percentage necessary to achieve 80 percent of

9 that sum, and increasing receipts to achieve the other 20

10 percent of that sum as specified in sections 59B, 59C, and

11 59D of the Internal Revenue Code of 1986, necessary to

12 achieve that amount.

13 SEC. 110. ACROSS-THE-BOARD REDUCTION OF DISCRE14 TIONARY PROGRAMS.

15 (a) SEQUESTRATION.—Within 15 days after Con16 gress adjourns to end a session, and on the same day as

17 a sequestration (if any) under section 108 or 109, there

18 shall be a sequestration to reduce the amount of discre19 tionary sequestrable budget authority in the current policy

20 baseline for the budget year by the amount (if any) needed

21 to eliminate any excess of new budget authority for that

22 year over the discretionary funding limit for that year as

23 measured under section 107, unless that excess is less

24 than $250,000,000.
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1 (b) UNIFORM REDUCTION.—Each nonexempt ac2 count (or activity within an account) shall be reduced by

3 a dollar amount calculated by multiplying the level of

4 sequestrable budget authority in the baseline for that ac5 count or activity by the uniform percentage necessary to

6 reduce new budget authority by the amount in subsection

7 (a).

8 (c) FEDERAL PERSONNEL.—If the President uses

9 the authority under section 111(b) to exempt any amounts

10 appropriated for military personnel from sequestration, all

11 remaining sequestrable budget authority within subfunc12 tion 051 shall be further reduced by the uniform percent13 age needed to fully offset the reduction in the amount se14 questered resulting from that exemption.

15 (d) PART-YEAR APPROPRIATIONS.—If, on the date

16 specified in subsection (a), there is in effect an Act making

17 or continuing appropriations for part of a fiscal year for

18 any budget account, then the dollar reduction calculated

19 for that account under subsections (b) and (c) shall be

20 applied to—

21 (1) the annualized amount otherwise available

22 by law in that account under that or a subsequent

23 part-year appropriation; and
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1 (2) when a full-year appropriation for that ac2 count is enacted, from the amount otherwise pro3 vided by that appropriation.

4 SEC. 111. EXEMPT PROGRAMS AND ACTIVITIES.

5 (a) DESCRIPTIONS AND LISTS.—Except as provided

6 in subsection (c), the following budget accounts, activities

7 within accounts, or income shall be exempt from seques8 tration—

9 (1) net interest;

10 (2) deposit insurance and pension benefit guar11 antees;

12 (3) all payments to trust funds from excise

13 taxes or other receipts or collections properly cred14 itable to those trust funds;

15 (4) offsetting receipts and collections;

16 (5) all payments from one Federal direct spend17 ing budget account to another Federal budget ac18 count; all intragovernmental funds including those

19 from which funding is derived primarily from other

20 Government accounts, except to the extent that such

21 funds are augmented by direct appropriations for

22 the fiscal year for which the order is in effect; and
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1 those obligations of discretionary accounts or activi2 ties that are financed by intragovernmental pay3 ments from another discretionary account or activ4 ity;

5 (6) expenses to the extent they result from pri6 vate donations, bequests, or voluntary contributions

7 to the Government;

8 (7) nonbudgetary activities, including but not

9 limited to—

10 (A) credit liquidating and financing ac11 counts;

12 (B) the Pension Benefit Guarantee Cor13 poration Trust Funds;

14 (C) the Thrift Savings Fund;

15 (D) the Federal Reserve System; and

16 (E) appropriations for the District of Co17 lumbia to the extent they are appropriations of

18 locally raised funds;

19 (8) payments resulting from Government insur20 ance, Government guarantees, or any other form of

21 contingent liability, to the extent those payments re22 sult from contractual or other legally binding com23 mitments of the Government at the time of any se24 questration;
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1 (9) the following accounts, which largely fulfill

2 requirements of the Constitution or otherwise make

3 payments to which the Government is committed—

4 Administration of Territories, Northern

5 Mariana Islands Covenant grants (14–0412–0–

6 1–806);

7 Bureau of Indian Affairs, miscellaneous

8 payments to Indians (14–2303–0–1–452);

9 Bureau of Indian Affairs, miscellaneous

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

11 999);

12 Claims, defense;

13 Claims, judgments, and relief act (20–

14 1895–0–1–806);

15 Compact of Free Association, economic as16 sistance pursuant to Public Law 99–658 (14–

17 0415–0–1–806);

18 Compensation of the President (11–0001–

19 0–1–802);

20 Customs Service, miscellaneous permanent

21 appropriations (20–9992–0–2–852);

22 Eastern Indian land claims settlement

23 fund (14–2202–0–1–806)
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1 Farm Credit System Financial Assistance

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

3 351);

4 Internal Revenue collections of Puerto Rico

5 (20–5737–0–2–852);

6 Panama Canal Commission, operating ex7 penses and capital outlay (95–5190–0–2–403);

8 Payments of Vietnam and USS Pueblo

9 prisoner-of-war claims (15–0104–0–1–153);

10 Payments to copyright owners (03–5175–

11 0–2–376);

12 Payments to the United States territories,

13 fiscal assistance (14–0418–0–1–801);

14 Salaries of Article III judges;

15 Soldier’s and Airmen’s Home, payment of

16 claims (84–8930–0–7–705);

17 Washington Metropolitan Area Transit Au18 thority, interest payments (46–0300–0–1–401).

19 (10) the following noncredit special, revolving,

20 or trust-revolving funds—

21 Coinage profit fund (20–5811–0–2–803);

22 Exchange Stabilization Fund (20–4444–0–

23 3–155);

24 Foreign Military Sales trust fund (11–

25 82232–0–7–155);
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1 (11)(A) any amount paid as regular unemploy2 ment compensation by a State from its account in

3 the Unemployment Trust Fund (established by sec4 tion 904(a) of the Social Security Act);

5 (B) any advance made to a State from the Fed6 eral unemployment account (established by section

7 904(g) of such Act) under title XII of such Act and

8 any advance appropriated to the Federal unemploy9 ment account pursuant to section 1203 of such Act;

10 and

11 (C) any payment made from the Federal Em12 ployees Compensation Account (as established under

13 section 909 of such Act) for the purpose of carrying

14 out chapter 85 of title 5, United States Code, and

15 funds appropriated or transferred to or otherwise

16 deposited in such Account;

17 (12) the earned income tax credit (payments to

18 individuals pursuant to section 32 of the Internal

19 Revenue Code of 1986).

20 (b) OPTIONAL EXEMPTIONS OF MILITARY PERSON21 NEL.—(1) The President may exempt some or all of the

22 budgetary resources of any military personnel account

23 from sequestration under section 109.

24 (2) The President may not use the authority under

25 paragraph (1) unless he notifies the Congress of the extent
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1 to which such authority will be exercised for the budget

2 year on or before the preceding August 29.

3 (c) FEDERAL ADMINISTRATIVE EXPENSES.—

4 (1) Notwithstanding any provision of law other

5 than paragraph (3), administrative expenses in6 curred by the departments and agencies, including

7 independent agencies, of the Federal Government in

8 connection with any program, project, activity, or ac9 count shall be subject to reduction pursuant to any

10 sequestration order, without regard to the exemp11 tions under subsection (a) and regardless of whether

12 the program, project, activity, or account is self-sup13 porting and does not receive appropriations.

14 (2) Payments made by the Federal Government

15 to reimburse or match administrative costs incurred

16 by a State or political subdivision under or in con17 nection with any program, project, activity, or ac18 count shall not be considered administrative ex19 penses of the Federal Government for purposes of

20 this section, and shall be subject to sequestration to

21 the extent (and only to the extent) that other pay22 ments made by the Federal Government under or in

23 connection with that program, project, activity, or

24 account are subject to that reduction or sequestra25 tion; except that Federal payments made to a State
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•HR 898 IH

1 as reimbursement of administrative costs incurred

2 by that State under or in connection with the unem3 ployment compensation programs specified in sub4 section (a)(11) shall be subject to reduction or se5 questration under this part notwithstanding the ex6 emption otherwise granted to such programs under

7 that subsection.

8 (3) Notwithstanding any other provision of law,

9 the administrative expenses of the following pro10 grams shall be exempt from sequestration:

11 (A) Deposit insurance.

12 (B) The Federal Retirement Thrift Invest13 ment Board.

14 (C) The Federal Reserve System.

15 SEC. 112. GENERAL AND SPECIAL SEQUESTRATION RULES.

16 (a) PERMANENT SEQUESTRATION OF DIRECT

17 SPENDING AND RECEIPTS.—

18 (1) The purpose of any direct spending or re19 ceipts sequestration under this Act is to ensure defi20 cit reduction in the budget year and all subsequent

21 fiscal years, so that the budget-year deficit reduction

22 target in section 101 is met and so that it will be

23 feasible to meet the increasingly ambitious targets

24 for the subsequent years.
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1 (2) Obligations in sequestered direct spending

2 accounts shall be reduced in the fiscal year in which

3 a sequestration occurs and in all succeeding fiscal

4 years. Notwithstanding any other provision of this

5 section, after the first direct spending sequestration

6 or receipts sequestration, any later sequestration

7 shall reduce direct spending or increase receipts (as

8 the case may be) by an amount in addition to, rath9 er than in lieu of, the reduction in direct spending

10 or the increase in receipts in place under the exist11 ing sequestration or sequestrations.

12 (b) UNIFORM PERCENTAGES.—

13 (1) In calculating the uniform percentage appli14 cable to the sequestration of all nonexempt direct

15 spending programs or activities and receipts under

16 section 109, or the uniform percentage applicable to

17 the sequestration of nonexempt direct spending pro18 grams or activities within a category under section

19 108, the sequestrable base for direct spending rules

20 and activities is the total budget-year level of outlays

21 for those programs or activities in the current policy

22 baseline minus—

23 (A) those budget-year outlays resulting

24 from obligations incurred in the current or

25 prior fiscal years, and
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1 (B) those budget-year outlays resulting

2 from exemptions under section 111.

3 (2) For any direct spending program in

4 which—

5 (A) outlays pay for entitlement benefits,

6 (B) a budget-year sequestration takes ef7 fect after the 1st day of the budget year, and

8 (C) that delay reduces the amount of enti9 tlement authority that is subject to sequestra10 tion in the budget year,

11 the uniform percentage otherwise applicable to the

12 sequestration of that program in the budget year

13 shall be increased as necessary to achieve the same

14 budget-year outlay reduction in that program as

15 would have been achieved had there been no delay.

16 (3) If the uniform percentage otherwise applica17 ble to the budget-year sequestration of a program or

18 activity is increased under paragraph (2), then it

19 shall revert to the uniform percentage calculated

20 under paragraph (1) when the budget year is com21 pleted.

22 (c) GENERAL RULES FOR SEQUESTRATION.—

23 (1) INDEFINITE AUTHORITY.—Except as other24 wise provided, sequestration in accounts for which

25 obligations are indefinite shall be taken in a manner
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1 to ensure that obligations in the fiscal year of a se2 questration and succeeding fiscal years are reduced,

3 from the level that would actually have occurred, by

4 the applicable sequestration percentage or percent5 ages.

6 (2) CANCELLATION OF BUDGETARY RE7 SOURCES.—Budgetary resources sequestered from

8 any account other than an entitlement trust, special,

9 or revolving fund account shall revert to the Treas10 ury and be permanently canceled or repealed.

11 (3) INDEXED BENEFIT PAYMENTS.—If, under

12 any entitlement program—

13 (A) benefit payments are made to persons

14 or governments more frequently than once a

15 year, and

16 (B) the amount of entitlement authority is

17 periodically adjusted under existing law to re18 flect changes in a price index,

19 then for the first fiscal year to which a sequestration

20 order applies, the benefit reductions in that program

21 accomplished by the order shall take effect starting

22 with the payment made at the beginning of January

23 or 7 weeks after the order is issued, whichever is

24 later. For the purposes of this subsection, Veterans
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1 Compensation shall be considered a program that

2 meets the conditions of the preceding sentence.

3 (4) PROGRAMS, PROJECTS, OR ACTIVITIES.—

4 Except as otherwise provided, the same percentage

5 sequestration shall apply to all programs, projects,

6 and activities within a budget account (with pro7 grams, projects, and activities as delineated in the

8 appropriation Act or accompanying report for the

9 relevant fiscal year covering that account, or for ac10 counts not included in appropriation Acts, as delin11 eated in the most recently submitted President’s

12 budget).

13 (5) IMPLEMENTING REGULATIONS.—Adminis14 trative regulations or similar actions implementing

15 the sequestration of a program or activity shall be

16 made within 120 days of the effective date of the se17 questration of that program or activity.

18 (6) DISTRIBUTION FORMULAS.—To the extent

19 that distribution or allocation formulas differ at dif20 ferent levels of budgetary resources within an ac21 count, program, project, or activity, a sequestration

22 shall be interpreted as producing a lower total ap23 propriation, with that lower appropriation being obli24 gated as though it had been the pre-sequestration

25 appropriation and no sequestration had occurred.
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1 (7) CONTINGENT FEES.—In any account for

2 which fees charged to the public are legally deter3 mined by the level of appropriations, fees shall be

4 charged on the basis of the presequestration level of

5 appropriations.

6 (d) BLOCK GRANTS TO STATES FOR TEMPORARY AS7 SISTANCE FOR NEEDY FAMILIES.—Any sequestration

8 order shall accomplish the full amount of any required re9 duction in payments under sections 403 and 418 of the

10 Social Security Act by reducing the amount otherwise pay11 able to each State (within the meaning of part A of title

12 IV of such Act) under the section involved for the fiscal

13 year involved by the uniform percentage applicable to the

14 sequestration of nonexempt direct spending programs or

15 activities.

16 (e) CHILD SUPPORT ENFORCEMENT PROGRAM.—

17 Any sequestration order shall accomplish the full amount

18 of any required reduction in payments under sections 455

19 and 458 of the Social Security Act by reducing the Fed20 eral matching rate for State administrative costs under

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

22 section 455(a) of such Act, to the extent necessary to re23 duce such expenditures by that amount.

24 (f) COMMODITY CREDIT CORPORATION.—
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1 (1) GENERAL EFFECTIVE DATE.—Except as

2 provided in paragraph (2), for the Commodity Credit

3 Corporation, a sequestration order shall take effect

4 on the date on which the order is issued.

5 (2) SPECIAL EFFECTIVE DATE FOR CERTAIN

6 CCC CONTRACTS.—For each crop of a commodity for

7 which 1-year contracts are issued as an entitlement,

8 a sequestration order shall take effect with the start

9 of the sign-up period for that crop that begins after

10 the sequestration order is issued. In the case of a

11 commodity for which a production flexibility contract

12 is in effect under section 111 of the Agricultural

13 Market Transition Act (7 U.S.C. 7211), a sequestra14 tion order shall take effect on October 1 of the fiscal

15 year that begins after the sequestration order is is16 sued. Payments for each contract shall be reduced

17 under the same terms and conditions.

18 (3) DAIRY PROGRAM.—As the sole means of

19 achieving any reduction in outlays under the milk

20 price support program, the Secretary of Agriculture

21 shall provide for a reduction to be made in the price

22 received by producers for all milk produced in the

23 United States and marketed by producers for com24 mercial use. The price reduction shall be measured

25 in cents per hundredweight of milk marketed. The
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•HR 898 IH

1 reduction in outlays as a result of the price reduc2 tion shall not exceed the aggregate amount of the

3 reduction in outlays under the milk price support

4 program that otherwise would have been achieved by

5 reducing payments made for the purchase of milk

6 or the products of milk under section 141 of the Ag7 ricultural Market Transition Act (7 U.S.C. 7251)

8 during the fiscal year involved.

9 (4) EFFECT OF DELAY.—For purposes of sub10 section (b)(1), the sequestrable base for the Com11 modity Credit Corporation is the budget-year level of

12 gross outlays resulting from new budget authority

13 that is subject to reduction under paragraphs (2)

14 and (3), and subsection (b)(2) shall not apply.

15 (5) CERTAIN AUTHORITY NOT TO BE LIM16 ITED.—Nothing in this Act shall restrict the Cor17 poration in the discharge of its authority and re18 sponsibility as a corporation to buy and sell com19 modities in world trade, or limit or reduce in any

20 way any appropriation that provides the Corporation

21 with funds to cover its net realized losses.

22 (g) CONSERVATION RESERVE PROGRAM.—Multiyear

23 contracts under the conservation reserve program shall be

24 considered binding and not subject to sequestration, but

25 any contract entered into after a sequestration applicable
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1 to that program takes effect shall provide for payments

2 reduced by the uniform percentage or percentages applica3 ble to that sequestration.

4 (h) EXTENDED UNEMPLOYMENT COMPENSATION.—

5 (1) A State may reduce each weekly benefit payment made

6 under the Federal-State Extended Unemployment Com7 pensation Act of 1970 for any week of unemployment oc8 curring during any period with respect to which payments

9 are reduced under any sequestration order by a percentage

10 not to exceed the percentage by which the Federal pay11 ment to the State under section 204 of such Act is to be

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

13 (2) A reduction by a State in accordance with sub14 paragraph (A) shall not be considered as a failure to fulfill

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

16 Revenue Code of 1986.

17 (i) 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. For purposes of sub24 section (b)(1), the sequestrable base for the Fund is the

25 budget-year level of gross outlays resulting from claims
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1 paid after the sequestration order takes effect, and sub2 section (b)(2) shall not apply.

3 (j) FEDERAL HOUSING FINANCE BOARD.—Any se4 questration of the Federal Housing Finance Board shall

5 be accomplished by annual payments (by the end of each

6 fiscal year) from that Board to the general fund of the

7 Treasury, in amounts equal to the uniform sequestration

8 percentage for that year times the gross obligations of the

9 Board in that year.

10 (k) FEDERAL PAY.—

11 (1) IN GENERAL.—Except as provided in sec12 tion 111(b)(3), new budget authority to pay Federal

13 personnel shall be reduced by the uniform percent14 age calculated under section 108, 109, or 110, as

15 applicable, but no sequestration order may reduce or

16 have the effect of reducing the rate of pay to which

17 any individual is entitled under any statutory pay

18 system (as increased by any amount payable under

19 section 5304 of title 5, United States Code, or sec20 tion 302 of the Federal Employees Pay Comparabil21 ity Act of 1990) or the rate of any element of mili22 tary pay to which any individual is entitled under

23 title 37, United States Code, or any increase in rates

24 of pay which is scheduled to take effect under sec25 tion 5303 of title 5, United States Code, section
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1 1009 of title 37, United States Code, or any other

2 provision of law.

3 (2) DEFINITIONS.—For purposes of this sub4 section:

5 (A) The term ‘‘statutory pay system’’ shall

6 have the meaning given that term in section

7 5302(1) of title 5, United States Code.

8 (B) The term ‘‘elements of military pay’’

9 means—

10 (i) the elements of compensation of

11 members of the uniformed services speci12 fied in section 1009 of title 37, United

13 States Code,

14 (ii) allowances provided members of

15 the uniformed services under sections 403a

16 and 405 of such title, and

17 (iii) cadet pay and midshipman pay

18 under section 203(c) of such title.

19 (C) The term ‘‘uniformed services’’ shall

20 have the meaning given that term in section

21 101(3) of title 37, United States Code.

22 (l) GUARANTEED STUDENT LOANS.—(A) For all stu23 dent loans under parts B and D of title IV of the Higher

24 Education Act of 1965 made on or after the date of a

25 sequestration, the origination fees shall be increased by
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•HR 898 IH

1 a uniform percentage sufficient to produce the dollar sav2 ings in student loan programs for the fiscal year of the

3 sequestration required by section 108 or 109, and all sub4 sequent origination fees shall be increased by the same

5 percentage, notwithstanding any other provision of law.

6 (B) The origination fees to which paragraph (A) ap7 plies are those specified in sections 428H(f)(1), 438(c),

8 and 455(c) of that Act.

9 (m) INSURANCE PROGRAMS.—Any sequestration in a

10 Federal program that sells insurance contracts to the pub11 lic (including the Federal Crop Insurance Fund, the Na12 tional Insurance Development Fund, the National Flood

13 Insurance Fund, insurance activities of the Overseas Pri14 vate Insurance Corporation, and Veterans’ life insurance

15 programs) shall be accomplished by annual payments from

16 the insurance fund or account to the general fund of the

17 Treasury. The amount of each annual payment by each

18 such fund or account shall be the amount received by the

19 fund or account by increasing premiums on contracts en20 tered into after the date a sequestration order takes effect

21 by the uniform sequestration percentage, and premiums

22 shall be increased accordingly.

23 (n) MEDICAID.—The November 15th estimate of

24 medicaid spending by States shall be the base estimate

25 from which the uniform percentage reduction under any
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1 sequestration, applied across-the-board by State, shall be

2 made. Succeeding Federal payments to States shall reflect

3 that reduction. The Health Care Financing Administra4 tion shall reconcile actual medicaid spending for each fis5 cal year with the base estimate as reduced by the uniform

6 percentage, and adjust each State’s grants as soon as

7 practicable, but no later than 100 days after the end of

8 the fiscal year to which the base estimate applied, to com9 ply with the sequestration order.

10 (o) MEDICARE.—

11 (1) TIMING OF APPLICATION OF REDUC12 TIONS.—

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

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

15 payment amounts pursuant to a sequestration

16 order, the reduction shall be applied to payment

17 for services furnished after the effective date of

18 the order. For purposes of the previous sen19 tence, in the case of inpatient services furnished

20 for an individual, the services shall be consid21 ered to be furnished on the date of the individ22 ual’s discharge from the inpatient facility.

23 (B) PAYMENT ON THE BASIS OF COST RE24 PORTING PERIODS.—In the case in which pay25 ment for services of a provider of services is
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1 made under title XVIII of the Social Security

2 Act on a basis relating to the reasonable cost

3 incurred for the services during a cost reporting

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

5 payment amounts pursuant to a sequestration

6 order, the reduction shall be applied to payment

7 for costs for such services incurred at any time

8 during each cost reporting period of the pro9 vider any part of which occurs after the effec10 tive date of the order, but only (for each such

11 cost reporting period) in the same proportion as

12 the fraction of the cost reporting period that oc13 curs after the effective date of the order.

14 (2) NO INCREASE IN BENEFICIARY CHARGES IN

15 ASSIGNMENT-RELATED CASES.—If a reduction in

16 payment amounts is made pursuant to a sequestra17 tion order for services for which payment under part

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

19 on the basis of an assignment described in section

20 1842(b)(3)(B)(ii), in accordance with section

21 1842(b)(6)(B), or under the procedure described in

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

23 the services shall be considered to have accepted

24 payment of the reasonable charge for the services,
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1 less any reduction in payment amount made pursu2 ant to a sequestration order, as payment in full.

3 (3) 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 (p) 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 shall have the duty to make those payments during

15 the fiscal year to which the sequestration order applies

16 and each succeeding fiscal year. The amount of each an17 nual 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

22 foregone for 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 must 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 (q) POWER MARKETING ADMINISTRATIONS AND

21 TVA.—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 succeed3 ing fiscal year. The amount of each annual payment by

4 a 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 presequester 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 rates, or by

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

20 surplus or a higher fund deficit and must follow the re21 quirements of existing law governing the fund in all other

22 respects. The administrator of a fund or the TVA Board

23 is authorized to take the actions specified above in order

24 to make the annual payments to the Treasury.
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1 (r) VETERANS’ HOUSING LOANS.—(1) For all hous2 ing loans guaranteed, insured, or made under chapter 37

3 of title 38, United States Code, on or after the date of

4 a sequestration, the origination fees shall be increased by

5 a uniform percentage sufficient to produce the dollar sav6 ings in veterans’ housing programs for the fiscal year of

7 the sequestration required by section 108 or 109, and all

8 subsequent origination fees shall be increased by the same

9 percentage, notwithstanding any other provision of law.

10 (2) The origination fees to which paragraph (1) ap11 plies are those referred to in section 3729 of title 38,

12 United States Code.

13 SEC. 113. SEQUESTRATION THROUGH SURTAXES.

14 (a) GENERAL RULE.—Subchapter A of chapter 1 of

15 the Internal Revenue Code of 1986 (relating to determina16 tion of tax liability) is amended by adding at the end

17 thereof the following new part:

18 ‘‘PART VIII—TAX SEQUESTRATION SURTAXES

‘‘Sec. 59B. Imposition of surtax on individuals.

‘‘Sec. 59C. Imposition of surtax on corporations.

‘‘Sec. 59D. Definitions and special rules.

19 ‘‘SEC. 59B. IMPOSITION OF SURTAX ON INDIVIDUALS.

20 ‘‘(a) SECTION 1.—In the case of an individual, the

21 amount of the tax imposed under section 1 for any taxable

22 year shall be increased by the applicable surtax percentage

23 of the tax imposed under section 1 for such taxable year

24 (determined without regard to this section).
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1 ‘‘(b) MINIMUM TAX.—In the case of an individual,

2 the amount of the tentative minimum tax determined

3 under section 55 for any taxable year shall be increased

4 by the applicable surtax percentage of the amount of the

5 tentative minimum tax for such taxable year (determined

6 without regard to this section).

7 ‘‘(c) SURTAX TO APPLY TO ESTATES AND TRUSTS.—

8 For purposes of this section, the term ‘individual’ includes

9 any estate or trust taxable under section 1.

10 ‘‘(d) COORDINATION WITH OTHER PROVISIONS.—

11 The provisions of this section—

12 ‘‘(1) shall be applied after section 1(h), but

13 ‘‘(2) before the application of any other provi14 sion of this title which refers to the amount of the

15 tax imposed by section 1 or 55, as the case may be.

16 ‘‘SEC. 59C. IMPOSITION OF SURTAX ON CORPORATIONS.

17 ‘‘(a) NORMAL CORPORATE TAX.—

18 ‘‘(1) IN GENERAL.—In the case of a corpora19 tion, the amount of the tax imposed under section

20 11 for any taxable year shall be increased by the ap21 plicable surtax percentage of the amount of the tax

22 imposed under section 11 for such taxable year (de23 termined without regard to this section).

24 ‘‘(2) TREATMENT OF CERTAIN TAXES.—For

25 purposes of paragraph (1), a tax shall be treated as
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1 imposed under section 11 if the amount of such tax

2 is determined by reference to the provisions of sec3 tion 11 (or by reference to any rate contained there4 in).

5 ‘‘(b) MINIMUM TAX.—In the case of a corporation,

6 the amount of the tentative minimum tax determined

7 under section 55 for any taxable year shall be increased

8 by the applicable surtax percentage of the amount of the

9 tentative minimum tax for such taxable year (determined

10 without regard to this section).

11 ‘‘(c) COORDINATION WITH OTHER PROVISIONS.—

12 The provisions of this section shall be applied—

13 ‘‘(1) after the application of section 1201 and

14 801(a)(2), but

15 ‘‘(2) before the application of any other provi16 sion of this title which refers to the amount of tax

17 imposed by section 11 or 55, as the case may be.

18 ‘‘SEC. 59D. DEFINITIONS AND SPECIAL RULES.

19 ‘‘(a) APPLICABLE SURTAX PERCENTAGE.—For pur20 poses of this subpart—

21 ‘‘(1) IN GENERAL.—The term ‘applicable surtax

22 percentage’ means, with respect to a taxable year be23 ginning in a calendar year, the sum, rounded up to

24 the nearest 0.5 percentage point, of—
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1 ‘‘(A) the surtax percentage (if any) deter2 mined under paragraph (2) for such calendar

3 year, plus

4 ‘‘(B) the sum of the surtax percentages (if

5 any) for all preceding calendar years.

6 ‘‘(2) SURTAX PERCENTAGE.—The surtax per7 centage for a calendar year is the surtax percentage

8 included in the final sequestration report effectuated

9 by the sequestration order under section 114 of the

10 Deficit Elimination Act of 1997 for the fiscal year

11 in which the calendar year begins.

12 ‘‘(b) SECTION 15 NOT TO APPLY.—Section 15 shall

13 not apply to any change in rates under this part.

14 ‘‘(c) ADJUSTMENT TO APPLICATION OF CERTAIN

15 PROVISIONS.—

16 ‘‘(1) DIVIDENDS PAID ON CERTAIN PREFERRED

17 STOCK.—In computing for a taxable year of a cor18 poration the fractions described in sections

19 244(a)(2) and 247(a)(2), the denominator shall,

20 under regulations prescribed by the Secretary, be in21 creased to reflect the provisions of this part.

22 ‘‘(2) SHAREHOLDERS OF REGULATED INVEST23 MENT COMPANIES.—In computing the adjustment to

24 basis described in section 852(b)(3)(D)(iii), the per25 centage set forth therein shall be adjusted, under
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1 regulations prescribed by the Secretary, to reflect

2 the provisions of this part.’’

3 (b) CLERICAL AMENDMENT.—The table of parts for

4 subchapter A of chapter 1 of such Code is amended by

5 adding at the end thereof the following new item:

‘‘Part VIII. Tax sequestration surtaxes.’’

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

7 this section shall apply to taxable years beginning after

8 December 31, 1997.

9 SEC. 114. ESTIMATING ASSUMPTIONS, REPORTS, AND OR10 DERS.

11 (a) TIMETABLE.—The timetable with respect to this

12 part for any budget year is as follows:

Date: Action to be completed:

Dec. 31 .......................................... OMB and CBO sequestration preview

reports submitted to Board.

Jan. 15 .......................................... Board selects sequestration preview

report.

The President’s budget submission OMB publishes sequestration preview

report.

August 29: ..................................... President’s midsession review; notification regarding military personnel.

Within 10 days after end of session.OMB and CBO final budget year sequestration reports submitted to

Board.

5 days later .................................... Board selects final sequestration report; President issues sequestration

order.

13 (b) SUBMISSION AND AVAILABILITY OF REPORTS.—

14 Each report required by this section shall be submitted,

15 in the case of CBO, to the House of Representatives, the

16 Senate, OMB, and the Board and, in the case of OMB,
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1 to the House of Representatives, the Senate, the Presi2 dent, and the Board on the day it is issued. On the follow3 ing day a notice of the report shall be printed in the Fed4 eral Register.

5 (c) EXCHANGE OF PRELIMINARY CURRENT POLICY

6 BASELINES.—On December 15 or 3 weeks after Congress

7 adjourns to end a session, whichever is later, OMB and

8 CBO shall exchange their preliminary current policy base9 lines for the budget-year session starting in January.

10 (d) SEQUESTRATION PREVIEW REPORTS.—

11 (1) REPORTING REQUIREMENT.—On December

12 31 or 2 weeks after exchanging preliminary current

13 policy baselines, whichever is later, OMB and CBO

14 shall each submit a sequestration preview report.

15 (2) CONTENTS.—Each preview report shall set

16 forth the following:

17 (A) MAJOR ESTIMATING ASSUMPTIONS.—

18 The major estimating assumptions for the cur19 rent year, the budget year, and the outyears,

20 and an explanation of them.

21 (B) CURRENT POLICY BASELINE.—A de22 tailed display of the current policy baseline for

23 the current year, the budget year, and the out24 years, with an explanation of changes in the

25 baseline since it was last issued that includes
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1 the effect of policy decisions made during the

2 intervening period and an explanation of the

3 differences between OMB and CBO for each

4 item set forth in the report.

5 (C) DEFICITS ASSUMING COMPLIANCE.—

6 Estimates for the budget year and each subse7 quent year through fiscal year 2002 of the defi8 cits or surpluses in the current policy baseline

9 assuming deficit reduction specified in section

10 116.

11 (D) DISCRETIONARY FUNDING LIMITS.—

12 (i) estimates for the current year, the budget

13 year, and each outyear through 2002 of the dis14 cretionary funding limits and an explanation of

15 each adjustment made to those limits under

16 section 102(b), (ii) starting with fiscal year

17 2002, an estimate of the aggregate first-year

18 spendout rate for the budget year for discre19 tionary programs, (iii) starting with budget

20 year 2002, an estimate for the current year and

21 for the budget year of the discretionary funding

22 limits under the spinoff law under section 105,

23 or if no such law exists for a fiscal year, for

24 those limits established under the automatic ap25 plication of section 103 or 104.
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1 (E) SEQUESTRATION OF DISCRETIONARY

2 ACCOUNTS.—Estimates of the uniform percent3 age and the amount of budgetary resources to

4 be sequestered from discretionary programs

5 given the baseline level of appropriations, and if

6 the President chooses to exempt some or all

7 military personnel from sequestration, the effect

8 of that decision on the percentage and amounts.

9 (F) DEFICIT REDUCTION REQUIREMENTS

10 FOR DIRECT SPENDING AND RECEIPTS.—An es11 timate for direct spending and receipts of the

12 deficit reduction remaining to be achieved for

13 the budget year under section 101 or 104 or of

14 the decrease in the surplus allowed for that

15 year under section 104 (given the amount al16 ready achieved as measured under section 106).

17 (G) DIRECT SPENDING SEQUESTRATION.—

18 Estimates of the uniform percentage and the

19 amount of targeted sequestration under section

20 108 that will be necessary in each direct spend21 ing category to meet the direct spending targets

22 for the budget year in the spin-off law under

23 section 105, or if no such law has been enacted

24 for the budget year, the uniform percentage and

25 the amount of comprehensive sequestration of
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1 direct spending programs that will be necessary

2 under section 109.

3 (H) RECEIPTS SEQUESTRATION.—Esti4 mates of the increase in receipts under section

5 108 that will be necessary to meet the receipts

6 targets for the budget year in the spin-off law

7 under section 105, or if no such law has been

8 enacted for the budget year, the increase in re9 ceipts that will be necessary under section 109;

10 including the surtax percentage needed to

11 achieve the increase in receipts required under

12 section 108 or the uniform percentage under

13 section 109.

14 (e) SELECTION OF OFFICIAL SEQUESTRATION PRE15 VIEW REPORT.—On January 15 or 2 weeks after receiving

16 the OMB and CBO sequestration preview reports, which17 ever is later, the Board shall choose either the OMB or

18 CBO sequestration preview report as the official report for

19 purposes of this Act. The Board shall add to the chosen

20 report an analysis of which reports submitted in previous

21 years have proven to be more accurate and recommenda22 tions about methods of improving the accuracy of future

23 reports. That report shall be set forth, without change,

24 in the budget submitted by the President under section
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1 1105(a) of title 31, United States Code, for the budget

2 year.

3 (f) AGREEING ON EARLIER DATES.—The Chairman

4 of the Board may set earlier dates for subsections (c), (d),

5 and (e) if OMB and CBO concur.

6 (g) NOTIFICATION REGARDING MILITARY PERSON7 NEL.—On or before August 29, the President shall notify

8 the Congress of the manner in which he intends to exercise

9 flexibility with respect to military personnel accounts

10 under section 111(b).

11 (h) FINAL SEQUESTRATION REPORTS.—

12 (1) REPORTING REQUIREMENT.—Not later than

13 10 days following the end of a budget-year session,

14 OMB and CBO shall each submit a final sequestra15 tion report.

16 (2) CONTENTS.—That report shall be based

17 upon laws enacted through the date of the report

18 and shall set forth all the information and estimates

19 required of a sequestration preview report required

20 by subsection (d)(2) (D) through (H). In addition,

21 that report shall include—

22 (A) for each account to be sequestered, the

23 baseline level of sequestrable budgetary re24 sources and the resulting reductions in new

25 budget authority and outlays;
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1 (B) the effects of sequestration on the level

2 of direct spending outlays for each fiscal year

3 through 2002; and

4 (C) the effects of sequestration on the level

5 of receipts for each fiscal year through 2002.

6 (i) SELECTION OF OFFICIAL FINAL SEQUESTRATION

7 REPORT.—Not later than 5 days after receiving the final

8 OMB and CBO sequestration reports, the Board shall

9 choose either the OMB or CBO final sequestration report

10 as the official report for purposes of this Act, and shall

11 issue a report stating that decision and making any com12 ments that the Board chooses.

13 (j) PRESIDENTIAL ORDER.—(1) On the day that the

14 Board chooses a final sequestration report, the President

15 shall issue an order fully implementing without change all

16 sequestrations and tax actions required by—

17 (A) the final sequestration report that requires

18 the lesser amount of discretionary sequestration

19 under section 110; and

20 (B) the final sequestration report that requires

21 the lesser total amount of direct spending and re22 ceipts sequestration under section 108 or 109 (as

23 applicable).

24 The order shall be effective on issuance and shall be issued

25 only if sequestration is required.
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1 (2)(A) If both the CBO and OMB final sequestration

2 reports require a sequestration of discretionary programs,

3 and the Board chooses the report requiring the greater

4 sequestration, then a positive amount equal to the dif5 ference between the CBO and OMB estimates of discre6 tionary new budget authority for the budget year shall be

7 subtracted from the budget-year column and added to the

8 column for the first outyear of the discretionary scorecard

9 under section 107 as though that amount had been en10 acted in the next session of Congress.

11 (B) If one final sequestration report requires a se12 questration of discretionary programs and the Board

13 chooses that report, then an amount equal to the dif14 ference between that report’s estimate of discretionary

15 new budget authority for the budget year and the discre16 tionary funding limit for that year shall be subtracted

17 from the budget-year column and added to column for the

18 first outyear of the discretionary scorecard under section

19 107 as though that amount had been enacted in the next

20 session of Congress.

21 (3)(A) If both the CBO and OMB final sequestration

22 reports require a sequestration of direct spending or re23 ceipts, and the Board chooses the report requiring the

24 greater sequestration, then a positive amount equal to the

25 difference between the total CBO and OMB estimates of
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1 required budget-year direct spending and receipts seques2 trations shall be subtracted from the budget-year column

3 and added to the column for the first outyear of the direct

4 spending and receipts scorecard under section 106 as

5 though that amount had been enacted in the next session

6 of Congress.

7 (B) If one final sequestration report requires a se8 questration of direct spending or receipts and the Board

9 chooses that report, then the estimate of total required

10 budget-year direct spending and receipts sequestrations

11 shall be subtracted from the budget-year column and

12 added to column for the first outyear of the direct spend13 ing and receipts scorecard under section 106 as though

14 that amount had been enacted in the next session of

15 Congress.

16 (k) LOW-GROWTH REPORT.—At any time until the

17 end of fiscal year 1999, the Director of the Board shall

18 notify the Congress if—

19 (1) during the period consisting of the quarter

20 during which such notification is given, the quarter

21 preceding that notification, and the 4 quarters fol22 lowing that notification, CBO or OMB has deter23 mined that real economic growth is projected or esti24 mated to be less than zero for each of any 2 con25 secutive quarters within that period; or
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1 (2) the most recent of the Department of Com2 merce’s advance, preliminary, or final reports of ac3 tual real economic growth for each of the most re4 cently reported quarter and the immediately preced5 ing quarter is less than 1 percent.

6 (l) USE OF MAJOR ESTIMATING ASSUMPTIONS AND

7 SCOREKEEPING CONVENTIONS.—In the estimates, projec8 tions, and reports under subsections (c) and (d), CBO and

9 OMB shall use the best and most recent estimating as10 sumptions available. In all other reports required by this

11 section and in all estimates or calculations required by this

12 Act, CBO and OMB shall use—

13 (1) current-year and budget-year discretionary

14 funding limits chosen by the Board and the esti15 mates chosen by the Board of the deficit reduction

16 (or decrease in the surplus) through changes in di17 rect spending and receipts required (or allowed) in

18 the budget year;

19 (2) in estimating the effects of bills and discre20 tionary regulations, the major estimating assump21 tions most recently chosen by the Board, except to

22 the extent that they must be altered to reflect actual

23 results occurring or measured after the Board’s

24 choice; and
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1 (3) scorekeeping conventions determined after

2 consultation among the House and Senate Commit3 tees on the Budget, CBO, and OMB.

4 In applying the two previous sentences, the major estimat5 ing assumptions and other calculations required by this

6 Act that are included in the statement of managers accom7 panying the conference report on this Act shall be consid8 ered, for all purposes of this Act, to be the report of the

9 Board chosen under subsection (e) for fiscal year 1998.

10 (m) BILL COST ESTIMATES.—Within 10 days after

11 the enactment of any discretionary appropriations, direct

12 spending, or receipts legislation, CBO and OMB shall

13 transmit to each other, the Board, and to the Congress

14 an estimate of the budgetary effects of that law, following

15 the estimating requirements of this section. Those esti16 mates may not change after the 10-day period except—

17 (1) to the extent those estimates are subsumed

18 within (and implicitly changed by) the estimates

19 made in preparation of a new baseline under sub20 sections (c), (d), and (h);

21 (2) to reflect a choice of the Board regarding

22 an official set of estimates under subsections (l) and

23 (n); and

24 (3) to correct clerical errors or errors in the ap25 plication of this Act.
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1 SEC. 115. THE CURRENT POLICY BASELINE.

2 (a) IN GENERAL.—For any budget year, the baseline

3 refers to a projection of current-year levels of new budget

4 authority, outlays, revenues, and the surplus or deficit into

5 the budget year and the outyears based on laws enacted

6 through, and discretionary regulations promulgated as

7 final by, the applicable date.

8 (b) DIRECT SPENDING AND RECEIPTS.—For the cur9 rent year, the budget year, and each outyear, the baseline

10 shall be calculated using the following assumptions:

11 (1) IN GENERAL.—Laws providing or creating

12 direct spending and receipts are assumed to operate

13 in the manner specified in those laws for each such

14 year, funding for entitlement authority is assumed

15 to be adequate to make all payments required by

16 those entitlements, and funding for deposit insur17 ance is assumed to be adequate to meet the costs of

18 the Financial Institutions Reform, Recovery, and

19 Enforcement Act of 1989 or successor laws.

20 (2) EXCEPTIONS.—Except as provided in para21 graph (3):

22 (A) No program with estimated current23 year gross new budget authority greater than

24 $100 million is assumed to expire in the budget

25 year or outyears. In carrying out the preceding

26 sentence, expiring entitlement programs and
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1 programs financed by indefinite budget author2 ity are assumed to continue as in effect just

3 prior to their expiration, and other expiring

4 programs are assumed to continue with new

5 budget authority projected as under subsection

6 (c)(4).

7 (B) The percentage increase for veterans’

8 compensation for a fiscal year is assumed to be

9 the same as that required by law for veterans’

10 pensions unless otherwise provided by a law en11 acted in that session.

12 (C) Excise taxes dedicated to a trust fund,

13 if expiring, are assumed to continue at the rates

14 in effect immediately prior to their expiration.

15 (3) CUTOFF DATE.—Programs or taxes that ex16 pire on or before December 31 and that have not

17 been reauthorized by the date of the final sequestra18 tion report are assumed to expire. If an increase in

19 veterans compensation has not been enacted by the

20 date of the final sequestration report, it is not

21 assumed.

22 (c) DISCRETIONARY APPROPRIATIONS.—For the cur23 rent year, the budget year, and each outyear, the baseline

24 shall be calculated using the following assumptions regard25 ing discretionary programs:
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1 (1) INFLATION OF CURRENT-YEAR APPROPRIA2 TIONS.—New budget authority shall be at the level

3 provided for that fiscal year in appropriation Acts.

4 If for any account an appropriation has not yet been

5 enacted, new budget authority is assumed to be at

6 the level available in the current year, adjusted se7 quentially and cumulatively for expiring housing con8 tracts as specified in paragraph (2), for inflation as

9 specified in paragraph (3), and to account for

10 changes required by law in the level of agency pay11 ments for personnel benefits other than pay.

12 (2) EXPIRING HOUSING CONTRACTS.—New

13 budget authority to renew expiring multiyear sub14 sidized housing contracts or provide contracts to re15 place units lost due to prepayments shall be adjusted

16 to reflect the difference in the number of such con17 tracts that are estimated to expire or be prepaid in

18 that fiscal year and the number expiring or being

19 prepaid in the current year, with the per-contract re20 newal/replacement cost equal to the average current21 year cost of renewal or replacement contracts.

22 (3) INFLATORS.—The inflator to adjust new

23 budget authority relating to personnel is the percent

24 by which the average rate of basic pay for statutory

25 pay systems, computed as specified in section
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1 5303(a) of title 5, United States Code, for that fis2 cal year exceeds the average rate of pay for the cur3 rent year. The inflator to adjust all other budgetary

4 resources is the percent by which the average of the

5 estimated gross domestic product fixed-weight price

6 index for that fiscal year differs from the average of

7 such estimated index for the current year.

8 (4) PART-YEAR APPROPRIATIONS; PERMISSIVE

9 TRANSFERS.—If, for any account, a continuing ap10 propriation is in effect for less than an entire fiscal

11 year, then the amount available for that fiscal year

12 is assumed to equal the amount that would be avail13 able if that continuing appropriation covered the en14 tire fiscal year. If law permits the transfer of budget

15 authority among budget accounts in the current

16 year, the current-year level for an account shall re17 flect transfers accomplished by the applicable date

18 or assumed for the current year in the President’s

19 original budget or midsession review for the budget

20 year.

21 (d) UP-TO-DATE CONCEPTS.—In deriving the base22 line for any budget year or outyear, current-year amounts

23 shall be calculated using the concepts and definitions that

24 are required for that budget year.
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1 SEC. 116. BASELINE ASSUMING DEFICIT REDUCTION.

2 For any budget year, a baseline assuming deficit re3 duction refers to a projection of current policy baseline

4 surpluses or deficits into the budget year and the outyears

5 that is adjusted in aggregate by—

6 (1) assuming compliance with the deficit reduc7 tion targets for direct spending and receipts legisla8 tion under section 101 without any adjustment pur9 suant to section 103;

10 (2) assuming compliance with the discretionary

11 funding limits under section 102 without any adjust12 ment pursuant to section 103; and

13 (3) excluding amounts resulting from legislation

14 that has been designated as an emergency require15 ment under section 102(b)(4) or 106(f).

16 SEC. 117. STABILIZATION RESERVE FUND.

17 (a) ESTABLISHMENT AND PURPOSE.—There is here18 by established as a deposit fund in the Treasury a Sta19 bilization Reserve Fund (‘‘Fund’’), to be administered by

20 the Secretary of the Treasury. The purpose of that Fund

21 is to accumulate balances during years of comparative

22 prosperity, which balances may later be used to cover the

23 loss of receipts and the increase in outlays that occur dur24 ing times of comparative economic distress.
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1 (b) AMOUNTS PAID TO THE FUND.—On the last day

2 of any fiscal year for which an actual surplus has oc3 curred, the amount of that surplus shall be paid to the

4 Fund. In fiscal year 2003, the Secretary of the Treasury

5 shall pay an additional $10 billion from the general fund

6 of the Treasury to the Fund. In each fiscal year starting

7 with 2000, the Secretary of the Treasury shall pay an ad8 ditional $20 billion to the Fund from the general fund of

9 the Treasury. Balances in the Fund shall not receive inter10 est.

11 (c) TRANSFER OF FUND BALANCES.—At any time

12 starting with the fiscal year 2003 session, a law may be

13 enacted withdrawing some or all of the current balance

14 of the Stabilization Reserve Fund and paying that

15 amount, as a receipt, to the General Fund of the Treas16 ury. That law may also provide for the later transfer to

17 the Treasury (as a receipt) of some or all of the current18 year estimated surplus (if any), to be paid into the Sta19 bilization Reserve Fund at the end of the current year

20 under subsection (b). Except for transfers to the General

21 Fund of the Treasury, no law reducing the balances of

22 the Stabilization Reserve Fund may be enacted in any

23 year.
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1 SEC. 118. MODIFICATIONS IF WAR OR LOW GROWTH.

2 (a) WAR.—Upon the enactment of a declaration of

3 war—

4 (1) the subsequent issuance of any sequestra5 tion report or any sequestration order is precluded;

6 (2) sections 302(f), 310(d), and 311 of the

7 Congressional Budget Act of 1974 are suspended;

8 and

9 (3) sections 1105(f) and 1103 of title 31, Unit10 ed States Code, are suspended.

11 (b) PEACE.—In the event of a suspension of seques12 tration procedures due to a declaration of war, then, effec13 tive with the first fiscal year that begins in the session

14 after the state of war is concluded by Senate ratification

15 of the necessary treaties, the provisions of subsection (a)

16 triggered by that declaration of war are no longer effec17 tive. The provisions of this Act that would have applied

18 to the fiscal year that started in the calendar year in which

19 the declaration of war was enacted shall instead apply to

20 the first fiscal year that begins in the session after the

21 state of was is concluded. The preceding sentence shall

22 apply in the same manner to each succeeding fiscal year.

23 If the implementation of this subsection requires adding

24 entries to the direct spending and receipts scorecard under

25 section 106, CBO and OMB shall submit estimates of
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1 those entries as part of their next sequestration preview

2 report under section 114.

3 (c) LOW GROWTH.—

4 (1) TRIGGER.—Within 20 days after the Board

5 issues a low-growth report under section 114(k), the

6 majority leader of the House of Representatives

7 may, and the majority leader of the Senate shall, in8 troduce a joint resolution in the form set forth in

9 paragraph (2).

10 (2) FORM OF JOINT RESOLUTION.—

11 (A) The matter after the resolving clause

12 in any joint resolution introduced pursuant to

13 paragraph (1) shall be as follows: ‘‘That the

14 conditions specified in section 114(k) of the

15 Deficit Elimination Act of 1997 are met. The

16 implementation of the Congressional Budget

17 Act of 1974, chapter 11 of title 31, United

18 States Code, and the Deficit Elimination Act of

19 1997 are modified as follows:

20 (i) the subsequent issuance of any se21 questration report or any sequestration

22 order is precluded;

23 (ii) sections 302(f), 310(d), and 311

24 of the Congressional Budget Act of 1974

25 are suspended; and
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1 (iii) sections 1105(f) and 1103 of title

2 31, United States Code, are suspended.

3 The provisions of this joint resolution shall

4 cease to be effective with respect to the first fis5 cal year beginning at least 12 months after its

6 enactment.’’.

7 (B) The title of the joint resolution shall

8 be ‘‘Joint resolution modifying certain provi9 sions of law pursuant to section 118(c) of the

10 Deficit Elimination Act of 1997.’’; and the joint

11 resolution shall not contain any preamble.

12 (3) COMMITTEE ACTION.—Each joint resolution

13 introduced pursuant to paragraph (1) shall be re14 ferred to the Committees on Rules, Government Op15 erations, and Budget of the House of Representa16 tives or to the Committee on the Budget of the Sen17 ate, as the case may be.

18 (4) SENATE BUDGET COMITTEE CONSIDER19 ATION.—The Committee on the Budget of the Sen20 ate shall report the joint resolution with or without

21 amendment on or before the 20th day after the date

22 on which the joint resolution is introduced. If any

23 committee fails to report the joint resolution within
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1 that 20-day period, it shall be automatically dis2 charged from further consideration of the joint reso3 lution, and the joint resolution shall be placed on the

4 appropriate calendar.

5 (5) COMMITTEE AMENDMENTS.—Amendments

6 reported by any committee under paragraph (3)

7 shall only strike the second and third sentences of

8 the joint resolution as introduced and insert matter

9 providing—

10 (A) changes to the budget targets or dates

11 under sections 101 through 104 to allow higher

12 discretionary funding limits or lower direct

13 spending and receipts deficit reduction require14 ments for any fiscal year or years;

15 (B) conforming amendments that may be

16 needed to chapter 11 of title 31, United States

17 Code; and

18 (C) conforming amendments that may be

19 needed to the Congressional Budget Act of

20 1974 or the rules of the House of Representa21 tives or the Senate.

22 (6) CONSIDERATION OF JOINT RESOLUTION.—
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1 (A) A vote on final passage of a joint reso2 lution reported to the Senate or discharged pur3 suant to paragraph (3) shall be taken on or be4 fore the close of the 10th calendar day of ses5 sion after the date on which the joint resolution

6 is reported or after the Committee has been dis7 charged from further consideration of the joint

8 resolution.

9 (B)(i) In the Senate, a joint resolution

10 under this paragraph shall be privileged. It

11 shall not be in order to move to reconsider the

12 vote by which the motion is agreed to or dis13 agreed to.

14 (ii) Debate in the Senate on a joint resolu15 tion under this paragraph, and all debatable

16 motions and appeals in connection therewith,

17 shall be limited to not more than five hours.

18 The time shall be equally divided between, and

19 controlled by, the majority leader and the mi20 nority leader or their designees.

21 (iii) Debate in the Senate on any debatable

22 motion or appeal in connection with a joint res23 olution under this paragraph shall be limited to

24 not more than one hour, to be equally divided

25 between, and controlled by, the mover and the
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1 manager of the joint resolution, except that in

2 the event the manager of the joint resolution

3 is in favor of any such motion or appeal, the

4 time in opposition thereto shall be controlled by

5 the minority leader or his designee.

6 (iv) A motion in the Senate to further limit

7 debate on a joint resolution under this para8 graph is not debatable. A motion to table or to

9 recommit a joint resolution under this para10 graph is not in order.

11 (C) If, after a joint resolution has been re12 ported to one House and prior to its passage by

13 that House, an identical joint resolution is re14 ceived from the other House, then—

15 (i) the procedure in that House shall

16 be the same as if no such joint resolution

17 had been received from the other House,

18 but

19 (ii) the vote on final passage shall be

20 on the joint resolution of the other House,

21 and

22 when the joint resolution is agreed to, the Clerk

23 of the House of Representatives (in the case of

24 a House joint resolution agreed to in the House
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1 of Representatives) or the Secretary of the Sen2 ate (in the case of a Senate joint resolution

3 agreed to in the Senate) shall cause the joint

4 resolution to be engrossed, certified, and trans5 mitted to the other House of the Congress as

6 soon as practicable.

7 (D) Amendments to a joint resolution con8 sidered under this paragraph shall be in order

9 in the Senate only if germane to that resolution

10 in the form in which it was reported or dis11 charged.

12 (7) CONSIDERATION OF A CONFERENCE RE13 PORT.—Consideration of a conference report on a

14 joint resolution under this subsection shall be gov15 erned by the Standing Rules of the Senate, and by

16 provisions of paragraph (5)(a) and (B) as if those

17 provisions applied to conference reports.

18 SEC. 119. BOARD OF ESTIMATES.

19 (a) ESTABLISHMENT.—There is established a Board

20 of Estimates.

21 (b) DUTIES OF THE BOARD.—(1) On the dates speci22 fied in section 114, the Board shall issue a report to the

23 President and the Congress which states whether it has

24 chosen (with no modification)—
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1 (A) the sequestration preview report for the

2 budget year submitted by OMB under section

3 114(d) or the report for that year submitted by

4 CBO under section 114(d); and

5 (B) the final sequestration report for the budg6 et year submitted by OMB under section 114(h) or

7 the report for that year submitted by CBO under

8 section 114(h);

9 that shall be used for purposes of this Act, chapter 11

10 of title 31, United States Code, and section 403 of the

11 Congressional Budget Act of 1974. In making its choice,

12 the Board shall choose the report that, in its opinion, is

13 the more accurate.

14 (2) At any time the Board may change the list of

15 major estimating assumptions to be used by OMB and

16 CBO in preparing their sequestration preview reports.

17 (3) At any time the Board may approve a revision

18 to the list of the direct spending jurisdiction of the stand19 ing committees of the House of Representatives to be used

20 for implementing targeted sequestration under section

21 108. Each such revision must be requested in writing by

22 the Speaker of the House of Representatives and may be

23 approved or disapproved, but may not be modified.

24 (c) MEMBERSHIP.—
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1 (1) NUMBER AND APPOINTMENT.—The Board

2 shall be composed of 5 members, the chairman of

3 the Board of Governors of the Federal Reserve Sys4 tem and 4 other members to be appointed by the

5 President as follows:

6 (A) One from a list of at least 5 individ7 uals nominated for such appointment by the

8 Speaker of the House of Representatives.

9 (B) One from a list of at least 5 individ10 uals nominated for such appointment by the

11 majority leader of the Senate.

12 (C) One from a list of at least 5 individ13 uals nominated for such appointment by the mi14 nority leader of the House of Representatives.

15 (D) One from a list of at least 5 individ16 uals nominated for such appointment by the mi17 nority leader of the Senate.

18 No member appointed by the President may be an

19 officer or employee of any government. A vacancy in

20 the Board shall be filled in the manner in which the

21 original appointment was made.

22 (2) CONTINUATION OF MEMBERSHIP.—If any

23 member of the Board appointed by the President be24 comes an officer or employee of a government, he

25 may continue as a member of the Board for not
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1 longer than the 30-day period beginning on the date

2 he becomes such an officer or employee.

3 (3) TERMS.—(A) Members shall be appointed

4 for terms of 4 years.

5 (B) Any member appointed to fill a vacancy oc6 curring before the expiration of the term for which

7 his predecessor was appointed shall be appointed

8 only for the remainder of such term. A member may

9 serve after the expiration of his term until his suc10 cessor has taken office.

11 (4) BASIC PAY.—Members of the Board shall

12 serve without pay.

13 (5) QUORUM.—Three members of the Board

14 shall constitute a quorum but a lesser number may

15 hold hearings.

16 (6) CHAIRMAN.—The Chairman of the Board

17 shall be chosen annually by its members.

18 (7) MEETINGS.—The Board shall meet at the

19 call of the Chairman or a majority of its members.

20 (d) DIRECTOR AND STAFF.—

21 (1) APPOINTMENT.—The Board shall have a

22 Director who shall be appointed by the members of

23 the Board. Subject to such rules as may be pre24 scribed by the Board, the Director may appoint and
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1 fix the pay of such personnel as the Director consid2 ers appropriate.

3 (2) APPLICABILITY OF CERTAIN CIVIL SERVICE

4 LAWS.—The Director and staff of the Board may be

5 appointed without regard to the provisions of title 5,

6 United States Code, governing appointments in the

7 competitive service, and may be paid without regard

8 to the provisions of chapter 51 and subchapter III

9 of chapter 53 of such title relating to classification

10 and General Schedule pay rates, except that no indi11 vidual so appointed may receive pay in excess of the

12 annual rate of basic pay payable for GS–18 of the

13 General Schedule.

14 (3) STAFF OF FEDERAL AGENCIES.—Upon re15 quest of the Board, the head of any Federal agency

16 is authorized to detail, on a reimbursable basis, any

17 of the personnel of such agency to the Board to as18 sist the Board in carrying out its duties, notwith19 standing section 202(a) of the Legislative Reorga20 nization Act of 1946 (2 U.S.C. 72a(a)).

21 (e) POWERS.—

22 (1) HEARINGS AND SESSIONS.—The Board

23 may, for the purpose of carrying out its duties, hold

24 such hearings, sit and act at such times and places,
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1 take such testimony, and receive such evidence, as

2 it considers appropriate.

3 (2) OBTAINING OFFICIAL DATA.—The Board

4 may secure directly from any department or agency

5 of the United States information necessary to enable

6 it to carry out its duties. Upon request of the Chair7 man of the Board, the head of such department or

8 agency shall furnish such information to the Board.

9 (3) ADMINISTRATIVE SUPPORT SERVICES.—The

10 Administrator of General Services shall provide to

11 the Board on a reimbursable basis such administra12 tive support services as the Board may request.

13 SEC. 120. JUDICIAL REVIEW.

14 (a) EXPEDITED REVIEW.—

15 (1) Any Member of Congress may bring an ac16 tion, in the United States District Court for the Dis17 trict of Columbia, for declaratory judgment and in18 junctive relief on the ground that any order that

19 might be issued pursuant to section 114 violates the

20 Constitution.

21 (2) Any Member of Congress, or any other per22 son adversely affected by any action taken under

23 this title, may bring an action, in the United States
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1 District Court for the District of Columbia, for de2 claratory judgment and injunctive relief concerning

3 the constitutionality of this title.

4 (3) Any Member of Congress may bring an ac5 tion, in the United States District Court for the Dis6 trict of Columbia, for declaratory and injunctive re7 lief on the ground that the terms of an order issued

8 under section 114 do not comply with the require9 ments of this title.

10 (4) A copy of any complaint in an action

11 brought under paragraph (1), (2), or (3) shall be

12 promptly delivered to the Secretary of the Senate

13 and the Clerk of the House of Representatives, and

14 each House of Congress shall have the right to inter15 vene in such action.

16 (5) Any action brought under paragraph (1),

17 (2), or (3) shall be heard and determined by a three18 judge court in accordance with section 2284 of title

19 28, United States Code.

20 Nothing in this section or in any other law shall infringe

21 upon the right of the House of Representatives to inter22 vene in an action brought under paragraph (1), (2), or

23 (3) without the necessity of adopting a resolution to au24 thorize such intervention.
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1 (b) APPEAL TO SUPREME COURT.—Notwithstanding

2 any other provision of law, any order of the United States

3 District Court for the District of Columbia which is issued

4 pursuant to an action brought under paragraph (1), (2),

5 or (3) of subsection (a) shall be reviewable by appeal di6 rectly to the Supreme Court of the United States. Any

7 such appeal shall be taken by a notice of appeal filed with8 in 10 days after such order is entered; and the jurisdic9 tional statement shall be filed within 30 days after such

10 order is entered. No stay of an order issued pursuant to

11 an action brought under paragraph (1), (2), or (3) of sub12 section (a) shall be issued by a single Justice of the Su13 preme Court.

14 (c) EXPEDITED CONSIDERATION.—It shall be the

15 duty of the District Court for the District of Columbia

16 and the Supreme Court of the United States to advance

17 on the docket and to expedite to the greatest possible ex18 tent the disposition of any matter brought under sub19 section (a).

20 (d) NONCOMPLIANCE WITH SEQUESTRATION PROCE21 DURES.—

22 (1) If it is finally determined by a court of com23 petent jurisdiction that an order issued by the Presi24 dent under section 114 for any fiscal year does not
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1 fully implement without change all sequestrations re2 quired by the appropriate Office of Management and

3 Budget or Congressional Budget Office report cho4 sen by the Board to be the basis for the order, the

5 President shall, within 20 days after such deter6 mination is made, revise the order in accordance

7 with such determination.

8 (2) If the order issued by the President under

9 section 114 for any fiscal year does not fully imple10 ment without change all sequestrations required by

11 the appropriate OMB or CBO report chosen by the

12 Board to be the basis for the order on the claim or

13 defense that the constitutional powers of the Presi14 dent prevent such sequestration or reduction or per15 mit the avoidance of such sequestration or reduction,

16 and such claim or defense is finally determined by

17 the Supreme Court of the United States to be valid,

18 then the entire order issued pursuant to section 114

19 for such fiscal year shall be null and void.

20 (e) TIMING OF RELIEF.—No order of any court

21 granting declaratory or injunctive relief from the order of

22 the President issued under section 114, including relief

23 permitting or requiring the expenditure of funds seques24 tered by such order, shall take effect during the pendency

25 of the action before such court, during the time appeal
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1 may be taken, or, if appeal is taken, during the period

2 before the court to which such appeal is taken has entered

3 its final order disposing of such action.

4 (f) ALTERNATIVE PROCEDURES.—(1) If any order is

5 invalidated because of the manner of appointment of mem6 bers of the Board, then section 120(c)(1) is amended to

7 read as follows:

8 ‘‘(1) NUMBER AND APPOINTMENT.—The Board

9 shall be composed of 5 members, the Chairman of

10 the Board of Governors of the Federal Reserve Sys11 tem and 4 other members to be appointed by the

12 President. No member appointed by the President

13 may be an officer or employee of any government.’’;

14 and any reports upon which such order was based shall

15 be transmitted to the newly constituted Board.

16 (2) No later than 5 days after the receipt of the re17 ports, the Board shall choose the report upon which the

18 order is to be based.

19 (3) This report shall be deemed to be the report re20 ceived by the President under section 114.

21 (g) PRESERVATION OF OTHER RIGHTS.—The rights

22 created by this section are in addition to the rights of any

23 person under law, subject to subsection (e).
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1 (h) ECONOMIC DATA, ASSUMPTIONS, AND METH2 ODOLOGIES.—The economic data and economic and tech3 nical assumptions and estimation of methodologies used

4 by OMB or CBO in preparing any report issued under

5 section 114 shall not be subject to review in any judicial

6 or administrative proceeding, and any choice made by the

7 Board under section 114 shall not be subject to any such

8 review.

9 TITLE II—TECHNICAL AND

10 CONFORMING AMENDMENTS

11 SEC. 201. AMENDMENTS TO THE CONGRESSIONAL BUDGET

12 AND IMPOUNDMENT CONTROL ACT OF 1974.

13 (a) REPEALER.—Paragraph (2) of section 3 of the

14 Congressional Budget and Impoundment Control Act of

15 1974, the first time it appears, is repealed.

16 (b) DEFINITION OF BUDGET AUTHORITY.—Para17 graph (2) of section 3 of the Congressional Budget and

18 Impoundment Control Act of 1974, the second time it ap19 pears, is amended by inserting ‘‘in any form’’ after ‘‘prom20 issory notes’’, by inserting at the end of subparagraph (A)

21 the following new sentence: ‘‘Such term excludes trans22 actions classified as means of financing.’’, and by striking

23 ‘‘With respect to’’ and all that follows through ‘‘retirement

24 account, any’’ and inserting ‘‘Any’’, by inserting after sub25 paragraph (B) the following:
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1 ‘‘(C) RELATIONSHIP TO ENTITLEMENT AU2 THORITY.—For purposes of titles III and IV,

3 all references to budget authority shall be con4 sidered to include the amount of budget author5 ity estimated to be needed to fund entitlement

6 provisions under existing or proposed law, and

7 all legislation increasing (or decreasing) the

8 level of entitlement authority under existing law

9 shall be considered to provide (or decrease) new

10 budget authority in that amount.’’,

11 and by redesignating the next subparagraph accordingly.

12 (c) DEFINITION OF ENTITLEMENT AUTHORITY.—

13 Paragraph (9) of section 3 of the Congressional Budget

14 and Impoundment Control Act of 1974 is amended by

15 striking ‘‘spending authority described by section

16 401(c)(2)(C)’’ and inserting the following: ‘‘, and the term

17 ‘entitlement program’ refers to, any provision of law that

18 has the effect of requiring the Government to make net

19 payments (including intragovernmental payments) regard20 less of the amount of budget authority that may be avail21 able to make those payments. Those terms shall include

22 amounts estimated to be required under provisions of law

23 that depend on the fulfillment of non-legislative conditions
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1 or are indefinite as to amount or timing. Except as pro2 vided in the next sentence, if a provision of law that other3 wise requires the Government to make net payments is

4 directly or indirectly limited by any other provision of law

5 to an amount of available budget authority, then entitle6 ment authority does not exist. Subchapter II of chapter

7 13 of title 31, United States Code, and the sequestration

8 provisions of the Deficit Elimination Act of 1997 shall not

9 be considered provisions of law that limit entitlement au10 thority to the amount of available budget authority.’’

11 (d) DEFINITION OF MEANS OF FINANCING.—Section

12 3 of the Congressional Budget and Impoundment Control

13 Act of 1974 is amended by adding at the end the following

14 new paragraph:

15 ‘‘(11) The term ‘means of financing’ means the

16 financial transactions of the Government that con17 sist of exchanges of money or monetary proxies of

18 equal value and therefore are not counted as obliga19 tions, outlays, or revenues, such as net Federal bor20 rowing from the public in any form, debt redemp21 tion, seignorage on coins and profits from the sale

22 of gold, and changes in outstanding check or other

23 monetary credits, including write-offs.’’.
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1 (e) CBO STUDIES.—Section 202(h) of the Congres2 sional Budget Act of 1974 is amended by striking ‘‘out3 lays, credit authority,’’ and inserting ‘‘outlays’’.

4 (f) TIMETABLE.—Section 300 of the Congressional

5 Budget Act of 1974 is amended by striking ‘‘February

6 25’’ and inserting ‘‘Six weeks after the President’s budget

7 submission’’.

8 (g) REQUIRED CONTENTS OF BUDGET RESOLU9 TION.—Section 301(a) of the Congressional Budget Act

10 of 1974 is amended by striking ‘‘planning levels’’, by strik11 ing ‘‘two’’ and inserting ‘‘four’’, by striking ‘‘, budget out12 lays, direct loan obligations, and primary loan guarantee

13 commitments’’ both places it appears and inserting ‘‘and

14 outlays’’, by striking paragraphs (5), (6) and (7), by strik15 ing the semicolon at the end of paragraph (4) and insert16 ing a period, by inserting ‘‘and’’ after the semicolon at

17 the end of paragraph (3), and by striking the last sen18 tence.

19 (h) DELAYED ENROLLMENT.—Section 301(b)(3) of

20 the Congressional Budget Act of 1974 is amended by

21 striking ‘‘or new entitlement authority’’.

22 (i) SPIN-OFF BILL.—(1) Paragraphs (5), (6), (7),

23 and (8) of section 301(b) of the Congressional Budget Act

24 of 1974 are amended to read as follows:

25 ‘‘(5) set forth in a separate section—
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1 ‘‘(A) the appropriate level of the debt held

2 by the public;

3 ‘‘(B) the discretionary funding limit for

4 the fiscal year, but only if and to the extent re5 quired by section 103 or 104 of the Deficit

6 Elimination Act of 1997;

7 ‘‘(C) the amount of direct spending change

8 required of or allowed by each committee of the

9 House of Representatives in laws within that

10 committee’s jurisdiction and the amount of re11 ceipts change required of or allowed by the

12 Committee on Ways and Means of the House of

13 Representatives in laws within that committee’s

14 jurisdiction, but only to the extent specified in

15 section 105 of that Act; and

16 ‘‘(D) the amount, if any, to be withdrawn

17 from the Stabilization Reserve Fund and paid

18 to the General Fund of the Treasury during the

19 fiscal year under section 117 of that Act.’’.

20 (2) Paragraph (4) of section 301(b) of the Congres21 sional Budget Act of 1974 is amended by inserting ‘‘and’’

22 after the semicolon.

23 (j) TECHNICAL CORRECTION TO SECTION 301(e).—

24 Section 301(e) of the Congressional Budget Act of 1974
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1 is amended by inserting ‘‘new’’ before ‘‘budget authority’’

2 in the second sentence.

3 (k) SECTION 301(i) POINT OF ORDER.—Section

4 301(i) of the Congressional Budget Act of 1974 is amend5 ed to read as follows:

6 ‘‘(i) It shall not be in order in the House of Rep7 resentatives or the Senate to consider any concurrent reso8 lution on the budget for a fiscal year beginning on October

9 1 of the year in which the resolution is considered (or

10 amendment to, motion regarding, or conference report on

11 such a resolution) unless—

12 ‘‘(1) it does not exceed the discretionary fund13 ing limit, and

14 ‘‘(2) it fully meets the direct spending and re15 ceipts deficit reduction requirement,

16 for that fiscal year under sections 101 through 104 of the

17 Deficit Elimination Act of 1997, using estimates of that

18 limit and that requirement chosen by the Board of Esti19 mates.’’.

20 (l) COMMITTEE ALLOCATIONS AND SUBALLO21 CATIONS.—Section 602 of the Congressional Budget Act

22 of 1974 is amended—

23 (1) by striking ‘‘of—’’ and all that follows

24 through ‘‘outlays;’’ both places it appears and insert25 ing ‘‘of total new budget authority and outlays’’;
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1 (2) in subsection (a)(1)(B), by striking ‘‘com2 mittee.’’ and inserting ‘‘committee, except that new

3 budget authority and outlays for entitlement pro4 grams funded through annual appropriations shall

5 be allocated and scored both to the Committee on

6 Appropriations and to the committee that authorized

7 such programs.’’; and

8 (3) in subsection (a)(3), by striking ‘‘, entitle9 ment authority,’’ both times it appears and by strik10 ing ‘‘, outlays, or social security outlays’’ both times

11 it appears and inserting ‘‘or outlays’’.

12 (m) REDESIGNATION OF COMMITTEE ALLOCA13 TIONS.—Subsections (a) and (b) of section 302 of the

14 Congressional Budget Act of 1974 are repealed and sub15 sections (a) and (b) of section 602 of that Act (as amend16 ed by subsection (g)) are redesignated as subsections (a)

17 and (b) of section 302, respectively.

18 (n) CONSIDERATION OF APPROPRIATION BILLS.—

19 Section 302(c) of the Congressional Budget Act of 1974

20 is amended by striking ‘‘—(1)’’ and everything that fol21 lows through ‘‘401(c)(2) for a fiscal year;’’ and inserting

22 ‘‘new budget authority for a fiscal year’’.

23 (o) POINTS OF ORDER UNDER SECTION 302(f).—(1)

24 Section 302(f)(1) of the Congressional Budget Act of

25 1974 is amended to read as follows:
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1 ‘‘(1) IN THE HOUSE OF REPRESENTATIVES.—It

2 shall not be in order in the House of Representatives

3 to consider any bill, joint resolution, or amendment

4 providing new budget authority, or any conference

5 report on any such bill or joint resolution, if—

6 ‘‘(A) the enactment of the bill or resolution

7 as reported or in the form recommended in the

8 conference report, or

9 ‘‘(B) the adoption of the amendment,

10 when added to existing levels of new budget author11 ity, would cause the level of new budget authority

12 for the fiscal year starting in the year in which the

13 most recent concurrent resolution on the budget was

14 agreed to, or for the sum of that fiscal year and the

15 next 4 fiscal years, to exceed an allocation to a com16 mittee made under subsection (a) for either period,

17 or to exceed a suballocation made under subsection

18 (b) for that fiscal year.’’.

19 (2) Section 302(f)(2) of that Act is amended—

20 (A) in the first sentence, by striking ‘‘for budg21 et outlays,’’, by striking ‘‘new budget authority, or

22 new spending authority (as defined in section

23 401(c)(2))’’ and inserting ‘‘new budget authority’’,

24 by striking ‘‘outlays or’’ both places it appears, and

25 by striking ‘‘or provides for social security outlays in
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1 excess of the appropriate allocation of social security

2 outlays under subsection (a)’’; and

3 (B) by striking the third sentence.

4 (3) Section 302(g) of that Act is amended by striking

5 ‘‘budget authority’’ and all that follows through ‘‘credit

6 authority’’ and inserting ‘‘budget authority and outlays’’.

7 (p) SECTION 303.—Section 303 of the Congressional

8 Budget Act of 1974 is amended—

9 (1) in its title by striking ‘‘, New Spending Au10 thority, New Credit Authority,’’;

11 (2) in subsection (a) by striking ‘‘either the

12 House of Representatives or’’, by inserting ‘‘or’’ at

13 the end of paragraph (2), by striking ‘‘paragraphs

14 (4), (5), and (6), and after paragraph (6) by strik15 ing ‘‘for’’ and inserting ‘‘covering’’ and by striking

16 ‘‘(or, in the Senate, a concurrent resolution on the

17 budget covering such fiscal year)’’;

18 (3) in subsection (b) by repealing paragraph (1)

19 and by striking ‘‘(2)’’; and

20 (4) by adding at the end the following new sub21 section:

22 ‘‘(d) POINT OF ORDER IN THE HOUSE OF REP23 RESENTATIVES.—It shall not be in order in the House of

24 Representatives to consider any bill, joint resolution,
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1 amendment, or conference report if that legislation, as re2 ported, includes any provision—

3 ‘‘(1) providing new budget authority;

4 ‘‘(2) reducing the level of revenues; or

5 ‘‘(3) altering the limit on the debt held by the

6 public;

7 that is first effective in the last fiscal year covered by the

8 most recently agreed to concurrent resolution on the budg9 et or any subsequent fiscal year.’’.

10 (q) CONSIDERATION OF SPIN-OFF LEGISLATION.—

11 Section 305 of the Congressional Budget Act of 1974 is

12 amended by adding at the end the following new sub13 section:

14 ‘‘(e) CONFERENCE REPORTS.—Conference reports on

15 concurrent resolutions on the budget that contain addi16 tional matter under section 301(b)(5) shall be considered

17 first in the House of Representatives.’’.

18 (r) COST ESTIMATES AND SCOREKEEPING RE19 PORTS.—Section 308 of the Congressional Budget Act of

20 1974 is amended—

21 (1) in its title, by striking ‘‘, NEW SPENDING

22 AUTHORITY, OR NEW CREDIT AUTHORITY,’’;

23 (2) by striking ‘‘, new spending authority de24 scribed in section 401(c)(2), or new credit author25 ity,’’ the 3 times it appears;
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1 (3) in subsection (a), by striking ‘‘in the reports

2 submitted’’, by inserting ‘‘302(a) or’’ before

3 ‘‘302(b)’’, in paragraph (1)(B) by striking ‘‘spending

4 authority’’ and everything that follows through

5 ‘‘401(c)(2) which is’’ and inserting ‘‘budget author6 ity’’ and by striking ‘‘annual appropriations’’ and in7 serting ‘‘annual discretionary appropriations’’, and

8 in paragraph (1)(C) by striking ‘‘such budget au9 thority’’ and all that follows through ‘‘loan guaran10 tee commitments’’ and inserting ‘‘new budget au11 thority, outlays, or revenues’’; and

12 (4) in subsection (c), by adding ‘‘and’’ at the

13 end of paragraph (1), by striking ‘‘period;’’ and in14 serting ‘‘period.’’ at the end of paragraph (2), and

15 by striking paragraphs (3), (4), and (5).

16 (s) RECONCILIATION.—Section 310 of the Congres17 sional Budget Act of 1974 is amended—

18 (1) in subsection (a), by striking ‘‘which—(A)’’

19 and all that follows through ‘‘fiscal year, contained

20 in’’ and inserting the following: ‘‘which outlays re21 sulting from’’ and by striking ‘‘jurisdiction of a com22 mittee is’’ and inserting ‘‘jurisdiction of a committee

23 other than the Committee on Appropriations of ei24 ther House are’’;
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1 (2) by repealing subsection (c) and inserting

2 the following new subsection:

3 ‘‘(c) INCLUSION OF SPIN-OFF BILL IN RECONCILI4 ATION LEGISLATION.—Reconciliation legislation may in5 clude a separate title to be inserted by the Committee on

6 the Budget consisting of a spin-off bill (containing the

7 matter described in section 301(b)(5)), if such bill has not

8 been enacted for the first fiscal year covered by that legis9 lation. The targets for each category contained in this title

10 shall be identical to the reconciliation directive contained

11 in the most recently agreed to concurrent resolution on

12 the budget.’’;

13 (3) in subsection (d)(1), by striking ‘‘or new en14 titlement authority’’; and

15 (4) by repealing subsection (g).

16 (t) REVISION OF SECTION 311.—(1) Section 311 of

17 the Congressional Budget Act of 1974 is amended to read

18 as follows:

19 ‘‘ENFORCING THE REVENUE FLOOR

20 ‘‘SEC. 311. (a) POINT OF ORDER.—It shall not be

21 in order in either the House of Representatives or the Sen22 ate to consider any bill, joint resolution, amendment, mo23 tion, or conference report if, as proposed to be adopted

24 and when added to existing revenue levels, it would cause

25 the level of revenues for the fiscal year starting in the year

26 in which the most recent concurrent resolution on the
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1 budget was agreed to, or for the sum of that fiscal year

2 and the 4 succeeding fiscal years, to be lower than the

3 appropriate level of revenues for either period set forth

4 in that concurrent resolution.

5 ‘‘(b) DETERMINATION OF REVENUE LEVELS.—For

6 purposes of this section, the levels of revenues for a fiscal

7 year shall be determined on the basis of estimates made

8 by the Committee on the Budget of the House of Rep9 resentatives or of the Senate, as the case may be.’’.

10 (2) CONFORMING AMENDMENT.—The item relating

11 to section 311 in the table of contents set forth in section

12 1(b) is amended to read as follows:

‘‘SEC. 311. Enforcing the revenue floor.’’.

13 (u) TECHNICAL CORRECTION TO SECTION 312.—

14 Section 312 of the Congressional Budget Act of 1974 is

15 amended by inserting ‘‘(a)’’ after ‘‘312.’’.

16 (v) CONSIDERATION OF LEGISLATION THAT HAS

17 NOT BEEN REPORTED.—Section 312 of the Congres18 sional Budget Act of 1974 is amended by inserting at the

19 end the following:

20 ‘‘(c) CONSIDERATION OF LEGISLATION THAT HAS

21 NOT BEEN REPORTED.—In the House of Representatives,

22 any point of order under title III or IV that would lie

23 against consideration of a bill or joint resolution as re24 ported by a committee shall also lie against a motion to
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1 consider legislation respecting which no report has been

2 filed.’’

3 (w) CONFORMING AMENDMENTS TO SECTION 313.—

4 Section 313 of the Congressional Budget Act of 1974 is

5 amended by striking ‘‘or section 258C’’ and everything

6 that follows through ‘‘Deficit Control Act of 1985’’, by

7 striking ‘‘; and (F)’’ and everything that follows through

8 ‘‘310(g)’’, by redesignating the second subsection (c) and

9 subsection (d) as subsections (d) and (e), respectively, and

10 by striking ‘‘or (b)(1)(F),’’.

11 (x) BORROWING AND CONTRACT AUTHORITY.—Sec12 tion 401 of the Congressional Budget Act of 1974 is

13 amended—

14 (1) in subsection (a), by striking ‘‘new spending

15 authority described in subsection (c)(2)(A) or (B)’’

16 both times it appears and inserting ‘‘borrowing au17 thority or contract authority’’;

18 (2) by repealing subsections (b) and (c) and by

19 redesignating subsection (d) as subsection (b); and

20 (3) in subsection (b) (as redesignated), by strik21 ing ‘‘Subsections (a) and (b)’’ and inserting ‘‘Sub22 section (a)’’, by inserting ‘‘non-interest’’ before ‘‘re23 ceipts’’ in paragraph (1)(B), by repealing paragraph

24 (2), and by redesignating paragraph (3) as para25 graph (2).
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1 (y) CREDIT AUTHORITY.—Section 402(a) of the Con2 gressional Budget Act of 1974 is amended by inserting

3 before the period the following: ‘‘, except that this provi4 sion shall not apply with respect to programs that, as of

5 August 15, 1992, provide credit authority as an entitle6 ment’’.

7 (z) COSTS OF FEDERAL MANDATES; CONFORMING

8 CHANGE TO SECTION 403.—Section 403 of the Congres9 sional Budget Act of 1974 is amended—

10 (1) by adding at the end the following new sub11 section:

12 ‘‘(d) In fulfilling the requirements of subsection

13 (a)(2), the Director shall place special emphasis on costs

14 imposed on State or local governments by the enactment

15 or expansion of Federal mandates, and shall estimate both

16 the costs of those mandates and the degree, if any, to

17 which Federal financing is provided to State or local gov18 ernments to cover those costs.’’; and

19 (2) in subsection (a), by striking ‘‘of a public

20 character’’.

21 (aa) CONFORMING CHANGE TO SECTION 405.—Sec22 tion 405 of the Congressional Budget Act of 1974 is

23 amended by striking ‘‘spending authority’’ and all that fol24 lows through ‘‘permanent appropriations’’ and inserting
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1 ‘‘new budget authority (other than through appropriations

2 Acts) or entitlement authority’’.

3 (bb) OFF-BUDGET AGENCIES.—Section 406(a) of the

4 Congressional Budget Act of 1974 is amended by striking

5 ‘‘credit authority, and estimates of outlays’’ and inserting

6 ‘‘outlays,’’, by striking ‘‘the date of enactment’’ and all

7 that follows through ‘‘Trust Funds,’’ and inserting ‘‘Au8 gust 15, 1992,’’, and by striking ‘‘, outlays, and spending

9 authority’’ and inserting ‘‘and outlays’’.

10 (cc) REPEAL OF TITLE VI.—Title VI of the Congres11 sional Budget Act of 1974 is repealed.

12 SEC. 202. AMENDMENTS TO THE FEDERAL CREDIT REFORM

13 ACT OF 1990.

14 (a) DEFERRED COST SHARING.—The second sen15 tence of section 502(1) of the Congressional Budget Act

16 of 1974 is amended by inserting before the period the fol17 lowing: ‘‘, and Federal payments for the construction of

18 a Federal project to the extent those payments must, by

19 law or contract, be repaid to the Government’’.

20 (b) LOAN MODIFICATIONS.—Section 502(5) of the

21 Congressional Budget Act of 1974 is amended—

22 (1) in subparagraph (A), by inserting ‘‘or a

23 modification thereof’’ after ‘‘guarantee’’;

24 (2) in subparagraph (B), by striking ‘‘recover25 ies.’’ and inserting ‘‘recoveries, and routine work-
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1 outs of loans in imminent danger of default when

2 those work-outs are to maximize repayments to the

3 Government.’’;

4 (3) in subparagraph (C), by striking ‘‘and’’ at

5 the end of clause (i), by striking the period at the

6 end of clause (ii) and inserting a comma, and by

7 adding at the end the following:

8 ‘‘(iii) routine work-outs of loans in immi9 nent danger of default when those work-outs

10 are to minimize claims against the Govern11 ment.’’; and

12 (4) by striking subparagraph (D) and inserting

13 the following new subparagraph:

14 ‘‘(D) The cost of a modification of a direct

15 loan, a direct loan obligation, a loan guarantee, or

16 a loan guarantee commitment shall be the net

17 present value, at the time of the modification, of the

18 change in cash flows estimated to occur as a result

19 of that modification. OMB shall measure that

20 change in relation to the current policy baseline in

21 the most recent budget under section 1105(a) of

22 title 31, United States Code. A modification may re23 sult either from the enactment of legislation that di24 rectly or indirectly alters the expected cash flows, or

25 from the exercise of administrative discretion under
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1 existing law, and includes the sale (with or without

2 recourse) of loan assets by the Government. Modi3 fications do not include changes in loan terms result4 ing from the exercise by the borrower of an option

5 included in the loan contract.’’.

6 (c) CREDIT REFORM ACT CLARIFICATION.—Section

7 504 of the Congressional Budget Act of 1974 is amend8 ed—

9 (1) in subsection (b)(1), by striking ‘‘appropria10 tions of’’ and inserting ‘‘new’’, by striking ‘‘are

11 made’’ and inserting ‘‘is provided’’, and by inserting

12 ‘‘in appropriation Acts’’ before the semicolon;

13 (2) in subsection (b)(2), by striking ‘‘enacted’’

14 and inserting ‘‘provided in an appropriation Act’’;

15 (3) in subsection (d)(1) by striking ‘‘costs of

16 outstanding direct loans and loan guarantees’’ and

17 inserting ‘‘costs of outstanding direct loans (or di18 rect loan obligations) or loan guarantees (or loan

19 guarantee commitments)’’; and

20 (4) in subsection (e), by striking ‘‘A direct

21 loan’’ and all that follows through ‘‘comitment’’ and

22 inserting ‘‘An outstanding direct loan (or direct loan

23 obligation) or loan guarantee (or loan guarantee

24 commitment)’’.
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1 (d) CREDIT REFORM ACT CORRECTION.—(1) Section

2 506 of the Congressional Budget Act of 1974 is repealed.

3 (2) Section 507 of the Congressional Budget Act of

4 1974 is redesignated as section 506, and the table of con5 tents in section 1(b) of the Congressional Budget and Im6 poundment Control Act of 1974 is amended by striking

7 the item relating to section 506 and striking ‘‘SEC. 507.’’

8 and inserting ‘‘SEC. 506.’’.

9 (e) EXISTING RIGHTS NOT IMPAIRED.—Section 506

10 of the Congressional Budget Act of 1974 (as redesignated)

11 is amended by striking ‘‘title. Nothing’’ and inserting

12 ‘‘title, except that nothing’’ and by inserting after ‘‘con13 strued’’ the following ‘‘(1) to alter the terms or conditions

14 authorized to be included in loan or guarantee contracts

15 or the rights and responsibilities of the government and

16 the recipients of loans or guarantees under those contracts

17 or the laws that authorize them, or (2)’’.

18 (f) CREDIT REFORM LIQUIDATING ACCOUNTS.—(1)

19 Section 502(8) of the Congressional Budget Act of 1974

20 is amended by striking ‘‘budget account’’ and inserting

21 ‘‘nonbudget account’’ and by striking the last sentence

22 and inserting ‘‘Transactions between the Treasury or the

23 Federal Financing Bank and any liquidating account shall

24 be considered non-budgetary.’’.
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1 (2) Section 505(d) of the Congressional Budget Act

2 of 1974 is amended by striking ‘‘If funds’’ and all that

3 follows through ‘‘accounts, there’’ and inserting ‘‘There’’

4 and by striking ‘‘such obligations and commitments’’ and

5 inserting ‘‘the obligations and commitments of liquidating

6 accounts’’.

7 (3) Section 506(b) of the Congressional Budget Act

8 of 1974 (as redesignated) is amended by striking ‘‘be

9 available, to’’ and all that follows through the end of that

10 section, and inserting ‘‘immediately be transferred to the

11 Federal Financing Bank to repay those debt obligations

12 held by the Bank that were created to finance the loan

13 being repaid, and all amounts not transferred to the Bank

14 shall immediately be paid to the general fund of the Treas15 ury. All debt owed to the Treasury as a result of agency

16 borrowing authority used before October 1, 1991, for

17 loans or guarantees is hereby cancelled. The provisions of

18 this subsection shall not diminish any rights or respon19 sibilities guaranteed by subsection (a).’’.

20 SEC. 203. AMENDMENTS TO THE RULES OF THE HOUSE OF

21 REPRESENTATIVES.

22 (a) BUDGET COMMITTEE JURISDICTION.—Clause

23 1(e)(2) of rule X of the Rules of the House of Representa24 tives is amended by inserting ‘‘(A)’’ after ‘‘(2)’’ and by

25 inserting at the end the following:
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1 ‘‘(B) Budget targets contained in any joint resolution

2 described in section 118 of the Deficit Elimination Act of

3 1997 (relating to low growth).’’.

4 (b) MISCELLANEOUS CONFORMING AMENDMENTS.—

5 Clause 4 of rule X of the Rules of the House of Represent6 atives is amended—

7 (1) by repealing subparagraph (2) of paragraph

8 (a) and by redesignating subparagraph (3) as sub9 paragraph (2);

10 (2) in paragraph (g), by striking ‘‘February 25

11 of each year’’ and inserting ‘‘within 6 weeks after

12 the President’s budget submission’’; and

13 (3) in paragraph (h), by striking ‘‘or section

14 602 (in the case of fiscal years 1991 through

15 1995)’’.

16 (c) EMERGENCY DESIGNATIONS.—Clause 2(b) of rule

17 XXI of the Rules of the House of Representatives is

18 amended by striking ‘‘and’’ and by inserting before the

19 period the following: ‘‘, and except emergency designations

20 under section 102(b)(4) of the Deficit Elimination Act of

21 1997’’.

22 (d) REPEALER.—Clause 8 of rule XXI of the Rules

23 of the House of Representatives is repealed.

24 (e) SPIN-OFF LEGISLATION.—Rule XLIX of the

25 Rules of the House of Representatives is amended—
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1 (1) by changing the name of that rule to ‘‘En2 actment of Spin-Off Legislation under the Congres3 sional Budget Act’’;

4 (2) in clause 2 by striking ‘‘section 301, 304,

5 or 310’’ and inserting ‘‘section 301 or 304’’;

6 (3) in clause 1 by striking ‘‘adoption by the

7 Congress’’ and all that follows through ‘‘for such pe8 riod’’ and inserting ‘‘passage by the House of Rep9 resentatives (under section 301 or 304 of the Con10 gressional Budget Act of 1974) of a conference re11 port or final agreement on any concurrent resolution

12 on the budget containing any matter under section

13 301(b)(5) of that Act’’;

14 (4) in clause 1 by striking ‘‘, increasing or de15 creasing the statutory limit on the public debt’’;

16 (5) in the last sentence of clause 1 by inserting

17 ‘‘at the same time the engrossed copy of the concur18 rent resolution on the budget is transmitted to the

19 Senate’’ after ‘‘transmitted to the Senate for further

20 legislative action’’;

21 (6) in the first sentence of clause 2 by striking

22 ‘‘be as follows’’ and all that follows through the pe23 riod and inserting the following: ‘‘be the text of the

24 section in the concurrent resolution on the budget
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1 included under section 301(b)(5) of the Congres2 sional Budget Act of 1974, without change.’’, and in

3 the second sentence by striking ‘‘budget;’’ and all

4 that follows through the period and inserting ‘‘budg5 et.’’; and

6 (7) in clause 3 by striking ‘‘301(d)’’ and insert7 ing ‘‘301(e)’’, and by striking ‘‘upon the statutory

8 limit on the public debt’’.

9 SEC. 204. AMENDMENTS TO THE STANDING RULES OF THE

10 SENATE.

11 The Standing Rules of the Senate are amended by

12 adding at the end the following:

13 ‘‘Rule ——

14 ‘‘SPIN-OFF LEGISLATION

15 ‘‘Upon passage of a conference report on any concur16 rent resolution on the budget containing additional matter

17 under section 301(b)(5) of the Congressional Budget Act

18 of 1974, the joint resolution passed by the House of Rep19 resentatives under rule XLIX of the Rules of the House

20 of Representatives shall be deemed to have been passed

21 by the Senate, and shall be prepared for transmittal to

22 the President under the applicable rules of the Senate and

23 the House of Representatives. The vote by which the con24 ference report on the concurrent resolution on the budget

25 was agreed to in the Senate shall be deemed to have been
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1 a vote in favor of such joint resolution upon final passage

2 in the Senate.’’.

3 SEC. 205. PRESIDENT’S BUDGET AND SUPPLEMENTAL

4 BUDGET ESTIMATES.

5 (a) DEFINITIONS.—Section 1101 of title 31, United

6 States Code, is amended by adding at the end the follow7 ing:

8 ‘‘(3) ‘Expenditures’ has the same meaning as

9 the term ‘outlays’ in the Deficit Elimination Act of

10 1997.

11 ‘‘(4) All other terms used herein or in the docu12 ments prepared hereunder shall have the meanings

13 set forth in the Deficit Elimination Act of 1997.’’.

14 (b) BYRD AMENDMENT.—Section 1103 of title 31,

15 United States Code, is amended by striking ‘‘commitment

16 that budget’’ and inserting ‘‘commitment that, starting

17 with fiscal year 2002,’’.

18 (c) PRESIDENT’S BUDGET SUBMISSION.—Section

19 1105(a) of title 31, United States Code, is amended—

20 (1) in the first sentence by striking ‘‘On or

21 after the first Monday in January but not later than

22 the first Monday in February of each year’’ and in23 serting ‘‘On or before the first Monday in February

24 or the 21st calendar day beginning after the date
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1 the Board of Estimates issues a report to the Presi2 dent under section 114 of the Deficit Elimination

3 Act of 1997’’;

4 (2) in paragraph (15) by striking ‘‘section

5 301(a)(1)–(5)’’ and inserting ‘‘section 301(a)(1)–

6 (4);

7 (3) in paragraph (16) by striking ‘‘section

8 3(a)(3)’’ and inserting ‘‘section 3(3)’’; and

9 (4) by adding at the end the following new

10 paragraph:

11 ‘‘(32) an analysis of the financial condition of

12 Government-sponsored enterprises and the financial

13 exposure of the Government, if any, posed by

14 them.’’.

15 (d) USE OF OFFICIAL ESTIMATES.—Section 1105(f)

16 of title 31, United States Code, is amended by striking

17 ‘‘Balanced Budget and Emergency Deficit Control Act of

18 1985’’ and inserting ‘‘Deficit Elimination Act of 1997’’

19 and by inserting at the end the following new sentence:

20 ‘‘That budget shall be consistent with the discretionary

21 funding limit and the direct spending and receipts deficit

22 reduction requirement for that year chosen by the Board

23 of Estimates and shall be based upon the major estimating

24 assumptions chosen by that Board.’’.
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1 (e) MIDSESSION REVIEW.—Section 1106(a) of title

2 31, United States Code, is amended by striking ‘‘July 16

3 of each year’’ and inserting ‘‘August 30 of each year’’ and

4 by striking ‘‘submitted before July 16’’.

5 (f) CURRENT POLICY BASELINE.—(1) The first sen6 tence of section 1109 of title 31, United States Code, is

7 amended to read as follows: ‘‘In the budget submitted

8 under section 1105(a) or 1106(a), the President shall in9 clude a current policy baseline (as defined in section 116

10 of the Deficit Elimination Act of 1997) for the current

11 year, the budget year, and the outyears, including a de12 tailed comparison of that baseline with his proposed budg13 et for those years.’’.

14 (2) Subsection (b) of that section 1109 is amended

15 to read as follows:

16 ‘‘(b) The baseline referred to in subsection (a) shall

17 be calculated using the major estimating assumptions cho18 sen by the Board of Estimates under section 114 of the

19 Deficit Elimination Act of 1997.’’.

20 (g) GLOSSARY OF TERMS.—Section 1112(c) of title

21 31, United States Code, is amended by striking ‘‘The

22 Comptroller General—’’ and inserting ‘‘The Directors of

23 CBO and OMB, jointly—’’.
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1 SEC. 206. AMENDMENTS TO OTHER LAWS.

2 (a) REPEALERS.—The following provisions of law are

3 repealed:

4 (1) Section 710 of the Social Security Act.

5 (2) Section 201 (relating to 2-year appropria6 tions) of Public Law 100–119 (2 U.S.C. 621 note).

7 (3) Section 203 (relating to financial manage8 ment reform) of Public Law 100–119 (2 U.S.C. 621

9 note).

10 (4) The first subparagraph (F) of section

11 201(d)(2) of the Agricultural Act of 1949 (7 U.S.C.

12 1446(d)(2)(F)).

13 (b) ANTIDEFICIENCY ACT.—Section 1341(a)(1) of

14 title 31, United States Code, is amended by striking ‘‘sec15 tion 252 of the Balanced Budget and Emergency Deficit

16 Control Act of 1985’’ both times it appears and inserting

17 ‘‘the Deficit Elimination Act of 1997’’.

18 (c) DEBT HELD BY THE PUBLIC.—(1) Section 3101

19 of title 31, United States Code, is amended to read as

20 follows:

21 ‘‘SEC. 3101. PUBLIC DEBT LIMIT.

22 ‘‘(a) The amount of public debt obligations issued

23 under this chapter, and the amount of debt issued by

24 agencies other than the Treasury under separate statutory

25 authority, may be not more than $5,500,000,000,000 out26 standing at one time, subject to changes periodically made
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1 in that amount as provided by law through the congres2 sional budget process described in rule XLIX of the Rules

3 of the House of Representatives or otherwise.

4 ‘‘(b) Debt issued to United States Government trust

5 funds or to other agencies or accounts of the United

6 States Government (except the Federal Reserve System)

7 shall be excluded from the amount of debt taken into ac8 count in deciding whether the limit of subsection (a) has

9 been exceeded.

10 ‘‘(c) The limit in subsection (a) shall be applied to

11 the face amount of securities except for securities issued

12 on a discount basis:

13 ‘‘(1) Securities issued on a discount basis that

14 are redeemable before maturity at the option of their

15 holders shall be included in the total subject to sub16 section (a) at their current redemption values.

17 ‘‘(2) Securities issued on a discount basis that

18 are not redeemable before maturity at the option of

19 their holders shall be included in the total subject to

20 subsection (a) in an amount equal to the sum of—

21 ‘‘(A) the original purchase price of the ob22 ligation, plus

23 ‘‘(B) the portion of the discount on the ob24 ligation attributable to periods before the begin25 ning of such month (as determined under the
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1 principles of section 1272(a) of the Internal

2 Revenue Code of 1986 without regard to any

3 exceptions contained in paragraph (2) of such

4 section).’’.

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