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[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3925 Introduced in House (IH)]

108th CONGRESS
  2d Session
                                H. R. 3925

 To amend the Congressional Budget Act of 1974 and the Balanced Budget 
  and Emergency Deficit Control Act of 1985 to reform Federal budget 
   procedures, provide for budget discipline, accurately account for 
              Government spending, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             March 10, 2004

 Mr. Kirk (for himself, Mr. Bass, Mr. Castle, Mr. Ehlers, Mr. Feeney, 
  Mr. Franks of Arizona, Mr. Gibbons, Mr. Gillmor, Mr. Houghton, Mrs. 
 Kelly, Mrs. Myrick, Mr. Platts, Mr. Ryan of Wisconsin, Mr. Shays, Mr. 
 Upton, Mrs. Biggert, and Mrs. Johnson of Connecticut) introduced the 
following bill; which was referred to the Committee on the Budget, for 
  a period ending not later than June 1, 2004, and in addition to the 
   Committees on Rules, Ways and Means, and Government Reform, 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 amend the Congressional Budget Act of 1974 and the Balanced Budget 
  and Emergency Deficit Control Act of 1985 to reform Federal budget 
   procedures, provide for budget discipline, accurately account for 
              Government spending, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Deficit Control 
Act of 2004''.
    (b) Table of Contents.--

Sec. 1. Short title; table of contents.
Sec. 2. Effective date.
                  TITLE I--A SIMPLE AND BINDING BUDGET

                  Subtitle A--Joint Budget Resolutions

Sec. 101. Declaration of purposes for the Budget Act.
Sec. 102. The timetable.
Sec. 103. Annual joint resolutions on the budget.
Sec. 104. Budget required before spending bills may be considered.
Sec. 105. Amendments to effectuate joint resolutions on the budget.
               Subtitle B--Rainy Day Fund for Emergencies

Sec. 111. Purpose.
Sec. 112. Repeal of adjustments for emergencies.
Sec. 113. OMB emergency criteria.
Sec. 114. Development of guidelines for application of emergency 
                            definition.
Sec. 115. Reserve fund for emergencies in President's budget.
Sec. 116. Adjustments and reserve fund for emergencies in joint budget 
                            resolutions.
Sec. 117. Application of section 306 to emergencies in excess of 
                            amounts in reserve fund.
Sec. 118. Up-to-date tabulations.
Sec. 119. Prohibition on amendments to emergency reserve fund.
                        Subtitle C--The Baseline

Sec. 121. Elimination of inflation adjustment.
Sec. 122. The President's budget.
Sec. 123. The congressional budget.
Sec. 124. Congressional budget office reports to committees.
Sec. 125. Treatment of emergencies.
           TITLE II--IMPLEMENTING FEDERAL SPENDING DISCLIPINE

   Subtitle A--Spending Safeguards on the Growth of Entitlements and 
                              Mandatories

Sec. 201. Spending caps on growth of entitlements and mandatories.
Sec. 202. Exempt programs and activities.
Sec. 203. Exceptions, limitations, and special rules.
Sec. 204. Point of order.
Sec. 205. Technical and conforming amendments.
               Subtitle B--Discretionary Spending Limits

Sec. 211. Enforcing discretionary spending limits.
             TITLE III--COMBATING WASTE, FRAUD, AND ABUSE.

Subtitle A--Enhanced Rescissions of Budget Authority Identified by the 
                     President as Wasteful Spending

Sec. 301. Enhanced consideration of certain proposed rescissions.
      Subtitle B--Commission to Eliminate Waste, Fraud, and Abuse

Sec. 311. Establishment of Commission.
Sec. 312. Duties of the Commission.
Sec. 313. Powers of the Commission.
Sec. 314. Commission personnel matters.
Sec. 315. Termination of the Commission.
Sec. 316. Authorization of appropriations.
                     TITLE IV--TRUTH IN ACCOUNTING

Subtitle A--Accrual Funding of Pensions and Retirement Pay for Federal 
               Employees and Uniformed Services Personnel

Sec. 401. Civil Service Retirement System.
Sec. 402. Central Intelligence Agency Retirement and Disability System.
Sec. 403. Foreign Service Retirement and Disability System.
Sec. 404. Public Health Service Commissioned Corps Retirement System.
Sec. 405. National Oceanic and Atmospheric Administration Commissioned 
                            Officer Corps Retirement System.
Sec. 406. Coast Guard Military Retirement System.
 Subtitle B--Accrual Funding of Post-Retirement Health Benefits Costs 
                         for Federal Employees

Sec. 411. Federal employees health benefits fund.
Sec. 412. Funding uniformed services health benefits for all retirees.
Sec. 413. Effective date.
                  Subtitle C--Limit on the Public Debt

Sec. 421. Limit on public debt.
                 TITLE V--EXPEDITING THE BUDGET PROCESS

               Subtitle A--Further Enforcement Amendments

Sec. 501. Super-majority points of order.
Sec. 502. Budget resolution enforcement point of order.
Sec. 503. Point of order waiver protection.
                      Subtitle B--PAYGO Extension

Sec. 511. PAYGO extension.

SEC. 2. EFFECTIVE DATE.

    Except as otherwise specifically provided, this Act and the 
amendments made by this Act shall become effective on the date of 
enactment of this Act and shall apply with respect to fiscal years 
beginning after September 30, 2005.

                  TITLE I--A SIMPLE AND BINDING BUDGET

                  Subtitle A--Joint Budget Resolutions

SEC. 101. DECLARATION OF PURPOSES FOR THE BUDGET ACT.

    Paragraphs (1) and (2) of section 2 of the Congressional Budget and 
Impoundment Control Act of 1974 are amended to read as follows:
            ``(1) to assure effective control over the budgetary 
        process;
            ``(2) to facilitate the determination each year of the 
        appropriate level of Federal revenues and expenditures by the 
        Congress and the President;''.

SEC. 102. THE TIMETABLE.

    The timetable set forth in section 300 of the Congressional Budget 
Act of 1974 is amended by striking ``concurrent'' each place it appears 
and inserting ``joint''.

SEC. 103. ANNUAL JOINT RESOLUTIONS ON THE BUDGET.

    (a) Content of Annual Joint Resolutions on the Budget.--Section 
301(a) of the Congressional Budget Act of 1974 is amended as follows:
            (1) Strike paragraph (4) and insert the following new 
        paragraph:
            ``(4) subtotals of new budget authority and outlays for 
        nondefense discretionary spending, defense discretionary 
        spending, direct spending (excluding interest), and interest; 
        and for fiscal years to which the amendments made by subtitle B 
        of title I of the Deficit Control Act of 2004 apply, subtotals 
        of new budget authority and outlays for emergencies;''.
            (2) Strike the last sentence of such subsection.
    (b) Additional Matters in Joint Resolution.--Section 301(b) of the 
Congressional Budget Act of 1974 is amended as follows:
            (1) Strike paragraphs (2), (4), and (6) through (9).
            (2) After paragraph (1), insert the following new 
        paragraph:
            ``(2) if submitted by the Committee on Ways and Means of 
        the House of Representatives or the Committee on Finance of the 
        Senate to the Committee on the Budget of that House of 
        Congress, amend section 3101 of title 31, United States Code, 
        to change the statutory limit on the public debt;''.
            (3) After paragraph (3), insert the following new 
        paragraph:
            ``(4) require such other congressional procedures, relating 
        to the budget, as may be appropriate to carry out the purposes 
        of this Act;''; and
            (4) After paragraph (5), insert the following new 
        paragraph:
            ``(6) set forth procedures in the Senate whereby committee 
        allocations, aggregates, and other levels can be revised for 
        legislation if that legislation would not increase the deficit, 
        or would not increase the deficit when taken with other 
        legislation enacted after the adoption of the resolution, for 
        the first fiscal year or the total period of fiscal years 
        covered by the resolution.''.
    (c) Required Contents of Report.--Section 301(e)(2) of the 
Congressional Budget Act of 1974 is amended as follows:
            (1) Redesignate subparagraphs (A), (B), (C), (D), (E), and 
        (F) as subparagraphs (B), (C), (E), (F), (H), and (I), 
        respectively.
            (2) Before subparagraph (B) (as redesignated), insert the 
        following new subparagraph:
                    ``(A) new budget authority and outlays for each 
                major functional category, based on allocations of the 
                total levels set forth pursuant to subsection 
                (a)(1);''.
            (3) In subparagraph (C) (as redesignated), strike 
        ``mandatory'' and insert ``direct spending''.
            (4) After subparagraph (C) (as redesignated), insert the 
        following new subparagraph:
                    ``(D) a measure, as a percentage of gross domestic 
                product, of total outlays, total Federal revenues, the 
                surplus or deficit, and new outlays for nondefense 
                discretionary spending, defense spending, and direct 
                spending as set forth in such resolution;''.
            (5) After subparagraph (F) (as redesignated), insert the 
        following new subparagraph:
                    ``(G) if the joint resolution on the budget 
                includes any allocation to a committee other than the 
                Committee on Appropriations of levels in excess of 
                current law levels, a justification for not subjecting 
                any program, project, or activity (for which the 
                allocation is made) to annual discretionary 
                appropriations;''.
    (d) Additional Contents of Report.--Section 301(e)(3) of the 
Congressional Budget Act of 1974 is amended as follows:
            (1) Redesignate subparagraphs (A) and (B) as subparagraphs 
        (B) and (C), respectively, strike subparagraphs (C) and (D), 
        and redesignate subparagraph (E) as subparagraph (D).
            (2) Before subparagraph (B), insert the following new 
        subparagraph:
                    ``(A) reconciliation directives described in 
                section 310;''.
    (e) President's Budget Submission to the Congress.--(1) The first 
two sentences of section 1105(a) of title 31, United States Code, are 
amended to read as follows:
``On or after the first Monday in January but not later than the first 
Monday in February of each year the President shall submit a budget of 
the United States Government for the following fiscal year which shall 
set forth the following levels:
            ``(A) totals of new budget authority and outlays;
            ``(B) total Federal revenues and the amount, if any, by 
        which the aggregate level of Federal revenues should be 
        increased or decreased by bills and resolutions to be reported 
        by the appropriate committees;
            ``(C) the surplus or deficit in the budget;
            ``(D) subtotals of new budget authority and outlays for 
        nondefense discretionary spending, defense discretionary 
        spending, direct spending, and interest; and for fiscal years 
        to which the amendments made by subtitle B of title I of the 
        Deficit Control Act of 2004 apply, subtotals of new budget 
        authority and outlays for emergencies; and
            ``(E) the public debt.
Each budget submission shall include a budget message and summary and 
supporting information and, as a separately delineated statement, the 
levels required in the preceding sentence for at least each of the 9 
ensuing fiscal years.''.
    (2) The third sentence of section 1105(a) of title 31, United 
States Code, is amended by inserting ``submission'' after ``budget''.
    (f) Limitation on Contents of Budget Resolutions.--Section 305 of 
the Congressional Budget Act of 1974 is amended by adding at the end 
the following new subsection:
    ``(e) Limitation on Contents.--(1) It shall not be in order in the 
House of Representatives or in the Senate to consider any joint 
resolution on the budget or any amendment thereto or conference report 
thereon that contains any matter referred to in paragraph (2).
    ``(2) Any joint resolution on the budget or any amendment thereto 
or conference report thereon that contains any matter not permitted in 
section 301(a) or (b) shall not be treated in the House of 
Representatives or the Senate as a budget resolution under subsection 
(a) or (b) or as a conference report on a budget resolution under 
subsection (c) of this section.''.

SEC. 104. BUDGET REQUIRED BEFORE SPENDING BILLS MAY BE CONSIDERED.

    (a) Amendments to Section 302.--Section 302(a) of the Congressional 
Budget Act of 1974 is amended by striking paragraph (5).
    (b) Amendments to Section 303 and Conforming Amendments.--(1) 
Section 303 of the Congressional Budget Act of 1974 is amended by 
striking ``(a) In General.--'', by striking ``as reported to the House 
or Senate'', by striking ``to become effective'' in paragraph (1), and 
by striking subsections (b) and (c); and
    (2) by striking its section heading and inserting the following new 
section heading: ``consideration of budget-related legislation before 
budget becomes law''.
    (c) Additional Amendments.--(1) Section 302(g)(1) of the 
Congressional Budget Act of 1974 is amended by striking ``and, after 
April 15, section 303''.
    (2)(A) Section 904(c)(1) of the Congressional Budget Act of 1974 is 
amended by inserting ``303,'' before ``305(b)(2),''.
    (B) Section 904(d)(2) of the Congressional Budget Act of 1974 is 
amended by inserting ``303,'' before ``305(b)(2),''.

SEC. 105. AMENDMENTS TO EFFECTUATE JOINT RESOLUTIONS ON THE BUDGET.

    (a) Definition.--Paragraph (4) of section 3 of the Congressional 
Budget Act of 1974 is amended to read as follows:
            ``(4) the term `joint resolution on the budget' means--
                    ``(A) a joint resolution setting forth the budget 
                for the United States Government for a fiscal year as 
                provided in section 301; and
                    ``(B) any other joint resolution revising the 
                budget for the United States Government for a fiscal 
                year as described in section 304.''.
    (b) Additional Amendments to the Congressional Budget and 
Impoundment Control Act of 1974.--(1)(A) Sections 301, 302, 303, 305, 
308, 310, 311, 312, 314, 405, and 904 of the Congressional Budget Act 
of 1974 (2 U.S.C. 621 et seq.) are amended by striking ``concurrent'' 
each place it appears and inserting ``joint''.
    (B)(i) Sections 302(d), 302(g), 308(a)(1)(A), and 310(d)(1) of the 
Congressional Budget Act of 1974 are amended by striking ``most 
recently agreed to concurrent resolution on the budget'' each place it 
occurs and inserting ``most recently enacted joint resolution on the 
budget or agreed to concurrent resolution on the budget (as 
applicable)''.
    (ii) The section heading of section 301 is amended by striking 
``adoption of concurrent resolution'' and inserting ``joint 
resolutions''; and
    (iii) Section 304 of such Act is amended to read as follows:

             ``permissible revisions of budget resolutions

    ``Sec. 304. At any time after the joint resolution on the budget 
for a fiscal year has been enacted pursuant to section 301, and before 
the end of such fiscal year, the two Houses and the President may enact 
a joint resolution on the budget which revises or reaffirms the joint 
resolution on the budget for such fiscal year most recently enacted.''.
    (C) Sections 302, 303, 310, and 311, of such Act are amended by 
striking ``agreed to'' each place it appears and by inserting 
``enacted''.
    (2)(A) Paragraph (4) of section 3 of the Congressional Budget and 
Impoundment Control Act of 1974 is amended by striking ``concurrent'' 
each place it appears and by inserting ``joint''.
    (B) The table of contents set forth in section 1(b) of such Act is 
amended--
            (i) in the item relating to section 301, by striking 
        ``adoption of concurrent resolution'' and inserting ``joint 
        resolutions'';
            (ii) by striking the item relating to section 303 and 
        inserting the following:

``Sec. 303. Consideration of budget-related legislation before budget 
                            becomes law.'';
            (iii) by striking ``concurrent'' and inserting ``joint'' in 
        the item relating to section 305.
    (c) Conforming Amendments to the Rules of the House of 
Representatives.--Clauses 1(e)(1), 4(a)(4), 4(b)(2), 4(f)(1)(A), and 
4(f)(2) of rule X, clause 10 of rule XVIII, and clause 10 of rule XX of 
the Rules of the House of Representatives are amended by striking 
``concurrent'' each place it appears and inserting ``joint''.
    (d) Conforming Amendments to the Balanced Budget and Emergency 
Deficit Control Act of 1985.--Section 258C(b)(1) of the Balanced Budget 
and Emergency Deficit Control Act of 1985 (2 U.S.C. 907d(b)(1)) is 
amended by striking ``concurrent'' and inserting ``joint''.
    (e) Conforming Amendments to Section 310 Regarding Reconciliation 
Directives.--(1) The side heading of section 310(a) of the 
Congressional Budget Act of 1974 (as amended by subsection (b)) is 
further amended by inserting ``Joint Explanatory Statement Accompanying 
Conference Report on'' before ``Joint''.
    (2) Section 310(a) of such Act is amended by striking ``A'' and 
inserting ``The joint explanatory statement accompanying the conference 
report on a''.
    (3) The first sentence of section 310(b) of such Act is amended by 
striking ``If'' and inserting ``If the joint explanatory statement 
accompanying the conference report on''.
    (4) Section 310(c)(1) of such Act is amended by inserting ``the 
joint explanatory statement accompanying the conference report on'' 
after ``pursuant to''.
    (f) Conforming Amendments to Section 3 Regarding Direct Spending.--
Section 3 of the Congressional Budget and Impoundment Control Act of 
1974 is amended by adding at the end the following new paragraph:
            ``(11) The term `direct spending' has the meaning given to 
        such term in section 250(c)(8) of the Balanced Budget and 
        Emergency Deficit Control Act of 1985.''.

               Subtitle B--Rainy Day Fund for Emergencies

SEC. 111. PURPOSE.

    The purposes of this subtitle are to--
            (1) develop budgetary and fiscal procedures for 
        emergencies;
            (2) subject spending for emergencies to budgetary 
        procedures and controls; and
            (3) establish criteria for determining compliance with 
        emergency requirements.

SEC. 112. REPEAL OF ADJUSTMENTS FOR EMERGENCIES.

    (a) Elimination of Emergency Designation.--Sections 252(e) and 
252(d)(4)(B) of the Balanced Budget and Emergency Deficit Control Act 
of 1985 are repealed.
    (b) Elimination of Adjustments.--Section 314 of the Congressional 
Budget Act of 1974 is repealed.
    (c) Conforming Amendment.--Clause 2 of rule XXI of the Rules of the 
House of Representatives is amended by repealing paragraph (e) and by 
redesignating paragraph (f) as paragraph (e).

SEC. 113. OMB EMERGENCY CRITERIA.

    (a) Definition of Emergency.--Section 3 of the Congressional Budget 
and Impoundment Control Act of 1974 (as amended by section 105(f)) is 
further amended by adding at the end the following new paragraph:
            ``(12)(A) The term `emergency' means a situation that--
                    ``(i) requires new budget authority and outlays (or 
                new budget authority and the outlays flowing therefrom) 
                for the prevention or mitigation of, or response to, 
                loss of life or property, or a threat to national 
                security; and
                    ``(ii) is unanticipated.
            ``(B) As used in subparagraph (A), the term `unanticipated' 
        means that the situation is--
                    ``(i) sudden, which means quickly coming into being 
                or not building up over time;
                    ``(ii) urgent, which means a pressing and 
                compelling need requiring immediate action;
                    ``(iii) unforeseen, which means not predicted or 
                anticipated as an emerging need; and
                    ``(iv) temporary, which means not of a permanent 
                duration.''.
    (b) Conforming Amendment.--The term `emergency' has the meaning 
given to such term in section 3 of the Congressional Budget and 
Impoundment Control Act of 1974.''.

SEC. 114. DEVELOPMENT OF GUIDELINES FOR APPLICATION OF EMERGENCY 
              DEFINITION.

    Not later than 5 months after the date of enactment of this Act, 
the chairmen of the Committees on the Budget (in consultation with the 
President) shall, after consulting with the chairmen of the Committees 
on Appropriations and applicable authorizing committees of their 
respective Houses and the Directors of the Congressional Budget Office 
and the Office of Management and Budget, jointly publish in the 
Congressional Record guidelines for application of the definition of 
emergency set forth in section 3(12) of the Congressional Budget and 
Impoundment Control Act of 1974.

SEC. 115. RESERVE FUND FOR EMERGENCIES IN PRESIDENT'S BUDGET.

    Section 1105(f) of title 31, United States Code is amended by 
adding at the end the following new sentences: ``Such budget submission 
shall also comply with the requirements of section 316(b) of the 
Congressional Budget Act of 1974 and, in the case of any budget 
authority requested for an emergency, such submission shall include a 
detailed justification of why such emergency is an emergency within the 
meaning of section 3(12) of the Congressional Budget Act of 1974.''.

SEC. 116. ADJUSTMENTS AND RESERVE FUND FOR EMERGENCIES IN JOINT BUDGET 
              RESOLUTIONS.

    (a) Emergencies.--Title III of the Congressional Budget Act of 1974 
is amended by adding at the end the following new section:

                             ``emergencies

    ``Sec. 316. (a) Adjustments.--
            ``(1) In general.--After the reporting of a bill or joint 
        resolution or the submission of a conference report thereon 
        that provides budget authority for any emergency as identified 
        pursuant to subsection (d) that is not covered by subsection 
        (c)--
                    ``(A) the chairman of the Committee on the Budget 
                of the House of Representatives or the Senate shall 
                determine and certify, pursuant to the guidelines 
                referred to in section 114 of the Deficit Control Act 
                of 2004, the portion (if any) of the amount so 
                specified that is for an emergency within the meaning 
                of section 3(12); and
                    ``(B) such chairman shall make the adjustment set 
                forth in paragraph (2) for the amount of new budget 
                authority (or outlays) in that measure and the outlays 
                flowing from that budget authority.
            ``(2) Matters to be adjusted.--The adjustments referred to 
        in paragraph (1) are to be made to the allocations made 
        pursuant to the appropriate joint resolution on the budget 
        pursuant to section 302(a) and shall be in an amount not to 
        exceed the amount reserved for emergencies pursuant to the 
        requirements of subsection (b).
    ``(b) Reserve Fund for Emergencies.--
            ``(1) Amounts.--The amount set forth in the reserve fund 
        for emergencies (other than those covered by subsection (c)) 
        for budget authority and outlays for a fiscal year pursuant to 
        section 301(a)(4) shall equal--
                    ``(A) the average of the enacted levels of budget 
                authority for emergencies (other than those covered by 
                subsection (c)) in the 5 fiscal years preceding the 
                current year; and
                    ``(B) the average of the levels of outlays for 
                emergencies in the 5 fiscal years preceding the current 
                year flowing from the budget authority referred to in 
                subparagraph (A), but only in the fiscal year for which 
                such budget authority first becomes available for 
                obligation.
            ``(2) Average levels.--For purposes of paragraph (1), the 
        amount used for a fiscal year to calculate the average of the 
        enacted levels when one or more of such 5 preceding fiscal 
        years is any of fiscal years 2000 through 2004 is as follows: 
        the amount of enacted levels of budget authority and the amount 
        of new outlays flowing therefrom for emergencies, but only in 
        the fiscal year for which such budget authority first becomes 
        available for obligation for each of such 5 fiscal years, which 
        shall be determined by the Committees on the Budget of the 
        House of Representatives and the Senate after receipt of a 
        report on such matter transmitted to such committees by the 
        Director of the Congressional Budget Office 6 months after the 
        date of enactment of this section and thereafter in February of 
        each calendar year.
    ``(c) Treatment of Emergencies To Fund Certain Military 
Operations.--Whenever the Committee on Appropriations reports any bill 
or joint resolution that provides budget authority for any emergency 
that is a threat to national security and the funding of which carries 
out a military operation authorized by a declaration of war or a joint 
resolution authorizing the use of military force and the report 
accompanying that bill or joint resolution, pursuant to subsection (d), 
identifies any provision that increases outlays or provides budget 
authority (and the outlays flowing therefrom) for such emergency, the 
enactment of which would cause the total amount of budget authority or 
outlays provided for emergencies for the budget year in the joint 
resolution on the budget (pursuant to section 301(a)(4)) to be 
exceeded:
            ``(A) Such bill or joint resolution shall be referred to 
        the Committee on the Budget of the House or the Senate, as the 
        case may be, with instructions to report it without amendment, 
        other than that specified in subparagraph (B), within 5 
        legislative days of the day in which it is reported from the 
        originating committee. If the Committee on the Budget of either 
        House fails to report a bill or joint resolution referred to it 
        under this subparagraph within such 5-day period, the committee 
        shall be automatically discharged from further consideration of 
        such bill or joint resolution and such bill or joint resolution 
        shall be placed on the appropriate calendar.
            ``(B) An amendment to such a bill or joint resolution 
        referred to in this subsection shall only consist of an 
        exemption from section 251 of the Balanced Budget and Emergency 
        Deficit Control Act of 1985 of all or any part of the 
        provisions that provide budget authority (and the outlays 
        flowing therefrom) for such emergency if the committee 
        determines, pursuant to the guidelines referred to in section 
        114 of the Deficit Control Act of 2004, that such budget 
authority is for an emergency within the meaning of section 3(12).
            ``(C) If such a bill or joint resolution is reported with 
        an amendment specified in subparagraph (B) by the Committee on 
        the Budget of the House of Representatives or the Senate, then 
        the budget authority and resulting outlays that are the subject 
        of such amendment shall not be included in any determinations 
        under section 302(f) or 311(a) for any bill, joint resolution, 
        amendment, motion, or conference report.
    ``(d) Committee Notification of Emergency Legislation.--Whenever 
the Committee on Appropriations or any other committee of either House 
(including a committee of conference) reports any bill or joint 
resolution that provides budget authority for any emergency, the report 
accompanying that bill or joint resolution (or the joint explanatory 
statement of managers in the case of a conference report on any such 
bill or joint resolution) shall identify all provisions that provide 
budget authority and the outlays flowing therefrom for such emergency 
and include a statement of the reasons why such budget authority meets 
the definition of an emergency pursuant to the guidelines referred to 
in section 114 of the Deficit Control Act of 2004.''.
    (b) Conforming Amendment.--The table of contents set forth in 
section 1(b) of the Congressional Budget and Impoundment Control Act of 
1974 is amended by inserting after the item relating to section 315 the 
following new item:

``Sec. 316. Emergencies.''.

SEC. 117. APPLICATION OF SECTION 306 TO EMERGENCIES IN EXCESS OF 
              AMOUNTS IN RESERVE FUND.

    Section 306 of the Congressional Budget Act of 1974 is amended by 
inserting at the end the following new sentence: ``No amendment 
reported by the Committee on the Budget (or from the consideration of 
which such committee has been discharged) pursuant to section 316(c) 
may be amended.''.

SEC. 118. UP-TO-DATE TABULATIONS.

    Section 308(b)(2) of the Congressional Budget Act of 1974 is 
amended by striking ``and'' at the end of subparagraph (B), by striking 
the period at the end of subparagraph (C) and inserting ``; and'', and 
by adding at the end the following new subparagraph:
                    ``(D) shall include an up-to-date tabulation of 
                amounts remaining in the reserve fund for 
                emergencies.''.

SEC. 119. PROHIBITION ON AMENDMENTS TO EMERGENCY RESERVE FUND.

    (a) Point of Order.--Section 305 of the Congressional Budget Act of 
1974 (as amended by section 103(f)) is further amended by adding at the 
end the following new subsection:
    ``(f) Point of Order Regarding Emergency Reserve Fund.--It shall 
not be in order in the House of Representatives or in the Senate to 
consider an amendment to a joint resolution on the budget which changes 
the amount of budget authority and outlays set forth in section 
301(a)(4) for emergency reserve fund.''.
    (b) Technical Amendment.--(1) Section 904(c)(1) of the 
Congressional Budget Act of 1974 is amended by inserting ``305(e), 
305(f),'' after ``305(c)(4),''.
    (2) Section 904(d)(2) of the Congressional Budget Act of 1974 is 
amended by inserting ``305(e), 305(f),'' after ``305(c)(4),''.

                        Subtitle C--The Baseline

SEC. 121. ELIMINATION OF INFLATION ADJUSTMENT.

    Section 257(c) of the Balanced Budget and Emergency Deficit Control 
Act of 1985 is amended--
            (1) in paragraph (1) by striking ``for inflation as 
        specified in paragraph (5),''; and
            (2) by striking paragraph (5) and redesignating paragraph 
        (6) as paragraph (5).

SEC. 122. THE PRESIDENT'S BUDGET.

    (a) Paragraph (5) of section 1105(a) of title 31, United States 
Code, is amended to read as follows:
            ``(5) except as provided in subsection (b) of this section, 
        estimated expenditures and appropriations for the current year 
        and estimated expenditures and proposed appropriations the 
        President decides are necessary to support the Government in 
        the fiscal year for which the budget is submitted and the 4 
        fiscal years following that year, and, except for detailed 
        budget estimates, the percentage change from the current year 
        to the fiscal year for which the budget is submitted for 
        estimated expenditures and for appropriations.''.
    (b) Section 1105(a)(6) of title 31, United States Code, is amended 
to read as follows:
            ``(6) estimated receipts of the Government in the current 
        year and the fiscal year for which the budget is submitted and 
        the 4 fiscal years after that year under--
                    ``(A) laws in effect when the budget is submitted; 
                and
                    ``(B) proposals in the budget to increase revenues,
        and the percentage change (in the case of each category 
        referred to in subparagraphs (A) and (B)) between the current 
        year and the fiscal year for which the budget is submitted and 
        between the current year and each of the 9 fiscal years after 
        the fiscal year for which the budget is submitted.''.
    (c) Section 1105(a)(12) of title 31, United States Code, is amended 
to read as follows:
            ``(12) for each proposal in the budget for legislation that 
        would establish or expand a Government activity or function, a 
        table showing--
                    ``(A) the amount proposed in the budget for 
                appropriation and for expenditure because of the 
                proposal in the fiscal year for which the budget is 
                submitted;
                    ``(B) the estimated appropriation required because 
                of the proposal for each of the 4 fiscal years after 
                that year that the proposal will be in effect; and
                    ``(C) the estimated amount for the same activity or 
                function, if any, in the current fiscal year,
        and, except for detailed budget estimates, the percentage 
        change (in the case of each category referred to in 
        subparagraphs (A), (B), and (C)) between the current year and 
        the fiscal year for which the budget is submitted.''.
    (d) Section 1105(a)(18) of title 31, United States Code, is amended 
by inserting ``new budget authority and'' before ``budget outlays''.
    (e) Section 1105(a) of title 31, United States Code, is amended by 
adding at the end the following new paragraphs:
            ``(35) a comparison of levels of estimated expenditures and 
        proposed appropriations for each function and subfunction in 
        the current fiscal year and the fiscal year for which the 
        budget is submitted, along with the proposed increase or 
        decrease of spending in percentage terms for each function and 
        subfunction.
            ``(36) a table on sources of growth in total direct 
        spending under current law and as proposed in this budget 
        submission for the budget year and the ensuing 9 fiscal years, 
        which shall include changes in outlays attributable to the 
        following: cost-of-living adjustments; changes in the number of 
        program recipients; increases in medical care prices, 
        utilization and intensity of medical care; and residual 
        factors.''.
    (f) Section 1109(a) of title 31, United States Code, is amended by 
inserting after the first sentence the following new sentence: ``For 
discretionary spending, these estimates shall assume the levels set 
forth in the discretionary spending limits under section 251(b) of the 
Balanced Budget and Emergency Deficit Control Act of 1985, as adjusted, 
for the appropriate fiscal years (and if no such limits are in effect, 
these estimates shall assume the adjusted levels for the most recent 
fiscal year for which such levels were in effect).''.

SEC. 123. THE CONGRESSIONAL BUDGET.

    Section 301(e) of the Congressional Budget Act of 1974 (as amended 
by section 103) is further amended--
            (1) in paragraph (1), by inserting at the end the 
        following: ``The basis of deliberations in developing such 
        joint resolution shall be the estimated budgetary levels for 
        the preceding fiscal year. Any budgetary levels pending before 
        the committee and the text of the joint resolution shall be 
        accompanied by a document comparing such levels or such text to 
        the estimated levels of the prior fiscal year. Any amendment 
        offered in the committee that changes a budgetary level and is 
        based upon a specific policy assumption for a program, project, 
        or activity shall be accompanied by a document indicating the 
        estimated amount for such program, project, or activity in the 
        current year.''; and
            (2) in paragraph (2), by striking ``and'' at the end of 
        subparagraph (H) (as redesignated), by striking the period and 
        inserting ``; and'' at the end of subparagraph (I) (as 
        redesignated), and by adding at the end the following new 
        subparagraph:
                    ``(J) a comparison of levels for the current fiscal 
                year with proposed spending and revenue levels for the 
                subsequent fiscal years along with the proposed 
                increase or decrease of spending in percentage terms 
                for each function.''.

SEC. 124. CONGRESSIONAL BUDGET OFFICE REPORTS TO COMMITTEES.

    (a) The first sentence of section 202(e)(1) of the Congressional 
Budget Act of 1974 is amended by inserting ``compared to comparable 
levels for the current year'' before the comma at the end of 
subparagraph (A) and before the comma at the end of subparagraph (B).
    (b) Section 202(e)(1) of the Congressional Budget Act of 1974 is 
amended by inserting after the first sentence the following new 
sentence: ``Such report shall also include a table on sources of 
spending growth in total direct spending for the budget year and the 
ensuing 4 fiscal years, which shall include changes in outlays 
attributable to the following: cost-of-living adjustments; changes in 
the number of program recipients; increases in medical care prices, 
utilization and intensity of medical care; and residual factors.''.
    (c) Section 308(a)(1)(B) of the Congressional Budget Act of 1974 is 
amended by inserting ``and shall include a comparison of those levels 
to comparable levels for the current fiscal year'' before ``if timely 
submitted''.

SEC. 125. TREATMENT OF EMERGENCIES.

    Section 257(c) of the Balanced Budget and Emergency Deficit Control 
Act of 1985 (as amended by section 121) is further amended by adding at 
the end the following new paragraph:
            ``(6) Emergencies.--Budgetary resources for emergencies 
        shall be at the level provided in the reserve fund for 
        emergencies for that fiscal year pursuant to section 301(a)(4) 
        of the Congressional Budget Act of 1974.''.

           TITLE II--IMPLEMENTING FEDERAL SPENDING DISCIPLINE

   Subtitle A--Spending Safeguards on the Growth of Entitlements and 
                              Mandatories

SEC. 201. SPENDING CAPS ON GROWTH OF ENTITLEMENTS AND MANDATORIES.

    (a) Control of Entitlements and Mandatories.--The Balanced Budget 
and Emergency Deficit Control Act of 1985 is amended by adding after 
section 252 the following new section:

``SEC. 252A. ENFORCING CONTROLS ON DIRECT SPENDING.

    ``(a) Cap on Growth of Entitlements.--Effective for fiscal year 
2006 and for each ensuing fiscal year, the total level of direct 
spending for all direct spending programs, projects, and activities 
(excluding social security) for any such fiscal year shall not exceed 
the total level of spending for all such programs, projects, and 
activities for the previous fiscal year after the direct spending for 
each such program, project, or activity is increased by the inflator 
(if any) applicable to that program, project, or activity and the 
growth in eligible population for such program, project, or activity.
    ``(b) Sequestration.--Within 15 days after Congress adjourns to end 
a session (other than of the second session of the One Hundred Eighth 
Congress), and on the same day as a sequestration (if any) under 
section 251, there shall be a sequestration to reduce the amount of 
direct spending for the fiscal year beginning in the year the Congress 
adjourns by any amount necessary to reduce such spending to the level 
set forth in subsection (a) unless that amount is less than 
$250,000,000.
    ``(c) Uniform Reductions; Limitations.--The amount required to be 
sequestered for the fiscal year under subsection (a) shall be obtained 
from nonexempt direct spending accounts by actions taken in the 
following order:
            ``(1) First.--The reductions in the programs specified in 
        section 256(a) (National Wool Act and special milk), section 
        256(b) (guaranteed student loans), and section 256(c) (foster 
        care and adoption assistance) shall be made.
            ``(2) Second.--Any additional reductions that may be 
        required shall be achieved by reducing each remaining nonexempt 
        direct spending account by the uniform percentage necessary to 
        achieve those additional reductions, except that--
                    ``(A) the low-income programs specified in section 
                256(d) shall not be reduced by more than 2 percent; and
                    ``(B) the retirement and veterans benefits 
                specified in sections 256(f), (g), and (h) shall not be 
                reduced by more than 2 percent in the manner specified 
                in that section.
        The limitations set forth in subparagraphs (A) and (B) shall be 
        applied iteratively, and after each iteration the uniform 
        percentage applicable to all other programs under this 
        paragraph shall be increased (if necessary) to a level 
        sufficient to achieve the reductions required by this 
        paragraph.''.
    (b) Table of Contents Amendment.--The table of contents set forth 
in 250(c) of the Balanced Budget and Emergency Deficit Control Act of 
1985 is amended by adding after the item relating to section 252 the 
following new item:

``Sec. 252A. Enforcing controls on direct spending.''.

SEC. 202. EXEMPT PROGRAMS AND ACTIVITIES.

    Section 255 of the Balanced Budget and Emergency Deficit Control 
Act of 1985 is amended to read as follows:

``SEC. 255. EXEMPT PROGRAMS AND ACTIVITIES.

    ``(a) Social Security Benefits; Tier I Railroad Retirement 
Benefits; and Medicare Benefits.--(1) Benefits payable under the old-
age, survivors, and disability insurance program established under 
title II of the Social Security Act, and benefits payable under section 
3(a), 3(f)(3), 4(a), or 4(f) of the Railroad Retirement Act of 1974, 
shall be exempt from reduction under any order issued under this part.
    ``(2) Payments made under title XVIII (relating to medicare of the 
Social Security Act shall be exempt from reduction under any order 
issued under this part.
    ``(b) Descriptions and Lists.--The following budget accounts or 
activities shall be exempt from sequestration:
            ``(1) net interest;
            ``(2) all payments to trust funds from excise taxes or 
        other receipts or collections properly creditable to those 
        trust funds;
            ``(3) all payments from one Federal direct spending budget 
        account to another Federal budget account; and all 
        intragovernmental funds including those from which funding is 
        derived primarily from other Government accounts, except to the 
        extent that such funds are augmented by direct appropriations 
        for the fiscal year for which the order is in effect;
            ``(4) activities resulting from private donations, 
        bequests, or voluntary contributions to the Government;
            ``(5) payments from any revolving fund or trust-revolving 
        fund (or similar activity) that provides deposit insurance or 
        other Government insurance, Government guarantees, or any other 
        form of contingent liability, to the extent those payments 
        result from contractual or other legally binding commitments of 
        the Government at the time of any sequestration;
            ``(6) credit liquidating and financing accounts;
            ``(7) the following accounts, which largely fulfill 
        requirements of the Constitution or otherwise make payments to 
        which the Government is committed:
                    ``Administration of Territories, Northern Mariana 
                Islands Covenant grants (14-0412-0-1-806);
                    ``Armed Forces Retirement Home Trust Fund, payment 
                of claims (84-8930-0-7-705);
                    ``Bureau of Indian Affairs, miscellaneous payments 
                to Indians (14-2303-0-1-452);
                    ``Bureau of Indian Affairs, miscellaneous trust 
                funds, tribal trust funds (14-9973-0-7-999);
                    ``Claims, defense;
                    ``Claims, judgments, and relief act (20-1895-0-1-
                806);
                    ``Compact of Free Association, economic assistance 
                pursuant to Public Law 99-658 (14-0415-0-1-806);
                    ``Compensation of the President (11-0001-0-1-802);
                    ``Customs Service, miscellaneous permanent 
                appropriations (20-9992-0-2-852);
                    ``Eastern Indian land claims settlement fund (14-
                2202-0-1-806);
                    ``Farm Credit Administration, Limitation on 
                Administration Expenses (78-4131-0-3-351);
                    ``Farm Credit System Financial Assistance 
                Corporation, interest payments (20-1850-0-1-351);
                    ``Internal Revenue collections of Puerto Rico (20-
                5737-0-2-852);
                    ``Panama Canal Commission, operating expenses and 
                capital outlay (95-5190-0-2-403);
                    ``Payments of Vietnam and USS Pueblo prisoner-of-
                war claims (15-0104-0-1-153);
                    ``Payments to copyright owners (03-5175-0-2-376);
                    ``Payments to health care trust funds (75-0580-0-1-
                571);
                    ``Payments to social security trust funds (75-0404-
                0-1-651);
                    ``Payments to the United States territories, fiscal 
                assistance (14-0418-0-1-801);
                    ``Payments to widows and heirs of deceased Members 
                of Congress (00-0215-0-1-801);
                    ``Pension Benefit Guaranty Corporation Fund (16-
                4204-0-3-601);
                    ``Salaries of Article III judges;
                    ``Washington Metropolitan Area Transit Authority, 
                interest payments (46-0300-0-1-401);
            ``(8) the following noncredit special, revolving, or trust-
        revolving funds:
                    ``Coinage profit fund (20-5811-0-2-803);
                    ``Comptroller of the Currency;
                    ``Director of the Office of Thrift Supervision;
                    ``Exchange Stabilization Fund (20-4444-0-3-155);
                    ``Federal Housing Finance Board;
                    ``Foreign Military Sales trust fund (11-82232-0-7-
                155);
                    ``National Credit Union Administration, central 
                liquidating facility (25-4470-0-3-373);
                    ``National Credit Union Administration, credit 
                union insurance fund (25-4468-0-3-373);
                    ``National Credit Union Administration operating 
                fund (25-4056-0-3-373); and
                    ``Resolution Trust Corporation Revolving Fund (22-
                4055-0-3-373);
            ``(9) Thrift Savings Fund;
            ``(10) appropriations for the District of Columbia to the 
        extent they are appropriations of locally raised funds;
            ``(11)(A) any amount paid as regular unemployment 
        compensation by a State from its account in the Unemployment 
        Trust Fund (established by section 904(a) of the Social 
        Security Act);
            ``(B) any advance made to a State from the Federal 
        unemployment account (established by section 904(g) of such 
        Act) under title XII of such Act and any advance appropriated 
        to the Federal unemployment account pursuant to section 1203 of 
        such Act; and
            ``(C) any payment made from the Federal Employees 
        Compensation Account (as established under section 909 of such 
        Act) for the purpose of carrying out chapter 85 of title 5, 
        United States Code, and funds appropriated or transferred to or 
        otherwise deposited in such Account; and
            ``(12)(A) FDIC, Bank Insurance Fund (51-4064-0-3-373);
            ``(B) FDIC, FSLIC Resolution Fund (51-4065-0-3-373); and
            ``(C) FDIC, Savings Association Insurance Fund (51-4066-0-
        3-373).
    ``(c) Federal Retirement and Disability Accounts.--The following 
Federal retirement and disability accounts shall be exempt from 
reduction under any order issued under this part:
            ``Civil service retirement and disability fund (24-8135-0-
        7-602).
            ``Black Lung Disability Trust Fund (20-8144-0-7-601).
            ``Foreign Service Retirement and Disability Fund (19-8186-
        0-7-602).
            ``District of Columbia Judicial Retirement and Survivors 
        Annuity Fund (20-8212-0-7-602).
            ``Judicial Survivors' Annuities Fund (10-8110-0-7-602).
            ``Payments to the Railroad Retirement Accounts (60-0113-0-
        1-601).
            ``Tax Court Judges Survivors Annuity Fund (23-8115-0-7-
        602).
            ``Employees Life Insurance Fund (24-8424-0-8-602).
    ``(d) Federal Administrative Expenses.--
            ``(1) Notwithstanding any provision of law other than 
        paragraph (3), administrative expenses incurred by the 
        departments and agencies, including independent agencies, of 
        the Government in connection with any program, project, 
        activity, or account shall be subject to reduction pursuant to 
        any sequestration order, without regard to any exemption, 
        exception, limitation, or special rule otherwise applicable 
        with respect to such program, project, activity, or account, 
        and regardless of whether the program, project, activity, or 
        account is self-supporting and does not receive appropriations.
            ``(2) Payments made by the Government to reimburse or match 
        administrative costs incurred by a State or political 
        subdivision under or in connection with any program, project, 
        activity, or account shall not be considered administrative 
        expenses of the Government for purposes of this section, and 
        shall be subject to sequestration to the extent (and only to 
        the extent) that other payments made by the Government under or 
        in connection with that program, project, activity, or account 
        are subject to that reduction or sequestration; except that 
        Federal payments made to a State as reimbursement of 
        administrative costs incurred by that State under or in 
        connection with the unemployment compensation programs 
        specified in subsection (a)(11) shall be subject to reduction 
        or sequestration under this part notwithstanding the exemption 
        otherwise granted to such programs under that subsection.
            ``(3) Notwithstanding any other provision of law, the 
        administrative expenses of the following programs shall be 
        exempt from sequestration:
                    ``(A) Comptroller of the Currency.
                    ``(B) Federal Deposit Insurance Corporation.
                    ``(C) Office of Thrift Supervision.
                    ``(D) National Credit Union Administration.
                    ``(E) National Credit Union Administration, central 
                liquidity facility.
                    ``(F) Federal Retirement Thrift Investment Board.
                    ``(G) Resolution Funding Corporation.
                    ``(H) Resolution Trust Corporation.
                    ``(I) Board of Governors of the Federal Reserve 
                System.
    ``(e) Veterans' Programs.--The following programs shall be exempt 
from reduction under any order issued under this part:
            ``General Post Funds (36-8180-0-7-705).
            ``Veterans Insurance and Indemnities (36-0120-0-1-701).
            ``Service-Disabled Veterans Insurance Funds (36-4012-0-
        701).
            ``Veterans Reopened Insurance Fund (36-4010-0-3-701).
            ``Servicemembers' Group Life Insurance Fund (36-4009-0-3-
        701).
            ``Post-Vietnam Era Veterans Education Account (36-8133-0-7-
        702).
            ``National Service Life Insurance Fund (36-8132-0-7-701).
            ``United States Government Life Insurance Fund (36-8150-0-
        7-701).
            ``Veterans Special Life Insurance Fund (36-8455-0-8-701).
    ``(f) Optional Exemption of Defense and Homeland Security 
Accounts.--
            ``(1) In general.--The President may, with respect to any 
        defense or homeland security account, exempt that account from 
        sequestration or provide for a lower uniform percentage 
        reduction than would otherwise apply.
            ``(2) Limitation.--The President may not use the authority 
        provided by paragraph (1) unless the President notifies the 
        Congress of the manner in which such authority will be 
        exercised on or before the date specified in section 254(a) for 
        the budget year.''.

SEC. 203. EXCEPTIONS, LIMITATIONS, AND SPECIAL RULES.

    (a) In General.--Section 256 of the Balanced Budget and Emergency 
Deficit Control Act of 1985 is amended to read as follows:

``SEC. 256. EXCEPTIONS, LIMITATIONS, AND SPECIAL RULES.

    ``(a) National Wool Act and the Special Milk Program.--Automatic 
spending increases are increases in outlays due to changes in indexes 
in the following programs:
            ``(1) National Wool Act; and
            ``(2) Special milk program.
In those programs all amounts other than the automatic spending 
increases shall be exempt from reduction under any sequestration order.
    ``(b) The Guaranteed Student Loan Program.--(1) Any reductions 
which are required to be achieved from the student loan programs 
operated pursuant to part B of title IV of the Higher Education Act of 
1965 under any sequestration order shall be achieved only from loans 
described in paragraphs (2) and (3) by the application of the measures 
described in such paragraphs.
    ``(2) For any loan made during the period beginning on the date 
that a sequestration order takes effect with respect to a fiscal year, 
the rate used in computing the special allowance payment pursuant to 
section 438(b)(2)(A)(iii) of such Act for each of the first four 
special allowance payments for such loan shall be adjusted by reducing 
such rate by the lesser of--
            ``(A) 0.40 percent, or
            ``(B) the percentage by which the rate specified in such 
        section exceeds 3 percent.
    ``(3) For any loan made during the period beginning on the date 
that a sequestration order takes effect with respect to a fiscal year, 
the origination fee which is authorized to be collected pursuant to 
section 438(c)(2) of such Act shall be increased by 0.50 percent.
    ``(c) Foster Care and Adoption Assistance Programs.--Any 
sequestration order shall make the reduction otherwise required under 
the foster care and adoption assistance programs (established by part E 
of title IV of the Social Security Act) only with respect to payments 
and expenditures made by States in which increases in foster care 
maintenance payment rates or adoption assistance payment rates (or 
both) are to take effect during the fiscal year involved, and only to 
the extent that the required reduction can be accomplished by applying 
a uniform percentage reduction to the Federal matching payments that 
each such State would otherwise receive under section 474 of that Act 
(for such fiscal year) for that portion of the State's payments 
attributable to the increases taking effect during that year. No 
State's matching payments from the Government for foster care 
maintenance payments or for adoption assistance maintenance payments 
may be reduced by a percentage exceeding the applicable domestic 
sequestration percentage. No State may, after the date of the enactment 
of this Act, make any change in the timetable for making payments under 
a State plan approved under part E of title IV of the Social Security 
Act which has the effect of changing the fiscal year in which 
expenditures under such part are made.
    ``(d) Low-Income Programs.--(1) Benefit payments or payments to 
States or other entities for the programs listed in paragraph (2) shall 
not be reduced by more than 2 percent under any sequestration order. 
When reduced under an end-of-session sequestration order, those benefit 
reductions shall occur starting with the payment made at the start of 
January. When reduced under a within-session sequestration order, those 
benefit reductions shall occur starting with the next periodic payment.
    ``(2) The programs referred to in paragraph (1) are the following:
            ``Child Nutrition (12-3539-0-1-605).
            ``Food Stamp Programs (12-3505-0-1-605).
            ``Grants to States for Medicaid (75-0512-0-1-551).
            ``State Children's Health Insurance Fund (75-0515-0-1-551).
            ``Supplemental Security Income Program (75-0406-0-1-609).
            ``Temporary Assistance for Needy Families (75-1552-0-1-
        609).
            ``Special supplemental nutrition program for women, 
        infants, and children (WIC) (12-3510-0-1-605).
    ``(e) Veterans' Medical Care.--The maximum permissible reduction in 
budget authority for Veterans' medical care (36-0160-0-1-703) for any 
fiscal year, pursuant to an order issued under section 254, shall be 2 
percent.
    ``(f) Federal Retirement Programs.--
            ``(1) For each of the programs listed in paragraph (2) and 
        except as provided in paragraph (3), monthly (or other 
        periodic) benefit payments shall be reduced by the uniform 
        percentage applicable to direct spending sequestrations for 
        such programs, which shall in no case exceed 2 percent under 
        any sequestration order. When reduced under an end-of-session 
sequestration order, those benefit reductions shall occur starting with 
the payment made at the start of January or 7 weeks after the order is 
issued, whichever is later. When reduced under a within-session 
sequestration order, those benefit reductions shall occur starting with 
the next periodic payment.
            ``(2) The programs subject to paragraph (1) are:
                    ``Central Intelligence Agency Retirement and 
                Disability Fund (56-3400-0-1-054).
                    ``Comptrollers General Retirement System (05-0107-
                0-1-801)
                    ``Judicial Officers' Retirement Fund (10-8122-0-7-
                602).
                    ``Claims Judges' Retirement Fund (10-8124-0-7-602).
                    ``Pensions for former Presidents (47-0105-0-1-802).
                    ``National Oceanic and Atmospheric Administration 
                Retirement (13-1450-0-1-306).
                    ``Railroad Industry Pension Fund (60-8011-0-7-601).
                    ``Retired pay, Coast Guard (70-0602-0-1-403).
                    ``Retirement pay and medical benefits for 
                commissioned officers, Public Health Service (75-0379-
                0-1-551).
                    ``Payments to Civil Service Retirement and 
                Disability Fund (24-0200-0-1-805).
                    ``Payments to the Foreign Service Retirement and 
                Disability Fund (72-1036-0-1-153)
                    ``Payments to Judiciary Trust Funds (10-0941-0-1-
                752).
    ``(g) Veterans Programs.--To achieve the total percentage reduction 
required by any order issued under this part, the percentage reduction 
that shall apply to payments under the following programs shall in no 
event exceed 2 percent:
            ``Canteen Service Revolving Fund (36-4014-0-3-705).
            ``Medical Center Research Organizations (36-4026-0-3-703).
            ``Disability Compensation Benefits (36-0102-0-1-701).
            ``Education Benefits (36-0137-0-1-702).
            ``Vocational Rehabilitation and Employment Benefits (36-
        0135-0-1-702).
            ``Pensions Benefits (36-0154-0-1-701).
            ``Burial Benefits (36-0139-0-1-701).
            ``Guaranteed Transitional Housing Loans For Homeless 
        Veterans Program Account (36-1119-0-1-704).
            ``Housing Direct Loan Financing Account (36-4127-0-1-704).
            ``Housing Guaranteed Loan Financing Account (36-4129-0-3-
        704).
            ``Vocational Rehabilitation and Education Direct Loan 
        Financing Account (36-4259-0-3-702).
    ``(h) Military Retirement.--To achieve the total percentage 
reduction in military retirement required by any order issued under 
this part, the percentage reduction that shall apply to payments under 
the military retirement fund (97-8097-0-7-602) and payments to the 
military retirement fund (97-0040-0-1-054) shall in no event exceed 2 
percent.
    ``(i) Federal Pay.--
            ``(1) In general.--For purposes of any order issued under 
        section 254, new budget authority to pay Federal personnel 
        shall be reduced by the applicable uniform percentage, but no 
        sequestration order may reduce or have the effect of reducing 
        the rate of pay to which any individual is entitled under any 
        statutory pay system (as increased by any amount payable under 
        section 5304 of title 5, United States Code, or section 302 of 
        the Federal Employees Pay Comparability Act of 1990) or the 
        rate of any element of military pay to which any individual is 
        entitled under title 37, United States Code, or any increase in 
        rates of pay which is scheduled to take effect under section 
        5303 of title 5, United States Code, section 1009 of title 37, 
        United States Code, or any other provision of law.
            ``(2) Definitions.--For purposes of this subsection:
                    ``(A) The term `statutory pay system' shall have 
                the meaning given that term in section 5302(1) of title 
                5, United States Code.
                    ``(B) The term `elements of military pay' means--
                            ``(i) the elements of compensation of 
                        members of the uniformed services specified in 
                        section 1009 of title 37, United States Code,
                            ``(ii) allowances provided members of the 
                        uniformed services under sections 403a and 405 
                        of such title, and
                            ``(iii) cadet pay and midshipman pay under 
                        section 203(c) of such title.
                    ``(C) The term `uniformed services' shall have the 
                meaning given that term in section 101(3) of title 37, 
                United States Code.
    ``(j) Child Support Enforcement Program.--Any sequestration order 
shall accomplish the full amount of any required reduction in 
expenditures under sections 455 and 458 of the Social Security Act by 
reducing the Federal matching rate for State administrative costs under 
such program, as specified (for the fiscal year involved) in section 
455(a) of such Act, to the extent necessary to reduce such expenditures 
by that amount.
    ``(k) Extended Unemployment Compensation.--(1) A State may reduce 
each weekly benefit payment made under the Federal-State Extended 
Unemployment Compensation Act of 1970 for any week of unemployment 
occurring during any period with respect to which payments are reduced 
under an order issued under this title by a percentage not to exceed 
the percentage by which the Federal payment to the State under section 
204 of such Act is to be reduced for such week as a result of such 
order.
    ``(2) A reduction by a State in accordance with subparagraph (A) 
shall not be considered as a failure to fulfill the requirements of 
section 3304(a)(11) of the Internal Revenue Code of 1954.
    ``(l) Commodity Credit Corporation.--
            ``(1) Powers and authorities of the commodity credit 
        corporation.--This title shall not restrict the Commodity 
        Credit Corporation in the discharge of its authority and 
        responsibility as a corporation to buy and sell commodities in 
        world trade, to use the proceeds as a revolving fund to meet 
        other obligations and otherwise operate as a corporation, the 
        purpose for which it was created.
            ``(2) Reduction in payments made under contracts.--(A) 
        Payments and loan eligibility under any contract entered into 
        with a person by the Commodity Credit Corporation prior to the 
        time any sequestration order has been issued shall not be 
        reduced by an order subsequently issued. Subject to 
        subparagraph (B), after any sequestration order is issued for a 
        fiscal year, any cash payments made by the Commodity Credit 
        Corporation--
                    ``(i) under the terms of any one-year contract 
                entered into in or after such fiscal year and after the 
                issuance of the order; and
                    ``(ii) out of an entitlement account,
        to any person (including any producer, lender, or guarantee 
        entity) shall be subject to reduction under the order.
            ``(B) Each contract entered into with producers or producer 
        cooperatives with respect to a particular crop of a commodity 
        and subject to reduction under subparagraph (A) shall be 
        reduced in accordance with the same terms and conditions. If 
        some, but not all, contracts applicable to a crop of a 
        commodity have been entered into prior to the issuance of any 
        sequestration order, the order shall provide that the necessary 
        reduction in payments under contracts applicable to the 
        commodity be uniformly applied to all contracts for succeeding 
        crops of the commodity, under the authority provided in 
        paragraph (3).
            ``(3) Delayed reduction in outlays permissible.--
        Notwithstanding any other provision of this title, if any 
        sequestration order is issued with respect to a fiscal year, 
        any reduction under the order applicable to contracts described 
        in paragraph (2) may provide for reductions in outlays for the 
        account involved to occur in the fiscal years following the 
        fiscal year to which the order applies.
            ``(4) Uniform percentage rate of reduction and other 
        limitations.--All reductions described in paragraph (2) that 
        are required to be made in connection with any sequestration 
        order with respect to a fiscal year--
                    ``(A) shall be made so as to ensure that outlays 
                for each program, project, activity, or account 
                involved are reduced by a percentage rate that is 
                uniform for all such programs, projects, activities, 
                and accounts, and may not be made so as to achieve a 
                percentage rate of reduction in any such item exceeding 
                the rate specified in the order; and
                    ``(B) with respect to commodity price support and 
                income protection programs, shall be made in such 
                manner and under such procedures as will attempt to 
                ensure that--
                            ``(i) uncertainty as to the scope of 
                        benefits under any such program is minimized;
                            ``(ii) any instability in market prices for 
                        agricultural commodities resulting from the 
                        reduction is minimized; and
                            ``(iii) normal production and marketing 
                        relationships among agricultural commodities 
                        (including both contract and non-contract 
                        commodities) are not distorted.
                In meeting the criterion set out in clause (iii) of 
                subparagraph (B) of the preceding sentence, the 
                President shall take into consideration that reductions 
                under an order may apply to programs for two or more 
                agricultural commodities that use the same type of 
                production or marketing resources or that are 
                alternative commodities among which a producer could 
                choose in making annual production decisions.
            ``(5) Certain authority not to be limited.--Nothing in this 
        title shall limit or reduce in any way any appropriation that 
        provides the Commodity Credit Corporation with funds to cover 
        the Corporation's net realized losses.
    ``(m) Postal Service Fund.--Notwithstanding any other provision of 
law, any sequestration of the Postal Service Fund shall be accomplished 
by a payment from that Fund to the General Fund of the Treasury, and 
the Postmaster General of the United States shall make the full amount 
of that payment during the fiscal year to which the presidential 
sequestration order applies.
    ``(n) Effects of Sequestration.--The effects of sequestration shall 
be as follows:
            ``(1) Budgetary resources sequestered from any account 
        other than an entitlement trust, special, or revolving fund 
        account shall revert to the Treasury and be permanently 
        canceled.
            ``(2) Except as otherwise provided, the same percentage 
        sequestration shall apply to all programs, projects, and 
        activities within a budget account (with programs, projects, 
        and activities as delineated in the appropriation Act or 
        accompanying report for the relevant fiscal year covering that 
        account, or for accounts not included in appropriation Acts, as 
        delineated in the most recently submitted President's budget).
            ``(3) Administrative regulations or similar actions 
        implementing a sequestration shall be made within 120 days of 
        the sequestration order. To the extent that formula allocations 
        differ at different levels of budgetary resources within an 
        account, program, project, or activity, the sequestration shall 
        be interpreted as producing a lower total appropriation, with 
that lower appropriation being obligated as though it had been the pre-
sequestration appropriation and no sequestration had occurred.
            ``(4) Except as otherwise provided, obligations in 
        sequestered direct spending accounts shall be reduced in the 
        fiscal year in which a sequestration occurs and in all 
        succeeding fiscal years.
            ``(5) If an automatic spending increase is sequestered, the 
        increase (in the applicable index) that was disregarded as a 
        result of that sequestration shall not be taken into account in 
        any subsequent fiscal year.
            ``(6) Except as otherwise provided, sequestration in 
        accounts for which obligations are indefinite shall be taken in 
        a manner to ensure that obligations in the fiscal year of a 
        sequestration and succeeding fiscal years are reduced, from the 
        level that would actually have occurred, by the applicable 
        sequestration percentage.''.
    (b) Conforming Amendment.--The table of contents set forth in 
250(c) of the Balanced Budget and Emergency Deficit Control Act of 1985 
is amended by amending the item relating to section 256 to read as 
follows:

``Sec. 256. Exceptions, limitations, and special rules.''.

SEC. 204. POINT OF ORDER.

    (a) Entitlement Point of Order.--Section 312 of the Congressional 
Budget Act of 1974 is amended by adding at the end the following new 
subsection:
    ``(g) Entitlement Point of Order.--It shall not be in order in the 
House of Representatives or the Senate to consider any bill, joint 
resolution, amendment, or conference report that--
            ``(1) increases aggregate level of direct spending for any 
        ensuing fiscal year or
            ``(2) includes any provision that has the effect of 
        modifying the application of section 252A of the Balanced 
        Budget and Emergency Deficit Control Act of 1985 to any 
        entitlement program subject to sequestration or exempt from 
        sequestration under such Act.''.

SEC. 205. TECHNICAL AND CONFORMING AMENDMENTS.

    The Balanced Budget and Emergency Deficit Control Act of 1985 is 
amended as follows:
            (1) Section 251(a)(1) is amended by inserting ``, section 
        252A,'' after ``section 252''.
            (2) Section 254(c)(4)(B) is amended by inserting ``or 
        section 252A'' after ``section 252''.
            (3) Section 254(c) is amended by redesignating paragraph 
        (5) as paragraph (6) and by inserting after paragraph (4) the 
        following new paragraph:
            ``(5) Direct spending control sequestration reports.--The 
        preview reports shall set forth, for the current year and the 
        budget year, estimates for each of the following:
                    ``(A) The total level of direct spending for all 
                programs, projects, and activities (excluding social 
                security).
                    ``(B) The sequestration percentage or (if the 
                required sequestration percentage is greater than the 
                maximum allowable percentage for medicare) percentages 
                necessary to comply with section 252A.''.
            (4) Section 254(f) is amended by redesignating paragraphs 
        (4) and (5) as paragraphs (5) and (6) and by inserting after 
        paragraph (3) the following new paragraph:
            ``(4) Direct spending control sequestration reports.--The 
        final reports shall contain all the information required in the 
        direct spending control sequestration preview reports. In 
        addition, these reports shall contain, for the budget year, for 
        each account to be sequestered, estimates of the baseline level 
        of sequesterable budgetary resources and resulting outlays and 
        the amount of budgetary resources to be sequestered and 
        resulting outlay reductions. The reports shall also contain 
        estimates of the effects on outlays of the sequestration in 
        each outyear for direct spending programs.''.
            (5) Section 258C(a)(1) is amended by inserting ``, 252A,'' 
        after ``section 252''.

               Subtitle B--Discretionary Spending Limits

SEC. 211. ENFORCING DISCRETIONARY SPENDING LIMITS.

    (a) Discretionary Spending Limits.--Sections 251(b) and (c) of the 
Balanced Budget and Emergency Deficit Control of Act of 1985 are 
amended to read as follows:
    ``(b) Discretionary Spending Limit.--As used in this part, the term 
`discretionary spending limit' means--
            ``(1) with respect to fiscal year 2006--
                    ``(A) $816,697,800,000 in new budget authority of 
                which no more than $431,533,400,000 shall be for the 
                nondefense category; and
                    ``(B) $____ in outlays of which no more than $____ 
                shall be for the nondefense category;
            ``(2) with respect to fiscal year 2007--
                    ``(A) $834,665,100,000 in new budget authority of 
                which no more than $441,027,200,000 shall be for the 
                nondefense category; and
                    ``(B) $____ in outlays of which no more than $____ 
                shall be for the nondefense category;
            ``(3) with respect to fiscal year 2008--
                    ``(A) $853,027,800,000 in new budget authority of 
                which no more than $450,729,800,000 shall be for the 
                nondefense category; and
                    ``(B) $____ in outlays of which no more than $____ 
                shall be for the nondefense category;
            ``(4) with respect to fiscal year 2009--
                    ``(A) $871,794,400,000 in new budget authority of 
                which no more than $460,645,800,000 shall be for the 
                nondefense category; and
                    ``(B) $____ in outlays of which no more than $____ 
                shall be for the nondefense category;
            ``(5) with respect to fiscal year 2010--
                    ``(A) $890,973,900,000 in new budget authority of 
                which no more than $470,780,000,000 shall be for the 
nondefense category; and
                    ``(B) $____ in outlays of which no more than $____ 
                shall be for the nondefense category;
            ``(6) with respect to fiscal year 2011--
                    ``(A) $910,575,300,000 in new budget authority of 
                which no more than $481,137,200,000 shall be for the 
                nondefense category; and
                    ``(B) $____ in outlays of which no more than $____ 
                shall be for the nondefense category;
            ``(7) with respect to fiscal year 2012--
                    ``(A) $930,607,900,000 in new budget authority of 
                which no more than $491,722,200,000 shall be for the 
                nondefense category; and
                    ``(B) $____ in outlays of which no more than $____ 
                shall be for the nondefense category;
            ``(8) with respect to fiscal year 2013--
                    ``(A) $951,081,300,000 in new budget authority of 
                which no more than $502,540,100,000 shall be for the 
                nondefense category; and
                    ``(B) $____ in outlays of which no more than $____ 
                shall be for the nondefense category; and
            ``(9) with respect to fiscal year 2014--
                    ``(A) $972,005,100,000 in new budget authority of 
                which no more than $513,596,000,000 shall be for the 
                nondefense category; and
                    ``(B) $____ in outlays of which no more than $____ 
                shall be for the nondefense category;''.
    (b) Discretionary Spending Limit Point of Order.--Section 312 of 
the Congressional Budget Act of 1974 (as amended by section 204(a)) is 
further amended by adding at the end the following new subsection:
    ``(h) Discretionary Spending Limit Point of Order.--It shall not be 
in order in the House of Representatives or the Senate to consider any 
bill, joint resolution, amendment, or conference report that--
            ``(1) increases the discretionary spending limits for any 
        ensuing fiscal year after the budget year; or
            ``(2) would cause the discretionary spending limits for the 
        budget year to be breached.''.
    (c) Advance Appropriation Point of Order.--Section 312 of the 
Congressional Budget Act of 1974 (as amended by this section) is 
further amended by adding at the end the following new subsection:
    ``(i) Advance Appropriation Point of Order.--It shall not be in 
order in the House of Representatives or the Senate to consider any 
appropriation bill or joint resolution, or amendment thereto or 
conference report thereon, that provides advance discretionary new 
budget authority that first becomes available for any fiscal year after 
the budget year at an amount for any program, project, or activity 
above the amount of appropriations for fiscal year 2004 for such 
program, project, or activity.''.

             TITLE III--COMBATING WASTE, FRAUD, AND ABUSE.

Subtitle A--Enhanced Rescissions of Budget Authority Identified by the 
                     President as Wasteful Spending

SEC. 301. ENHANCED CONSIDERATION OF CERTAIN PROPOSED RESCISSIONS.

    (a) In General.--Part B of title X of the Congressional Budget and 
Impoundment Control Act of 1974 (2 U.S.C. 681 et seq.) is amended by 
redesignating sections 1013 through 1017 as sections 1014 through 1018, 
respectively, and by inserting after section 1012 the following new 
section:

        ``enhanced consideration of certain proposed rescissions

    ``Sec. 1013. (a) Proposed Rescission of Budget Authority Identified 
as Wasteful Spending.--The President may propose, at the time and in 
the manner provided in subsection (b), the rescission of any budget 
authority provided in an appropriation Act that he identifies as 
wasteful spending. If the President proposes a rescission of budget 
authority, he may also propose to reduce the appropriate discretionary 
spending limits for new budget authority and outlays flowing therefrom 
set forth in section 251(b) of the Balanced Budget and Emergency 
Deficit Control Act of 1985 by an amount that does not exceed the 
amount of the proposed rescission. Funds made available for obligation 
under this procedure may not be proposed for rescission again under 
this section.
    ``(b) Transmittal of Special Message.--
            ``(1) The President may transmit to Congress a special 
        message proposing to rescind amounts of budget authority and 
        include with that special message a draft bill that, if 
        enacted, would only rescind that budget authority unless the 
        President also proposes a reduction in the appropriate 
        discretionary spending limits set forth in section 251(b) of 
        the Balanced Budget and Emergency Deficit Control Act of 1985. 
        That bill shall clearly identify the amount of budget authority 
        that is proposed to be rescinded for each program, project, or 
        activity to which that budget authority relates.
            ``(2) In the case of an appropriation Act that includes 
        accounts within the jurisdiction of more than one subcommittee 
        of the Committee on Appropriations, the President in proposing 
        to rescind budget authority under this section shall send a 
        separate special message and accompanying draft bill for 
        accounts within the jurisdiction of each subcommittee.
            ``(3) Each special message shall specify, with respect to 
        the budget authority proposed to be rescinded, the following:
                    ``(A) The amount of budget authority which he 
                proposes to be rescinded.
                    ``(B) Any account, department, or establishment of 
                the Government to which such budget authority is 
                available for obligation, and the specific project or 
                governmental functions involved.
                    ``(C) The reasons why the budget authority should 
                be rescinded, including why he considers it to be 
                wasteful spending.
                    ``(D) To the maximum extent practicable, the 
                estimated fiscal, economic, and budgetary effect 
                (including the effect on outlays and receipts in each 
                fiscal year) of the proposed rescission.
                    ``(E) All facts, circumstances, and considerations 
                relating to or bearing upon the proposed rescission and 
                the decision to effect the proposed rescission, and to 
                the maximum extent practicable, the estimated effect of 
                the proposed rescission upon the objects, purposes, and 
                programs for which the budget authority is provided.
                    ``(F) A reduction in the appropriate discretionary 
                spending limits set forth in section 251(b) of the 
                Balanced Budget and Emergency Deficit Control Act of 
                1985, if proposed by the President.
    ``(c) Procedures for Expedited Consideration.--
            ``(1)(A) Before the close of the second legislative day of 
        the House of Representatives after the date of receipt of a 
        special message transmitted to Congress under subsection (b), 
        the majority leader or minority leader of the House of 
        Representatives shall introduce (by request) the draft bill 
        accompanying that special message. If the bill is not 
        introduced as provided in the preceding sentence, then, on the 
        third legislative day of the House of Representatives after the 
        date of receipt of that special message, any Member of that 
        House may introduce the bill.
            ``(B) The bill shall be referred to the Committee on 
        Appropriations. The committee shall report the bill without 
        substantive revision and with or without recommendation. The 
        bill shall be reported not later than the seventh legislative 
        day of that House after the date of receipt of that special 
        message. If that committee fails to report the bill within that 
        period, that committee shall be automatically discharged from 
        consideration of the bill, and the bill shall be placed on the 
        appropriate calendar.
            ``(C) A vote on final passage of the bill shall be taken in 
        the House of Representatives on or before the close of the 10th 
        legislative day of that House after the date of the 
        introduction of the bill in that House. If the bill is passed, 
        the Clerk of the House of Representatives shall cause the bill 
        to be engrossed, certified, and transmitted to the Senate 
        within one calendar day of the day on which the bill is passed.
            ``(2)(A) A motion in the House of Representatives to 
        proceed to the consideration of a bill under this section shall 
        be highly privileged and not debatable. An amendment to the 
        motion shall not be in order, nor shall it be in order to move 
        to reconsider the vote by which the motion is agreed to or 
        disagreed to.
            ``(B) Debate in the House of Representatives on a bill 
        under this section shall not exceed 4 hours, which shall be 
        divided equally between those favoring and those opposing the 
        bill. A motion to further limit debate shall not be debatable. 
        It shall not be in order to move to recommit a bill under this 
        section or to move to reconsider the vote by which the bill is 
        agreed to or disagreed to.
            ``(C) Appeals from decisions of the Chair relating to the 
        application of the Rules of the House of Representatives to the 
        procedure relating to a bill under this section shall be 
        decided without debate.
            ``(D) Except to the extent specifically provided in the 
        preceding provisions of this subsection, consideration of a 
        bill under this section shall be governed by the Rules of the 
        House of Representatives. It shall not be in order in the House 
        of Representatives to consider any rescission bill introduced 
        pursuant to the provisions of this section under a suspension 
        of the rules or under a special rule.
            ``(3) A bill transmitted to the Senate pursuant to 
        paragraph (1)(D) shall be referred to its Committee on 
        Appropriations. That committee shall report the bill without 
        substantive revision and with or without recommendation. The 
        bill shall be reported not later than the seventh legislative 
        day of the Senate after it receives the bill. A committee 
        failing to report the bill within such period shall be 
        automatically discharged from consideration of the bill, and 
        the bill shall be placed upon the appropriate calendar.
            ``(4)(A) A motion in the Senate to proceed to the 
        consideration of a bill under this section shall be privileged 
        and not debatable. An amendment to the motion shall not be in 
        order, nor shall it be in order to move to reconsider the vote 
        by which the motion is agreed to or disagreed to.
            ``(B) Debate in the Senate on a bill under this section, 
        and all debatable motions and appeals in connection therewith 
        (including debate pursuant to subparagraph (C)), shall not 
        exceed 10 hours. The time shall be equally divided between, and 
        controlled by, the majority leader and the minority leader or 
        their designees.
            ``(C) Debate in the Senate or any debatable motion or 
        appeal in connection with a bill under this section shall be 
        limited to not more than 1 hour, to be equally divided between, 
        and controlled by, the mover and the manager of the bill, 
        except that in the event the manager of the bill is in favor of 
        any such motion or appeal, the time in opposition thereto, 
        shall be controlled by the minority leader or his designee. 
        Such leaders, or either of them, may, from time under their 
        control of the passage of a bill, allot additional time to any 
        Senator during the consideration of any debatable motion or 
        appeal.
            ``(D) A motion in the Senate to further limit debate on a 
        bill under this section is not debatable. A motion to recommit 
        a bill under this section is not in order.
    ``(d) Amendment and Divisions Prohibited.--No amendment to a bill 
considered under this section shall be in order in either the House of 
Representatives or the Senate. It shall not be in order to demand a 
division of the question in the House of Representatives (or in a 
Committee of the Whole) or in the Senate. No motion to suspend the 
application of this subsection shall be in order in either House, nor 
shall it be in order in either House to suspend the application of this 
subsection by unanimous consent.
    ``(e) Requirement To Make Available for Obligation.--Any amount of 
budget authority proposed to be rescinded in a special message 
transmitted to Congress under subsection (b) shall be made available 
for obligation on the day after the date on which either House rejects 
the bill transmitted with that special message.
    ``(f) Definitions.--For purposes of this section:
            ``(1) The term `appropriation Act' means any general or 
        special appropriation Act, and any Act or joint resolution 
        making supplemental, deficiency, or continuing appropriations.
            ``(2) The term `legislative day' means, with respect to 
        either House of Congress, any day of session.
            ``(3) The term `rescind' means, with respect to an 
        appropriation Act, to reduce the amount of budget authority 
        appropriated in that Act, and reducing budget authority shall 
        include reducing obligation limitations set forth in that 
        Act.''.
    (b) Exercise of Rulemaking Powers.--Section 904 of the 
Congressional Budget Act of 1974 (2 U.S.C. 621 note) is amended--
            (1) in subsection (a), by striking ``and 1017'' and 
        inserting ``1012, and 1017''; and
            (2) in subsection (d), by striking ``section 1017'' and 
        inserting ``sections 1012 and 1017''.
    (c) Conforming Amendments.--
            (1) Section 1011 of the Congressional Budget Act of 1974 (2 
        U.S.C. 682(5)) is amended by repealing paragraphs (3) and (5) 
        and by redesignating paragraph (4) as paragraph (3).
            (2) Section 1014 of such Act (2 U.S.C. 685) is amended--
                    (A) in subsection (b)(1), by striking ``or the 
                reservation''; and
                    (B) in subsection (e)(1), by striking ``or a 
                reservation'' and by striking ``or each such 
                reservation''.
            (3) Section 1015(a) of such Act (2 U.S.C. 686) is amended 
        by striking ``is to establish a reserve or'', by striking ``the 
        establishment of such a reserve or'', and by striking ``reserve 
        or'' each other place it appears.
            (4) Section 1017 of such Act (2 U.S.C. 687) is amended--
                    (A) in subsection (a), by striking ``rescission 
                bill introduced with respect to a special message or'';
                    (B) in subsection (b)(1), by striking ``rescission 
                bill or'', by striking ``bill or'' the second place it 
                appears, by striking ``rescission bill with respect to 
                the same special message or'', and by striking ``, and 
                the case may be,'';
                    (C) in subsection (b)(2), by striking ``bill or'' 
                each place it appears;
                    (D) in subsection (c), by striking ``rescission'' 
                each place it appears and by striking ``bill or'' each 
                place it appears;
                    (E) in subsection (d)(1), by striking ``rescission 
                bill or'' and by striking ``, and all amendments 
                thereto (in the case of a rescission bill)'';
                    (F) in subsection (d)(2)--
                            (i) by striking the first sentence;
                            (ii) by amending the second sentence to 
                        read as follows: ``Debate on any debatable 
                        motion or appeal in connection with an 
                        impoundment resolution shall be limited to 1 
                        hour, to be equally divided between, and 
                        controlled by, the mover and the manager of the 
                        resolution, except that in the event that the 
                        manager of the resolution is in favor of any 
                        such motion or appeal, the time in opposition 
                        thereto shall be controlled by the minority 
                        leader or his designee.'';
                            (iii) by striking the third sentence; and
                            (iv) in the fourth sentence, by striking 
                        ``rescission bill or'' and by striking 
                        ``amendment, debatable motion,'' and by 
                        inserting `debatable motion';
                    (G) in paragraph (d)(3), by striking the second and 
                third sentences; and
                    (H) by striking paragraphs (4), (5), (6), and (7) 
                of paragraph (d).
    (d) Clerical Amendments.--The table of sections for subpart B of 
title X of the Congressional Budget and Impoundment Control Act of 1974 
is amended by redesignating the item relating to sections 1014 through 
1018 as items 1015 through 1019, respectively, and by inserting after 
the item relating to section 1012 the following new item:

``Sec. 1013. Enhanced consideration of certain proposed rescissions.''.

      Subtitle B--Commission to Eliminate Waste, Fraud, and Abuse

SEC. 311. ESTABLISHMENT OF COMMISSION.

    (a) Establishment.--There is established the Commission to 
Eliminate Waste, Fraud, and Abuse (hereafter in this subtitle referred 
to as the ``Commission'').
    (b) Membership.--
            (1) In general.--The Commission shall consist of 12 
        members, all of whom shall be appointed by the President not 
        later than 90 days after the date of enactment of this Act.
            (2) Chairperson and vice chairperson.--The President shall 
        designate a chairperson and vice chairperson from among the 
        members of the Commission.
    (c) Period of Appointment; Vacancies.--Members shall be appointed 
for the life of the Commission. Any vacancy in the Commission shall not 
affect its powers, but shall be filled in the same manner as the 
original appointment.
    (d) Meetings.--
            (1) Initial meeting.--Not later than 30 days after the date 
        on which all members of the Commission have been appointed, the 
        Commission shall hold its first meeting.
            (2) Subsequent meetings.--The Commission shall meet at the 
        call of the chairperson.
    (e) Quorum.--A majority of the members of the Commission shall 
constitute a quorum, but a lesser number of members may hold hearings.

SEC. 312. DUTIES OF THE COMMISSION.

    (a) Definitions.--In this section, the following definitions shall 
apply:
            (1) Agency.--The term ``agency'' has the meaning given the 
        term ``Executive agency'' under section 105 of title 5, United 
        States Code.
            (2) Program.--The term ``program'' means any activity or 
        function of an agency.
    (b) In General.--The Commission shall--
            (1) evaluate all agencies and programs within those 
        agencies, using the criteria under subsection (c); and
            (2) submit to Congress a plan with recommendations of the 
        agencies and programs that should be realigned or eliminated.
    (c) Criteria.--
            (1) Duplicative.--If 2 or more agencies or programs are 
        performing the same essential function and the function can be 
        consolidated or streamlined into a single agency or program, 
        the Commission shall recommend that the agency or program be 
        realigned.
            (2) Wasteful or inefficient.--The Commission shall 
        recommend the realignment or elimination of any agency or 
        program that has wasted Federal funds by--
                    (A) egregious spending;
                    (B) mismanagement of resources and personnel; or
                    (C) use of such funds for personal benefit or the 
                benefit of a special interest group.
            (3) Outdated, irrelevant, or failed.--The Commission shall 
        recommend the elimination of any agency or program that--
                    (A) has completed its intended purpose;
                    (B) has become irrelevant; or
                    (C) has failed to meet its objectives.
    (d) Systematic Assessment of Programs.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, the President shall--
                    (A) establish a systematic method for assessing the 
                effectiveness and accountability of agency programs; 
                and
                    (B) submit, to the Commission, assessments of not 
                less than \1/2\ of all programs covered under 
                subsection (b)(1) that use the method established under 
                subparagraph (A).
            (2) Method objectives.--The method established under 
        paragraph (1) shall--
                    (A) recognize different types of federal programs;
                    (B) assess programs based primarily on the 
                achievement of performance goals (as defined under 
                section 1115(f)(4) of title 31, United States Code); 
                and
                    (C) assess programs based in part on the adequacy 
                of the program's performance measures, financial 
                management, and other factors determined by the 
                President.
            (3) Development.--The method established under paragraph 
        (1) shall not be implemented until it has been reviewed and 
        accepted by the Commission.
            (4) Consideration of assessments.--The Commission shall 
        consider assessments submitted under this subsection when 
        evaluating programs under subsection (b)(1).
    (e) Common Performance Measures.--Not later than 1 year after the 
date of enactment of this Act, the President shall identify common 
performance measures for programs covered in subsection (b)(1) that 
have similar functions and, to the extent feasible, provide the 
Commission with data on such performance measures.
    (f) Report.--Not later than 2 years after the date of enactment of 
this Act, the Commission shall submit to the President and Congress a 
report that includes the plan described under subsection (b)(2), with 
supporting documentation for all recommendations.

SEC. 313. POWERS OF THE COMMISSION.

    (a) Hearings.--The Commission or, at its direction, any 
subcommittee or member of the Commission, may, for the purpose of 
carrying out this subtitle--
            (1) hold such hearings, sit and act at such times and 
        places, take such testimony, receive such evidence, and 
        administer such oaths as any member of the Commission considers 
        advisable;
            (2) require, by subpoena or otherwise, the attendance and 
        testimony of such witnesses as any member of the Commission 
        considers advisable; and
            (3) require, by subpoena or otherwise, the production of 
        such books, records, correspondence, memoranda, papers, 
        documents, tapes, and other evidentiary materials relating to 
        any matter under investigation by the Commission.
    (b) Subpoenas.--
            (1) Issuance.--Subpoenas issued under subsection (a) shall 
        bear the signature of the chairperson of the Commission and 
        shall be served by any person or class of persons designated by 
        the chairperson for that purpose.
            (2) Enforcement.--In the case of contumacy or failure to 
        obey a subpoena issued under subsection (a), the United States 
        district court for the judicial district in which the 
        subpoenaed person resides, is served, or may be found, may 
        issue an order requiring such person to appear at any 
        designated place to testify or to produce documentary or other 
        evidence. Any failure to obey the order of the court may be 
        punished by the court as a contempt of that court.
    (c) Information From Federal Agencies.--The Commission may secure 
directly from any Federal department or agency such information as the 
Commission considers necessary to carry out this Act. Upon request of 
the chairperson of the Commission, the head of such department or 
agency shall furnish such information to the Commission.
    (d) Postal Services.--The Commission may use the United States 
mails in the same manner and under the same conditions as other 
departments and agencies of the Government.
    (e) Gifts.--The Commission may accept, use, and dispose of gifts or 
donations of services or property.

SEC. 314. COMMISSION PERSONNEL MATTERS.

    (a) Compensation of Members.--
            (1) Non-federal members.--Except as provided under 
        subsection (b), each member of the Commission who is not an 
        officer or employee of the Government shall not be compensated.
            (2) Federal officers or employees.--All members of the 
        Commission who are officers or employees of the United States 
        shall serve without compensation in addition to that received 
        for their services as officers or employees of the United 
        States.
    (b) Travel Expenses.--The members of the Commission shall be 
allowed travel expenses, including per diem in lieu of subsistence, at 
rates authorized for employees of agencies under subchapter I of 
chapter 57 of title 5, United States Code, while away from their homes 
or regular places of business in the performance of services for the 
Commission.
    (c) Staff.--
            (1) In general.--The chairperson of the Commission may, 
        without regard to the civil service laws and regulations, 
        appoint and terminate an executive director and such other 
        additional personnel as may be necessary to enable the 
        Commission to perform its duties. The employment of an 
        executive director shall be subject to confirmation by the 
        Commission.
            (2) Compensation.--Upon the approval of the chairperson, 
        the executive director may fix the compensation of the 
        executive director and other personnel without regard to 
        chapter 51 and subchapter III of chapter 53 of title 5, United 
        States Code, relating to classification of positions and 
        General Schedule pay rates, except that the rate of pay for the 
        executive director and other personnel may not exceed the 
        maximum rate payable for a position at GS-15 of the General 
        Schedule under section 5332 of such title.
            (3) Personnel as federal employees.--
                    (A) In general.--The executive director and any 
                personnel of the Commission who are employees shall be 
                employees under section 2105 of title 5, United States 
                Code, for purposes of chapters 63, 81, 83, 84, 85, 87, 
                89, and 90 of that title.
                    (B) Members of commission.--Subparagraph (A) shall 
                not be construed to apply to members of the Commission.
    (d) Detail of Government Employees.--Any Government employee may be 
detailed to the Commission without reimbursement, and such detail shall 
be without interruption or loss of civil service status or privilege.
    (e) Procurement of Temporary and Intermittent Services.--The 
chairperson of the Commission may procure temporary and intermittent 
services under section 3109(b) of title 5, United States Code, at rates 
for individuals which do not exceed the daily equivalent of the annual 
rate of basic pay prescribed for level V of the Executive Schedule 
under section 5316 of such title.

SEC. 315. TERMINATION OF THE COMMISSION.

    The Commission shall terminate 90 days after the date on which the 
Commission submits its report.

SEC. 316. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated such sums as may be 
necessary for carrying out this subtitle for each of the fiscal years 
2006 through 2008.

                     TITLE IV--TRUTH IN ACCOUNTING

Subtitle A--Accrual Funding of Pensions and Retirement Pay for Federal 
               Employees and Uniformed Services Personnel

SEC. 401. CIVIL SERVICE RETIREMENT SYSTEM.

    (a) Civil Service Retirement and Disability Fund.--Chapter 83 of 
title 5, United States Code, is amended--
            (1) in section 8331--
                    (A) in paragraph (17)--
                            (i) by striking ``normal cost'' and 
                        inserting ``normal cost percentage''; and
                            (ii) by inserting ``and standards (using 
                        dynamic assumptions)'' after ``practice'';
                    (B) by amending paragraph (18) to read as follows:
            ``(18) `Fund balance' means the current net assets of the 
        Fund available for payment of benefits, as determined by the 
        Office in accordance with appropriate accounting standards, but 
        does not include any amount attributable to--
                    ``(A) the Federal Employees' Retirement System; or
                    ``(B) contributions made under the Federal 
                Employees' Retirement Contribution Temporary Adjustment 
                Act of 1983 by or on behalf of any individual who 
                became subject to the Federal Employees' Retirement 
                System;''
                    (C) by amending paragraph (19) to read as follows:
            ``(19) `accrued liability' means the estimated excess of 
        the present value of all benefits payable from the Fund to 
        employees and Members, and former employees and Members, 
        subject to this subchapter, and their survivors, over the 
        present value of deductions to be withheld from the future 
        basic pay of employees and Members currently subject to this 
        subchapter and of future agency contributions to be made in 
        their behalf;''
                    (D) in paragraph (27) by striking ``and'' at the 
                end;
                    (E) in paragraph (28) by striking the period at the 
                end and inserting a semicolon; and
                    (F) by adding at the end the following paragraphs:
            ``(29) `dynamic assumptions' means economic assumptions 
        that are used in determining actuarial costs and liabilities of 
        a retirement system and in anticipating the effects of long-
        term future--
                    ``(A) investment yields;
                    ``(B) increases in rates of basic pay; and
                    ``(C) rates of price inflation; and
            ``(30) `unfunded liability' means the estimated excess of--
                    ``(A) the actuarial present value of all future 
                benefits payable from the Fund under this subchapter 
                based on the service of current or former employees or 
                Members, over
                    ``(B) the sum of--
                            ``(i) the actuarial present value of 
                        deductions to be withheld from the future basic 
                        pay of employees and Members currently subject 
                        to this chapter pursuant to section 8334;
                            ``(ii) the actuarial present value of the 
                        future contributions to be made pursuant to 
                        section 8334 with respect to employees and 
                        Members currently subject to this subchapter;
                            ``(iii) the Fund balance, as defined in 
                        paragraph (18), as of the date the unfunded 
                        liability is determined; and
                            ``(iv) any other appropriate amount, as 
                        determined by the Office of Personnel 
                        Management in accordance with generally 
                        accepted actuarial practices and principles.'';
            (2) in section 8334--
                    (A) in subsection (a)(1)--
                            (i) by striking the last two sentences;
                            (ii) by redesignating that subsection, as 
                        so amended, as (a)(1)(A); and
                            (iii) by adding at the end the following 
                        new subparagraphs:
    ``(B) Except as provided in subparagraph (E), each employing agency 
having any employees or Members subject to subparagraph (A) shall 
contribute from amounts available for salaries and expenses an amount 
equal to the sum of--
            ``(i) the product of--
                    ``(I) the normal cost percentage, as determined for 
                employees (other than employees covered by clause 
                (ii)), multiplied by
                    ``(II) the aggregate amount of basic pay payable by 
                the agency, for the period involved, to employees 
                (under subclause (I)) who are within such agency; and
            ``(ii) the product of--
                    ``(I) the normal cost percentage, as determined for 
                Members, Congressional employees, law enforcement 
                officers, firefighters, air traffic controllers, 
                bankruptcy judges, Court of Federal Claims judges, 
                United States magistrates, judges of the United States 
                Court of Appeals for the Armed Forces, members of the 
                Capitol Police, nuclear materials couriers, and members 
                of the Supreme Court Police, multiplied by
                    ``(II) the aggregate amount of basic pay payable by 
                the agency for the period involved, to employees and 
                Members (under subclause (I)) who are within such 
                agency.
    ``(C) In determining the normal cost percentage to be applied under 
subparagraph (B), amounts provided for under subparagraph (A) shall be 
taken into account.
    ``(D) Contributions under this paragraph shall be paid--
            ``(i) in the case of law enforcement officers, 
        firefighters, air traffic controllers, bankruptcy judges, Court 
        of Federal Claims judges, United States magistrates, judges of 
        the United States Court of Appeals for the Armed Forces, 
        members of the Supreme Court Police, nuclear materials couriers 
        and other employees, from the appropriations or fund used to 
        pay such law enforcement officers, firefighters, air traffic 
        controllers, bankruptcy judges, Court of Federal Claims judges, 
        United States magistrates, judges of the United States Court of 
        Appeals for the Armed Forces, members of the Supreme Court 
        Police, nuclear materials couriers and other employees, 
        respectively;
            ``(ii) in the case of elected officials, from an 
        appropriation or fund available for payment of other salaries 
        of the same office or establishment; and
            ``(iii) in the case of employees of the legislative branch 
        paid by the Clerk of the House of Representatives, from the 
        contingent fund of the House.
    ``(E) In the case of the United States Postal Service, the 
Metropolitan Washington Airports Authority, and the government of the 
District of Columbia, an amount equal to that withheld under 
subparagraph (A) shall be contributed from the appropriation or fund 
used to pay the employee.''; and
                    (B) in subsection (k)--
                            (i) in paragraph (1)--
                                    (I) in subparagraph (A) by striking 
                                ``the first sentence of subsection 
                                (a)(1) of this section'' and inserting 
                                ``subsection (a)(1)(A)''; and
                                    (II) by amending subparagraph (B) 
                                to read as follows:
            ``(B) the amount of the contribution under subsection 
        (a)(1)(B) shall be the amount which would have been contributed 
        under such subsection if this subsection had not been 
        enacted.''; and
                            (ii) in paragraph (2)(C)(iii) by striking 
                        ``the first sentence of subsection (a)(1)'' and 
                        inserting ``subsection (a)(1)(A)''; and
            (3) in section 8348--
                    (A) by repealing subsection (f);
                    (B) by amending subsection (g) to read as follows:
    ``(g)(1)(A) Not later than June 30, 2005, the Office of the Actuary 
shall determine the unfunded liability of the Fund, as of September 30, 
2004, attributable to benefits payable under this chapter and make 
recommendations regarding its liquidation. After considering such 
recommendations, the Office shall establish an amortization schedule, 
including a series of annual installments commencing October 1, 2005, 
which provides for the liquidation of such liability by October 1, 
2044.
    ``(B) The Office shall redetermine the unfunded liability of the 
Fund as of the close of the fiscal year, for each fiscal year beginning 
after September 30, 2004, through the fiscal year ending September 30, 
2039, and shall establish a new amortization schedule, including a 
series of annual installments commencing on October 1 of the second 
subsequent fiscal year, which provides for the liquidation of such 
liability by October 1, 2044.
    ``(C) The Office shall redetermine the unfunded liability of the 
Fund as of the close of the fiscal year for each fiscal year beginning 
after September 30, 2039, and shall establish a new amortization 
schedule, including a series of annual installments commencing on 
October 1 of the second subsequent fiscal year, which provides for the 
liquidation of such liability over five years.
    ``(D) Amortization schedules established under this paragraph shall 
be set in accordance with generally accepted actuarial practices and 
principles, with interest computed at the rate used in the most recent 
valuation of the Civil Service Retirement System.
    ``(2) At the beginning of each fiscal year, beginning on October 1, 
2005, the Office shall notify the Secretary of the Treasury of the 
amount of the first installment under the most recent amortization 
schedule established under paragraph (1). The Secretary shall credit 
that amount to the Fund, as a Government contribution, out of any money 
in the Treasury of the United States not otherwise appropriated.
    ``(3) For the purpose of carrying out paragraph (1) with respect to 
any fiscal year, the Office may--
            ``(A) require the Board of Actuaries of the Civil Service 
        Retirement System to make actuarial determinations and 
        valuations, make recommendations, and maintain records in 
        accordance with section 8347(f); and
            ``(B) use the latest actuarial determinations and 
        valuations made by such Board of Actuaries.'';
                    (C) in subsections (h), (i), and (m) by striking 
                ``unfunded'' and inserting ``accrued'' each place it 
                appears; and
                    (D) by adding at the end the following new 
                subsection:
    ``(n) Under regulations prescribed by the Office, the head of an 
agency may request reconsideration of any amount determined to be 
payable with respect to such agency under section 8334(a)(1)(B)-(D). 
Any such request shall be referred to the Board of Actuaries of the 
Civil Service Retirement System. The Board of Actuaries shall review 
the computations of the Office and may make any adjustment with respect 
to any such amount which the Board determines appropriate. A 
determination by the Board of Actuaries under this subsection shall be 
final.''.
    (b) Government Contributions.--Section 8423 of title 5, United 
States Code, is amended--
            (1) in subsection (a)(2) by striking ``section 8422'' and 
        inserting ``section 8422(a)''; and
            (2) in subsection (b)(2) by striking ``equal annual 
        installments'' and inserting ``annual installments set in 
        accordance with generally accepted actuarial practices and 
        principles''.

SEC. 402. CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM.

    (a) Section 101 of the Central Intelligence Agency Retirement Act 
(50 U.S.C. 2001) is amended--
            (1) in paragraph (5), to read as follows:
            ``(5) Unfunded liability.--The term `unfunded liability' 
        means the estimated excess of--
                    ``(A) the actuarial present value of all future 
                benefits payable from the Fund under title II of this 
                Act based on the service of current or former 
                participants, over
                    ``(B) the sum of--
                            ``(i) the actuarial present value of 
                        deductions to be withheld from the future basic 
                        pay of participants currently subject to title 
                        II of this Act pursuant to section 211;
                            ``(ii) the actuarial present value of the 
                        future contributions to be made pursuant to 
                        section 211 with respect to participants 
                        currently subject to title II of this Act;
                            ``(iii) the Fund balance, as defined in 
                        paragraph (4), as of the date the unfunded 
                        liability is determined; and
                            ``(iv) any other appropriate amount, as 
                        determined by the Director in accordance with 
                        generally accepted actuarial practices and 
                        principles.'';
            (2) in paragraph (6)--
                    (A) by striking ```normal cost''' and inserting 
                ```normal cost percentage'''; and
                    (B) by inserting ``and standards (using dynamic 
                assumptions)'' after ``practice''; and
            (3) by adding at the end the following paragraph:
            ``(10) Dynamic assumptions.--The term `dynamic assumptions' 
        means economic assumptions that are used in determining 
        actuarial costs and liabilities of a retirement system and in 
        anticipating the effects of long-term future--
                    ``(A) investment yields;
                    ``(B) increases in rates of basic pay; and
                    ``(C) rates of price inflation.''.
    (b) Section 202 of such Act (50 U.S.C. 2012) is amended by adding 
at the end the following: ``The Fund is appropriated for the payment of 
benefits as provided by this title.''.
    (c) Section 211(a)(2) of such Act (50 U.S.C. 2021(a)(2)) is amended 
to read as follows:
            ``(2) Agency contributions.--The Agency shall contribute to 
        the Fund the amount computed in a manner similar to that used 
        under section 8334(a) of title 5, United States Code, pursuant 
        to determinations of the normal cost percentage of the Central 
        Intelligence Agency Retirement and Disability System by the 
        Director. Contributions under this paragraph shall be paid from 
        amounts available for salaries and expenses.''.
    (d) Section 261 of such Act (50 U.S.C. 2091) is amended--
            (1) by striking subsections (c), (d), and (e); and
            (2) by inserting after subsection (b) the following new 
        subsections:
    ``(c)(1) Not later than June 30, 2005, the Director shall cause to 
be made actuarial valuations of the Fund that determine the unfunded 
liability of the Fund, as of September 30, 2004, attributable to 
benefits payable under this title and make recommendations regarding 
its liquidation. After considering such recommendations, the Director 
shall establish an amortization schedule, including a series of annual 
installments commencing October 1, 2005, which provides for the 
liquidation of such liability by October 1, 2044.
    ``(2) The Director shall redetermine the unfunded liability of the 
Fund as of the close of the fiscal year, for each fiscal year beginning 
after September 30, 2004, through the fiscal year ending September 30, 
2039, and shall establish a new amortization schedule, including a 
series of annual installments commencing on October 1 of the second 
subsequent fiscal year, which provides for the liquidation of such 
liability by October 1, 2044.
    ``(3) The Director shall redetermine the unfunded liability of the 
Fund as of the close of the fiscal year for each fiscal year beginning 
after September 30, 2039, and shall establish a new amortization 
schedule, including a series of annual installments commencing on 
October 1 of the second subsequent fiscal year, which provides for the 
liquidation of such liability over five years.
    ``(4) Amortization schedules established under this subsection 
shall be set in accordance with generally accepted actuarial practices 
and principles, with interest computed at the rate used in the most 
recent valuation of the Civil Service Retirement and Disability System.
    ``(d) At the beginning of each fiscal year, beginning on October 1, 
2005, the Director shall notify the Secretary of the Treasury of the 
amount of the first installment under the most recent amortization 
schedule established under subsection (c). The Secretary shall credit 
that amount to the Fund, as a Government contribution, out of any money 
in the Treasury of the United States not otherwise appropriated. For 
the purposes of Section 504 of the National Security Act of 1947, this 
amount shall be considered authorized.''.
    (e)(1) Title III of such Act (50 U.S.C. 2151 et seq.) is amended by 
adding at the end the following new section:

``SEC. 308. FULL FUNDING OF RETIREE COSTS FOR EMPLOYEES DESIGNATED 
              UNDER SECTION 302.

    ``(a) In addition to other government contributions required by 
law, the Agency shall contribute to the Civil Service Retirement and 
Disability fund (hereinafter in this section referred to as the `Fund') 
amounts calculated in accordance with section 8423 of title 5, United 
States Code, based on the projected number of employees to be 
designated pursuant to section 302 of this Act. In addition, the 
Agency, in a manner similar to that established for employee 
contributions to the Fund by section 8422 of title 5, United States 
Code, will contribute an amount equal to the difference between that 
which would be contributed by the number of employees projected to be 
designated under section 302 and the amounts that are actually being 
deducted and contributed from the basic pay of an equal number of 
employees pursuant to section 8422. The amounts of the Agency's 
contributions under this subsection shall be determined by the Director 
of the Office of Personnel Management, in consultation with the 
Director, and shall be paid by the Agency from funds available for 
salaries and expenses. Agency employees designated pursuant to section 
302 of this Act shall, commencing with such designation, have deducted 
from their basic pay the full amount required by section 8422 of title 
5, United States Code, and such deductions shall be contributed to the 
Fund.
    ``(b)(1) The Director of the Office of Personnel Management, in 
consultation with the Director, shall determine the total amount of 
unpaid contributions (government and employee contributions) and 
interest attributable to the number of individuals employed with the 
Agency on September 30, 2005, who are projected to be designated under 
section 302 of this Act, but are not yet designated under that section 
as of that date. The amount shall be referred to as the section 302 
unfunded liability.
    ``(2) Not later than June 30, 2006, the Director of the Office of 
Personnel Management, in consultation with the Director, shall 
establish an amortization schedule, setting forth a series of annual 
installments commencing September 30, 2006, which provides for the 
liquidation of the section 302 unfunded liability by September 30, 
2013.
    ``(3) At the end of each fiscal year, beginning on September 30, 
2006, the Director shall notify the Secretary of the Treasury of the 
amount of the annual installment under the amortization schedule 
established under paragraph (2) of this subsection. Before closing the 
accounts for that fiscal year, the Secretary shall credit that amount 
to the Fund, out of any money in the Treasury of the United States not 
otherwise appropriated.
    ``(c) Amounts paid by the Agency pursuant to this section are 
deemed to be specifically authorized by the Congress for the purposes 
of section 504 of the National Security Act of 1947.''.
    (2) The table of contents of such Act is amended by inserting after 
the item relating to section 307 the following new item:

``Sec. 308. Full funding of retiree costs for employees designated 
                            under section 302.''.

SEC. 403. FOREIGN SERVICE RETIREMENT AND DISABILITY SYSTEM.

    Chapter 8 of title I of the Foreign Service Act of 1980, Public Law 
96-465 (22 U.S.C. 4041 et seq.) 94 Stat. 2071, as amended, is further 
amended--
            (1) in section 804 (22 U.S.C. 4044)--
                    (A) by amending paragraph (5) to read as follows:
            ``(5) `normal cost percentage' means the entry-age normal 
        cost computed in accordance with generally accepted actuarial 
        practice and standards (using dynamic assumptions) and 
        expressed as a level percentage of aggregate basic pay;'';
                    (B) by amending paragraph (14) to read as follows:
            ``(14) `unfunded liability' means the estimated excess of--
                    ``(A) the actuarial present value of all future 
                benefits payable from the Fund under this part based on 
                the service of current or former participants, over
                    ``(B) the sum of--
                            ``(i) the actuarial present value of 
                        deductions to be withheld from the future basic 
                        pay of participants currently subject to this 
                        part pursuant to section 805;
                            ``(ii) the actuarial present value of the 
                        future contributions to be made pursuant to 
                        section 805 with respect to participants 
                        currently subject to this part;
                            ``(iii) the Fund balance, as defined in 
                        paragraph (7), as of the date the unfunded 
                        liability is determined, excluding any amount 
                        attributable to the Foreign Service Pension 
                        System, or contributions made under the Federal 
                        Employees' Retirement Contribution Temporary 
                        Adjustment Act of 1983 by or on behalf of any 
                        individual who became subject to the Foreign 
                        Service Pension System; and
                            ``(iv) any other appropriate amount, as 
                        determined by the Secretary of the Treasury in 
                        accordance with generally accepted actuarial 
                        practices and principles.''; and
                    (C)(i) by striking the period at the end of 
                paragraph (15) and inserting ``; and''; and
                    (ii) by adding at the end the following new 
                paragraph:
            ``(16) `dynamic assumptions' means economic assumptions 
        that are used in determining actuarial costs and liabilities of 
        a retirement system and in anticipating the effects of long-
        term future--
                    ``(A) investment yields;
                    ``(B) increases in rates of basic pay; and
                    ``(C) rates of price inflation.'';
            (2) in section 852 (22 U.S.C. 4071a)--
                    (A) in paragraph (4)--
                            (i) by striking ``normal cost'' and 
                        inserting ``normal cost percentage''; and
                            (ii) by striking ``by the Secretary of 
                        State'';
                    (B) in paragraph (7)--
                            (i) by striking ``supplemental'' and 
                        inserting ``unfunded'';
                            (ii) in subparagraph (B)(i) by striking 
                        ``(I)'' and ``and (II) contributions for past 
                        civilian and military service''; and
                            (iii) in subparagraph (B)(ii) by inserting 
                        before the semicolon ``with respect to 
                        participants currently subject to this part''; 
                        and
                    (C)(i) at the end of paragraph (8) by striking 
                ``and'';
                    (ii) at the end of paragraph (9) by striking the 
                period and inserting ``; and''; and
                    (iii) by adding at the end the following new 
                paragraph:
            ``(10) `dynamic assumptions' means economic assumptions 
        that are used in determining actuarial costs and liabilities of 
        a retirement system and in anticipating the effects of long-
        term future--
                    ``(A) investment yields;
                    ``(B) increases in rates of basic pay; and
                    ``(C) rates of price inflation.'';
            (3) in section 805(a)(1) (22 U.S.C. 4045(a)(i))--
                    (A) by striking the second sentence;
                    (B) by redesignating that subsection, as so 
                amended, as (a)(1)(A);
                    (C) by redesignating the last sentence of that 
                subsection, as so amended as (a)(1)(C);
                    (D) by inserting after subparagraph (A) the 
                following new subparagraph:
                    ``(B) Each employing agency having participants 
                shall contribute to the Fund the amount computed in a 
                manner similar to that used under section 8334(a) of 
                title 5, United States Code, pursuant to determinations 
                of the normal cost percentage of the Foreign Service 
                Retirement and Disability System. Contributions under 
                this subparagraph shall be paid from the appropriations 
                or fund used for payment of the salary of the 
                participant.'';
                    (E) in subsection (a)(2)(A) by striking ``An equal 
                amount shall be contributed by the Department'' and 
                inserting in its place ``Each employing agency having 
                participants shall contribute to the Fund the amount 
                computed in a manner similar to that used under section 
                8334(a) of title 5, United States Code, pursuant to 
                determinations of the normal cost percentage of the 
                Foreign Service Retirement and Disability System''; and
                    (F) in subsection (a)(2)(B) by striking ``An equal 
                amount shall be contributed by the Department'' and 
                inserting in its place ``Each employing agency having 
                participants shall contribute to the Fund from amounts 
                available for salaries and expenses the amount computed 
in a manner similar to that used under section 8334(a) of title 5, 
United States Code, pursuant to determinations of the normal cost 
percentage of the Foreign Service Retirement and Disability System'';
            (4) by repealing sections 821 and 822 (22 U.S.C. 4061 and 
        4062) and by adding the following new section:
    ``Sec. 821. Unfunded Liability.--(a)(1) Not later than June 30, 
2005, the Secretary of State shall cause to be made actuarial 
valuations of the Fund that determine the unfunded liability of the 
Fund, as of September 30, 2004, attributable to benefits payable under 
this subchapter and make recommendations regarding its liquidation. 
After considering such recommendations, the Secretary of State shall 
establish an amortization schedule, including a series of annual 
installments commencing October 1, 2004, which provides for the 
liquidation of such liability by October 1, 2044.
    ``(2) The Secretary of State shall redetermine the unfunded 
liability of the Fund as of the close of the fiscal year, for each 
fiscal year beginning after September 30, 2004, through the fiscal year 
ending September 30, 2039, and shall establish a new amortization 
schedule, including a series of annual installments commencing on 
October 1 of the second subsequent fiscal year, which provides for the 
liquidation of such liability by October 1, 2044.
    ``(3) The Secretary of State shall redetermine the unfunded 
liability of the Fund as of the close of the fiscal year for each 
fiscal year beginning after September 30, 2039, and shall establish a 
new amortization schedule, including a series of annual installments 
commencing on October 1 of the second subsequent fiscal year, which 
provides for the liquidation of such liability over five years.
    ``(4) Amortization schedules established under this subsection 
shall be set in accordance with generally accepted actuarial practices 
and principles, with interest computed at the rate used in the most 
recent valuation of the Foreign Service Retirement and Disability 
System.
    ``(b) At the beginning of each fiscal year, beginning on October 1, 
2005, the Secretary of State shall notify the Secretary of the Treasury 
of the amount of the first installment under the most recent 
amortization schedule established under paragraph (1). The Secretary of 
the Treasury shall credit that amount to the Fund, as a Government 
contribution, out of any money in the Treasury of the United States not 
otherwise appropriated.'';
            (5) in section 857(b)(1) (22 U.S.C. 4071f(b)(1)) by 
        striking ``equal annual installments'' and inserting ``annual 
        installments set in accordance with generally accepted 
        actuarial practices and principles'';
            (6) in section 859 (22 U.S.C. 4071h) by adding 
        ``percentage'' after ``normal cost'';
            (7) in section 802 (22 U.S.C. 4042) by adding at the end 
        the following: ``The Fund is appropriated for the payment of 
        benefits as provided by this subchapter.''; and
            (8) in section 818 (22 U.S.C. 4058) by striking ``System'' 
        and inserting ``Systems under this subchapter''.

SEC. 404. PUBLIC HEALTH SERVICE COMMISSIONED CORPS RETIREMENT SYSTEM.

    (a) In General.--Title II of the Public Health Service Act (42 
U.S.C. 202 et seq.) is amended by adding at the end the following new 
part:

  ``PART C--PUBLIC HEALTH SERVICE COMMISSIONED CORPS RETIREMENT SYSTEM

                  ``establishment and purpose of fund

    ``Sec. 251. There is established on the books of the Treasury a 
fund to be known as the Public Health Service Commissioned Corps 
Retirement Fund (hereinafter in this part referred to as the `Fund'), 
which shall be administered by the Secretary. The Fund shall be used 
for the accumulation of funds in order to finance on an actuarially 
sound basis liabilities of the Department of Health and Human Services 
for benefits payable on account of retirement, disability, or death to 
commissioned officers of the Public Health Service and to their 
survivors pursuant to part A of this title.

                          ``assets of the fund

    ``Sec. 252. There shall be deposited into the Fund the following, 
which shall constitute the assets of the Fund:
            ``(1) Amounts paid into the Fund under section 255.
            ``(2) Any return on investment of the assets of the Fund.
            ``(3) Amounts transferred into the Fund pursuant to section 
        404(c) of the Deficit Control Act of 2004.

                        ``payment from the fund

    ``Sec. 253. There shall be paid from the Fund benefits payable on 
account of retirement, disability, or death to commissioned officers of 
the Public Health Service and to their survivors pursuant to part A of 
this title.

              ``determination of contributions to the fund

    ``Sec. 254. (a)(1) Not later than June 30, 2005, the Secretary 
shall determine the unfunded liability of the Fund attributable to 
service performed as of September 30, 2004, which is `active service' 
for the purpose of section 212. The Secretary shall establish an 
amortization schedule, including a series of annual installments 
commencing October 1, 2005, which provides for the liquidation of such 
liability by October 1, 2044.
    ``(2) The Secretary shall redetermine the unfunded liability of the 
Fund as of the close of the fiscal year, for each fiscal year beginning 
after September 30, 2004, through the fiscal year ending September 30, 
2039, and shall establish a new amortization schedule, including a 
series of annual installments commencing on October 1 of the second 
subsequent fiscal year, which provides for the liquidation of such 
liability by October 1, 2044.
    ``(3) The Secretary shall redetermine the unfunded liability of the 
Fund as of the close of the fiscal year for each fiscal year beginning 
after September 30, 2039, and shall establish a new amortization 
schedule, including a series of annual installments commencing on 
October 1 of the second subsequent fiscal year, which provides for the 
liquidation of such liability over 5 years.
    ``(b) The Secretary shall determine each fiscal year, in sufficient 
time for inclusion in the budget request for the following fiscal year, 
the total amount of Department of Health and Human Services 
contributions to be made to the Fund during the fiscal year under 
section 255(a). That amount shall be the sum of--
            ``(1) the product of--
                    ``(A) the current estimate of the value of the 
                single level percentage of basic pay to be determined 
                under subsection (c)(1) at the time of the most recent 
                actuarial valuation under subsection (c); and
                    ``(B) the total amount of basic pay expected to be 
                paid during that fiscal year to commissioned officers 
                of the Public Health Service on active duty (other than 
                active duty for training); and
            ``(2) the product of--
                    ``(A) the current estimate of the value of the 
                single level percentage of basic pay and of 
                compensation (paid pursuant to section 206 of title 37, 
                United States Code) to be determined under subsection 
                (c)(2) at the time of the most recent actuarial 
                valuation under subsection (c); and
                    ``(B) the total amount of basic pay and of 
                compensation (paid pursuant to section 206 of title 37, 
                United States Code) expected to be paid during the 
                fiscal year to commissioned officers of the Reserve 
                Corps of the Public Health Service (other than officers 
                on full-time duty other than for training) who are not 
                otherwise described in subparagraph (A).
    ``(c) Not less often than every four years thereafter (or by the 
fiscal year end prior to the effective date of any statutory change 
affecting benefits payable on account of retirement, disability, or 
death to commissioned officers or their survivors), the Secretary shall 
carry out an actuarial valuation of benefits payable on account of 
retirement, disability, or death to commissioned officers of the Public 
Health Service and to their survivors pursuant to part A of this title. 
Each such actuarial valuation shall be signed by an enrolled Actuary 
and shall include--
            ``(1) a determination (using the aggregate entry-age normal 
        cost method) of a single level percentage of basic pay for 
        commissioned officers of the Public Health Service on active 
        duty (other than active duty for training); and
            ``(2) a determination (using the aggregate entry-age normal 
        cost method) of a single level percentage of basic pay and of 
        compensation (paid pursuant to section 206 of title 37, United 
        States Code) of commissioned officers of the Reserve Corps of 
        the Public Health Service (other than officers on full time 
        duty other than for training) who are not otherwise described 
        in paragraph (1).
    ``(d) All determinations under this section shall be in accordance 
with generally accepted actuarial principles and practices and, where 
appropriate, shall follow the general pattern of methods and 
assumptions approved by the Department of Defense Retirement Board of 
Actuaries.
    ``(e) The Secretary shall provide for the keeping of such records 
as are necessary for determining the actuarial status of the Fund.

                        ``payments into the fund

    ``Sec. 255. (a) From amounts available to the Department of Health 
and Human Services for salaries and expenses, the Secretary shall pay 
into the Fund at the end of each month the amount that is the sum of--
            ``(1) the product of--
                    ``(A) the level percentage of basic pay determined 
                using all the methods and assumptions approved for the 
                most recent (as of the first day of the current fiscal 
                year) actuarial valuation under sections 254(c)(1) 
                (except that any statutory change affecting benefits 
                payable on account of retirement, disability, or death 
                to commissioned officers or their survivors that is 
                effective after the date of that valuation and on or 
                before the first day of the current fiscal year shall 
                be used in such determination); and
                    ``(B) the total amount of basic pay accrued for 
                that month by commissioned officers of the Public 
                Health Service on active duty (other than active duty 
                for training); and
            ``(2) the product of--
                    ``(A) the level percentage of basic pay and of 
                compensation (paid pursuant to section 206 of title 37, 
                United States Code) determined using all the methods 
                and assumptions approved for the most recent (as of the 
                first day of the current fiscal year) actuarial 
                valuation under section 254(c)(2) (except that any 
                statutory change affecting benefits payable on account 
                of retirement, disability, or death to commissioned 
                officers or their survivors that is effective after the 
                date of that valuation and on or before the first day 
                of the current fiscal year shall be used in such 
                determinations); and
                    ``(B) the total amount of basic pay and of 
                compensation (paid pursuant to section 206 of title 37, 
                United States Code) accrued for that month by 
                commissioned officers of the Reserve Corps of the 
                Public Health Service (other than officers on full-time 
                duty other than for training).
    ``(b) At the beginning of each fiscal year, beginning on October 1, 
2005, the Secretary shall certify to the Secretary of the Treasury the 
amount of the first installment under the most recent amortization 
schedule established under section 254(a). The Secretary of the 
Treasury shall pay into the Fund from the General Fund of the Treasury 
the amount so certified. Such payment shall be the contribution to the 
Fund for that fiscal year.

                    ``investments of assets of fund

    ``Sec. 256. The Secretary may request the Secretary of the Treasury 
to invest such portion of the Fund as is not, in the judgment of the 
Secretary, required to meet the current needs of the Fund. Such 
investments shall be made by the Secretary of the Treasury in public 
debt securities with maturities suitable to the needs of the Fund, as 
determined by the Secretary, and bearing interest at rates determined 
by the Secretary of the Treasury, taking into consideration current 
market yields on outstanding marketable obligations of the United 
States of comparable maturities. The income on such investments shall 
be credited to and form a part of the Fund.

                    ``implementation year exceptions

    ``Sec. 257. (a) To avoid funding shortfalls in the first year 
should formal actuarial determinations not be available in time for 
budget preparation, the amounts used in the first year in sections 
255(a)(1)(A) and 255(a)(2)(A) shall be set equal to those estimates in 
sections 254(b)(1)(A) and 254(b)(2)(A) if final determinations are not 
available. The original unfunded liability as defined in section 254(a) 
shall include an adjustment to correct for this difference between the 
formal actuarial determinations and the estimates in sections 
254(b)(1)(A) and 254(b)(2)(A).''.
    (b) Conforming Amendments.--
            (1) Condition of detail.--Section 214 of the Public Health 
        Service Act (42 U.S.C. 215) is amended by adding at the end the 
        following new subsection:
    ``(e) The Secretary shall condition any detail under subsection 
(a), (b), or (c) upon the agreement of the executive department, State, 
subdivision, Committee of the Congress, or institution concerned to pay 
to the Department of Health and Human Services, in advance or by way of 
reimbursement, for the full cost of the detail including that portion 
of the contributions under section 255(a) that is attributable to the 
detailed personnel.''.
            (2) Exemption from sequestration.--Section 255(g)(1) of the 
        Balanced Budget and Emergency Deficit Control Act of 1985 (2 
        U.S.C. 905(g)(1)) is amended--
                    (A) in subparagraph (A), by inserting after the 
                item relating to ``payment to the foreign service 
                retirement and disability fund'' the following item: 
                ``Payment to the Public Health Service Commissioned 
                Corps Retirement Fund (75-0380-0-1-551);''; and
                    (B) in subparagraph (B), by inserting after the 
                item relating to the ``Pensions for former Presidents'' 
                the following item: ``Public Health Service 
                Commissioned Corps Retirement Fund (75-8274-0-7-
                602);''.
    (c) Transfer of Appropriations.--There shall be transferred on 
October 1, 2006, into the fund established under section 251 of the 
Public Health Service Act, as added by subsection (a), any obligated or 
unobligated balances of appropriations made to the Department of Health 
and Human Services that are currently available for benefits payable on 
account of retirement, disability, or death to commissioned officers of 
the Public Health Service and to their survivors pursuant to part A of 
title II of the Public Health Service Act, and amounts so transferred 
shall be part of the assets of the Fund.

SEC. 405. NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION COMMISSIONED 
              OFFICER CORPS RETIREMENT SYSTEM.

    (a) In General.--The National Oceanic and Atmospheric 
Administration Commissioned Officer Corps Act of 2002 (title II of 
Public Law 107-372) is amended by inserting after section 246 (33 
U.S.C. 3046) the following new section:
    ``Sec. 246A. (a) Establishment and Purpose of NOAA Commissioned 
Officer Corps Retirement Fund.--(1) There is established on the books 
of the Treasury a fund to be known as the National Oceanic and 
Atmospheric Administration Commissioned Officer Corps Retirement Fund 
(hereinafter in this section referred to as the `Fund'), which shall be 
administered by the Secretary. The Fund shall be used for the 
accumulation of funds in order to finance on an actuarially sound basis 
liabilities of the Department of Commerce under military retirement and 
survivor benefit programs for the commissioned officers corps.
    ``(2) The term `military retirement and survivor benefit program' 
means--
            ``(A) the provisions of this title and title 10, United 
        States Code, creating entitlement to, or determining, the 
        amount of retired pay;
            ``(B) the programs under the jurisdiction of the Department 
        of Defense providing annuities for survivors and members and 
        former members of the Armed Forces, including chapter 73 of 
        title 10, section 4 of Public Law 92-425, and section 5 of 
        Public Law 96-202, as made applicable to the commissioned 
        officer corps by section 261.
    ``(b) Assets of the Fund.--There shall be deposited into the Fund 
the following, which shall constitute the assets of the Fund:
            ``(1) Amounts paid into the Fund under subsection (e).
            ``(2) Any return on investment of the assets of the Fund.
            ``(3) Amounts transferred into the Fund pursuant to section 
        405(c) of the Deficit Control Act of 2004.
    ``(c) Payments From the Fund.--There shall be paid from the Fund 
benefits payable on account of military retirement and survivor benefit 
programs to commissioned officers of the commissioned officer corps and 
their survivors.
    ``(d) Determination of Contributions to the Fund.--(1)(A) Not later 
than June 30, 2004, the Secretary shall determine the unfunded 
liability of the Fund attributable to service performed as of September 
30, 2004, which is `active service' for the purpose of this title. The 
Secretary shall establish an amortization schedule, including a series 
of annual installments commencing October 1, 2005, which provides for 
the liquidation of such liability by October 1, 2044.
    ``(B) The Secretary shall redetermine the unfunded liability of the 
Fund as of the close of the fiscal year, for each fiscal year beginning 
after September 30, 2004, through the fiscal year ending September 30, 
2039, and shall establish a new amortization schedule, including a 
series of annual installments commencing on September 30 of the 
subsequent fiscal year, which provides for the liquidation of such 
liability by October 1, 2044.
    ``(C) The Secretary shall redetermine the unfunded liability of the 
Fund as of the close of the fiscal year for each fiscal year beginning 
after September 30, 2039, and shall establish a new authorization 
schedule, including series of annual installments commencing on October 
1 of the second subsequent fiscal year, which provides for the 
liquidation of such liability over 5 years.
    ``(2) The Secretary shall determine each fiscal year, in sufficient 
time for inclusion in the budget request for the following fiscal year, 
the total amount of Department of Commerce contributions to be made to 
the Fund during that fiscal year under (e). The amount shall be the 
product of--
            ``(A) the current estimate of the value of the single level 
        percentage of basic pay to be determined under subsection (e) 
        at the time of the most recent actuarial valuation under 
        paragraph (3); and
            ``(B) the total amount of basic pay expected to be paid 
        during that fiscal year to commissioned officers of NOAA on 
        active duty.
    ``(3) Not less often then every four years (or by the fiscal year 
end before the effective date of any statutory change affecting 
benefits payable on account of retirement, disability, or death to 
commissioned officers or their survivors), the Secretary shall carry 
out an actuarial valuation of benefits payable on account of military 
retirement and survivor benefit programs to commissioned officers of 
the Administration and to their survivors. Each such actuarial 
valuation shall be signed by an enrolled Actuary and shall include a 
determination (using the aggregate entry-age normal cost method) of a 
single level percentage of basic pay for commissioned officers on 
active duty.
    ``(4) All determinations under this section shall be in accordance 
with generally accepted actuarial principles and practices, and, where 
appropriate, shall follow the general pattern of methods and 
assumptions approved by the Department of Defense Retirement Board of 
Actuaries.
    ``(5) The Secretary shall provide for the keeping of such records 
as are necessary for determining the actuarial status of the Fund.
    ``(e) Payments Into the Fund.--(1) From amounts appropriated to the 
National Oceanic Atmospheric Administration for salaries and expenses, 
the Secretary shall pay into the Fund at the end of each month the 
amount that is the product of--
            ``(A) the level percentage of basic pay determined using 
        all the methods and assumptions approved for the most recent 
        (as of the first day of the current fiscal year) actuarial 
        valuation under subsection (d) (except that any statutory 
        change affecting benefits payable on account of military 
        retirement and survivor benefit programs to commissioned 
        officers of the Administration and to their survivors that is 
        effective date after the date of that valuation and on or 
        before the first day of the current fiscal year shall be used 
        in such determination); and
            ``(B) the total amount of basic pay accrued for that month 
        by commissioned officers on active duty.
    ``(2)(A) At the beginning of each fiscal year, the Secretary shall 
determine the sum of--
            ``(i) the amount of the payment for that year under the 
        amortization of the original unfunded liability of the Fund;
            ``(ii) the amount (including any negative amount) for that 
        year under the most recent amortization schedule determined by 
        the Secretary for the amortization of any cumulative actuarial 
        gain or loss to the Fund, resulting from changes in benefits; 
        and
            ``(iii) the amount (including any negative amount) for that 
        year under the most recent amortization schedule determined by 
        the Secretary for the amortization or any cumulative actuarial 
        gain or loss to the Fund resulting from changes in actuarial 
        assumptions and from experience different from the assumed 
        since the last valuation.
The Secretary shall promptly certify the amount of the sum to the 
Secretary of the Treasury.
    ``(B) Upon receiving the certification pursuant to paragraph (1), 
the Secretary of the Treasury shall promptly pay into the Fund from the 
General Fund of the Treasury the amount so certified. Such payment 
shall be the contribution to the Fund for that fiscal year.
    ``(f) Investment of Assets of the Fund.--The Secretary may request 
the Secretary of the Treasury to invest such portion of the Fund as is 
not, in the judgment of the Secretary, required to meet the current 
needs of the Fund. Such investments shall be made by the Secretary of 
the Treasury in public debt securities with maturities suitable to the 
needs of the Fund, as determined by the Secretary, and bearing interest 
at rates determined by the Secretary of the Treasury, taking into 
consideration current market yields on outstanding marketable 
obligations of the United States of comparable maturities. The income 
of such investments shall be credited to and form a part of the Fund.
    ``(g) Implementation Year Exceptions.--(1) To avoid funding 
shortfalls in the first year should formal actuarial determinations not 
be available in time for budget preparation, the amounts used in the 
first year in subsection (e)(1)(A) shall be set equal to the estimate 
in subsection (d)(2)(A) if final determinations are not available. The 
original unfunded liability as determined in subsection (d)(1) shall 
include an adjustment to correct for this difference between the formal 
actuarial determinations and the estimates in subsection (d)(2)(A).''.
    (b) Exemption From Sequestration.--Section 255(g)(1)(B) of the 
Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 
905(g)(1)(B)) is amended by striking ``National Oceanic and Atmospheric 
Administration retirement (13-1450-0-1-306);'' and inserting ``National 
Oceanic and Atmospheric Administration Commissioned Officer Corps 
Retirement Fund;''.
    (c) Transfer of Appropriations.--There shall be transferred on 
October 1, 2006, into the fund established under section 246A(a) of the 
National Oceanic and Atmospheric Administration Commissioned Officer 
Corps Act of 2002 (title II of Public Law 107-372, as added by 
subsection (a)), any obligated and unobligated balance of 
appropriations made to the Department of Commerce that are available as 
of the date of the enactment of this Act for benefits payable on 
account of military retirement and survivor benefit programs to 
commissioned officers of the NOAA Commissioned Officer Corps and to 
their survivors, and amounts so transferred shall be part of the assets 
of the Fund, effective October 1, 2006.
    (d) Effective Date.--Subsection (c) (relating to payments from the 
Fund) and (e) (relating to payments into the Fund) of section 246A of 
the National Oceanic and Atmospheric Administration Commissioned 
Officer Corps Act of 2002 (title II of Public Law 107-372, as added by 
subsection (a)), shall take effect on October 1, 2006.

SEC. 406. COAST GUARD MILITARY RETIREMENT SYSTEM.

    (a) Accrual Funding for Coast Guard Retirement.--
            (1) In general.--Chapter 11 of title 14, United States 
        Code, is amended by adding at the end the following new 
        subchapter:

          ``SUBCHAPTER V--COAST GUARD MILITARY RETIREMENT FUND

``Sec. 441. Establishment and purpose of Fund; definitions
    ``(a) Establishment of Fund; Purpose.--There is established on the 
books of the Treasury a fund to be known as the Coast Guard Military 
Retirement Fund (hereinafter in this subchapter referred to as the 
`Fund'), which shall be administered by the Secretary. The Fund shall 
be used for the accumulations of funds in order to finance on an 
actuarially sound basis liabilities of the Coast Guard under military 
retirement and survivor benefit programs.
    ``(b) Military Retirement and Survivor Benefit Programs Defined.--
In this subchapter, the term `military retirement and survivor benefit 
programs' means--
            ``(1) the provisions of this title and title 10 creating 
        entitlement to, or determining the amount of, retired pay;
            ``(2) the programs providing annuities for survivors of 
        members and former members of the armed forces, including 
        chapter 73 of title 10, section 4 of Public Law 92-425, and 
        section 5 of Public Law 96-402; and
            ``(3) the authority provided in section 1048(h) of title 
        10.
    ``(c) Secretary Defined.--In this subchapter, the term `Secretary' 
means the Secretary of Homeland Security when the Coast Guard is not 
operating as a service in the Navy and the Secretary of Defense when 
the Coast Guard is operating as a service in the Navy.
``Sec. 442. Assets of the Fund
    ``There shall be deposited into the Fund the following, which shall 
constitute the assets of the Fund:
            ``(1) Amounts paid into the Fund under section 445 of this 
        title.
            ``(2) Any return on investment of the assets of the Fund.
            ``(3) Amounts transferred into the Fund pursuant to section 
        406(d) of the Deficit Control Act of 2004.
``Sec. 443. Payments from the Fund
    ``(a) In General.--There shall be paid from the Fund the following:
            ``(1) Retired pay payable to persons on the retired list of 
        the Coast Guard.
            ``(2) Retired pay payable under chapter 1223 of title 10 to 
        former members of the Coast Guard and the former United States 
        Lighthouse Service.
            ``(3) Benefits payable under programs that provide 
        annuities for survivors of members and former members of the 
        armed forces, including chapter 73 of title 10, section 4 of 
        Public Law 92-425, and section 5 of Public Law 96-402.
            ``(4) Amounts payable under section 1048(h) of title 10.
    ``(b) Availability of Assets of the Fund.--The assets of the Fund 
are hereby made available for payments under subsection (a).
``Sec. 444. Determination of contributions to the Fund
    ``(a) Initial Unfunded Liability.--(1) Not later than June 30, 
2005, the Secretary shall determine the unfunded liability of the Fund 
attributable to service performed as of September 30, 2004, which is 
`active service' for the purposes of section 212. The Secretary shall 
establish an amortization schedule, including a series of annual 
installments commencing October 1, 2005, which provides for the 
liquidation of such liability by October 1, 2044.
    ``(2) The Secretary shall redetermine the unfunded liability of the 
Fund as of the close of the fiscal year, for each beginning after 
September 30, 2004, through the fiscal year ending September 30, 2039, 
and shall establish a new amortization schedule, including a series of 
annual installments commencing on October 1 of the second subsequent 
fiscal year, which provides for the liquidation of such liability by 
October 1, 2044.
    ``(3) The Secretary shall redetermine the unfunded liability of the 
Fund as of the close of the fiscal year for each fiscal year beginning 
after September 30, 2039, and shall establish a new amortization 
schedule, including a series of annual installments commencing on 
October 1 of the second subsequent fiscal year, which provides for the 
liquidation of such liability over five years.
    ``(b) Annual Contributions for Current Services.--(1) The Secretary 
shall determine each fiscal year, in sufficient time for inclusion in 
the budget request for the following fiscal year, the total amount of 
Department of Homeland Security, or Department of Defense, 
contributions to be made to the Fund during that fiscal year under 
section 445(a) of this title. That amount shall be the sum of the 
following:
            ``(A) The product of--
                    ``(i) the current estimate of the value of the 
                single level percentage of basic pay to be determined 
                under subsection (c)(1)(A) at the time of the most 
                recent actuarial valuation under subsection (c); and
                    ``(ii) the total amount of basic pay expected to be 
                paid during that fiscal year to members of the Coast 
                Guard on active duty (other than active duty for 
                training).
            ``(B) The product of--
                    ``(i) the current estimate of the value of the 
                single level percentage of basic pay and of 
                compensation (paid pursuant to section 206 of title 37) 
                to be determined under subsection (c)(1)(B) at the time 
                of the most recent actuarial valuation under subsection 
                (c); and
                    ``(ii) the total amount of basic pay and 
                compensation (paid pursuant to section 206 of title 37) 
                expected to be paid during that fiscal year to members 
                of the Coast Guard Ready Reserve (other than members on 
                full-time Reserve duty other than for training) who are 
                not otherwise described in subparagraph (A)(ii).
    ``(2) The amount determined under paragraph (1) for any fiscal year 
is the amount needed to be appropriated to the Department of Homeland 
Security for that fiscal year for payments to be made to the Fund 
during that year under section 445(a) of this title. The President 
shall include not less than the full amount so determined in the budget 
transmitted to Congress for that fiscal year under section 1105 of 
title 31. The President may comment and make recommendations concerning 
any such amount.
    ``(c) Periodic Actuarial Valuations.--(1) Not less often than every 
four years (or before the effective date of any statutory change 
affecting benefits payable on account of retirement, disability, or 
death to members of the Coast Guard or their survivors), the Secretary 
shall carry out an actuarial valuation of the Coast Guard military 
retirement and survivor benefit programs. Each actuarial valuation of 
such programs shall be signed by an enrolled actuary and shall 
include--
            ``(A) a determination (using the aggregate entry-age normal 
        cost method) of a single level percentage of basic pay for 
        members of the Coast Guard on active duty (other than active 
        duty for training); and
            ``(B) a determination (using the aggregate entry-age normal 
        cost method) of single level percentage of basic pay and of 
        compensation (paid pursuant to section 206 of title 37) for 
        members of the Ready Reserve of the Coast Guard (other than 
        members on full-time Reserve duty other than for training) who 
        are not otherwise described in subparagraph (A).
    ``(2) Such single level percentages shall be used for the purposes 
of subsection (b) and section 445(a) of this title.
    ``(d) Use of Generally Accepted Actuarial Principles and 
Practices.--All determinations under this section shall be in 
accordance with generally accepted actuarial principles and practices 
and, where appropriate, shall follow the general pattern of methods and 
assumptions approved by the Department of Defense Retirement Board of 
Actuaries.
    ``(e) Records.--The Secretary shall provide for the keeping of such 
records as are necessary for determining the actuarial status of the 
Fund.
``Sec. 445. Payments into the Fund
    ``(a) Monthly Accrual Charge for Current Services.--From amounts 
appropriated to the Coast Guard for salaries and expenses, the 
Secretary shall pay into the Fund at the end of each month as the 
Department of Homeland Security, or Department of Defense, contribution 
to the Fund for that month the amount that is the sum of the following:
            ``(1) The product of--
                    ``(A) the level percentage of basic pay determined 
                using all the methods and assumptions approved for the 
                most recent (as of the first day of the current fiscal 
                year) actuarial valuation under section 444(c)(1)(A) of 
                this title (except that any statutory change in the 
                military retirement and survivor benefit systems that 
                is effective after the date of that valuation and on or 
                before the first day of the current fiscal year shall 
                be used in such determination); and
                    ``(B) the total amount of basic pay accrued for 
                that month by members of the Coast Guard on active duty 
                (other than active duty for training).
            ``(2) The product of--
                    ``(A) the level percentage of basic pay and 
                compensation (accrued pursuant to section 206 of title 
                37) determined using all the methods and assumptions 
                approved for the most recent (as of the first day of 
                the current fiscal year) actuarial valuation under 
                section 444(c)(1)(B) of this title (except that any 
                statutory change in the military retirement and 
                survivor benefit systems that is effective after the 
                date of that valuation and on or before the first day 
                of the current fiscal year shall be used in such 
                determination); and
                    ``(B) the total amount of basic pay and of 
                compensation (paid pursuant to section 206 of title 37) 
                accrued for that month by members of the Ready Reserve 
                (other than members of full-time Reserve duty other 
                than for training) who are not otherwise described in 
                paragraph (1)(B).
    ``(b) Annual Payment for Unfunded Liabilities.--(1) At the 
beginning of each fiscal year, beginning on October 1, 2005, the 
Secretary shall certify to the Secretary of the Treasury the amount of 
the first installment under the most recent amortization schedule 
established under section 254(a). The Secretary of the Treasury shall 
promptly pay into the Fund from the General Fund of the Treasury the 
amount so certified. Such payment shall be the contribution to the Fund 
for that fiscal year.
``Sec. 446. Investment of assets of the Fund
    ``The Secretary may request the Secretary of the Treasury to invest 
such portion of the Fund as is not, in the judgment of the Secretary, 
required to meet the current needs of the Fund. Such investments shall 
be made by the Secretary of the Treasury in public debt securities with 
maturities suitable to the needs of the Fund, as determined by the 
Secretary, and bearing interest at rates determined by the Secretary of 
the Treasury, taking into consideration current market yields on 
outstanding marketable obligations of the United States of comparable 
maturities. The income on such investments shall be credited to and 
form a part of the Fund.''.
            (2) Technical amendments.--Such chapter is further 
        amended--
                    (A) by amending the center heading after the table 
                of sections to read as follows:

                      ``SUBCHAPTER I--OFFICERS'';

                    (B) by amending the center heading after section 
                336 to read as follows:

                  ``SUBCHAPTER II--ENLISTED MEMBERS'';

                    (C) by amending the center heading after section 
                373 to read as follows:

                ``SUBCHAPTER III--GENERAL PROVISIONS'';

            and
                    (D) by amending the center heading after section 
                425 to read as follows:

                 ``SUBCHAPTER IV--SPECIAL PROVISIONS''.

            (3) Clerical amendments.--The table of sections at the 
        beginning of such chapter is amended--
                    (A) by striking ``officers'' at the beginning of 
                the table and inserting ``subchapter i--officers'';
                    (B) by striking ``enlisted members'' after the item 
                relating to section 336 and inserting ``subchapter ii--
                enlisted members'';
                    (C) by striking ``general provisions'' after the 
                item relating to section 373 and inserting ``subchapter 
                iii--general provisions'';
                    (D) by striking ``special provisions'' after the 
                item relating to section 425 and inserting ``subchapter 
                iv--special provisions''; and
                    (E) by adding at the end the following:

          ``SUBCHAPTER V--COAST GUARD MILITARY RETIREMENT FUND

``441. Establishment and purpose of Fund; definitions.
``442. Assets of the Fund.
``443. Payments from the Fund.
``444. Determination of contributions to the Fund.
``445. Payments into the Fund.
``446. Investment of assets of the Fund.''.
    (b) Implementation Year Exceptions.--To avoid funding shortfalls in 
the first year of implementation of subchapter V of chapter 11 of title 
14, United States Code, as added by subsection (a), if formal actuarial 
determinations are not available in time for budget preparation, the 
amounts used in the first year under sections 445(a)(1)(A) and 
445(a)(2)(A) of such title shall be set equal to those estimates in 
sections 444(b)(1)(A)(i) and 444(b)(1)(B)(i), respectively, of such 
title if final determinations are not available. The original unfunded 
liability, as defined in section 444(a) of such title, shall include an 
adjustment to correct for this difference between the formal actuarial 
determinations and the estimates in sections 444(b)(1)(A)(i) and 
444(b)(1)(B)(i) of such title.
    (c) Conforming Amendment.--Subparagraph (B) of section 255(g)(1) of 
the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 
905(g)(1)) is amended by striking ``Retired Pay, Coast Guard (69-0241-
0-1-403)'' and inserting ``Coast Guard Military Retirement Fund (69-
0241-01-403)''.
    (d) Transfer of Existing Balances.--
            (1) Transfer.--There shall be transferred into the Fund on 
        October 1, 2005, any obligated and unobligated balances of 
        appropriations made to the Department of Homeland Security that 
        are currently available for retired pay, and amounts so 
        transferred shall be part of the assets of the Fund.
            (2) Fund defined.--For purposes of paragraph (1), the term 
        ``Fund'' means the Coast Guard Military Retirement Fund 
        established under section 441 of title 14, United States Code, 
        as added by subsection (a).
    (e) Effective Date.--Sections 443 (relating to payments from the 
Fund) and 445 (relating to payments into the Fund) of title 14, United 
States Code, as added by subsection (a), shall take effect on October 
1, 2005.

 Subtitle B--Accrual Funding of Post-Retirement Health Benefits Costs 
                         for Federal Employees

SEC. 411. FEDERAL EMPLOYEES HEALTH BENEFITS FUND.

    (a) Section 8906 of title 5, United States Code, is amended--
            (1) by redesignating subsection (c) as subsection (c)(1) 
        and by adding at the end the following new paragraphs:
    ``(2) In addition to Government contributions required by 
subsection (b) and paragraph (1), each employing agency shall 
contribute amounts as determined by the Office to be necessary to 
prefund the accruing actuarial cost of post-retirement health benefits 
for each of the agency's current employees who are eligible for 
Government contributions under this section. Amounts under this 
paragraph shall be paid by the employing agency separate from other 
contributions under this section, from the appropriations or fund used 
for payment of the salary of the employee, on a schedule to be 
determined by the Office.
    ``(3) Paragraph (2) shall not apply to the United States Postal 
Service or the government of the District of Columbia.''; and
            (2) by amending subsection (g)(1) to read as follows:
    ``(g)(1) Except as provided in paragraphs (2) and (3), all 
Government contributions authorized by this section for health benefits 
for an annuitant shall be paid from the Employees Health Benefits Fund 
to the extent that funds are available in accordance with section 
8909(h)(6) and, if necessary, from annual appropriations which are 
authorized to be made for that purpose and which may be made available 
until expended.''.
    (b) Section 8909 of title 5, United States Code, is amended by 
adding at the end the following new subsection:
    ``(h)(1) Not later than June 30, 2006, the Office shall determine 
the existing liability of the Fund for post-retirement health benefits, 
excluding the liability of the United States Postal Service for service 
under section 8906(g)(2), under this chapter as of September 30, 2006. 
The Office shall establish an amortization schedule, including a series 
of annual installments commencing September 30, 2006, which provides 
for the liquidation of such liability by September 30, 2043.
    ``(2) At the close of each fiscal year, for fiscal years beginning 
after September 30, 2005, the Office shall determine the supplemental 
liability of the Fund for post-retirement health benefits, excluding 
the liability attributable to the United States Postal Service for 
service subject to section 8906(g)(2), and shall establish an 
amortization schedule, including a series of annual installments 
commencing on September 30 of the subsequent fiscal year, which 
provides for liquidation of such supplemental liability over 30 years.
    ``(3) Amortization schedules established under this paragraph shall 
be set in accordance with generally accepted actuarial practices and 
principles.
    ``(4) At the end of each fiscal year on and after September 30, 
2006, the Office shall notify the Secretary of the Treasury of the 
amounts of the next installments under the most recent amortization 
schedules established under paragraphs (1) and (2). Before closing the 
accounts for the fiscal year, the Secretary shall credit the sum of 
these amounts (including in that sum any negative amount for the 
amortization of the supplemental liability) to the Fund, as a 
Government contribution, out of any money in the Treasury of the United 
States not otherwise appropriated.
    ``(5) For the purpose of carrying out paragraphs (1) and (2), the 
Office shall perform or arrange for actuarial determinations and 
valuations and shall prescribe retention of such records as it 
considers necessary for making periodic actuarial valuations of the 
Fund.
    ``(6) Notwithstanding subsection (b), the amounts deposited into 
the Fund pursuant to this subsection and section 8906(c)(2) to prefund 
post-retirement health benefits costs shall be segregated within the 
Fund so that such amounts, as well as earnings and proceeds under 
subsection (c) attributable to them, may be used exclusively for the 
purpose of paying Government contributions for post-retirement health 
benefits costs. When such amounts are used in combination with amounts 
withheld from annuitants to pay for health benefits, a portion of the 
contributions shall then be set aside in the Fund as described in 
subsection (b).
    ``(7) Under this subsection, `supplemental liability' means--
            ``(A) the actuarial present value for future post-
        retirement health benefits that are the liability of the Fund, 
        less
            ``(B) the sum of--
                    ``(i) the actuarial present value of all future 
                contributions by agencies and annuitants to the Fund 
                toward those benefits pursuant to section 8906;
                    ``(ii) the present value of all scheduled 
                amortization payments to the Fund pursuant to 
                paragraphs (1) and (2);
                    ``(iii) the Fund balance as of the date the 
                supplemental liability is determined, to the extent 
                that such balance is attributable to post-retirement 
                benefits; and
                    ``(iv) any other appropriate amount, as determined 
                by the Office in accordance with generally accepted 
                actuarial practices and principles.''.

SEC. 412. FUNDING UNIFORMED SERVICES HEALTH BENEFITS FOR ALL RETIREES.

    Title 10, United States Code, is amended--
            (1) in the title of chapter 56, by striking ``DEPARTMENT OF 
        DEFENSE MEDICARE-ELIGIBLE'' and inserting ``UNIFORMED 
        SERVICES'';
            (2) in section 1111--
                    (A) in subsection (a)--
                            (i) by striking ``Department of Defense 
                        Medicare-Eligible'' and inserting ``Uniformed 
                        Services'';
                            (ii) by striking ``Department of Defense 
                        under''; and
                            (iii) by striking ``for medicare-eligible 
                        beneficiaries'';
                    (B) in subsection (c)--
                            (i) by striking ``The Secretary of Defense 
                        may'' and inserting ``The Secretary of Defense 
                        shall'';
                            (ii) by striking ``with any other'' and 
                        inserting ``with each'';
                            (iii) by striking ``Any such agreement'' 
                        and inserting ``Such agreements''; and
                            (iv) by striking ``administering Secretary 
                        may'' and inserting ``administrative Secretary 
                        shall'';
            (3) in section 1113--
                    (A) in subsection (a)--
                            (i) by striking ``and are medicare 
                        eligible'';
                            (ii) by striking ``who are medicare 
                        eligible''; and
                            (iii) by adding at the end the following 
                        new sentence: ``For the fiscal year starting 
                        October 1, 2004, only, the payments will be 
                        solely for the costs of members or former 
                        members of a uniformed service who are entitled 
                        to retired or retainer pay and are medicare-
                        eligible, and eligible dependents or survivors 
                        who are medicare-eligible.'';
                    (B) in subsection (c)(1), by striking ``who are 
                medicare-eligible'';
                    (C) in subsection (d), by striking ``who are 
                medicare-eligible''; and
                    (D) in subsection (f), by striking ``If'' and 
                inserting ``When'';
            (4) in section 1114, in subsection (a)(1), by striking 
        ``Department of Defense Medicare-Eligible'' and inserting 
        ``Uniformed Services'';
            (5) in section 1115--
                    (A) in subsection (b)(2), by striking ``The amount 
                determined under paragraph (1) for any fiscal year is 
                the amount needed to be appropriated to the Department 
                of Defense (or to the other executive department having 
                jurisdiction over the participating uniformed 
                service)'' and inserting ``The amount determined under 
                paragraph (1), or the amount determined under section 
                1111(c) for a participating uniformed service, for any 
                fiscal year, is the amount needed to be appropriated to 
                the Department of Defense (or to any other executive 
                department having jurisdiction over a participating 
                uniformed service)'';
                    (B) in subsection (c)(2), by striking ``for 
                medicare eligible beneficiaries''; and
                    (C) by adding at the end the following new 
                subsection:
    ``(f) For the fiscal year starting October 1, 2004, only, the 
amounts in this section shall be based solely on the costs of medicare-
eligible benefits of beneficiaries and the costs for their eligible 
dependents or survivors who are medicare-eligible, and shall be 
recalculated thereafter to reflect the cost of beneficiaries defined in 
section 1111.''; and
            (6) in section 1116--
                    (A) in subsection (a)(1)(A), by striking ``for 
                medicare-eligible beneficiaries'';
                    (B) in subsection (a)(2)(A), by striking ``for 
                medicare-eligible beneficiaries''; and
                    (C) in subsection (c), by striking ``subsection (a) 
                shall be paid from funds available for the health care 
                programs'' and inserting ``subsection (a) and section 
                1111(c) shall be paid from funds available for the pay 
                of members of the participating uniformed services 
                under the jurisdiction of the respective administering 
                secretaries''.

SEC. 413. EFFECTIVE DATE.

    Except as otherwise provided, this title shall take effect upon 
enactment with respect to fiscal years beginning after 2005.

``Sec. 601. Short title.
``Sec. 602. Budgetary treatment.
``Sec. 603. Timetable for implementation of accrual budgeting for 
                            Federal insurance programs.
``Sec. 604. Definitions.
``Sec. 605. Authorizations to enter into contracts; actuarial cost 
                            account.
``Sec. 606. Effective date.''.

                  Subtitle C--Limit on the Public Debt

SEC. 421. LIMIT ON PUBLIC DEBT.

    Section 3101 of title 31, United States Code, is amended to read as 
follows:
``Sec. 3101. Public debt limit
    ``(a) In this section, the current redemption value of an 
obligation issued on a discount basis and redeemable before maturity at 
the option of its holder is deemed to be the face amount of the 
obligation.
    ``(b) The face amount of obligations issued under this chapter and 
the face amount of obligations whose principal and interest are 
guaranteed by the United States Government (except guaranteed 
obligations held by the Secretary of the Treasury and intragovernmental 
holdings) may not be more than $4,393,000,000,000 outstanding at one 
time, subject to changes periodically made in that amount as provided 
by law.
    ``(c) For purposes of this section, the face amount, for any month, 
of any obligation issued on a discount basis that is not redeemable 
before maturity at the option of the holder of the obligation is an 
amount equal to the sum of--
            ``(1) the original issue price of the obligation, plus
            ``(2) the portion of the discount on the obligation 
        attributable to periods before the beginning of such month (as 
        determined under the principles of section 1272(a) of the 
        Internal Revenue Code of 1986 without regard to any exceptions 
        contained in paragraph (2) of such section).
    ``(d) For purposes of this section, the term `intragovernment 
holding' is any obligation issued by the Secretary of the Treasury to 
any Federal trust fund or Government account, whether in respect of 
public money, money otherwise required to be deposited in the Treasury, 
or amounts appropriated.''.

                 TITLE V--EXPEDITING THE BUDGET PROCESS

               Subtitle A--Further Enforcement Amendments

SEC. 501. SUPER-MAJORITY POINTS OF ORDER.

    (a) Section 904 of the Congressional Budget Act of 1974 is amended 
as follows:
            (1) In subsection 904(c)(1), insert ``312(g), (h), (i), and 
        (j),'' before ``313,'', and insert ``316, 318,'' before 
        ``904(c),''.
            (2) In subsection (c) strike ``three-fifths'' each place it 
        appears and insert ``two-thirds''.
            (3)(A) In subsection (d)(2), insert ``312(g), (h), (i), and 
        (j),'' before ``313,'', and insert ``316, 318,'' before 
        ``904(c),''.
            (B) In subsection (d), strike ``three-fifths'' each place 
        it appears and insert ``two-thirds''.
            (4)(A) In subsections (c)(2) and (d)(3), strike 
        ``311(a),''.
            (B) In subsections (c)(1) and (d)(2) insert ``311(a),'' 
        after ``310(d)(2),''.
            (5) In subsection (e), strike ``2002'' and insert ``2010''.

SEC. 502. BUDGET RESOLUTION ENFORCEMENT POINT OF ORDER.

    (a) Entitlement Point of Order.--Section 312 of the Congressional 
Budget Act of 1974 is amended by adding at the end the following new 
subsection:
    ``(i) Budget Resolution Enforcement Point of Order.--It shall not 
be in order in the House of Representatives or the Senate to consider 
any joint resolution on the budget for a fiscal year, or amendment 
thereto or conference report thereon, that--
            ``(1) is not consistent with the discretionary spending 
        limits set forth in section 251(b) of the Balanced Budget and 
        Emergency Deficit Control Act of 1985; or
            ``(2) provides for an increase in the aggregate level of 
        direct spending for the fiscal year of the resolution or any 
        ensuing fiscal year included in such resolution.''.

SEC. 503. POINT OF ORDER WAIVER PROTECTION.

    Clause 6(c) of rule XIII of the Rules of the House of 
Representatives is amended by striking the period at the end of 
subparagraph (2) and inserting ``; or'' and by adding at the end the 
following new subparagraph:
            ``(3) a rule or order that would waive the provisions of 
        any section of the Congressional Budget Act of 1974 referred to 
        in section 904(c)(1) of such Act.''.

                      Subtitle B--PAYGO Extension

SEC. 511. PAYGO EXTENSION.

    (a) Effective Dates.--Section 275(b) of the Balanced Budget and 
Emergency Deficit Control Act of 1985 is amended by striking ``2002'' 
and inserting ``2014'' and by striking ``2006'' and inserting ``2018''.
    (b) PAYGO Sequestration.--Subsections (a) and (b)(1) of section 252 
of the Balanced Budget and Emergency Deficit Control Act of 1985 are 
amended by striking ``2002'' and inserting ``2014''.
    (c) Definition of Receipts Legislation.--Section 252 of the 
Balanced Budget and Emergency Deficit Control Act of 1985 is amended by 
adding at the end the following new subsection:
    ``(f) Definition.--As used in this section, the term `receipts 
legislation' does not include any provision of a bill or joint 
resolution amending the Internal Revenue Code of 1986 that increases 
the deficit, if the amount of increase in the deficit (when added to 
the increase or decrease in the deficit caused by the enactment of 
other bills or joint resolutions amending the Internal Revenue Code of 
1986 enacted since the enactment of the most recent joint resolution on 
the budget) does not exceed for any fiscal year covered by such joint 
resolution on the budget the amount by which the aggregate level of 
Federal revenues should be decreased under such joint resolution on the 
budget.''.
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