I 

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.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

3 ‘‘Deficit Control Act of 2004’’. 

4 (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. 
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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.

1 SEC. 2. EFFECTIVE DATE. 

2 Except as otherwise specifically provided, this Act 

3 and the amendments made by this Act shall become effec-
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1 tive on the date of enactment of this Act and shall apply 

2 with respect to fiscal years beginning after September 30, 

3 2005. 

4 TITLE I—A SIMPLE AND BINDING 

5 BUDGET 

6 Subtitle A—Joint Budget 

7 Resolutions 

8 SEC. 101. DECLARATION OF PURPOSES FOR THE BUDGET 

9 ACT. 

10 Paragraphs (1) and (2) of section 2 of the Congres11 sional Budget and Impoundment Control Act of 1974 are 

12 amended to read as follows: 

13 ‘‘(1) to assure effective control over the budg14 etary process; 

15 ‘‘(2) to facilitate the determination each year of 

16 the appropriate level of Federal revenues and ex17 penditures by the Congress and the President;’’. 

18 SEC. 102. THE TIMETABLE. 

19 The timetable set forth in section 300 of the Congres20 sional Budget Act of 1974 is amended by striking ‘‘con21 current’’ each place it appears and inserting ‘‘joint’’. 

22 SEC. 103. ANNUAL JOINT RESOLUTIONS ON THE BUDGET. 

23 (a) CONTENT OF ANNUAL JOINT RESOLUTIONS ON

24 THE BUDGET.—Section 301(a) of the Congressional 

25 Budget Act of 1974 is amended as follows: 
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1 (1) Strike paragraph (4) and insert the fol2 lowing new paragraph: 

3 ‘‘(4) subtotals of new budget authority and out4 lays for nondefense discretionary spending, defense 

5 discretionary spending, direct spending (excluding 

6 interest), and interest; and for fiscal years to which 

7 the amendments made by subtitle B of title I of the 

8 Deficit Control Act of 2004 apply, subtotals of new 

9 budget authority and outlays for emergencies;’’. 

10 (2) Strike the last sentence of such subsection. 

11 (b) ADDITIONAL MATTERS IN JOINT RESOLUTION.—

12 Section 301(b) of the Congressional Budget Act of 1974 

13 is amended as follows: 

14 (1) Strike paragraphs (2), (4), and (6) through 

15 (9). 

16 (2) After paragraph (1), insert the following 

17 new paragraph: 

18 ‘‘(2) if submitted by the Committee on Ways 

19 and Means of the House of Representatives or the 

20 Committee on Finance of the Senate to the Com21 mittee on the Budget of that House of Congress, 

22 amend section 3101 of title 31, United States Code, 

23 to change the statutory limit on the public debt;’’. 

24 (3) After paragraph (3), insert the following 

25 new paragraph:
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1 ‘‘(4) require such other congressional proce2 dures, relating to the budget, as may be appropriate 

3 to carry out the purposes of this Act;’’; and 

4 (4) After paragraph (5), insert the following 

5 new paragraph: 

6 ‘‘(6) set forth procedures in the Senate whereby 

7 committee allocations, aggregates, and other levels 

8 can be revised for legislation if that legislation would 

9 not increase the deficit, or would not increase the 

10 deficit when taken with other legislation enacted 

11 after the adoption of the resolution, for the first fis12 cal year or the total period of fiscal years covered by 

13 the resolution.’’. 

14 (c) REQUIRED CONTENTS OF REPORT.—Section 

15 301(e)(2) of the Congressional Budget Act of 1974 is 

16 amended as follows: 

17 (1) Redesignate subparagraphs (A), (B), (C), 

18 (D), (E), and (F) as subparagraphs (B), (C), (E), 

19 (F), (H), and (I), respectively. 

20 (2) Before subparagraph (B) (as redesignated), 

21 insert the following new subparagraph: 

22 ‘‘(A) new budget authority and outlays for 

23 each major functional category, based on alloca24 tions of the total levels set forth pursuant to 

25 subsection (a)(1);’’. 
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1 (3) In subparagraph (C) (as redesignated), 

2 strike ‘‘mandatory’’ and insert ‘‘direct spending’’. 

3 (4) After subparagraph (C) (as redesignated), 

4 insert the following new subparagraph: 

5 ‘‘(D) a measure, as a percentage of gross 

6 domestic product, of total outlays, total Federal 

7 revenues, the surplus or deficit, and new out8 lays for nondefense discretionary spending, de9 fense spending, and direct spending as set forth 

10 in such resolution;’’. 

11 (5) After subparagraph (F) (as redesignated), 

12 insert the following new subparagraph: 

13 ‘‘(G) if the joint resolution on the budget 

14 includes any allocation to a committee other 

15 than the Committee on Appropriations of levels 

16 in excess of current law levels, a justification 

17 for not subjecting any program, project, or ac18 tivity (for which the allocation is made) to an19 nual discretionary appropriations;’’. 

20 (d) ADDITIONAL CONTENTS OF REPORT.—Section 

21 301(e)(3) of the Congressional Budget Act of 1974 is 

22 amended as follows: 

23 (1) Redesignate subparagraphs (A) and (B) as 

24 subparagraphs (B) and (C), respectively, strike sub-
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1 paragraphs (C) and (D), and redesignate subpara2 graph (E) as subparagraph (D). 

3 (2) Before subparagraph (B), insert the fol4 lowing new subparagraph: 

5 ‘‘(A) reconciliation directives described in 

6 section 310;’’. 

7 (e) PRESIDENT’S BUDGET SUBMISSION TO THE CON8 GRESS.—(1) The first two sentences of section 1105(a) 

9 of title 31, United States Code, are amended to read as 

10 follows: 

11 ‘‘On or after the first Monday in January but not later 

12 than the first Monday in February of each year the Presi13 dent shall submit a budget of the United States Govern14 ment for the following fiscal year which shall set forth the 

15 following levels: 

16 ‘‘(A) totals of new budget authority and out17 lays; 

18 ‘‘(B) total Federal revenues and the amount, if 

19 any, by which the aggregate level of Federal reve20 nues should be increased or decreased by bills and 

21 resolutions to be reported by the appropriate com22 mittees; 

23 ‘‘(C) the surplus or deficit in the budget; 

24 ‘‘(D) subtotals of new budget authority and 

25 outlays for nondefense discretionary spending, de-
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1 fense discretionary spending, direct spending, and 

2 interest; and for fiscal years to which the amend3 ments made by subtitle B of title I of the Deficit 

4 Control Act of 2004 apply, subtotals of new budget 

5 authority and outlays for emergencies; and 

6 ‘‘(E) the public debt. 

7 Each budget submission shall include a budget message 

8 and summary and supporting information and, as a sepa9 rately delineated statement, the levels required in the pre10 ceding sentence for at least each of the 9 ensuing fiscal 

11 years.’’. 

12 (2) The third sentence of section 1105(a) of title 31, 

13 United States Code, is amended by inserting ‘‘submission’’ 

14 after ‘‘budget’’. 

15 (f) LIMITATION ON CONTENTS OF BUDGET RESOLU16 TIONS.—Section 305 of the Congressional Budget Act of 

17 1974 is amended by adding at the end the following new 

18 subsection: 

19 ‘‘(e) LIMITATION ON CONTENTS.—(1) It shall not be 

20 in order in the House of Representatives or in the Senate 

21 to consider any joint resolution on the budget or any 

22 amendment thereto or conference report thereon that con23 tains any matter referred to in paragraph (2). 

24 ‘‘(2) Any joint resolution on the budget or any 

25 amendment thereto or conference report thereon that con-
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1 tains any matter not permitted in section 301(a) or (b) 

2 shall not be treated in the House of Representatives or 

3 the Senate as a budget resolution under subsection (a) or 

4 (b) or as a conference report on a budget resolution under 

5 subsection (c) of this section.’’. 

6 SEC. 104. BUDGET REQUIRED BEFORE SPENDING BILLS 

7 MAY BE CONSIDERED. 

8 (a) AMENDMENTS TO SECTION 302.—Section 302(a) 

9 of the Congressional Budget Act of 1974 is amended by 

10 striking paragraph (5). 

11 (b) AMENDMENTS TO SECTION 303 AND CON12 FORMING AMENDMENTS.—(1) Section 303 of the Con13 gressional Budget Act of 1974 is amended by striking ‘‘(a) 

14 IN GENERAL.—’’, by striking ‘‘as reported to the House 

15 or Senate’’, by striking ‘‘to become effective’’ in paragraph 

16 (1), and by striking subsections (b) and (c); and 

17 (2) by striking its section heading and inserting the 

18 following new section heading: ‘‘CONSIDERATION OF

19 BUDGET-RELATED LEGISLATION BEFORE BUDGET BE20 COMES LAW’’. 

21 (c) ADDITIONAL AMENDMENTS.—(1) Section 

22 302(g)(1) of the Congressional Budget Act of 1974 is 

23 amended by striking ‘‘and, after April 15, section 303’’.
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1 (2)(A) Section 904(c)(1) of the Congressional Budget 

2 Act of 1974 is amended by inserting ‘‘303,’’ before 

3 ‘‘305(b)(2),’’. 

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

5 Act of 1974 is amended by inserting ‘‘303,’’ before 

6 ‘‘305(b)(2),’’. 

7 SEC. 105. AMENDMENTS TO EFFECTUATE JOINT RESOLU8 TIONS ON THE BUDGET. 

9 (a) DEFINITION.—Paragraph (4) of section 3 of the 

10 Congressional Budget Act of 1974 is amended to read as 

11 follows: 

12 ‘‘(4) the term ‘joint resolution on the budget’ 

13 means—

14 ‘‘(A) a joint resolution setting forth the 

15 budget for the United States Government for a 

16 fiscal year as provided in section 301; and 

17 ‘‘(B) any other joint resolution revising the 

18 budget for the United States Government for a 

19 fiscal year as described in section 304.’’. 

20 (b) ADDITIONAL AMENDMENTS TO THE CONGRES21 SIONAL BUDGET AND IMPOUNDMENT CONTROL ACT OF

22 1974.—(1)(A) Sections 301, 302, 303, 305, 308, 310, 

23 311, 312, 314, 405, and 904 of the Congressional Budget 

24 Act of 1974 (2 U.S.C. 621 et seq.) are amended by strik-
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1 ing ‘‘concurrent’’ each place it appears and inserting 

2 ‘‘joint’’. 

3 (B)(i) Sections 302(d), 302(g), 308(a)(1)(A), and 

4 310(d)(1) of the Congressional Budget Act of 1974 are 

5 amended by striking ‘‘most recently agreed to concurrent 

6 resolution on the budget’’ each place it occurs and insert7 ing ‘‘most recently enacted joint resolution on the budget 

8 or agreed to concurrent resolution on the budget (as appli9 cable)’’. 

10 (ii) The section heading of section 301 is amended 

11 by striking ‘‘adoption of concurrent resolution’’ and insert12 ing ‘‘joint resolutions’’; and 

13 (iii) Section 304 of such Act is amended to read as 

14 follows: 

15 ‘‘PERMISSIBLE REVISIONS OF BUDGET RESOLUTIONS

16 ‘‘SEC. 304. At any time after the joint resolution on 

17 the budget for a fiscal year has been enacted pursuant 

18 to section 301, and before the end of such fiscal year, the 

19 two Houses and the President may enact a joint resolution 

20 on the budget which revises or reaffirms the joint resolu21 tion on the budget for such fiscal year most recently en22 acted.’’. 

23 (C) Sections 302, 303, 310, and 311, of such Act 

24 are amended by striking ‘‘agreed to’’ each place it appears 

25 and by inserting ‘‘enacted’’. 
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1 (2)(A) Paragraph (4) of section 3 of the Congres2 sional Budget and Impoundment Control Act of 1974 is 

3 amended by striking ‘‘concurrent’’ each place it appears 

4 and by inserting ‘‘joint’’. 

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

6 of such Act is amended—

7 (i) in the item relating to section 301, by strik8 ing ‘‘adoption of concurrent resolution’’ and insert9 ing ‘‘joint resolutions’’; 

10 (ii) by striking the item relating to section 303 

11 and inserting the following:

‘‘Sec. 303. Consideration of budget-related legislation before budget becomes 

law.’’;

12 (iii) by striking ‘‘concurrent’’ and inserting 

13 ‘‘joint’’ in the item relating to section 305. 

14 (c) CONFORMING AMENDMENTS TO THE RULES OF

15 THE HOUSE OF REPRESENTATIVES.—Clauses 1(e)(1), 

16 4(a)(4), 4(b)(2), 4(f)(1)(A), and 4(f)(2) of rule X, clause 

17 10 of rule XVIII, and clause 10 of rule XX of the Rules 

18 of the House of Representatives are amended by striking 

19 ‘‘concurrent’’ each place it appears and inserting ‘‘joint’’. 

20 (d) CONFORMING AMENDMENTS TO THE BALANCED

21 BUDGET AND EMERGENCY DEFICIT CONTROL ACT OF

22 1985.—Section 258C(b)(1) of the Balanced Budget and 

23 Emergency Deficit Control Act of 1985 (2 U.S.C. 
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1 907d(b)(1)) is amended by striking ‘‘concurrent’’ and in2 serting ‘‘joint’’. 

3 (e) CONFORMING AMENDMENTS TO SECTION 310 

4 REGARDING RECONCILIATION DIRECTIVES.—(1) The side 

5 heading of section 310(a) of the Congressional Budget Act 

6 of 1974 (as amended by subsection (b)) is further amend7 ed by inserting ‘‘JOINT EXPLANATORY STATEMENT AC8 COMPANYING CONFERENCE REPORT ON’’ before ‘‘JOINT’’. 

9 (2) Section 310(a) of such Act is amended by striking 

10 ‘‘A’’ and inserting ‘‘The joint explanatory statement ac11 companying the conference report on a’’. 

12 (3) The first sentence of section 310(b) of such Act 

13 is amended by striking ‘‘If’’ and inserting ‘‘If the joint 

14 explanatory statement accompanying the conference re15 port on’’. 

16 (4) Section 310(c)(1) of such Act is amended by in17 serting ‘‘the joint explanatory statement accompanying 

18 the conference report on’’ after ‘‘pursuant to’’. 

19 (f) CONFORMING AMENDMENTS TO SECTION 3 RE20 GARDING DIRECT SPENDING.—Section 3 of the Congres21 sional Budget and Impoundment Control Act of 1974 is 

22 amended by adding at the end the following new para23 graph: 

24 ‘‘(11) The term ‘direct spending’ has the mean25 ing given to such term in section 250(c)(8) of the 
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1 Balanced Budget and Emergency Deficit Control 

2 Act of 1985.’’. 

3 Subtitle B—Rainy Day Fund for 

4 Emergencies 

5 SEC. 111. PURPOSE. 

6 The purposes of this subtitle are to—

7 (1) develop budgetary and fiscal procedures for 

8 emergencies; 

9 (2) subject spending for emergencies to budg10 etary procedures and controls; and 

11 (3) establish criteria for determining compliance 

12 with emergency requirements. 

13 SEC. 112. REPEAL OF ADJUSTMENTS FOR EMERGENCIES. 

14 (a) ELIMINATION OF EMERGENCY DESIGNATION.—

15 Sections 252(e) and 252(d)(4)(B) of the Balanced Budget 

16 and Emergency Deficit Control Act of 1985 are repealed. 

17 (b) ELIMINATION OF ADJUSTMENTS.—Section 314 of 

18 the Congressional Budget Act of 1974 is repealed. 

19 (c) CONFORMING AMENDMENT.—Clause 2 of rule 

20 XXI of the Rules of the House of Representatives is 

21 amended by repealing paragraph (e) and by redesignating 

22 paragraph (f) as paragraph (e). 

23 SEC. 113. OMB EMERGENCY CRITERIA. 

24 (a) DEFINITION OF EMERGENCY.—Section 3 of the 

25 Congressional Budget and Impoundment Control Act of 
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1 1974 (as amended by section 105(f)) is further amended 

2 by adding at the end the following new paragraph: 

3 ‘‘(12)(A) The term ‘emergency’ means a situa4 tion that—

5 ‘‘(i) requires new budget authority and 

6 outlays (or new budget authority and the out7 lays flowing therefrom) for the prevention or 

8 mitigation of, or response to, loss of life or 

9 property, or a threat to national security; and 

10 ‘‘(ii) is unanticipated. 

11 ‘‘(B) As used in subparagraph (A), the term 

12 ‘unanticipated’ means that the situation is—

13 ‘‘(i) sudden, which means quickly coming 

14 into being or not building up over time; 

15 ‘‘(ii) urgent, which means a pressing and 

16 compelling need requiring immediate action; 

17 ‘‘(iii) unforeseen, which means not pre18 dicted or anticipated as an emerging need; and 

19 ‘‘(iv) temporary, which means not of a per20 manent duration.’’. 

21 (b) CONFORMING AMENDMENT.—The term ‘emer22 gency’ has the meaning given to such term in section 3 

23 of the Congressional Budget and Impoundment Control 

24 Act of 1974.’’. 
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1 SEC. 114. DEVELOPMENT OF GUIDELINES FOR APPLICA2 TION OF EMERGENCY DEFINITION. 

3 Not later than 5 months after the date of enactment 

4 of this Act, the chairmen of the Committees on the Budget 

5 (in consultation with the President) shall, after consulting 

6 with the chairmen of the Committees on Appropriations 

7 and applicable authorizing committees of their respective 

8 Houses and the Directors of the Congressional Budget Of9 fice and the Office of Management and Budget, jointly 

10 publish in the Congressional Record guidelines for applica11 tion of the definition of emergency set forth in section 

12 3(12) of the Congressional Budget and Impoundment 

13 Control Act of 1974. 

14 SEC. 115. RESERVE FUND FOR EMERGENCIES IN PRESI15 DENT’S BUDGET. 

16 Section 1105(f) of title 31, United States Code is 

17 amended by adding at the end the following new sen18 tences: ‘‘Such budget submission shall also comply with 

19 the requirements of section 316(b) of the Congressional 

20 Budget Act of 1974 and, in the case of any budget author21 ity requested for an emergency, such submission shall in22 clude a detailed justification of why such emergency is an 

23 emergency within the meaning of section 3(12) of the Con24 gressional Budget Act of 1974.’’. 
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1 SEC. 116. ADJUSTMENTS AND RESERVE FUND FOR EMER2 GENCIES IN JOINT BUDGET RESOLUTIONS. 

3 (a) EMERGENCIES.—Title III of the Congressional 

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

5 following new section: 

6 ‘‘EMERGENCIES

7 ‘‘SEC. 316. (a) ADJUSTMENTS.—

8 ‘‘(1) IN GENERAL.—After the reporting of a bill 

9 or joint resolution or the submission of a conference 

10 report thereon that provides budget authority for 

11 any emergency as identified pursuant to subsection 

12 (d) that is not covered by subsection (c)—

13 ‘‘(A) the chairman of the Committee on 

14 the Budget of the House of Representatives or 

15 the Senate shall determine and certify, pursu16 ant to the guidelines referred to in section 114 

17 of the Deficit Control Act of 2004, the portion 

18 (if any) of the amount so specified that is for 

19 an emergency within the meaning of section 

20 3(12); and 

21 ‘‘(B) such chairman shall make the adjust22 ment set forth in paragraph (2) for the amount 

23 of new budget authority (or outlays) in that 

24 measure and the outlays flowing from that 

25 budget authority. 
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1 ‘‘(2) MATTERS TO BE ADJUSTED.—The adjust2 ments referred to in paragraph (1) are to be made 

3 to the allocations made pursuant to the appropriate 

4 joint resolution on the budget pursuant to section 

5 302(a) and shall be in an amount not to exceed the 

6 amount reserved for emergencies pursuant to the re7 quirements of subsection (b). 

8 ‘‘(b) RESERVE FUND FOR EMERGENCIES.—

9 ‘‘(1) AMOUNTS.—The amount set forth in the 

10 reserve fund for emergencies (other than those cov11 ered by subsection (c)) for budget authority and out12 lays for a fiscal year pursuant to section 301(a)(4) 

13 shall equal—

14 ‘‘(A) the average of the enacted levels of 

15 budget authority for emergencies (other than 

16 those covered by subsection (c)) in the 5 fiscal 

17 years preceding the current year; and 

18 ‘‘(B) the average of the levels of outlays 

19 for emergencies in the 5 fiscal years preceding 

20 the current year flowing from the budget au21 thority referred to in subparagraph (A), but 

22 only in the fiscal year for which such budget 

23 authority first becomes available for obligation. 

24 ‘‘(2) AVERAGE LEVELS.—For purposes of para25 graph (1), the amount used for a fiscal year to cal-
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1 culate the average of the enacted levels when one or 

2 more of such 5 preceding fiscal years is any of fiscal 

3 years 2000 through 2004 is as follows: the amount 

4 of enacted levels of budget authority and the amount 

5 of new outlays flowing therefrom for emergencies, 

6 but only in the fiscal year for which such budget au7 thority first becomes available for obligation for each 

8 of such 5 fiscal years, which shall be determined by 

9 the Committees on the Budget of the House of Rep10 resentatives and the Senate after receipt of a report 

11 on such matter transmitted to such committees by 

12 the Director of the Congressional Budget Office 6 

13 months after the date of enactment of this section 

14 and thereafter in February of each calendar year. 

15 ‘‘(c) TREATMENT OF EMERGENCIES TO FUND CER16 TAIN MILITARY OPERATIONS.—Whenever the Committee 

17 on Appropriations reports any bill or joint resolution that 

18 provides budget authority for any emergency that is a 

19 threat to national security and the funding of which car20 ries out a military operation authorized by a declaration 

21 of war or a joint resolution authorizing the use of military 

22 force and the report accompanying that bill or joint resolu23 tion, pursuant to subsection (d), identifies any provision 

24 that increases outlays or provides budget authority (and 

25 the outlays flowing therefrom) for such emergency, the en-
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1 actment of which would cause the total amount of budget 

2 authority or outlays provided for emergencies for the 

3 budget year in the joint resolution on the budget (pursu4 ant to section 301(a)(4)) to be exceeded: 

5 ‘‘(A) Such bill or joint resolution shall be re6 ferred to the Committee on the Budget of the House 

7 or the Senate, as the case may be, with instructions 

8 to report it without amendment, other than that 

9 specified in subparagraph (B), within 5 legislative 

10 days of the day in which it is reported from the orig11 inating committee. If the Committee on the Budget 

12 of either House fails to report a bill or joint resolu13 tion referred to it under this subparagraph within 

14 such 5-day period, the committee shall be automati15 cally discharged from further consideration of such 

16 bill or joint resolution and such bill or joint resolu17 tion shall be placed on the appropriate calendar. 

18 ‘‘(B) An amendment to such a bill or joint reso19 lution referred to in this subsection shall only consist 

20 of an exemption from section 251 of the Balanced 

21 Budget and Emergency Deficit Control Act of 1985 

22 of all or any part of the provisions that provide 

23 budget authority (and the outlays flowing therefrom) 

24 for such emergency if the committee determines, 

25 pursuant to the guidelines referred to in section 114
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1 of the Deficit Control Act of 2004, that such budget 

2 authority is for an emergency within the meaning 

3 of section 3(12). 

4 ‘‘(C) If such a bill or joint resolution is reported 

5 with an amendment specified in subparagraph (B) 

6 by the Committee on the Budget of the House of 

7 Representatives or the Senate, then the budget au8 thority and resulting outlays that are the subject of 

9 such amendment shall not be included in any deter10 minations under section 302(f) or 311(a) for any 

11 bill, joint resolution, amendment, motion, or con12 ference report. 

13 ‘‘(d) COMMITTEE NOTIFICATION OF EMERGENCY

14 LEGISLATION.—Whenever the Committee on Appropria15 tions or any other committee of either House (including 

16 a committee of conference) reports any bill or joint resolu17 tion that provides budget authority for any emergency, the 

18 report accompanying that bill or joint resolution (or the 

19 joint explanatory statement of managers in the case of a 

20 conference report on any such bill or joint resolution) shall 

21 identify all provisions that provide budget authority and 

22 the outlays flowing therefrom for such emergency and in23 clude a statement of the reasons why such budget author24 ity meets the definition of an emergency pursuant to the 
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1 guidelines referred to in section 114 of the Deficit Control 

2 Act of 2004.’’. 

3 (b) CONFORMING AMENDMENT.—The table of con4 tents set forth in section 1(b) of the Congressional Budget 

5 and Impoundment Control Act of 1974 is amended by in6 serting after the item relating to section 315 the following 

7 new item:

‘‘Sec. 316. Emergencies.’’.

8 SEC. 117. APPLICATION OF SECTION 306 TO EMERGENCIES 

9 IN EXCESS OF AMOUNTS IN RESERVE FUND. 

10 Section 306 of the Congressional Budget Act of 1974 

11 is amended by inserting at the end the following new sen12 tence: ‘‘No amendment reported by the Committee on the 

13 Budget (or from the consideration of which such com14 mittee has been discharged) pursuant to section 316(c) 

15 may be amended.’’. 

16 SEC. 118. UP-TO-DATE TABULATIONS. 

17 Section 308(b)(2) of the Congressional Budget Act 

18 of 1974 is amended by striking ‘‘and’’ at the end of sub19 paragraph (B), by striking the period at the end of sub20 paragraph (C) and inserting ‘‘; and’’, and by adding at 

21 the end the following new subparagraph: 

22 ‘‘(D) shall include an up-to-date tabulation 

23 of amounts remaining in the reserve fund for 

24 emergencies.’’. 
24

•HR 3925 IH 

1 SEC. 119. PROHIBITION ON AMENDMENTS TO EMERGENCY 

2 RESERVE FUND. 

3 (a) POINT OF ORDER.—Section 305 of the Congres4 sional Budget Act of 1974 (as amended by section 103(f)) 

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

6 subsection: 

7 ‘‘(f) POINT OF ORDER REGARDING EMERGENCY RE8 SERVE FUND.—It shall not be in order in the House of 

9 Representatives or in the Senate to consider an amend10 ment to a joint resolution on the budget which changes 

11 the amount of budget authority and outlays set forth in 

12 section 301(a)(4) for emergency reserve fund.’’. 

13 (b) TECHNICAL AMENDMENT.—(1) Section 904(c)(1) 

14 of the Congressional Budget Act of 1974 is amended by 

15 inserting ‘‘305(e), 305(f),’’ after ‘‘305(c)(4),’’. 

16 (2) Section 904(d)(2) of the Congressional Budget 

17 Act of 1974 is amended by inserting ‘‘305(e), 305(f),’’ 

18 after ‘‘305(c)(4),’’.

19 Subtitle C—The Baseline 

20 SEC. 121. ELIMINATION OF INFLATION ADJUSTMENT. 

21 Section 257(c) of the Balanced Budget and Emer22 gency Deficit Control Act of 1985 is amended—

23 (1) in paragraph (1) by striking ‘‘for inflation 

24 as specified in paragraph (5),’’; and 

25 (2) by striking paragraph (5) and redesignating 

26 paragraph (6) as paragraph (5). 
25

•HR 3925 IH 

1 SEC. 122. THE PRESIDENT’S BUDGET. 

2 (a) Paragraph (5) of section 1105(a) of title 31, 

3 United States Code, is amended to read as follows: 

4 ‘‘(5) except as provided in subsection (b) of this 

5 section, estimated expenditures and appropriations 

6 for the current year and estimated expenditures and 

7 proposed appropriations the President decides are 

8 necessary to support the Government in the fiscal 

9 year for which the budget is submitted and the 4 fis10 cal years following that year, and, except for detailed 

11 budget estimates, the percentage change from the 

12 current year to the fiscal year for which the budget 

13 is submitted for estimated expenditures and for ap14 propriations.’’. 

15 (b) Section 1105(a)(6) of title 31, United States 

16 Code, is amended to read as follows: 

17 ‘‘(6) estimated receipts of the Government in 

18 the current year and the fiscal year for which the 

19 budget is submitted and the 4 fiscal years after that 

20 year under—

21 ‘‘(A) laws in effect when the budget is sub22 mitted; and 

23 ‘‘(B) proposals in the budget to increase 

24 revenues, 

25 and the percentage change (in the case of each cat26 egory referred to in subparagraphs (A) and (B)) be-
26

•HR 3925 IH 

1 tween the current year and the fiscal year for which 

2 the budget is submitted and between the current 

3 year and each of the 9 fiscal years after the fiscal 

4 year for which the budget is submitted.’’. 

5 (c) Section 1105(a)(12) of title 31, United States 

6 Code, is amended to read as follows: 

7 ‘‘(12) for each proposal in the budget for legis8 lation that would establish or expand a Government 

9 activity or function, a table showing—

10 ‘‘(A) the amount proposed in the budget 

11 for appropriation and for expenditure because 

12 of the proposal in the fiscal year for which the 

13 budget is submitted; 

14 ‘‘(B) the estimated appropriation required 

15 because of the proposal for each of the 4 fiscal 

16 years after that year that the proposal will be 

17 in effect; and 

18 ‘‘(C) the estimated amount for the same 

19 activity or function, if any, in the current fiscal 

20 year, 

21 and, except for detailed budget estimates, the per22 centage change (in the case of each category re23 ferred to in subparagraphs (A), (B), and (C)) be24 tween the current year and the fiscal year for which 

25 the budget is submitted.’’.
27

•HR 3925 IH 

1 (d) Section 1105(a)(18) of title 31, United States 

2 Code, is amended by inserting ‘‘new budget authority 

3 and’’ before ‘‘budget outlays’’. 

4 (e) Section 1105(a) of title 31, United States Code, 

5 is amended by adding at the end the following new para6 graphs: 

7 ‘‘(35) a comparison of levels of estimated ex8 penditures and proposed appropriations for each 

9 function and subfunction in the current fiscal year 

10 and the fiscal year for which the budget is sub11 mitted, along with the proposed increase or decrease 

12 of spending in percentage terms for each function 

13 and subfunction. 

14 ‘‘(36) a table on sources of growth in total di15 rect spending under current law and as proposed in 

16 this budget submission for the budget year and the 

17 ensuing 9 fiscal years, which shall include changes 

18 in outlays attributable to the following: cost-of-living 

19 adjustments; changes in the number of program re20 cipients; increases in medical care prices, utilization 

21 and intensity of medical care; and residual factors.’’. 

22 (f) Section 1109(a) of title 31, United States Code, 

23 is amended by inserting after the first sentence the fol24 lowing new sentence: ‘‘For discretionary spending, these 

25 estimates shall assume the levels set forth in the discre-
28

•HR 3925 IH 

1 tionary spending limits under section 251(b) of the Bal2 anced Budget and Emergency Deficit Control Act of 1985, 

3 as adjusted, for the appropriate fiscal years (and if no 

4 such limits are in effect, these estimates shall assume the 

5 adjusted levels for the most recent fiscal year for which 

6 such levels were in effect).’’. 

7 SEC. 123. THE CONGRESSIONAL BUDGET. 

8 Section 301(e) of the Congressional Budget Act of 

9 1974 (as amended by section 103) is further amended—

10 (1) in paragraph (1), by inserting at the end 

11 the following: ‘‘The basis of deliberations in devel12 oping such joint resolution shall be the estimated 

13 budgetary levels for the preceding fiscal year. Any 

14 budgetary levels pending before the committee and 

15 the text of the joint resolution shall be accompanied 

16 by a document comparing such levels or such text to 

17 the estimated levels of the prior fiscal year. Any 

18 amendment offered in the committee that changes a 

19 budgetary level and is based upon a specific policy 

20 assumption for a program, project, or activity shall 

21 be accompanied by a document indicating the esti22 mated amount for such program, project, or activity 

23 in the current year.’’; and 

24 (2) in paragraph (2), by striking ‘‘and’’ at the 

25 end of subparagraph (H) (as redesignated), by strik-
29

•HR 3925 IH 

1 ing the period and inserting ‘‘; and’’ at the end of 

2 subparagraph (I) (as redesignated), and by adding 

3 at the end the following new subparagraph: 

4 ‘‘(J) a comparison of levels for the current 

5 fiscal year with proposed spending and revenue 

6 levels for the subsequent fiscal years along with 

7 the proposed increase or decrease of spending 

8 in percentage terms for each function.’’. 

9 SEC. 124. CONGRESSIONAL BUDGET OFFICE REPORTS TO 

10 COMMITTEES. 

11 (a) The first sentence of section 202(e)(1) of the Con12 gressional Budget Act of 1974 is amended by inserting 

13 ‘‘compared to comparable levels for the current year’’ be14 fore the comma at the end of subparagraph (A) and before 

15 the comma at the end of subparagraph (B). 

16 (b) Section 202(e)(1) of the Congressional Budget 

17 Act of 1974 is amended by inserting after the first sen18 tence the following new sentence: ‘‘Such report shall also 

19 include a table on sources of spending growth in total di20 rect spending for the budget year and the ensuing 4 fiscal 

21 years, which shall include changes in outlays attributable 

22 to the following: cost-of-living adjustments; changes in the 

23 number of program recipients; increases in medical care 

24 prices, utilization and intensity of medical care; and resid25 ual factors.’’. 
30

•HR 3925 IH 

1 (c) Section 308(a)(1)(B) of the Congressional Budget 

2 Act of 1974 is amended by inserting ‘‘and shall include 

3 a comparison of those levels to comparable levels for the 

4 current fiscal year’’ before ‘‘if timely submitted’’. 

5 SEC. 125. TREATMENT OF EMERGENCIES. 

6 Section 257(c) of the Balanced Budget and Emer7 gency Deficit Control Act of 1985 (as amended by section 

8 121) is further amended by adding at the end the fol9 lowing new paragraph: 

10 ‘‘(6) EMERGENCIES.—Budgetary resources for 

11 emergencies shall be at the level provided in the re12 serve fund for emergencies for that fiscal year pur13 suant to section 301(a)(4) of the Congressional 

14 Budget Act of 1974.’’.

15 TITLE II—IMPLEMENTING FED16 ERAL SPENDING DISCIPLINE

17 Subtitle A—Spending Safeguards 

18 on the Growth of Entitlements 

19 and Mandatories 

20 SEC. 201. SPENDING CAPS ON GROWTH OF ENTITLEMENTS 

21 AND MANDATORIES. 

22 (a) CONTROL OF ENTITLEMENTS AND

23 MANDATORIES.—The Balanced Budget and Emergency 

24 Deficit Control Act of 1985 is amended by adding after 

25 section 252 the following new section: 
31

•HR 3925 IH 

1 ‘‘SEC. 252A. ENFORCING CONTROLS ON DIRECT SPENDING. 

2 ‘‘(a) CAP ON GROWTH OF ENTITLEMENTS.—Effec3 tive for fiscal year 2006 and for each ensuing fiscal year, 

4 the total level of direct spending for all direct spending 

5 programs, projects, and activities (excluding social secu6 rity) for any such fiscal year shall not exceed the total 

7 level of spending for all such programs, projects, and ac8 tivities for the previous fiscal year after the direct spend9 ing for each such program, project, or activity is increased 

10 by the inflator (if any) applicable to that program, project, 

11 or activity and the growth in eligible population for such 

12 program, project, or activity. 

13 ‘‘(b) SEQUESTRATION.—Within 15 days after Con14 gress adjourns to end a session (other than of the second 

15 session of the One Hundred Eighth Congress), and on the 

16 same day as a sequestration (if any) under section 251, 

17 there shall be a sequestration to reduce the amount of di18 rect spending for the fiscal year beginning in the year the 

19 Congress adjourns by any amount necessary to reduce 

20 such spending to the level set forth in subsection (a) un21 less that amount is less than $250,000,000. 

22 ‘‘(c) UNIFORM REDUCTIONS; LIMITATIONS.—The 

23 amount required to be sequestered for the fiscal year 

24 under subsection (a) shall be obtained from nonexempt di25 rect spending accounts by actions taken in the following 

26 order:
32

•HR 3925 IH 

1 ‘‘(1) FIRST.—The reductions in the programs 

2 specified in section 256(a) (National Wool Act and 

3 special milk), section 256(b) (guaranteed student 

4 loans), and section 256(c) (foster care and adoption 

5 assistance) shall be made. 

6 ‘‘(2) SECOND.—Any additional reductions that 

7 may be required shall be achieved by reducing each 

8 remaining nonexempt direct spending account by the 

9 uniform percentage necessary to achieve those addi10 tional reductions, except that—

11 ‘‘(A) the low-income programs specified in 

12 section 256(d) shall not be reduced by more 

13 than 2 percent; and 

14 ‘‘(B) the retirement and veterans benefits 

15 specified in sections 256(f), (g), and (h) shall 

16 not be reduced by more than 2 percent in the 

17 manner specified in that section. 

18 The limitations set forth in subparagraphs (A) and 

19 (B) shall be applied iteratively, and after each 

20 iteration the uniform percentage applicable to all 

21 other programs under this paragraph shall be in22 creased (if necessary) to a level sufficient to achieve 

23 the reductions required by this paragraph.’’. 

24 (b) TABLE OF CONTENTS AMENDMENT.—The table 

25 of contents set forth in 250(c) of the Balanced Budget 
33

•HR 3925 IH 

1 and Emergency Deficit Control Act of 1985 is amended 

2 by adding after the item relating to section 252 the fol3 lowing new item:

‘‘Sec. 252A. Enforcing controls on direct spending.’’.

4 SEC. 202. EXEMPT PROGRAMS AND ACTIVITIES. 

5 Section 255 of the Balanced Budget and Emergency 

6 Deficit Control Act of 1985 is amended to read as follows: 

7 ‘‘SEC. 255. EXEMPT PROGRAMS AND ACTIVITIES. 

8 ‘‘(a) SOCIAL SECURITY BENEFITS; TIER I RAILROAD

9 RETIREMENT BENEFITS; AND MEDICARE BENEFITS.—

10 (1) Benefits payable under the old-age, survivors, and dis11 ability insurance program established under title II of the 

12 Social Security Act, and benefits payable under section 

13 3(a), 3(f)(3), 4(a), or 4(f) of the Railroad Retirement Act 

14 of 1974, shall be exempt from reduction under any order 

15 issued under this part. 

16 ‘‘(2) Payments made under title XVIII (relating to 

17 medicare of the Social Security Act shall be exempt from 

18 reduction under any order issued under this part. 

19 ‘‘(b) DESCRIPTIONS AND LISTS.—The following 

20 budget accounts or activities shall be exempt from seques21 tration: 

22 ‘‘(1) net interest; 

23 ‘‘(2) all payments to trust funds from excise 

24 taxes or other receipts or collections properly cred25 itable to those trust funds; 
34

•HR 3925 IH 

1 ‘‘(3) all payments from one Federal direct 

2 spending budget account to another Federal budget 

3 account; and all intragovernmental funds including 

4 those from which funding is derived primarily from 

5 other Government accounts, except to the extent 

6 that such funds are augmented by direct appropria7 tions for the fiscal year for which the order is in ef8 fect; 

9 ‘‘(4) activities resulting from private donations, 

10 bequests, or voluntary contributions to the Govern11 ment; 

12 ‘‘(5) payments from any revolving fund or 

13 trust-revolving fund (or similar activity) that pro14 vides deposit insurance or other Government insur15 ance, Government guarantees, or any other form of 

16 contingent liability, to the extent those payments re17 sult from contractual or other legally binding com18 mitments of the Government at the time of any se19 questration; 

20 ‘‘(6) credit liquidating and financing accounts; 

21 ‘‘(7) the following accounts, which largely fulfill 

22 requirements of the Constitution or otherwise make 

23 payments to which the Government is committed: 
35

•HR 3925 IH 

1 ‘‘Administration of Territories, Northern 

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

3 1–806); 

4 ‘‘Armed Forces Retirement Home Trust 

5 Fund, payment of claims (84–8930–0–7–705); 

6 ‘‘Bureau of Indian Affairs, miscellaneous 

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

8 ‘‘Bureau of Indian Affairs, miscellaneous 

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

10 999); 

11 ‘‘Claims, defense; 

12 ‘‘Claims, judgments, and relief act (20–

13 1895–0–1–806); 

14 ‘‘Compact of Free Association, economic 

15 assistance pursuant to Public Law 99–658 (14–

16 0415–0–1–806); 

17 ‘‘Compensation of the President (11–

18 0001–0–1–802); 

19 ‘‘Customs Service, miscellaneous perma20 nent appropriations (20–9992–0–2–852); 

21 ‘‘Eastern Indian land claims settlement 

22 fund (14–2202–0–1–806); 

23 ‘‘Farm Credit Administration, Limitation 

24 on Administration Expenses (78–4131–0–3–

25 351); 
36

•HR 3925 IH 

1 ‘‘Farm Credit System Financial Assistance 

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

3 351); 

4 ‘‘Internal Revenue collections of Puerto 

5 Rico (20–5737–0–2–852); 

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

8 ‘‘Payments of Vietnam and USS Pueblo 

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

10 ‘‘Payments to copyright owners (03–5175–

11 0–2–376); 

12 ‘‘Payments to health care trust funds (75–

13 0580–0–1–571); 

14 ‘‘Payments to social security trust funds 

15 (75–0404–0–1–651); 

16 ‘‘Payments to the United States terri17 tories, fiscal assistance (14–0418–0–1–801); 

18 ‘‘Payments to widows and heirs of de19 ceased Members of Congress (00–0215–0–1–

20 801); 

21 ‘‘Pension Benefit Guaranty Corporation 

22 Fund (16–4204–0–3–601); 

23 ‘‘Salaries of Article III judges;
37

•HR 3925 IH 

1 ‘‘Washington Metropolitan Area Transit 

2 Authority, interest payments (46–0300–0–1–

3 401); 

4 ‘‘(8) the following noncredit special, revolving, 

5 or trust-revolving funds: 

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

7 ‘‘Comptroller of the Currency; 

8 ‘‘Director of the Office of Thrift Super9 vision; 

10 ‘‘Exchange Stabilization Fund (20–4444–

11 0–3–155); 

12 ‘‘Federal Housing Finance Board; 

13 ‘‘Foreign Military Sales trust fund (11–

14 82232–0–7–155); 

15 ‘‘National Credit Union Administration, 

16 central liquidating facility (25–4470–0–3–373); 

17 ‘‘National Credit Union Administration, 

18 credit union insurance fund (25–4468–0–3–

19 373); 

20 ‘‘National Credit Union Administration op21 erating fund (25–4056–0–3–373); and 

22 ‘‘Resolution Trust Corporation Revolving 

23 Fund (22–4055–0–3–373); 

24 ‘‘(9) Thrift Savings Fund; 
38

•HR 3925 IH 

1 ‘‘(10) appropriations for the District of Colum2 bia to the extent they are appropriations of locally 

3 raised funds; 

4 ‘‘(11)(A) any amount paid as regular unemploy5 ment compensation by a State from its account in 

6 the Unemployment Trust Fund (established by sec7 tion 904(a) of the Social Security Act); 

8 ‘‘(B) any advance made to a State from the 

9 Federal unemployment account (established by sec10 tion 904(g) of such Act) under title XII of such Act 

11 and any advance appropriated to the Federal unem12 ployment account pursuant to section 1203 of such 

13 Act; and 

14 ‘‘(C) any payment made from the Federal Em15 ployees Compensation Account (as established under 

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

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

18 funds appropriated or transferred to or otherwise 

19 deposited in such Account; and 

20 ‘‘(12)(A) FDIC, Bank Insurance Fund (51–

21 4064–0–3–373); 

22 ‘‘(B) FDIC, FSLIC Resolution Fund (51–

23 4065–0–3–373); and 

24 ‘‘(C) FDIC, Savings Association Insurance 

25 Fund (51–4066–0–3–373). 
39

•HR 3925 IH 

1 ‘‘(c) FEDERAL RETIREMENT AND DISABILITY AC2 COUNTS.—The following Federal retirement and disability 

3 accounts shall be exempt from reduction under any order 

4 issued under this part: 

5 ‘‘Civil service retirement and disability fund 

6 (24–8135–0–7–602). 

7 ‘‘Black Lung Disability Trust Fund (20–8144–

8 0–7–601). 

9 ‘‘Foreign Service Retirement and Disability 

10 Fund (19–8186–0–7–602). 

11 ‘‘District of Columbia Judicial Retirement and 

12 Survivors Annuity Fund (20–8212–0–7–602). 

13 ‘‘Judicial Survivors’ Annuities Fund (10–8110–

14 0–7–602). 

15 ‘‘Payments to the Railroad Retirement Ac16 counts (60–0113–0–1–601). 

17 ‘‘Tax Court Judges Survivors Annuity Fund 

18 (23–8115–0–7–602). 

19 ‘‘Employees Life Insurance Fund (24–8424–0–

20 8–602). 

21 ‘‘(d) FEDERAL ADMINISTRATIVE EXPENSES.—

22 ‘‘(1) Notwithstanding any provision of law 

23 other than paragraph (3), administrative expenses 

24 incurred by the departments and agencies, including 

25 independent agencies, of the Government in connec-
40

•HR 3925 IH 

1 tion with any program, project, activity, or account 

2 shall be subject to reduction pursuant to any seques3 tration order, without regard to any exemption, ex4 ception, limitation, or special rule otherwise applica5 ble with respect to such program, project, activity, 

6 or account, and regardless of whether the program, 

7 project, activity, or account is self-supporting and 

8 does not receive appropriations. 

9 ‘‘(2) Payments made by the Government to re10 imburse or match administrative costs incurred by a 

11 State or political subdivision under or in connection 

12 with any program, project, activity, or account shall 

13 not be considered administrative expenses of the 

14 Government for purposes of this section, and shall 

15 be subject to sequestration to the extent (and only 

16 to the extent) that other payments made by the Gov17 ernment under or in connection with that program, 

18 project, activity, or account are subject to that re19 duction or sequestration; except that Federal pay20 ments made to a State as reimbursement of admin21 istrative costs incurred by that State under or in 

22 connection with the unemployment compensation 

23 programs specified in subsection (a)(11) shall be 

24 subject to reduction or sequestration under this part 
41

•HR 3925 IH 

1 notwithstanding the exemption otherwise granted to 

2 such programs under that subsection. 

3 ‘‘(3) Notwithstanding any other provision of 

4 law, the administrative expenses of the following 

5 programs shall be exempt from sequestration: 

6 ‘‘(A) Comptroller of the Currency. 

7 ‘‘(B) Federal Deposit Insurance Corpora8 tion. 

9 ‘‘(C) Office of Thrift Supervision. 

10 ‘‘(D) National Credit Union Administra11 tion. 

12 ‘‘(E) National Credit Union Administra13 tion, central liquidity facility. 

14 ‘‘(F) Federal Retirement Thrift Invest15 ment Board. 

16 ‘‘(G) Resolution Funding Corporation. 

17 ‘‘(H) Resolution Trust Corporation. 

18 ‘‘(I) Board of Governors of the Federal 

19 Reserve System. 

20 ‘‘(e) VETERANS’ PROGRAMS.—The following pro21 grams shall be exempt from reduction under any order 

22 issued under this part: 

23 ‘‘General Post Funds (36–8180–0–7–705). 

24 ‘‘Veterans Insurance and Indemnities (36–

25 0120–0–1–701).
42

•HR 3925 IH 

1 ‘‘Service-Disabled Veterans Insurance Funds 

2 (36–4012–0–701). 

3 ‘‘Veterans Reopened Insurance Fund (36–

4 4010–0–3–701). 

5 ‘‘Servicemembers’ Group Life Insurance Fund 

6 (36–4009–0–3–701). 

7 ‘‘Post-Vietnam Era Veterans Education Ac8 count (36–8133–0–7–702). 

9 ‘‘National Service Life Insurance Fund (36–

10 8132–0–7–701). 

11 ‘‘United States Government Life Insurance 

12 Fund (36–8150–0–7–701). 

13 ‘‘Veterans Special Life Insurance Fund (36–

14 8455–0–8–701). 

15 ‘‘(f) OPTIONAL EXEMPTION OF DEFENSE AND

16 HOMELAND SECURITY ACCOUNTS.—

17 ‘‘(1) IN GENERAL.—The President may, with 

18 respect to any defense or homeland security account, 

19 exempt that account from sequestration or provide 

20 for a lower uniform percentage reduction than would 

21 otherwise apply. 

22 ‘‘(2) LIMITATION.—The President may not use 

23 the authority provided by paragraph (1) unless the 

24 President notifies the Congress of the manner in 

25 which such authority will be exercised on or before 
43

•HR 3925 IH 

1 the date specified in section 254(a) for the budget 

2 year.’’. 

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

4 (a) IN GENERAL.—Section 256 of the Balanced 

5 Budget and Emergency Deficit Control Act of 1985 is 

6 amended to read as follows: 

7 ‘‘SEC. 256. EXCEPTIONS, LIMITATIONS, AND SPECIAL 

8 RULES. 

9 ‘‘(a) NATIONAL WOOL ACT AND THE SPECIAL MILK

10 PROGRAM.—Automatic spending increases are increases 

11 in outlays due to changes in indexes in the following pro12 grams: 

13 ‘‘(1) National Wool Act; and 

14 ‘‘(2) Special milk program. 

15 In those programs all amounts other than the automatic 

16 spending increases shall be exempt from reduction under 

17 any sequestration order.

18 ‘‘(b) THE GUARANTEED STUDENT LOAN PRO19 GRAM.—(1) Any reductions which are required to be 

20 achieved from the student loan programs operated pursu21 ant to part B of title IV of the Higher Education Act of 

22 1965 under any sequestration order shall be achieved only 

23 from loans described in paragraphs (2) and (3) by the ap24 plication of the measures described in such paragraphs. 
44

•HR 3925 IH 

1 ‘‘(2) For any loan made during the period beginning 

2 on the date that a sequestration order takes effect with 

3 respect to a fiscal year, the rate used in computing the 

4 special allowance payment pursuant to section 

5 438(b)(2)(A)(iii) of such Act for each of the first four spe6 cial allowance payments for such loan shall be adjusted 

7 by reducing such rate by the lesser of—

8 ‘‘(A) 0.40 percent, or 

9 ‘‘(B) the percentage by which the rate specified 

10 in such section exceeds 3 percent. 

11 ‘‘(3) For any loan made during the period beginning 

12 on the date that a sequestration order takes effect with 

13 respect to a fiscal year, the origination fee which is author14 ized to be collected pursuant to section 438(c)(2) of such 

15 Act shall be increased by 0.50 percent. 

16 ‘‘(c) FOSTER CARE AND ADOPTION ASSISTANCE

17 PROGRAMS.—Any sequestration order shall make the re18 duction otherwise required under the foster care and adop19 tion assistance programs (established by part E of title 

20 IV of the Social Security Act) only with respect to pay21 ments and expenditures made by States in which increases 

22 in foster care maintenance payment rates or adoption as23 sistance payment rates (or both) are to take effect during 

24 the fiscal year involved, and only to the extent that the 

25 required reduction can be accomplished by applying a uni-
45

•HR 3925 IH 

1 form percentage reduction to the Federal matching pay2 ments that each such State would otherwise receive under 

3 section 474 of that Act (for such fiscal year) for that por4 tion of the State’s payments attributable to the increases 

5 taking effect during that year. No State’s matching pay6 ments from the Government for foster care maintenance 

7 payments or for adoption assistance maintenance pay8 ments may be reduced by a percentage exceeding the ap9 plicable domestic sequestration percentage. No State may, 

10 after the date of the enactment of this Act, make any 

11 change in the timetable for making payments under a 

12 State plan approved under part E of title IV of the Social 

13 Security Act which has the effect of changing the fiscal 

14 year in which expenditures under such part are made. 

15 ‘‘(d) LOW-INCOME PROGRAMS.—(1) Benefit pay16 ments or payments to States or other entities for the pro17 grams listed in paragraph (2) shall not be reduced by 

18 more than 2 percent under any sequestration order. When 

19 reduced under an end-of-session sequestration order, those 

20 benefit reductions shall occur starting with the payment 

21 made at the start of January. When reduced under a with22 in-session sequestration order, those benefit reductions 

23 shall occur starting with the next periodic payment. 

24 ‘‘(2) The programs referred to in paragraph (1) are 

25 the following: 
46

•HR 3925 IH 

1 ‘‘Child Nutrition (12–3539–0–1–605). 

2 ‘‘Food Stamp Programs (12–3505–0–1–605). 

3 ‘‘Grants to States for Medicaid (75–0512–0–1–

4 551). 

5 ‘‘State Children’s Health Insurance Fund (75–

6 0515–0–1–551). 

7 ‘‘Supplemental Security Income Program (75–

8 0406–0–1–609). 

9 ‘‘Temporary Assistance for Needy Families 

10 (75–1552–0–1–609). 

11 ‘‘Special supplemental nutrition program for 

12 women, infants, and children (WIC) (12–3510–0–1–

13 605). 

14 ‘‘(e) VETERANS’ MEDICAL CARE.—The maximum 

15 permissible reduction in budget authority for Veterans’ 

16 medical care (36–0160–0–1–703) for any fiscal year, pur17 suant to an order issued under section 254, shall be 2 

18 percent. 

19 ‘‘(f) FEDERAL RETIREMENT PROGRAMS.—

20 ‘‘(1) For each of the programs listed in para21 graph (2) and except as provided in paragraph (3), 

22 monthly (or other periodic) benefit payments shall 

23 be reduced by the uniform percentage applicable to 

24 direct spending sequestrations for such programs, 

25 which shall in no case exceed 2 percent under any
47

•HR 3925 IH 

1 sequestration order. When reduced under an end-of2 session sequestration order, those benefit reductions 

3 shall occur starting with the payment made at the 

4 start of January or 7 weeks after the order is 

5 issued, whichever is later. When reduced under a 

6 within-session sequestration order, those benefit re7 ductions shall occur starting with the next periodic 

8 payment. 

9 ‘‘(2) The programs subject to paragraph (1) 

10 are: 

11 ‘‘Central Intelligence Agency Retirement 

12 and Disability Fund (56–3400–0–1–054). 

13 ‘‘Comptrollers General Retirement System 

14 (05–0107–0–1–801) 

15 ‘‘Judicial Officers’ Retirement Fund (10–

16 8122–0–7–602). 

17 ‘‘Claims Judges’ Retirement Fund (10–

18 8124–0–7–602). 

19 ‘‘Pensions for former Presidents (47–

20 0105–0–1–802). 

21 ‘‘National Oceanic and Atmospheric Ad22 ministration Retirement (13–1450–0–1–306). 

23 ‘‘Railroad Industry Pension Fund (60–

24 8011–0–7–601). 
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•HR 3925 IH 

1 ‘‘Retired pay, Coast Guard (70–0602–0–1–

2 403). 

3 ‘‘Retirement pay and medical benefits for 

4 commissioned officers, Public Health Service 

5 (75–0379–0–1–551). 

6 ‘‘Payments to Civil Service Retirement and 

7 Disability Fund (24–0200–0–1–805). 

8 ‘‘Payments to the Foreign Service Retire9 ment and Disability Fund (72–1036–0–1–153) 

10 ‘‘Payments to Judiciary Trust Funds (10–

11 0941–0–1–752). 

12 ‘‘(g) VETERANS PROGRAMS.—To achieve the total 

13 percentage reduction required by any order issued under 

14 this part, the percentage reduction that shall apply to pay15 ments under the following programs shall in no event ex16 ceed 2 percent: 

17 ‘‘Canteen Service Revolving Fund (36–4014–0–

18 3–705). 

19 ‘‘Medical Center Research Organizations (36–

20 4026–0–3–703). 

21 ‘‘Disability Compensation Benefits (36–0102–

22 0–1–701). 

23 ‘‘Education Benefits (36–0137–0–1–702). 

24 ‘‘Vocational Rehabilitation and Employment 

25 Benefits (36–0135–0–1–702). 
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•HR 3925 IH 

1 ‘‘Pensions Benefits (36–0154–0–1–701). 

2 ‘‘Burial Benefits (36–0139–0–1–701). 

3 ‘‘Guaranteed Transitional Housing Loans For 

4 Homeless Veterans Program Account (36–1119–0–

5 1–704). 

6 ‘‘Housing Direct Loan Financing Account (36–

7 4127–0–1–704). 

8 ‘‘Housing Guaranteed Loan Financing Account 

9 (36–4129–0–3–704). 

10 ‘‘Vocational Rehabilitation and Education Di11 rect Loan Financing Account (36–4259–0–3–702). 

12 ‘‘(h) MILITARY RETIREMENT.—To achieve the total 

13 percentage reduction in military retirement required by 

14 any order issued under this part, the percentage reduction 

15 that shall apply to payments under the military retirement 

16 fund (97–8097–0–7–602) and payments to the military 

17 retirement fund (97–0040–0–1–054) shall in no event ex18 ceed 2 percent. 

19 ‘‘(i) FEDERAL PAY.—

20 ‘‘(1) IN GENERAL.—For purposes of any order 

21 issued under section 254, new budget authority to 

22 pay Federal personnel shall be reduced by the appli23 cable uniform percentage, but no sequestration order 

24 may reduce or have the effect of reducing the rate 

25 of pay to which any individual is entitled under any 
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•HR 3925 IH 

1 statutory pay system (as increased by any amount 

2 payable under section 5304 of title 5, United States 

3 Code, or section 302 of the Federal Employees Pay 

4 Comparability Act of 1990) or the rate of any ele5 ment of military pay to which any individual is enti6 tled under title 37, United States Code, or any in7 crease in rates of pay which is scheduled to take ef8 fect under section 5303 of title 5, United States 

9 Code, section 1009 of title 37, United States Code, 

10 or any other provision of law. 

11 ‘‘(2) DEFINITIONS.—For purposes of this sub12 section: 

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

14 have the meaning given that term in section 

15 5302(1) of title 5, United States Code. 

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

17 means—

18 ‘‘(i) the elements of compensation of 

19 members of the uniformed services speci20 fied in section 1009 of title 37, United 

21 States Code, 

22 ‘‘(ii) allowances provided members of 

23 the uniformed services under sections 403a 

24 and 405 of such title, and 
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•HR 3925 IH 

1 ‘‘(iii) cadet pay and midshipman pay 

2 under section 203(c) of such title. 

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

4 have the meaning given that term in section 

5 101(3) of title 37, United States Code.

6 ‘‘(j) CHILD SUPPORT ENFORCEMENT PROGRAM.—

7 Any sequestration order shall accomplish the full amount 

8 of any required reduction in expenditures under sections 

9 455 and 458 of the Social Security Act by reducing the 

10 Federal matching rate for State administrative costs 

11 under such program, as specified (for the fiscal year in12 volved) in section 455(a) of such Act, to the extent nec13 essary to reduce such expenditures by that amount. 

14 ‘‘(k) EXTENDED UNEMPLOYMENT COMPENSA15 TION.—(1) A State may reduce each weekly benefit pay16 ment made under the Federal-State Extended Unemploy17 ment Compensation Act of 1970 for any week of unem18 ployment occurring during any period with respect to 

19 which payments are reduced under an order issued under 

20 this title by a percentage not to exceed the percentage by 

21 which the Federal payment to the State under section 204

22 of such Act is to be reduced for such week as a result 

23 of such order. 

24 ‘‘(2) A reduction by a State in accordance with sub25 paragraph (A) shall not be considered as a failure to fulfill 
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•HR 3925 IH 

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

2 Revenue Code of 1954. 

3 ‘‘(l) COMMODITY CREDIT CORPORATION.—

4 ‘‘(1) POWERS AND AUTHORITIES OF THE COM5 MODITY CREDIT CORPORATION.—This title shall not 

6 restrict the Commodity Credit Corporation in the 

7 discharge of its authority and responsibility as a cor8 poration to buy and sell commodities in world trade, 

9 to use the proceeds as a revolving fund to meet 

10 other obligations and otherwise operate as a corpora11 tion, the purpose for which it was created. 

12 ‘‘(2) REDUCTION IN PAYMENTS MADE UNDER

13 CONTRACTS.—(A) Payments and loan eligibility 

14 under any contract entered into with a person by the 

15 Commodity Credit Corporation prior to the time any 

16 sequestration order has been issued shall not be re17 duced by an order subsequently issued. Subject to 

18 subparagraph (B), after any sequestration order is 

19 issued for a fiscal year, any cash payments made by 

20 the Commodity Credit Corporation—

21 ‘‘(i) under the terms of any one-year con22 tract entered into in or after such fiscal year 

23 and after the issuance of the order; and 

24 ‘‘(ii) out of an entitlement account, 
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•HR 3925 IH 

1 to any person (including any producer, lender, or 

2 guarantee entity) shall be subject to reduction under 

3 the order. 

4 ‘‘(B) Each contract entered into with producers 

5 or producer cooperatives with respect to a particular 

6 crop of a commodity and subject to reduction under 

7 subparagraph (A) shall be reduced in accordance 

8 with the same terms and conditions. If some, but 

9 not all, contracts applicable to a crop of a com10 modity have been entered into prior to the issuance 

11 of any sequestration order, the order shall provide 

12 that the necessary reduction in payments under con13 tracts applicable to the commodity be uniformly ap14 plied to all contracts for succeeding crops of the 

15 commodity, under the authority provided in para16 graph (3). 

17 ‘‘(3) DELAYED REDUCTION IN OUTLAYS PER18 MISSIBLE.—Notwithstanding any other provision of 

19 this title, if any sequestration order is issued with 

20 respect to a fiscal year, any reduction under the 

21 order applicable to contracts described in paragraph 

22 (2) may provide for reductions in outlays for the ac23 count involved to occur in the fiscal years following 

24 the fiscal year to which the order applies. 
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•HR 3925 IH 

1 ‘‘(4) UNIFORM PERCENTAGE RATE OF REDUC2 TION AND OTHER LIMITATIONS.—All reductions de3 scribed in paragraph (2) that are required to be 

4 made in connection with any sequestration order 

5 with respect to a fiscal year—

6 ‘‘(A) shall be made so as to ensure that 

7 outlays for each program, project, activity, or 

8 account involved are reduced by a percentage 

9 rate that is uniform for all such programs, 

10 projects, activities, and accounts, and may not 

11 be made so as to achieve a percentage rate of 

12 reduction in any such item exceeding the rate 

13 specified in the order; and 

14 ‘‘(B) with respect to commodity price sup15 port and income protection programs, shall be 

16 made in such manner and under such proce17 dures as will attempt to ensure that—

18 ‘‘(i) uncertainty as to the scope of 

19 benefits under any such program is mini20 mized; 

21 ‘‘(ii) any instability in market prices 

22 for agricultural commodities resulting from 

23 the reduction is minimized; and 

24 ‘‘(iii) normal production and mar25 keting relationships among agricultural 
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•HR 3925 IH 

1 commodities (including both contract and 

2 non-contract commodities) are not dis3 torted. 

4 In meeting the criterion set out in clause (iii) 

5 of subparagraph (B) of the preceding sentence, 

6 the President shall take into consideration that 

7 reductions under an order may apply to pro8 grams for two or more agricultural commodities 

9 that use the same type of production or mar10 keting resources or that are alternative com11 modities among which a producer could choose 

12 in making annual production decisions. 

13 ‘‘(5) CERTAIN AUTHORITY NOT TO BE LIM14 ITED.—Nothing in this title shall limit or reduce in 

15 any way any appropriation that provides the Com16 modity Credit Corporation with funds to cover the 

17 Corporation’s net realized losses. 

18 ‘‘(m) POSTAL SERVICE FUND.—Notwithstanding any 

19 other provision of law, any sequestration of the Postal 

20 Service Fund shall be accomplished by a payment from 

21 that Fund to the General Fund of the Treasury, and the 

22 Postmaster General of the United States shall make the 

23 full amount of that payment during the fiscal year to 

24 which the presidential sequestration order applies. 
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•HR 3925 IH 

1 ‘‘(n) EFFECTS OF SEQUESTRATION.—The effects of 

2 sequestration shall be as follows: 

3 ‘‘(1) Budgetary resources sequestered from any 

4 account other than an entitlement trust, special, or 

5 revolving fund account shall revert to the Treasury 

6 and be permanently canceled. 

7 ‘‘(2) Except as otherwise provided, the same 

8 percentage sequestration shall apply to all programs, 

9 projects, and activities within a budget account (with 

10 programs, projects, and activities as delineated in 

11 the appropriation Act or accompanying report for 

12 the relevant fiscal year covering that account, or for 

13 accounts not included in appropriation Acts, as de14 lineated in the most recently submitted President’s 

15 budget). 

16 ‘‘(3) Administrative regulations or similar ac17 tions implementing a sequestration shall be made 

18 within 120 days of the sequestration order. To the 

19 extent that formula allocations differ at different 

20 levels of budgetary resources within an account, pro21 gram, project, or activity, the sequestration shall be

22 interpreted as producing a lower total appropriation, 

23 with that lower appropriation being obligated as 

24 though it had been the pre-sequestration appropria25 tion and no sequestration had occurred. 
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•HR 3925 IH 

1 ‘‘(4) Except as otherwise provided, obligations 

2 in sequestered direct spending accounts shall be re3 duced in the fiscal year in which a sequestration oc4 curs and in all succeeding fiscal years. 

5 ‘‘(5) If an automatic spending increase is se6 questered, the increase (in the applicable index) that 

7 was disregarded as a result of that sequestration 

8 shall not be taken into account in any subsequent 

9 fiscal year. 

10 ‘‘(6) Except as otherwise provided, sequestra11 tion in accounts for which obligations are indefinite 

12 shall be taken in a manner to ensure that obliga13 tions in the fiscal year of a sequestration and suc14 ceeding fiscal years are reduced, from the level that 

15 would actually have occurred, by the applicable se16 questration percentage.’’. 

17 (b) CONFORMING AMENDMENT.—The table of con18 tents set forth in 250(c) of the Balanced Budget and 

19 Emergency Deficit Control Act of 1985 is amended by 

20 amending the item relating to section 256 to read as fol21 lows:

‘‘Sec. 256. Exceptions, limitations, and special rules.’’.

22 SEC. 204. POINT OF ORDER. 

23 (a) ENTITLEMENT POINT OF ORDER.—Section 312 

24 of the Congressional Budget Act of 1974 is amended by 

25 adding at the end the following new subsection: 
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•HR 3925 IH 

1 ‘‘(g) ENTITLEMENT POINT OF ORDER.—It shall not 

2 be in order in the House of Representatives or the Senate 

3 to consider any bill, joint resolution, amendment, or con4 ference report that—

5 ‘‘(1) increases aggregate level of direct spending 

6 for any ensuing fiscal year or 

7 ‘‘(2) includes any provision that has the effect 

8 of modifying the application of section 252A of the 

9 Balanced Budget and Emergency Deficit Control 

10 Act of 1985 to any entitlement program subject to 

11 sequestration or exempt from sequestration under 

12 such Act.’’. 

13 SEC. 205. TECHNICAL AND CONFORMING AMENDMENTS. 

14 The Balanced Budget and Emergency Deficit Control 

15 Act of 1985 is amended as follows: 

16 (1) Section 251(a)(1) is amended by inserting 

17 ‘‘, section 252A,’’ after ‘‘section 252’’. 

18 (2) Section 254(c)(4)(B) is amended by insert19 ing ‘‘or section 252A’’ after ‘‘section 252’’. 

20 (3) Section 254(c) is amended by redesignating 

21 paragraph (5) as paragraph (6) and by inserting 

22 after paragraph (4) the following new paragraph: 

23 ‘‘(5) DIRECT SPENDING CONTROL SEQUESTRA24 TION REPORTS.—The preview reports shall set forth, 
59

•HR 3925 IH 

1 for the current year and the budget year, estimates 

2 for each of the following: 

3 ‘‘(A) The total level of direct spending for 

4 all programs, projects, and activities (excluding 

5 social security). 

6 ‘‘(B) The sequestration percentage or (if 

7 the required sequestration percentage is greater 

8 than the maximum allowable percentage for 

9 medicare) percentages necessary to comply with 

10 section 252A.’’. 

11 (4) Section 254(f) is amended by redesignating 

12 paragraphs (4) and (5) as paragraphs (5) and (6) 

13 and by inserting after paragraph (3) the following 

14 new paragraph: 

15 ‘‘(4) DIRECT SPENDING CONTROL SEQUESTRA16 TION REPORTS.—The final reports shall contain all 

17 the information required in the direct spending con18 trol sequestration preview reports. In addition, these 

19 reports shall contain, for the budget year, for each 

20 account to be sequestered, estimates of the baseline 

21 level of sequesterable budgetary resources and re22 sulting outlays and the amount of budgetary re23 sources to be sequestered and resulting outlay reduc24 tions. The reports shall also contain estimates of the 
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•HR 3925 IH 

1 effects on outlays of the sequestration in each out2 year for direct spending programs.’’. 

3 (5) Section 258C(a)(1) is amended by inserting 

4 ‘‘, 252A,’’ after ‘‘section 252’’. 

5 Subtitle B—Discretionary 

6 Spending Limits 

7 SEC. 211. ENFORCING DISCRETIONARY SPENDING LIMITS. 

8 (a) DISCRETIONARY SPENDING LIMITS.—Sections 

9 251(b) and (c) of the Balanced Budget and Emergency 

10 Deficit Control of Act of 1985 are amended to read as 

11 follows: 

12 ‘‘(b) DISCRETIONARY SPENDING LIMIT.—As used in 

13 this part, the term ‘discretionary spending limit’ means—

14 ‘‘(1) with respect to fiscal year 2006—

15 ‘‘(A) $816,697,800,000 in new budget au16 thority of which no more than 

17 $431,533,400,000 shall be for the nondefense 

18 category; and 

19 ‘‘(B) $llll in outlays of which no 

20 more than $llll shall be for the non21 defense category; 

22 ‘‘(2) with respect to fiscal year 2007—

23 ‘‘(A) $834,665,100,000 in new budget au24 thority of which no more than 
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•HR 3925 IH 

1 $441,027,200,000 shall be for the nondefense 

2 category; and 

3 ‘‘(B) $llll in outlays of which no 

4 more than $llll shall be for the non5 defense category; 

6 ‘‘(3) with respect to fiscal year 2008—

7 ‘‘(A) $853,027,800,000 in new budget au8 thority of which no more than 

9 $450,729,800,000 shall be for the nondefense 

10 category; and 

11 ‘‘(B) $llll in outlays of which no 

12 more than $llll shall be for the non13 defense category; 

14 ‘‘(4) with respect to fiscal year 2009—

15 ‘‘(A) $871,794,400,000 in new budget au16 thority of which no more than 

17 $460,645,800,000 shall be for the nondefense 

18 category; and 

19 ‘‘(B) $llll in outlays of which no 

20 more than $llll shall be for the non21 defense category; 

22 ‘‘(5) with respect to fiscal year 2010—

23 ‘‘(A) $890,973,900,000 in new budget au24 thority of which no more than
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•HR 3925 IH 

1 $470,780,000,000 shall be for the nondefense 

2 category; and 

3 ‘‘(B) $llll in outlays of which no 

4 more than $llll shall be for the non5 defense category; 

6 ‘‘(6) with respect to fiscal year 2011—

7 ‘‘(A) $910,575,300,000 in new budget au8 thority of which no more than 

9 $481,137,200,000 shall be for the nondefense 

10 category; and 

11 ‘‘(B) $llll in outlays of which no 

12 more than $llll shall be for the non13 defense category; 

14 ‘‘(7) with respect to fiscal year 2012—

15 ‘‘(A) $930,607,900,000 in new budget au16 thority of which no more than 

17 $491,722,200,000 shall be for the nondefense 

18 category; and 

19 ‘‘(B) $llll in outlays of which no 

20 more than $llll shall be for the non21 defense category; 

22 ‘‘(8) with respect to fiscal year 2013—

23 ‘‘(A) $951,081,300,000 in new budget au24 thority of which no more than 
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•HR 3925 IH 

1 $502,540,100,000 shall be for the nondefense 

2 category; and 

3 ‘‘(B) $llll in outlays of which no 

4 more than $llll shall be for the non5 defense category; and 

6 ‘‘(9) with respect to fiscal year 2014—

7 ‘‘(A) $972,005,100,000 in new budget au8 thority of which no more than 

9 $513,596,000,000 shall be for the nondefense 

10 category; and 

11 ‘‘(B) $llll in outlays of which no 

12 more than $llll shall be for the non13 defense category;’’. 

14 (b) DISCRETIONARY SPENDING LIMIT POINT OF

15 ORDER.—Section 312 of the Congressional Budget Act of 

16 1974 (as amended by section 204(a)) is further amended 

17 by adding at the end the following new subsection: 

18 ‘‘(h) DISCRETIONARY SPENDING LIMIT POINT OF

19 ORDER.—It shall not be in order in the House of Rep20 resentatives or the Senate to consider any bill, joint resolu21 tion, amendment, or conference report that—

22 ‘‘(1) increases the discretionary spending limits 

23 for any ensuing fiscal year after the budget year; or 

24 ‘‘(2) would cause the discretionary spending 

25 limits for the budget year to be breached.’’. 
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•HR 3925 IH 

1 (c) ADVANCE APPROPRIATION POINT OF ORDER.—

2 Section 312 of the Congressional Budget Act of 1974 (as 

3 amended by this section) is further amended by adding 

4 at the end the following new subsection: 

5 ‘‘(i) ADVANCE APPROPRIATION POINT OF ORDER.—

6 It shall not be in order in the House of Representatives 

7 or the Senate to consider any appropriation bill or joint 

8 resolution, or amendment thereto or conference report 

9 thereon, that provides advance discretionary new budget 

10 authority that first becomes available for any fiscal year 

11 after the budget year at an amount for any program, 

12 project, or activity above the amount of appropriations for 

13 fiscal year 2004 for such program, project, or activity.’’. 

14 TITLE III—COMBATING WASTE, 

15 FRAUD, AND ABUSE. 

16 Subtitle A—Enhanced Rescissions 

17 of Budget Authority Identified 

18 by the President as Wasteful 

19 Spending 

20 SEC. 301. ENHANCED CONSIDERATION OF CERTAIN PRO21 POSED RESCISSIONS. 

22 (a) IN GENERAL.—Part B of title X of the Congres23 sional Budget and Impoundment Control Act of 1974 (2 

24 U.S.C. 681 et seq.) is amended by redesignating sections 

25 1013 through 1017 as sections 1014 through 1018, re-
65

•HR 3925 IH 

1 spectively, and by inserting after section 1012 the fol2 lowing new section: 

3 ‘‘ENHANCED CONSIDERATION OF CERTAIN PROPOSED

4 RESCISSIONS

5 ‘‘SEC. 1013. (a) PROPOSED RESCISSION OF BUDGET

6 AUTHORITY IDENTIFIED AS WASTEFUL SPENDING.—The 

7 President may propose, at the time and in the manner 

8 provided in subsection (b), the rescission of any budget 

9 authority provided in an appropriation Act that he identi10 fies as wasteful spending. If the President proposes a re11 scission of budget authority, he may also propose to reduce 

12 the appropriate discretionary spending limits for new 

13 budget authority and outlays flowing therefrom set forth 

14 in section 251(b) of the Balanced Budget and Emergency 

15 Deficit Control Act of 1985 by an amount that does not 

16 exceed the amount of the proposed rescission. Funds made 

17 available for obligation under this procedure may not be 

18 proposed for rescission again under this section. 

19 ‘‘(b) TRANSMITTAL OF SPECIAL MESSAGE.—

20 ‘‘(1) The President may transmit to Congress a 

21 special message proposing to rescind amounts of 

22 budget authority and include with that special mes23 sage a draft bill that, if enacted, would only rescind 

24 that budget authority unless the President also pro25 poses a reduction in the appropriate discretionary 

26 spending limits set forth in section 251(b) of the 
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•HR 3925 IH 

1 Balanced Budget and Emergency Deficit Control 

2 Act of 1985. That bill shall clearly identify the 

3 amount of budget authority that is proposed to be 

4 rescinded for each program, project, or activity to 

5 which that budget authority relates. 

6 ‘‘(2) In the case of an appropriation Act that 

7 includes accounts within the jurisdiction of more 

8 than one subcommittee of the Committee on Appro9 priations, the President in proposing to rescind 

10 budget authority under this section shall send a sep11 arate special message and accompanying draft bill 

12 for accounts within the jurisdiction of each sub13 committee. 

14 ‘‘(3) Each special message shall specify, with 

15 respect to the budget authority proposed to be re16 scinded, the following: 

17 ‘‘(A) The amount of budget authority 

18 which he proposes to be rescinded. 

19 ‘‘(B) Any account, department, or estab20 lishment of the Government to which such 

21 budget authority is available for obligation, and 

22 the specific project or governmental functions 

23 involved.
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•HR 3925 IH 

1 ‘‘(C) The reasons why the budget authority 

2 should be rescinded, including why he considers 

3 it to be wasteful spending. 

4 ‘‘(D) To the maximum extent practicable, 

5 the estimated fiscal, economic, and budgetary 

6 effect (including the effect on outlays and re7 ceipts in each fiscal year) of the proposed re8 scission. 

9 ‘‘(E) All facts, circumstances, and consid10 erations relating to or bearing upon the pro11 posed rescission and the decision to effect the 

12 proposed rescission, and to the maximum extent 

13 practicable, the estimated effect of the proposed 

14 rescission upon the objects, purposes, and pro15 grams for which the budget authority is pro16 vided. 

17 ‘‘(F) A reduction in the appropriate discre18 tionary spending limits set forth in section 

19 251(b) of the Balanced Budget and Emergency 

20 Deficit Control Act of 1985, if proposed by the 

21 President. 

22 ‘‘(c) PROCEDURES FOR EXPEDITED CONSIDER23 ATION.—

24 ‘‘(1)(A) Before the close of the second legisla25 tive day of the House of Representatives after the 
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•HR 3925 IH 

1 date of receipt of a special message transmitted to 

2 Congress under subsection (b), the majority leader 

3 or minority leader of the House of Representatives 

4 shall introduce (by request) the draft bill accom5 panying that special message. If the bill is not intro6 duced as provided in the preceding sentence, then, 

7 on the third legislative day of the House of Rep8 resentatives after the date of receipt of that special 

9 message, any Member of that House may introduce 

10 the bill. 

11 ‘‘(B) The bill shall be referred to the Com12 mittee on Appropriations. The committee shall re13 port the bill without substantive revision and with or 

14 without recommendation. The bill shall be reported 

15 not later than the seventh legislative day of that 

16 House after the date of receipt of that special mes17 sage. If that committee fails to report the bill within 

18 that period, that committee shall be automatically 

19 discharged from consideration of the bill, and the 

20 bill shall be placed on the appropriate calendar. 

21 ‘‘(C) A vote on final passage of the bill shall be 

22 taken in the House of Representatives on or before 

23 the close of the 10th legislative day of that House 

24 after the date of the introduction of the bill in that 

25 House. If the bill is passed, the Clerk of the House 
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•HR 3925 IH 

1 of Representatives shall cause the bill to be en2 grossed, certified, and transmitted to the Senate 

3 within one calendar day of the day on which the bill 

4 is passed. 

5 ‘‘(2)(A) A motion in the House of Representa6 tives to proceed to the consideration of a bill under 

7 this section shall be highly privileged and not debat8 able. An amendment to the motion shall not be in 

9 order, nor shall it be in order to move to reconsider 

10 the vote by which the motion is agreed to or dis11 agreed to. 

12 ‘‘(B) Debate in the House of Representatives 

13 on a bill under this section shall not exceed 4 hours, 

14 which shall be divided equally between those favoring 

15 and those opposing the bill. A motion to further 

16 limit debate shall not be debatable. It shall not be 

17 in order to move to recommit a bill under this sec18 tion or to move to reconsider the vote by which the 

19 bill is agreed to or disagreed to. 

20 ‘‘(C) Appeals from decisions of the Chair relat21 ing to the application of the Rules of the House of 

22 Representatives to the procedure relating to a bill 

23 under this section shall be decided without debate. 

24 ‘‘(D) Except to the extent specifically provided 

25 in the preceding provisions of this subsection, con-
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•HR 3925 IH 

1 sideration of a bill under this section shall be gov2 erned by the Rules of the House of Representatives. 

3 It shall not be in order in the House of Representa4 tives to consider any rescission bill introduced pursu5 ant to the provisions of this section under a suspen6 sion of the rules or under a special rule.

7 ‘‘(3) A bill transmitted to the Senate pursuant 

8 to paragraph (1)(D) shall be referred to its Com9 mittee on Appropriations. That committee shall re10 port the bill without substantive revision and with or 

11 without recommendation. The bill shall be reported 

12 not later than the seventh legislative day of the Sen13 ate after it receives the bill. A committee failing to 

14 report the bill within such period shall be automati15 cally discharged from consideration of the bill, and 

16 the bill shall be placed upon the appropriate cal17 endar. 

18 ‘‘(4)(A) A motion in the Senate to proceed to 

19 the consideration of a bill under this section shall be 

20 privileged and not debatable. An amendment to the 

21 motion shall not be in order, nor shall it be in order 

22 to move to reconsider the vote by which the motion 

23 is agreed to or disagreed to. 

24 ‘‘(B) Debate in the Senate on a bill under this 

25 section, and all debatable motions and appeals in 
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•HR 3925 IH 

1 connection therewith (including debate pursuant to 

2 subparagraph (C)), shall not exceed 10 hours. The 

3 time shall be equally divided between, and controlled 

4 by, the majority leader and the minority leader or 

5 their designees. 

6 ‘‘(C) Debate in the Senate or any debatable mo7 tion or appeal in connection with a bill under this 

8 section shall be limited to not more than 1 hour, to 

9 be equally divided between, and controlled by, the 

10 mover and the manager of the bill, except that in 

11 the event the manager of the bill is in favor of any 

12 such motion or appeal, the time in opposition there13 to, shall be controlled by the minority leader or his 

14 designee. Such leaders, or either of them, may, from 

15 time under their control of the passage of a bill, 

16 allot additional time to any Senator during the con17 sideration of any debatable motion or appeal. 

18 ‘‘(D) A motion in the Senate to further limit 

19 debate on a bill under this section is not debatable. 

20 A motion to recommit a bill under this section is not 

21 in order. 

22 ‘‘(d) AMENDMENT AND DIVISIONS PROHIBITED.—No 

23 amendment to a bill considered under this section shall 

24 be in order in either the House of Representatives or the 

25 Senate. It shall not be in order to demand a division of
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•HR 3925 IH 

1 the question in the House of Representatives (or in a Com2 mittee of the Whole) or in the Senate. No motion to sus3 pend the application of this subsection shall be in order 

4 in either House, nor shall it be in order in either House 

5 to suspend the application of this subsection by unanimous 

6 consent. 

7 ‘‘(e) REQUIREMENT TO MAKE AVAILABLE FOR OBLI8 GATION.—Any amount of budget authority proposed to be 

9 rescinded in a special message transmitted to Congress 

10 under subsection (b) shall be made available for obligation 

11 on the day after the date on which either House rejects 

12 the bill transmitted with that special message. 

13 ‘‘(f) DEFINITIONS.—For purposes of this section: 

14 ‘‘(1) The term ‘appropriation Act’ means any 

15 general or special appropriation Act, and any Act or 

16 joint resolution making supplemental, deficiency, or 

17 continuing appropriations. 

18 ‘‘(2) The term ‘legislative day’ means, with re19 spect to either House of Congress, any day of ses20 sion. 

21 ‘‘(3) The term ‘rescind’ means, with respect to 

22 an appropriation Act, to reduce the amount of budg23 et authority appropriated in that Act, and reducing 

24 budget authority shall include reducing obligation 

25 limitations set forth in that Act.’’. 
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1 (b) EXERCISE OF RULEMAKING POWERS.—Section 

2 904 of the Congressional Budget Act of 1974 (2 U.S.C. 

3 621 note) is amended—

4 (1) in subsection (a), by striking ‘‘and 1017’’ 

5 and inserting ‘‘1012, and 1017’’; and 

6 (2) in subsection (d), by striking ‘‘section 

7 1017’’ and inserting ‘‘sections 1012 and 1017’’. 

8 (c) CONFORMING AMENDMENTS.—

9 (1) Section 1011 of the Congressional Budget 

10 Act of 1974 (2 U.S.C. 682(5)) is amended by re11 pealing paragraphs (3) and (5) and by redesignating 

12 paragraph (4) as paragraph (3). 

13 (2) Section 1014 of such Act (2 U.S.C. 685) is 

14 amended—

15 (A) in subsection (b)(1), by striking ‘‘or 

16 the reservation’’; and 

17 (B) in subsection (e)(1), by striking ‘‘or a 

18 reservation’’ and by striking ‘‘or each such res19 ervation’’. 

20 (3) Section 1015(a) of such Act (2 U.S.C. 686) 

21 is amended by striking ‘‘is to establish a reserve or’’, 

22 by striking ‘‘the establishment of such a reserve or’’, 

23 and by striking ‘‘reserve or’’ each other place it ap24 pears. 
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1 (4) Section 1017 of such Act (2 U.S.C. 687) is 

2 amended—

3 (A) in subsection (a), by striking ‘‘rescis4 sion bill introduced with respect to a special 

5 message or’’; 

6 (B) in subsection (b)(1), by striking ‘‘re7 scission bill or’’, by striking ‘‘bill or’’ the second 

8 place it appears, by striking ‘‘rescission bill with 

9 respect to the same special message or’’, and by 

10 striking ‘‘, and the case may be,’’; 

11 (C) in subsection (b)(2), by striking ‘‘bill 

12 or’’ each place it appears; 

13 (D) in subsection (c), by striking ‘‘rescis14 sion’’ each place it appears and by striking ‘‘bill 

15 or’’ each place it appears; 

16 (E) in subsection (d)(1), by striking ‘‘re17 scission bill or’’ and by striking ‘‘, and all 

18 amendments thereto (in the case of a rescission 

19 bill)’’; 

20 (F) in subsection (d)(2)—

21 (i) by striking the first sentence; 

22 (ii) by amending the second sentence 

23 to read as follows: ‘‘Debate on any debat24 able motion or appeal in connection with 

25 an impoundment resolution shall be limited 
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1 to 1 hour, to be equally divided between, 

2 and controlled by, the mover and the man3 ager of the resolution, except that in the 

4 event that the manager of the resolution is 

5 in favor of any such motion or appeal, the 

6 time in opposition thereto shall be con7 trolled by the minority leader or his des8 ignee.’’; 

9 (iii) by striking the third sentence; 

10 and 

11 (iv) in the fourth sentence, by striking 

12 ‘‘rescission bill or’’ and by striking 

13 ‘‘amendment, debatable motion,’’ and by 

14 inserting ‘debatable motion’; 

15 (G) in paragraph (d)(3), by striking the 

16 second and third sentences; and 

17 (H) by striking paragraphs (4), (5), (6), 

18 and (7) of paragraph (d). 

19 (d) CLERICAL AMENDMENTS.—The table of sections 

20 for subpart B of title X of the Congressional Budget and 

21 Impoundment Control Act of 1974 is amended by redesig22 nating the item relating to sections 1014 through 1018 

23 as items 1015 through 1019, respectively, and by inserting 

24 after the item relating to section 1012 the following new 

25 item:

‘‘Sec. 1013. Enhanced consideration of certain proposed rescissions.’’.
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1 Subtitle B—Commission to 

2 Eliminate Waste, Fraud, and Abuse 

3 SEC. 311. ESTABLISHMENT OF COMMISSION. 

4 (a) ESTABLISHMENT.—There is established the Com5 mission to Eliminate Waste, Fraud, and Abuse (hereafter 

6 in this subtitle referred to as the ‘‘Commission’’). 

7 (b) MEMBERSHIP.—

8 (1) IN GENERAL.—The Commission shall con9 sist of 12 members, all of whom shall be appointed 

10 by the President not later than 90 days after the 

11 date of enactment of this Act. 

12 (2) CHAIRPERSON AND VICE CHAIRPERSON.—

13 The President shall designate a chairperson and vice 

14 chairperson from among the members of the Com15 mission. 

16 (c) PERIOD OF APPOINTMENT; VACANCIES.—Mem17 bers shall be appointed for the life of the Commission. Any 

18 vacancy in the Commission shall not affect its powers, but 

19 shall be filled in the same manner as the original appoint20 ment. 

21 (d) MEETINGS.—

22 (1) INITIAL MEETING.—Not later than 30 days 

23 after the date on which all members of the Commis24 sion have been appointed, the Commission shall hold 

25 its first meeting.
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1 (2) SUBSEQUENT MEETINGS.—The Commission 

2 shall meet at the call of the chairperson. 

3 (e) QUORUM.—A majority of the members of the 

4 Commission shall constitute a quorum, but a lesser num5 ber of members may hold hearings. 

6 SEC. 312. DUTIES OF THE COMMISSION. 

7 (a) DEFINITIONS.—In this section, the following defi8 nitions shall apply: 

9 (1) AGENCY.—The term ‘‘agency’’ has the 

10 meaning given the term ‘‘Executive agency’’ under 

11 section 105 of title 5, United States Code. 

12 (2) PROGRAM.—The term ‘‘program’’ means 

13 any activity or function of an agency. 

14 (b) IN GENERAL.—The Commission shall—

15 (1) evaluate all agencies and programs within 

16 those agencies, using the criteria under subsection 

17 (c); and 

18 (2) submit to Congress a plan with rec19 ommendations of the agencies and programs that 

20 should be realigned or eliminated. 

21 (c) CRITERIA.—

22 (1) DUPLICATIVE.—If 2 or more agencies or 

23 programs are performing the same essential function 

24 and the function can be consolidated or streamlined 

25 into a single agency or program, the Commission 
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1 shall recommend that the agency or program be re2 aligned. 

3 (2) WASTEFUL OR INEFFICIENT.—The Com4 mission shall recommend the realignment or elimi5 nation of any agency or program that has wasted 

6 Federal funds by—

7 (A) egregious spending; 

8 (B) mismanagement of resources and per9 sonnel; or 

10 (C) use of such funds for personal benefit 

11 or the benefit of a special interest group. 

12 (3) OUTDATED, IRRELEVANT, OR FAILED.—The 

13 Commission shall recommend the elimination of any 

14 agency or program that—

15 (A) has completed its intended purpose; 

16 (B) has become irrelevant; or 

17 (C) has failed to meet its objectives. 

18 (d) SYSTEMATIC ASSESSMENT OF PROGRAMS.—

19 (1) IN GENERAL.—Not later than 1 year after 

20 the date of enactment of this Act, the President 

21 shall—

22 (A) establish a systematic method for as23 sessing the effectiveness and accountability of 

24 agency programs; and 
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1 (B) submit, to the Commission, assessments of not less than 1 2 ⁄2 of all programs cov3 ered under subsection (b)(1) that use the meth4 od established under subparagraph (A). 

5 (2) METHOD OBJECTIVES.—The method estab6 lished under paragraph (1) shall—

7 (A) recognize different types of federal 

8 programs; 

9 (B) assess programs based primarily on 

10 the achievement of performance goals (as de11 fined under section 1115(f)(4) of title 31, 

12 United States Code); and 

13 (C) assess programs based in part on the 

14 adequacy of the program’s performance meas15 ures, financial management, and other factors 

16 determined by the President. 

17 (3) DEVELOPMENT.—The method established 

18 under paragraph (1) shall not be implemented until 

19 it has been reviewed and accepted by the Commis20 sion. 

21 (4) CONSIDERATION OF ASSESSMENTS.—The 

22 Commission shall consider assessments submitted 

23 under this subsection when evaluating programs 

24 under subsection (b)(1). 
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1 (e) COMMON PERFORMANCE MEASURES.—Not later 

2 than 1 year after the date of enactment of this Act, the 

3 President shall identify common performance measures 

4 for programs covered in subsection (b)(1) that have simi5 lar functions and, to the extent feasible, provide the Com6 mission with data on such performance measures. 

7 (f) REPORT.—Not later than 2 years after the date 

8 of enactment of this Act, the Commission shall submit to 

9 the President and Congress a report that includes the plan 

10 described under subsection (b)(2), with supporting docu11 mentation for all recommendations. 

12 SEC. 313. POWERS OF THE COMMISSION. 

13 (a) HEARINGS.—The Commission or, at its direction, 

14 any subcommittee or member of the Commission, may, for 

15 the purpose of carrying out this subtitle—

16 (1) hold such hearings, sit and act at such 

17 times and places, take such testimony, receive such 

18 evidence, and administer such oaths as any member 

19 of the Commission considers advisable; 

20 (2) require, by subpoena or otherwise, the at21 tendance and testimony of such witnesses as any 

22 member of the Commission considers advisable; and 

23 (3) require, by subpoena or otherwise, the pro24 duction of such books, records, correspondence, 

25 memoranda, papers, documents, tapes, and other 
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1 evidentiary materials relating to any matter under 

2 investigation by the Commission. 

3 (b) SUBPOENAS.—

4 (1) ISSUANCE.—Subpoenas issued under sub5 section (a) shall bear the signature of the chair6 person of the Commission and shall be served by any 

7 person or class of persons designated by the chair8 person for that purpose. 

9 (2) ENFORCEMENT.—In the case of contumacy 

10 or failure to obey a subpoena issued under sub11 section (a), the United States district court for the 

12 judicial district in which the subpoenaed person re13 sides, is served, or may be found, may issue an order 

14 requiring such person to appear at any designated 

15 place to testify or to produce documentary or other 

16 evidence. Any failure to obey the order of the court 

17 may be punished by the court as a contempt of that 

18 court. 

19 (c) INFORMATION FROM FEDERAL AGENCIES.—The 

20 Commission may secure directly from any Federal depart21 ment or agency such information as the Commission con22 siders necessary to carry out this Act. Upon request of 

23 the chairperson of the Commission, the head of such de24 partment or agency shall furnish such information to the 

25 Commission.
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1 (d) POSTAL SERVICES.—The Commission may use 

2 the United States mails in the same manner and under 

3 the same conditions as other departments and agencies of 

4 the Government. 

5 (e) GIFTS.—The Commission may accept, use, and 

6 dispose of gifts or donations of services or property. 

7 SEC. 314. COMMISSION PERSONNEL MATTERS. 

8 (a) COMPENSATION OF MEMBERS.—

9 (1) NON-FEDERAL MEMBERS.—Except as pro10 vided under subsection (b), each member of the 

11 Commission who is not an officer or employee of the 

12 Government shall not be compensated. 

13 (2) FEDERAL OFFICERS OR EMPLOYEES.—All 

14 members of the Commission who are officers or em15 ployees of the United States shall serve without com16 pensation in addition to that received for their serv17 ices as officers or employees of the United States. 

18 (b) TRAVEL EXPENSES.—The members of the Com19 mission shall be allowed travel expenses, including per 

20 diem in lieu of subsistence, at rates authorized for employ21 ees of agencies under subchapter I of chapter 57 of title 

22 5, United States Code, while away from their homes or 

23 regular places of business in the performance of services 

24 for the Commission. 

25 (c) STAFF.—
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1 (1) IN GENERAL.—The chairperson of the Com2 mission may, without regard to the civil service laws 

3 and regulations, appoint and terminate an executive 

4 director and such other additional personnel as may 

5 be necessary to enable the Commission to perform 

6 its duties. The employment of an executive director 

7 shall be subject to confirmation by the Commission. 

8 (2) COMPENSATION.—Upon the approval of the 

9 chairperson, the executive director may fix the com10 pensation of the executive director and other per11 sonnel without regard to chapter 51 and subchapter 

12 III of chapter 53 of title 5, United States Code, re13 lating to classification of positions and General 

14 Schedule pay rates, except that the rate of pay for 

15 the executive director and other personnel may not 

16 exceed the maximum rate payable for a position at 

17 GS–15 of the General Schedule under section 5332 

18 of such title. 

19 (3) PERSONNEL AS FEDERAL EMPLOYEES.—

20 (A) IN GENERAL.—The executive director 

21 and any personnel of the Commission who are 

22 employees shall be employees under section 

23 2105 of title 5, United States Code, for pur24 poses of chapters 63, 81, 83, 84, 85, 87, 89, 

25 and 90 of that title. 
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1 (B) MEMBERS OF COMMISSION.—Subpara2 graph (A) shall not be construed to apply to 

3 members of the Commission. 

4 (d) DETAIL OF GOVERNMENT EMPLOYEES.—Any 

5 Government employee may be detailed to the Commission 

6 without reimbursement, and such detail shall be without 

7 interruption or loss of civil service status or privilege. 

8 (e) PROCUREMENT OF TEMPORARY AND INTERMIT9 TENT SERVICES.—The chairperson of the Commission 

10 may procure temporary and intermittent services under 

11 section 3109(b) of title 5, United States Code, at rates 

12 for individuals which do not exceed the daily equivalent 

13 of the annual rate of basic pay prescribed for level V of 

14 the Executive Schedule under section 5316 of such title. 

15 SEC. 315. TERMINATION OF THE COMMISSION. 

16 The Commission shall terminate 90 days after the 

17 date on which the Commission submits its report. 

18 SEC. 316. AUTHORIZATION OF APPROPRIATIONS. 

19 There are authorized to be appropriated such sums 

20 as may be necessary for carrying out this subtitle for each 

21 of the fiscal years 2006 through 2008. 
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1 TITLE IV—TRUTH IN 

2 ACCOUNTING 

3 Subtitle A—Accrual Funding of 

4 Pensions and Retirement Pay 

5 for Federal Employees and Uni6 formed Services Personnel 

7 SEC. 401. CIVIL SERVICE RETIREMENT SYSTEM. 

8 (a) CIVIL SERVICE RETIREMENT AND DISABILITY

9 FUND.—Chapter 83 of title 5, United States Code, is 

10 amended—

11 (1) in section 8331—

12 (A) in paragraph (17)—

13 (i) by striking ‘‘normal cost’’ and in14 serting ‘‘normal cost percentage’’; and 

15 (ii) by inserting ‘‘and standards 

16 (using dynamic assumptions)’’ after ‘‘prac17 tice’’; 

18 (B) by amending paragraph (18) to read 

19 as follows: 

20 ‘‘(18) ‘Fund balance’ means the current net as21 sets of the Fund available for payment of benefits, 

22 as determined by the Office in accordance with ap23 propriate accounting standards, but does not include 

24 any amount attributable to—
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1 ‘‘(A) the Federal Employees’ Retirement 

2 System; or 

3 ‘‘(B) contributions made under the Federal 

4 Employees’ Retirement Contribution Temporary 

5 Adjustment Act of 1983 by or on behalf of any 

6 individual who became subject to the Federal 

7 Employees’ Retirement System;’’

8 (C) by amending paragraph (19) to read 

9 as follows: 

10 ‘‘(19) ‘accrued liability’ means the estimated ex11 cess of the present value of all benefits payable from 

12 the Fund to employees and Members, and former 

13 employees and Members, subject to this subchapter, 

14 and their survivors, over the present value of deduc15 tions to be withheld from the future basic pay of em16 ployees and Members currently subject to this sub17 chapter and of future agency contributions to be 

18 made in their behalf;’’

19 (D) in paragraph (27) by striking ‘‘and’’ 

20 at the end; 

21 (E) in paragraph (28) by striking the pe22 riod at the end and inserting a semicolon; and 

23 (F) by adding at the end the following 

24 paragraphs:
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1 ‘‘(29) ‘dynamic assumptions’ means economic 

2 assumptions that are used in determining actuarial 

3 costs and liabilities of a retirement system and in 

4 anticipating the effects of long-term future—

5 ‘‘(A) investment yields; 

6 ‘‘(B) increases in rates of basic pay; and 

7 ‘‘(C) rates of price inflation; and 

8 ‘‘(30) ‘unfunded liability’ means the estimated 

9 excess of—

10 ‘‘(A) the actuarial present value of all fu11 ture benefits payable from the Fund under this 

12 subchapter based on the service of current or 

13 former employees or Members, over 

14 ‘‘(B) the sum of—

15 ‘‘(i) the actuarial present value of de16 ductions to be withheld from the future 

17 basic pay of employees and Members cur18 rently subject to this chapter pursuant to 

19 section 8334; 

20 ‘‘(ii) the actuarial present value of the 

21 future contributions to be made pursuant 

22 to section 8334 with respect to employees 

23 and Members currently subject to this sub24 chapter; 
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1 ‘‘(iii) the Fund balance, as defined in 

2 paragraph (18), as of the date the un3 funded liability is determined; and 

4 ‘‘(iv) any other appropriate amount, 

5 as determined by the Office of Personnel 

6 Management in accordance with generally 

7 accepted actuarial practices and prin8 ciples.’’; 

9 (2) in section 8334—

10 (A) in subsection (a)(1)—

11 (i) by striking the last two sentences; 

12 (ii) by redesignating that subsection, 

13 as so amended, as (a)(1)(A); and 

14 (iii) by adding at the end the fol15 lowing new subparagraphs: 

16 ‘‘(B) Except as provided in subparagraph (E), each 

17 employing agency having any employees or Members sub18 ject to subparagraph (A) shall contribute from amounts 

19 available for salaries and expenses an amount equal to the 

20 sum of—

21 ‘‘(i) the product of—

22 ‘‘(I) the normal cost percentage, as deter23 mined for employees (other than employees cov24 ered by clause (ii)), multiplied by 
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1 ‘‘(II) the aggregate amount of basic pay 

2 payable by the agency, for the period involved, 

3 to employees (under subclause (I)) who are 

4 within such agency; and 

5 ‘‘(ii) the product of—

6 ‘‘(I) the normal cost percentage, as deter7 mined for Members, Congressional employees, 

8 law enforcement officers, firefighters, air traffic 

9 controllers, bankruptcy judges, Court of Fed10 eral Claims judges, United States magistrates, 

11 judges of the United States Court of Appeals 

12 for the Armed Forces, members of the Capitol 

13 Police, nuclear materials couriers, and members 

14 of the Supreme Court Police, multiplied by 

15 ‘‘(II) the aggregate amount of basic pay 

16 payable by the agency for the period involved, 

17 to employees and Members (under subclause 

18 (I)) who are within such agency. 

19 ‘‘(C) In determining the normal cost percentage to 

20 be applied under subparagraph (B), amounts provided for 

21 under subparagraph (A) shall be taken into account. 

22 ‘‘(D) Contributions under this paragraph shall be 

23 paid—

24 ‘‘(i) in the case of law enforcement officers, 

25 firefighters, air traffic controllers, bankruptcy 
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1 judges, Court of Federal Claims judges, United 

2 States magistrates, judges of the United States 

3 Court of Appeals for the Armed Forces, members of 

4 the Supreme Court Police, nuclear materials couriers 

5 and other employees, from the appropriations or 

6 fund used to pay such law enforcement officers, fire7 fighters, air traffic controllers, bankruptcy judges, 

8 Court of Federal Claims judges, United States mag9 istrates, judges of the United States Court of Ap10 peals for the Armed Forces, members of the Su11 preme Court Police, nuclear materials couriers and 

12 other employees, respectively; 

13 ‘‘(ii) in the case of elected officials, from an ap14 propriation or fund available for payment of other 

15 salaries of the same office or establishment; and 

16 ‘‘(iii) in the case of employees of the legislative 

17 branch paid by the Clerk of the House of Represent18 atives, from the contingent fund of the House. 

19 ‘‘(E) In the case of the United States Postal Service, 

20 the Metropolitan Washington Airports Authority, and the 

21 government of the District of Columbia, an amount equal 

22 to that withheld under subparagraph (A) shall be contrib23 uted from the appropriation or fund used to pay the em24 ployee.’’; and 

25 (B) in subsection (k)—
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1 (i) in paragraph (1)—

2 (I) in subparagraph (A) by strik3 ing ‘‘the first sentence of subsection 

4 (a)(1) of this section’’ and inserting 

5 ‘‘subsection (a)(1)(A)’’; and 

6 (II) by amending subparagraph 

7 (B) to read as follows: 

8 ‘‘(B) the amount of the contribution under sub9 section (a)(1)(B) shall be the amount which would 

10 have been contributed under such subsection if this 

11 subsection had not been enacted.’’; and 

12 (ii) in paragraph (2)(C)(iii) by strik13 ing ‘‘the first sentence of subsection 

14 (a)(1)’’ and inserting ‘‘subsection 

15 (a)(1)(A)’’; and

16 (3) in section 8348—

17 (A) by repealing subsection (f); 

18 (B) by amending subsection (g) to read as 

19 follows: 

20 ‘‘(g)(1)(A) Not later than June 30, 2005, the Office 

21 of the Actuary shall determine the unfunded liability of 

22 the Fund, as of September 30, 2004, attributable to bene23 fits payable under this chapter and make recommenda24 tions regarding its liquidation. After considering such rec25 ommendations, the Office shall establish an amortization
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1 schedule, including a series of annual installments com2 mencing October 1, 2005, which provides for the liquida3 tion of such liability by October 1, 2044. 

4 ‘‘(B) The Office shall redetermine the unfunded li5 ability of the Fund as of the close of the fiscal year, for 

6 each fiscal year beginning after September 30, 2004, 

7 through the fiscal year ending September 30, 2039, and 

8 shall establish a new amortization schedule, including a 

9 series of annual installments commencing on October 1 

10 of the second subsequent fiscal year, which provides for 

11 the liquidation of such liability by October 1, 2044. 

12 ‘‘(C) The Office shall redetermine the unfunded li13 ability of the Fund as of the close of the fiscal year for 

14 each fiscal year beginning after September 30, 2039, and 

15 shall establish a new amortization schedule, including a 

16 series of annual installments commencing on October 1 

17 of the second subsequent fiscal year, which provides for 

18 the liquidation of such liability over five years. 

19 ‘‘(D) Amortization schedules established under this 

20 paragraph shall be set in accordance with generally accept21 ed actuarial practices and principles, with interest com22 puted at the rate used in the most recent valuation of the 

23 Civil Service Retirement System. 

24 ‘‘(2) At the beginning of each fiscal year, beginning 

25 on October 1, 2005, the Office shall notify the Secretary 
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1 of the Treasury of the amount of the first installment 

2 under the most recent amortization schedule established 

3 under paragraph (1). The Secretary shall credit that 

4 amount to the Fund, as a Government contribution, out 

5 of any money in the Treasury of the United States not 

6 otherwise appropriated. 

7 ‘‘(3) For the purpose of carrying out paragraph (1) 

8 with respect to any fiscal year, the Office may—

9 ‘‘(A) require the Board of Actuaries of the Civil 

10 Service Retirement System to make actuarial deter11 minations and valuations, make recommendations, 

12 and maintain records in accordance with section 

13 8347(f); and 

14 ‘‘(B) use the latest actuarial determinations 

15 and valuations made by such Board of Actuaries.’’; 

16 (C) in subsections (h), (i), and (m) by 

17 striking ‘‘unfunded’’ and inserting ‘‘accrued’’ 

18 each place it appears; and 

19 (D) by adding at the end the following new 

20 subsection: 

21 ‘‘(n) Under regulations prescribed by the Office, the 

22 head of an agency may request reconsideration of any 

23 amount determined to be payable with respect to such 

24 agency under section 8334(a)(1)(B)–(D). Any such re25 quest shall be referred to the Board of Actuaries of the 
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1 Civil Service Retirement System. The Board of Actuaries 

2 shall review the computations of the Office and may make 

3 any adjustment with respect to any such amount which 

4 the Board determines appropriate. A determination by the 

5 Board of Actuaries under this subsection shall be final.’’. 

6 (b) GOVERNMENT CONTRIBUTIONS.—Section 8423 

7 of title 5, United States Code, is amended—

8 (1) in subsection (a)(2) by striking ‘‘section 

9 8422’’ and inserting ‘‘section 8422(a)’’; and 

10 (2) in subsection (b)(2) by striking ‘‘equal an11 nual installments’’ and inserting ‘‘annual install12 ments set in accordance with generally accepted ac13 tuarial practices and principles’’. 

14 SEC. 402. CENTRAL INTELLIGENCE AGENCY RETIREMENT 

15 AND DISABILITY SYSTEM. 

16 (a) Section 101 of the Central Intelligence Agency 

17 Retirement Act (50 U.S.C. 2001) is amended—

18 (1) in paragraph (5), to read as follows: 

19 ‘‘(5) UNFUNDED LIABILITY.—The term ‘un20 funded liability’ means the estimated excess of—

21 ‘‘(A) the actuarial present value of all fu22 ture benefits payable from the Fund under title 

23 II of this Act based on the service of current 

24 or former participants, over 

25 ‘‘(B) the sum of—
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1 ‘‘(i) the actuarial present value of de2 ductions to be withheld from the future 

3 basic pay of participants currently subject 

4 to title II of this Act pursuant to section 

5 211; 

6 ‘‘(ii) the actuarial present value of the 

7 future contributions to be made pursuant 

8 to section 211 with respect to participants 

9 currently subject to title II of this Act; 

10 ‘‘(iii) the Fund balance, as defined in 

11 paragraph (4), as of the date the unfunded 

12 liability is determined; and 

13 ‘‘(iv) any other appropriate amount, 

14 as determined by the Director in accord15 ance with generally accepted actuarial 

16 practices and principles.’’; 

17 (2) in paragraph (6)—

18 (A) by striking ‘‘ ‘normal cost’ ’’ and in19 serting ‘‘ ‘normal cost percentage’ ’’; and 

20 (B) by inserting ‘‘and standards (using dy21 namic assumptions)’’ after ‘‘practice’’; and 

22 (3) by adding at the end the following para23 graph: 

24 ‘‘(10) DYNAMIC ASSUMPTIONS.—The term ‘dy25 namic assumptions’ means economic assumptions 
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1 that are used in determining actuarial costs and li2 abilities of a retirement system and in anticipating 

3 the effects of long-term future—

4 ‘‘(A) investment yields; 

5 ‘‘(B) increases in rates of basic pay; and 

6 ‘‘(C) rates of price inflation.’’. 

7 (b) Section 202 of such Act (50 U.S.C. 2012) is 

8 amended by adding at the end the following: ‘‘The Fund 

9 is appropriated for the payment of benefits as provided 

10 by this title.’’. 

11 (c) Section 211(a)(2) of such Act (50 U.S.C. 

12 2021(a)(2)) is amended to read as follows: 

13 ‘‘(2) AGENCY CONTRIBUTIONS.—The Agency 

14 shall contribute to the Fund the amount computed 

15 in a manner similar to that used under section 

16 8334(a) of title 5, United States Code, pursuant to 

17 determinations of the normal cost percentage of the 

18 Central Intelligence Agency Retirement and Dis19 ability System by the Director. Contributions under 

20 this paragraph shall be paid from amounts available 

21 for salaries and expenses.’’. 

22 (d) Section 261 of such Act (50 U.S.C. 2091) is 

23 amended—

24 (1) by striking subsections (c), (d), and (e); and
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1 (2) by inserting after subsection (b) the fol2 lowing new subsections: 

3 ‘‘(c)(1) Not later than June 30, 2005, the Director 

4 shall cause to be made actuarial valuations of the Fund 

5 that determine the unfunded liability of the Fund, as of 

6 September 30, 2004, attributable to benefits payable 

7 under this title and make recommendations regarding its 

8 liquidation. After considering such recommendations, the 

9 Director shall establish an amortization schedule, includ10 ing a series of annual installments commencing October 

11 1, 2005, which provides for the liquidation of such liability 

12 by October 1, 2044. 

13 ‘‘(2) The Director shall redetermine the unfunded li14 ability of the Fund as of the close of the fiscal year, for 

15 each fiscal year beginning after September 30, 2004, 

16 through the fiscal year ending September 30, 2039, and 

17 shall establish a new amortization schedule, including a 

18 series of annual installments commencing on October 1 

19 of the second subsequent fiscal year, which provides for 

20 the liquidation of such liability by October 1, 2044. 

21 ‘‘(3) The Director shall redetermine the unfunded li22 ability of the Fund as of the close of the fiscal year for 

23 each fiscal year beginning after September 30, 2039, and 

24 shall establish a new amortization schedule, including a 

25 series of annual installments commencing on October 1 
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1 of the second subsequent fiscal year, which provides for 

2 the liquidation of such liability over five years. 

3 ‘‘(4) Amortization schedules established under this 

4 subsection shall be set in accordance with generally accept5 ed actuarial practices and principles, with interest com6 puted at the rate used in the most recent valuation of the 

7 Civil Service Retirement and Disability System. 

8 ‘‘(d) At the beginning of each fiscal year, beginning 

9 on October 1, 2005, the Director shall notify the Secretary 

10 of the Treasury of the amount of the first installment 

11 under the most recent amortization schedule established 

12 under subsection (c). The Secretary shall credit that 

13 amount to the Fund, as a Government contribution, out 

14 of any money in the Treasury of the United States not 

15 otherwise appropriated. For the purposes of Section 504 

16 of the National Security Act of 1947, this amount shall 

17 be considered authorized.’’. 

18 (e)(1) Title III of such Act (50 U.S.C. 2151 et seq.) 

19 is amended by adding at the end the following new section: 

20 ‘‘SEC. 308. FULL FUNDING OF RETIREE COSTS FOR EM21 PLOYEES DESIGNATED UNDER SECTION 302. 

22 ‘‘(a) In addition to other government contributions 

23 required by law, the Agency shall contribute to the Civil 

24 Service Retirement and Disability fund (hereinafter in this 

25 section referred to as the ‘Fund’) amounts calculated in 
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1 accordance with section 8423 of title 5, United States 

2 Code, based on the projected number of employees to be 

3 designated pursuant to section 302 of this Act. In addi4 tion, the Agency, in a manner similar to that established 

5 for employee contributions to the Fund by section 8422 

6 of title 5, United States Code, will contribute an amount 

7 equal to the difference between that which would be con8 tributed by the number of employees projected to be des9 ignated under section 302 and the amounts that are actu10 ally being deducted and contributed from the basic pay 

11 of an equal number of employees pursuant to section 

12 8422. The amounts of the Agency’s contributions under 

13 this subsection shall be determined by the Director of the 

14 Office of Personnel Management, in consultation with the 

15 Director, and shall be paid by the Agency from funds 

16 available for salaries and expenses. Agency employees des17 ignated pursuant to section 302 of this Act shall, com18 mencing with such designation, have deducted from their 

19 basic pay the full amount required by section 8422 of title 

20 5, United States Code, and such deductions shall be con21 tributed to the Fund. 

22 ‘‘(b)(1) The Director of the Office of Personnel Man23 agement, in consultation with the Director, shall deter24 mine the total amount of unpaid contributions (govern25 ment and employee contributions) and interest attrib-
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1 utable to the number of individuals employed with the 

2 Agency on September 30, 2005, who are projected to be 

3 designated under section 302 of this Act, but are not yet 

4 designated under that section as of that date. The amount 

5 shall be referred to as the section 302 unfunded liability. 

6 ‘‘(2) Not later than June 30, 2006, the Director of 

7 the Office of Personnel Management, in consultation with 

8 the Director, shall establish an amortization schedule, set9 ting forth a series of annual installments commencing 

10 September 30, 2006, which provides for the liquidation of 

11 the section 302 unfunded liability by September 30, 2013. 

12 ‘‘(3) At the end of each fiscal year, beginning on Sep13 tember 30, 2006, the Director shall notify the Secretary 

14 of the Treasury of the amount of the annual installment 

15 under the amortization schedule established under para16 graph (2) of this subsection. Before closing the accounts 

17 for that fiscal year, the Secretary shall credit that amount 

18 to the Fund, out of any money in the Treasury of the 

19 United States not otherwise appropriated. 

20 ‘‘(c) Amounts paid by the Agency pursuant to this 

21 section are deemed to be specifically authorized by the 

22 Congress for the purposes of section 504 of the National 

23 Security Act of 1947.’’.
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1 (2) The table of contents of such Act is amended by 

2 inserting after the item relating to section 307 the fol3 lowing new item:

‘‘Sec. 308. Full funding of retiree costs for employees designated under section 

302.’’.

4 SEC. 403. FOREIGN SERVICE RETIREMENT AND DISABILITY 

5 SYSTEM. 

6 Chapter 8 of title I of the Foreign Service Act of 

7 1980, Public Law 96–465 (22 U.S.C. 4041 et seq.) 94 

8 Stat. 2071, as amended, is further amended—

9 (1) in section 804 (22 U.S.C. 4044)—

10 (A) by amending paragraph (5) to read as 

11 follows: 

12 ‘‘(5) ‘normal cost percentage’ means the entry13 age normal cost computed in accordance with gen14 erally accepted actuarial practice and standards 

15 (using dynamic assumptions) and expressed as a 

16 level percentage of aggregate basic pay;’’; 

17 (B) by amending paragraph (14) to read 

18 as follows: 

19 ‘‘(14) ‘unfunded liability’ means the estimated 

20 excess of—

21 ‘‘(A) the actuarial present value of all fu22 ture benefits payable from the Fund under this 

23 part based on the service of current or former 

24 participants, over 
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1 ‘‘(B) the sum of—

2 ‘‘(i) the actuarial present value of de3 ductions to be withheld from the future 

4 basic pay of participants currently subject 

5 to this part pursuant to section 805; 

6 ‘‘(ii) the actuarial present value of the 

7 future contributions to be made pursuant 

8 to section 805 with respect to participants 

9 currently subject to this part; 

10 ‘‘(iii) the Fund balance, as defined in 

11 paragraph (7), as of the date the unfunded 

12 liability is determined, excluding any 

13 amount attributable to the Foreign Service 

14 Pension System, or contributions made 

15 under the Federal Employees’ Retirement 

16 Contribution Temporary Adjustment Act 

17 of 1983 by or on behalf of any individual 

18 who became subject to the Foreign Service 

19 Pension System; and 

20 ‘‘(iv) any other appropriate amount, 

21 as determined by the Secretary of the 

22 Treasury in accordance with generally ac23 cepted actuarial practices and principles.’’; 

24 and 
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1 (C)(i) by striking the period at the end of 

2 paragraph (15) and inserting ‘‘; and’’; and 

3 (ii) by adding at the end the following new 

4 paragraph: 

5 ‘‘(16) ‘dynamic assumptions’ means economic 

6 assumptions that are used in determining actuarial 

7 costs and liabilities of a retirement system and in 

8 anticipating the effects of long-term future—

9 ‘‘(A) investment yields; 

10 ‘‘(B) increases in rates of basic pay; and 

11 ‘‘(C) rates of price inflation.’’; 

12 (2) in section 852 (22 U.S.C. 4071a)—

13 (A) in paragraph (4)—

14 (i) by striking ‘‘normal cost’’ and in15 serting ‘‘normal cost percentage’’; and 

16 (ii) by striking ‘‘by the Secretary of 

17 State’’; 

18 (B) in paragraph (7)—

19 (i) by striking ‘‘supplemental’’ and in20 serting ‘‘unfunded’’; 

21 (ii) in subparagraph (B)(i) by striking 

22 ‘‘(I)’’ and ‘‘and (II) contributions for past 

23 civilian and military service’’; and 

24 (iii) in subparagraph (B)(ii) by insert25 ing before the semicolon ‘‘with respect to 
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1 participants currently subject to this part’’; 

2 and 

3 (C)(i) at the end of paragraph (8) by strik4 ing ‘‘and’’; 

5 (ii) at the end of paragraph (9) by striking 

6 the period and inserting ‘‘; and’’; and 

7 (iii) by adding at the end the following new 

8 paragraph: 

9 ‘‘(10) ‘dynamic assumptions’ means economic 

10 assumptions that are used in determining actuarial 

11 costs and liabilities of a retirement system and in 

12 anticipating the effects of long-term future—

13 ‘‘(A) investment yields;

14 ‘‘(B) increases in rates of basic pay; and 

15 ‘‘(C) rates of price inflation.’’; 

16 (3) in section 805(a)(1) (22 U.S.C. 

17 4045(a)(i))—

18 (A) by striking the second sentence; 

19 (B) by redesignating that subsection, as so 

20 amended, as (a)(1)(A); 

21 (C) by redesignating the last sentence of 

22 that subsection, as so amended as (a)(1)(C); 

23 (D) by inserting after subparagraph (A) 

24 the following new subparagraph: 
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1 ‘‘(B) Each employing agency having par2 ticipants shall contribute to the Fund the 

3 amount computed in a manner similar to that 

4 used under section 8334(a) of title 5, United 

5 States Code, pursuant to determinations of the 

6 normal cost percentage of the Foreign Service 

7 Retirement and Disability System. Contribu8 tions under this subparagraph shall be paid 

9 from the appropriations or fund used for pay10 ment of the salary of the participant.’’; 

11 (E) in subsection (a)(2)(A) by striking 

12 ‘‘An equal amount shall be contributed by the 

13 Department’’ and inserting in its place ‘‘Each 

14 employing agency having participants shall con15 tribute to the Fund the amount computed in a 

16 manner similar to that used under section 

17 8334(a) of title 5, United States Code, pursu18 ant to determinations of the normal cost per19 centage of the Foreign Service Retirement and 

20 Disability System’’; and 

21 (F) in subsection (a)(2)(B) by striking 

22 ‘‘An equal amount shall be contributed by the 

23 Department’’ and inserting in its place ‘‘Each 

24 employing agency having participants shall con25 tribute to the Fund from amounts available for
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1 salaries and expenses the amount computed in 

2 a manner similar to that used under section 

3 8334(a) of title 5, United States Code, pursu4 ant to determinations of the normal cost per5 centage of the Foreign Service Retirement and 

6 Disability System’’; 

7 (4) by repealing sections 821 and 822 (22 

8 U.S.C. 4061 and 4062) and by adding the following 

9 new section: 

10 ‘‘SEC. 821. UNFUNDED LIABILITY.—(a)(1) Not later 

11 than June 30, 2005, the Secretary of State shall cause 

12 to be made actuarial valuations of the Fund that deter13 mine the unfunded liability of the Fund, as of September 

14 30, 2004, attributable to benefits payable under this sub15 chapter and make recommendations regarding its liquida16 tion. After considering such recommendations, the Sec17 retary of State shall establish an amortization schedule, 

18 including a series of annual installments commencing Oc19 tober 1, 2004, which provides for the liquidation of such 

20 liability by October 1, 2044. 

21 ‘‘(2) The Secretary of State shall redetermine the un22 funded liability of the Fund as of the close of the fiscal 

23 year, for each fiscal year beginning after September 30, 

24 2004, through the fiscal year ending September 30, 2039, 

25 and shall establish a new amortization schedule, including 
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1 a series of annual installments commencing on October 1 

2 of the second subsequent fiscal year, which provides for 

3 the liquidation of such liability by October 1, 2044. 

4 ‘‘(3) The Secretary of State shall redetermine the un5 funded liability of the Fund as of the close of the fiscal 

6 year for each fiscal year beginning after September 30, 

7 2039, and shall establish a new amortization schedule, in8 cluding a series of annual installments commencing on Oc9 tober 1 of the second subsequent fiscal year, which pro10 vides for the liquidation of such liability over five years. 

11 ‘‘(4) Amortization schedules established under this 

12 subsection shall be set in accordance with generally accept13 ed actuarial practices and principles, with interest com14 puted at the rate used in the most recent valuation of the 

15 Foreign Service Retirement and Disability System. 

16 ‘‘(b) At the beginning of each fiscal year, beginning 

17 on October 1, 2005, the Secretary of State shall notify 

18 the Secretary of the Treasury of the amount of the first 

19 installment under the most recent amortization schedule 

20 established under paragraph (1). The Secretary of the 

21 Treasury shall credit that amount to the Fund, as a Gov22 ernment contribution, out of any money in the Treasury 

23 of the United States not otherwise appropriated.’’; 

24 (5) in section 857(b)(1) (22 U.S.C. 

25 4071f(b)(1)) by striking ‘‘equal annual installments’’ 
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1 and inserting ‘‘annual installments set in accordance 

2 with generally accepted actuarial practices and prin3 ciples’’; 

4 (6) in section 859 (22 U.S.C. 4071h) by adding 

5 ‘‘percentage’’ after ‘‘normal cost’’; 

6 (7) in section 802 (22 U.S.C. 4042) by adding 

7 at the end the following: ‘‘The Fund is appropriated 

8 for the payment of benefits as provided by this sub9 chapter.’’; and 

10 (8) in section 818 (22 U.S.C. 4058) by striking 

11 ‘‘System’’ and inserting ‘‘Systems under this sub12 chapter’’. 

13 SEC. 404. PUBLIC HEALTH SERVICE COMMISSIONED CORPS 

14 RETIREMENT SYSTEM. 

15 (a) IN GENERAL.—Title II of the Public Health Serv16 ice Act (42 U.S.C. 202 et seq.) is amended by adding at 

17 the end the following new part: 

18 ‘‘PART C—PUBLIC HEALTH SERVICE 

19 COMMISSIONED CORPS RETIREMENT SYSTEM 

20 ‘‘ESTABLISHMENT AND PURPOSE OF FUND

21 ‘‘SEC. 251. There is established on the books of the 

22 Treasury a fund to be known as the Public Health Service 

23 Commissioned Corps Retirement Fund (hereinafter in this 

24 part referred to as the ‘Fund’), which shall be adminis25 tered by the Secretary. The Fund shall be used for the 
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1 accumulation of funds in order to finance on an actuarially 

2 sound basis liabilities of the Department of Health and 

3 Human Services for benefits payable on account of retire4 ment, disability, or death to commissioned officers of the 

5 Public Health Service and to their survivors pursuant to 

6 part A of this title. 

7 ‘‘ASSETS OF THE FUND

8 ‘‘SEC. 252. There shall be deposited into the Fund 

9 the following, which shall constitute the assets of the 

10 Fund: 

11 ‘‘(1) Amounts paid into the Fund under section 

12 255. 

13 ‘‘(2) Any return on investment of the assets of 

14 the Fund. 

15 ‘‘(3) Amounts transferred into the Fund pursu16 ant to section 404(c) of the Deficit Control Act of 

17 2004.

18 ‘‘PAYMENT FROM THE FUND

19 ‘‘SEC. 253. There shall be paid from the Fund bene20 fits payable on account of retirement, disability, or death 

21 to commissioned officers of the Public Health Service and 

22 to their survivors pursuant to part A of this title. 

23 ‘‘DETERMINATION OF CONTRIBUTIONS TO THE FUND

24 ‘‘SEC. 254. (a)(1) Not later than June 30, 2005, the 

25 Secretary shall determine the unfunded liability of the 

26 Fund attributable to service performed as of September 
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1 30, 2004, which is ‘active service’ for the purpose of sec2 tion 212. The Secretary shall establish an amortization 

3 schedule, including a series of annual installments com4 mencing October 1, 2005, which provides for the liquida5 tion of such liability by October 1, 2044. 

6 ‘‘(2) The Secretary shall redetermine the unfunded 

7 liability of the Fund as of the close of the fiscal year, for 

8 each fiscal year beginning after September 30, 2004, 

9 through the fiscal year ending September 30, 2039, and 

10 shall establish a new amortization schedule, including a 

11 series of annual installments commencing on October 1 

12 of the second subsequent fiscal year, which provides for 

13 the liquidation of such liability by October 1, 2044. 

14 ‘‘(3) The Secretary shall redetermine the unfunded 

15 liability of the Fund as of the close of the fiscal year for 

16 each fiscal year beginning after September 30, 2039, and 

17 shall establish a new amortization schedule, including a 

18 series of annual installments commencing on October 1 

19 of the second subsequent fiscal year, which provides for 

20 the liquidation of such liability over 5 years. 

21 ‘‘(b) The Secretary shall determine each fiscal year, 

22 in sufficient time for inclusion in the budget request for 

23 the following fiscal year, the total amount of Department 

24 of Health and Human Services contributions to be made 
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1 to the Fund during the fiscal year under section 255(a). 

2 That amount shall be the sum of—

3 ‘‘(1) the product of—

4 ‘‘(A) the current estimate of the value of 

5 the single level percentage of basic pay to be de6 termined under subsection (c)(1) at the time of 

7 the most recent actuarial valuation under sub8 section (c); and 

9 ‘‘(B) the total amount of basic pay ex10 pected to be paid during that fiscal year to 

11 commissioned officers of the Public Health 

12 Service on active duty (other than active duty 

13 for training); and 

14 ‘‘(2) the product of—

15 ‘‘(A) the current estimate of the value of 

16 the single level percentage of basic pay and of 

17 compensation (paid pursuant to section 206 of 

18 title 37, United States Code) to be determined 

19 under subsection (c)(2) at the time of the most 

20 recent actuarial valuation under subsection (c); 

21 and 

22 ‘‘(B) the total amount of basic pay and of 

23 compensation (paid pursuant to section 206 of 

24 title 37, United States Code) expected to be 

25 paid during the fiscal year to commissioned of-
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1 ficers of the Reserve Corps of the Public Health 

2 Service (other than officers on full-time duty 

3 other than for training) who are not otherwise 

4 described in subparagraph (A). 

5 ‘‘(c) Not less often than every four years thereafter 

6 (or by the fiscal year end prior to the effective date of 

7 any statutory change affecting benefits payable on account 

8 of retirement, disability, or death to commissioned officers 

9 or their survivors), the Secretary shall carry out an actu10 arial valuation of benefits payable on account of retire11 ment, disability, or death to commissioned officers of the 

12 Public Health Service and to their survivors pursuant to 

13 part A of this title. Each such actuarial valuation shall 

14 be signed by an enrolled Actuary and shall include—

15 ‘‘(1) a determination (using the aggregate 

16 entry-age normal cost method) of a single level per17 centage of basic pay for commissioned officers of the 

18 Public Health Service on active duty (other than ac19 tive duty for training); and 

20 ‘‘(2) a determination (using the aggregate 

21 entry-age normal cost method) of a single level per22 centage of basic pay and of compensation (paid pur23 suant to section 206 of title 37, United States Code) 

24 of commissioned officers of the Reserve Corps of the 

25 Public Health Service (other than officers on full 
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1 time duty other than for training) who are not oth2 erwise described in paragraph (1). 

3 ‘‘(d) All determinations under this section shall be in 

4 accordance with generally accepted actuarial principles 

5 and practices and, where appropriate, shall follow the gen6 eral pattern of methods and assumptions approved by the 

7 Department of Defense Retirement Board of Actuaries. 

8 ‘‘(e) The Secretary shall provide for the keeping of 

9 such records as are necessary for determining the actu10 arial status of the Fund. 

11 ‘‘PAYMENTS INTO THE FUND

12 ‘‘SEC. 255. (a) From amounts available to the De13 partment of Health and Human Services for salaries and 

14 expenses, the Secretary shall pay into the Fund at the end 

15 of each month the amount that is the sum of—

16 ‘‘(1) the product of—

17 ‘‘(A) the level percentage of basic pay de18 termined using all the methods and assump19 tions approved for the most recent (as of the 

20 first day of the current fiscal year) actuarial 

21 valuation under sections 254(c)(1) (except that 

22 any statutory change affecting benefits payable 

23 on account of retirement, disability, or death to 

24 commissioned officers or their survivors that is 

25 effective after the date of that valuation and on 
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1 or before the first day of the current fiscal year 

2 shall be used in such determination); and 

3 ‘‘(B) the total amount of basic pay accrued 

4 for that month by commissioned officers of the 

5 Public Health Service on active duty (other 

6 than active duty for training); and 

7 ‘‘(2) the product of—

8 ‘‘(A) the level percentage of basic pay and 

9 of compensation (paid pursuant to section 206 

10 of title 37, United States Code) determined 

11 using all the methods and assumptions ap12 proved for the most recent (as of the first day 

13 of the current fiscal year) actuarial valuation 

14 under section 254(c)(2) (except that any statu15 tory change affecting benefits payable on ac16 count of retirement, disability, or death to com17 missioned officers or their survivors that is ef18 fective after the date of that valuation and on 

19 or before the first day of the current fiscal year 

20 shall be used in such determinations); and 

21 ‘‘(B) the total amount of basic pay and of 

22 compensation (paid pursuant to section 206 of 

23 title 37, United States Code) accrued for that 

24 month by commissioned officers of the Reserve 

25 Corps of the Public Health Service (other than 
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1 officers on full-time duty other than for train2 ing). 

3 ‘‘(b) At the beginning of each fiscal year, beginning 

4 on October 1, 2005, the Secretary shall certify to the Sec5 retary of the Treasury the amount of the first installment 

6 under the most recent amortization schedule established 

7 under section 254(a). The Secretary of the Treasury shall 

8 pay into the Fund from the General Fund of the Treasury 

9 the amount so certified. Such payment shall be the con10 tribution to the Fund for that fiscal year. 

11 ‘‘INVESTMENTS OF ASSETS OF FUND

12 ‘‘SEC. 256. The Secretary may request the Secretary 

13 of the Treasury to invest such portion of the Fund as is 

14 not, in the judgment of the Secretary, required to meet 

15 the current needs of the Fund. Such investments shall be 

16 made by the Secretary of the Treasury in public debt secu17 rities with maturities suitable to the needs of the Fund, 

18 as determined by the Secretary, and bearing interest at 

19 rates determined by the Secretary of the Treasury, taking 

20 into consideration current market yields on outstanding 

21 marketable obligations of the United States of comparable 

22 maturities. The income on such investments shall be cred23 ited to and form a part of the Fund. 

24 ‘‘IMPLEMENTATION YEAR EXCEPTIONS

25 ‘‘SEC. 257. (a) To avoid funding shortfalls in the first 

26 year should formal actuarial determinations not be avail-
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1 able in time for budget preparation, the amounts used in 

2 the first year in sections 255(a)(1)(A) and 255(a)(2)(A)

3 shall be set equal to those estimates in sections 

4 254(b)(1)(A) and 254(b)(2)(A) if final determinations are 

5 not available. The original unfunded liability as defined 

6 in section 254(a) shall include an adjustment to correct 

7 for this difference between the formal actuarial determina8 tions and the estimates in sections 254(b)(1)(A) and 

9 254(b)(2)(A).’’. 

10 (b) CONFORMING AMENDMENTS.—

11 (1) CONDITION OF DETAIL.—Section 214 of the 

12 Public Health Service Act (42 U.S.C. 215) is 

13 amended by adding at the end the following new 

14 subsection: 

15 ‘‘(e) The Secretary shall condition any detail under 

16 subsection (a), (b), or (c) upon the agreement of the exec17 utive department, State, subdivision, Committee of the 

18 Congress, or institution concerned to pay to the Depart19 ment of Health and Human Services, in advance or by 

20 way of reimbursement, for the full cost of the detail in21 cluding that portion of the contributions under section 

22 255(a) that is attributable to the detailed personnel.’’. 

23 (2) EXEMPTION FROM SEQUESTRATION.—Sec24 tion 255(g)(1) of the Balanced Budget and Emer-
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1 gency Deficit Control Act of 1985 (2 U.S.C. 

2 905(g)(1)) is amended—

3 (A) in subparagraph (A), by inserting after 

4 the item relating to ‘‘payment to the foreign 

5 service retirement and disability fund’’ the fol6 lowing item: ‘‘Payment to the Public Health 

7 Service Commissioned Corps Retirement Fund 

8 (75–0380–0–1–551);’’; and 

9 (B) in subparagraph (B), by inserting 

10 after the item relating to the ‘‘Pensions for 

11 former Presidents’’ the following item: ‘‘Public 

12 Health Service Commissioned Corps Retirement 

13 Fund (75–8274–0–7–602);’’. 

14 (c) TRANSFER OF APPROPRIATIONS.—There shall be 

15 transferred on October 1, 2006, into the fund established 

16 under section 251 of the Public Health Service Act, as 

17 added by subsection (a), any obligated or unobligated bal18 ances of appropriations made to the Department of Health 

19 and Human Services that are currently available for bene20 fits payable on account of retirement, disability, or death 

21 to commissioned officers of the Public Health Service and 

22 to their survivors pursuant to part A of title II of the Pub23 lic Health Service Act, and amounts so transferred shall 

24 be part of the assets of the Fund. 
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1 SEC. 405. NATIONAL OCEANIC AND ATMOSPHERIC ADMIN2 ISTRATION COMMISSIONED OFFICER CORPS 

3 RETIREMENT SYSTEM. 

4 (a) IN GENERAL.—The National Oceanic and Atmos5 pheric Administration Commissioned Officer Corps Act of 

6 2002 (title II of Public Law 107–372) is amended by in7 serting after section 246 (33 U.S.C. 3046) the following 

8 new section: 

9 ‘‘SEC. 246A. (a) ESTABLISHMENT AND PURPOSE OF

10 NOAA COMMISSIONED OFFICER CORPS RETIREMENT

11 FUND.—(1) There is established on the books of the 

12 Treasury a fund to be known as the National Oceanic and 

13 Atmospheric Administration Commissioned Officer Corps 

14 Retirement Fund (hereinafter in this section referred to 

15 as the ‘Fund’), which shall be administered by the Sec16 retary. The Fund shall be used for the accumulation of 

17 funds in order to finance on an actuarially sound basis 

18 liabilities of the Department of Commerce under military 

19 retirement and survivor benefit programs for the commis20 sioned officers corps. 

21 ‘‘(2) The term ‘military retirement and survivor ben22 efit program’ means—

23 ‘‘(A) the provisions of this title and title 10, 

24 United States Code, creating entitlement to, or de25 termining, the amount of retired pay; 
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•HR 3925 IH 

1 ‘‘(B) the programs under the jurisdiction of the 

2 Department of Defense providing annuities for sur3 vivors and members and former members of the 

4 Armed Forces, including chapter 73 of title 10, sec5 tion 4 of Public Law 92–425, and section 5 of Pub6 lic Law 96–202, as made applicable to the commis7 sioned officer corps by section 261. 

8 ‘‘(b) ASSETS OF THE FUND.—There shall be depos9 ited into the Fund the following, which shall constitute 

10 the assets of the Fund: 

11 ‘‘(1) Amounts paid into the Fund under sub12 section (e). 

13 ‘‘(2) Any return on investment of the assets of 

14 the Fund. 

15 ‘‘(3) Amounts transferred into the Fund pursu16 ant to section 405(c) of the Deficit Control Act of 

17 2004.

18 ‘‘(c) PAYMENTS FROM THE FUND.—There shall be 

19 paid from the Fund benefits payable on account of mili20 tary retirement and survivor benefit programs to commis21 sioned officers of the commissioned officer corps and their 

22 survivors. 

23 ‘‘(d) DETERMINATION OF CONTRIBUTIONS TO THE

24 FUND.—(1)(A) Not later than June 30, 2004, the Sec25 retary shall determine the unfunded liability of the Fund 
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1 attributable to service performed as of September 30, 

2 2004, which is ‘active service’ for the purpose of this title. 

3 The Secretary shall establish an amortization schedule, in4 cluding a series of annual installments commencing Octo5 ber 1, 2005, which provides for the liquidation of such 

6 liability by October 1, 2044. 

7 ‘‘(B) The Secretary shall redetermine the unfunded 

8 liability of the Fund as of the close of the fiscal year, for 

9 each fiscal year beginning after September 30, 2004, 

10 through the fiscal year ending September 30, 2039, and 

11 shall establish a new amortization schedule, including a 

12 series of annual installments commencing on September 

13 30 of the subsequent fiscal year, which provides for the 

14 liquidation of such liability by October 1, 2044. 

15 ‘‘(C) The Secretary shall redetermine the unfunded 

16 liability of the Fund as of the close of the fiscal year for 

17 each fiscal year beginning after September 30, 2039, and 

18 shall establish a new authorization schedule, including se19 ries of annual installments commencing on October 1 of 

20 the second subsequent fiscal year, which provides for the 

21 liquidation of such liability over 5 years. 

22 ‘‘(2) The Secretary shall determine each fiscal year, 

23 in sufficient time for inclusion in the budget request for 

24 the following fiscal year, the total amount of Department 

25 of Commerce contributions to be made to the Fund during
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1 that fiscal year under (e). The amount shall be the product 

2 of—

3 ‘‘(A) the current estimate of the value of the 

4 single level percentage of basic pay to be determined 

5 under subsection (e) at the time of the most recent 

6 actuarial valuation under paragraph (3); and 

7 ‘‘(B) the total amount of basic pay expected to 

8 be paid during that fiscal year to commissioned offi9 cers of NOAA on active duty. 

10 ‘‘(3) Not less often then every four years (or by the 

11 fiscal year end before the effective date of any statutory 

12 change affecting benefits payable on account of retire13 ment, disability, or death to commissioned officers or their 

14 survivors), the Secretary shall carry out an actuarial valu15 ation of benefits payable on account of military retirement 

16 and survivor benefit programs to commissioned officers of 

17 the Administration and to their survivors. Each such actu18 arial valuation shall be signed by an enrolled Actuary and 

19 shall include a determination (using the aggregate entry20 age normal cost method) of a single level percentage of 

21 basic pay for commissioned officers on active duty. 

22 ‘‘(4) All determinations under this section shall be in 

23 accordance with generally accepted actuarial principles 

24 and practices, and, where appropriate, shall follow the 

25 general pattern of methods and assumptions approved by 
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1 the Department of Defense Retirement Board of Actu2 aries. 

3 ‘‘(5) The Secretary shall provide for the keeping of 

4 such records as are necessary for determining the actu5 arial status of the Fund. 

6 ‘‘(e) PAYMENTS INTO THE FUND.—(1) From 

7 amounts appropriated to the National Oceanic Atmos8 pheric Administration for salaries and expenses, the Sec9 retary shall pay into the Fund at the end of each month 

10 the amount that is the product of—

11 ‘‘(A) the level percentage of basic pay deter12 mined using all the methods and assumptions ap13 proved for the most recent (as of the first day of the 

14 current fiscal year) actuarial valuation under sub15 section (d) (except that any statutory change affect16 ing benefits payable on account of military retire17 ment and survivor benefit programs to commissioned 

18 officers of the Administration and to their survivors 

19 that is effective date after the date of that valuation 

20 and on or before the first day of the current fiscal 

21 year shall be used in such determination); and 

22 ‘‘(B) the total amount of basic pay accrued for 

23 that month by commissioned officers on active duty. 

24 ‘‘(2)(A) At the beginning of each fiscal year, the Sec25 retary shall determine the sum of—
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1 ‘‘(i) the amount of the payment for that year 

2 under the amortization of the original unfunded li3 ability of the Fund; 

4 ‘‘(ii) the amount (including any negative 

5 amount) for that year under the most recent amorti6 zation schedule determined by the Secretary for the 

7 amortization of any cumulative actuarial gain or loss 

8 to the Fund, resulting from changes in benefits; and 

9 ‘‘(iii) the amount (including any negative 

10 amount) for that year under the most recent amorti11 zation schedule determined by the Secretary for the 

12 amortization or any cumulative actuarial gain or loss 

13 to the Fund resulting from changes in actuarial as14 sumptions and from experience different from the 

15 assumed since the last valuation. 

16 The Secretary shall promptly certify the amount of the 

17 sum to the Secretary of the Treasury. 

18 ‘‘(B) Upon receiving the certification pursuant to 

19 paragraph (1), the Secretary of the Treasury shall 

20 promptly pay into the Fund from the General Fund of 

21 the Treasury the amount so certified. Such payment shall 

22 be the contribution to the Fund for that fiscal year. 

23 ‘‘(f) INVESTMENT OF ASSETS OF THE FUND.—The 

24 Secretary may request the Secretary of the Treasury to 

25 invest such portion of the Fund as is not, in the judgment 
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1 of the Secretary, required to meet the current needs of 

2 the Fund. Such investments shall be made by the Sec3 retary of the Treasury in public debt securities with matu4 rities suitable to the needs of the Fund, as determined 

5 by the Secretary, and bearing interest at rates determined 

6 by the Secretary of the Treasury, taking into consideration 

7 current market yields on outstanding marketable obliga8 tions of the United States of comparable maturities. The 

9 income of such investments shall be credited to and form 

10 a part of the Fund. 

11 ‘‘(g) IMPLEMENTATION YEAR EXCEPTIONS.—(1) To 

12 avoid funding shortfalls in the first year should formal ac13 tuarial determinations not be available in time for budget 

14 preparation, the amounts used in the first year in sub15 section (e)(1)(A) shall be set equal to the estimate in sub16 section (d)(2)(A) if final determinations are not available. 

17 The original unfunded liability as determined in sub18 section (d)(1) shall include an adjustment to correct for 

19 this difference between the formal actuarial determina20 tions and the estimates in subsection (d)(2)(A).’’. 

21 (b) EXEMPTION FROM SEQUESTRATION.—Section 

22 255(g)(1)(B) of the Balanced Budget and Emergency 

23 Deficit Control Act of 1985 (2 U.S.C. 905(g)(1)(B)) is 

24 amended by striking ‘‘National Oceanic and Atmospheric 

25 Administration retirement (13–1450–0–1–306);’’ and in-
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1 serting ‘‘National Oceanic and Atmospheric Administra2 tion Commissioned Officer Corps Retirement Fund;’’. 

3 (c) TRANSFER OF APPROPRIATIONS.—There shall be 

4 transferred on October 1, 2006, into the fund established 

5 under section 246A(a) of the National Oceanic and At6 mospheric Administration Commissioned Officer Corps 

7 Act of 2002 (title II of Public Law 107–372, as added 

8 by subsection (a)), any obligated and unobligated balance 

9 of appropriations made to the Department of Commerce 

10 that are available as of the date of the enactment of this 

11 Act for benefits payable on account of military retirement 

12 and survivor benefit programs to commissioned officers of 

13 the NOAA Commissioned Officer Corps and to their sur14 vivors, and amounts so transferred shall be part of the 

15 assets of the Fund, effective October 1, 2006. 

16 (d) EFFECTIVE DATE.—Subsection (c) (relating to 

17 payments from the Fund) and (e) (relating to payments 

18 into the Fund) of section 246A of the National Oceanic 

19 and Atmospheric Administration Commissioned Officer 

20 Corps Act of 2002 (title II of Public Law 107–372, as 

21 added by subsection (a)), shall take effect on October 1, 

22 2006.

23 SEC. 406. COAST GUARD MILITARY RETIREMENT SYSTEM. 

24 (a) ACCRUAL FUNDING FOR COAST GUARD RETIRE25 MENT.—
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1 (1) IN GENERAL.—Chapter 11 of title 14, 

2 United States Code, is amended by adding at the 

3 end the following new subchapter: 

4 ‘‘SUBCHAPTER V—COAST GUARD MILITARY 

5 RETIREMENT FUND

6 ‘‘§ 441. Establishment and purpose of Fund; defini7 tions 

8 ‘‘(a) ESTABLISHMENT OF FUND; PURPOSE.—There 

9 is established on the books of the Treasury a fund to be 

10 known as the Coast Guard Military Retirement Fund 

11 (hereinafter in this subchapter referred to as the ‘Fund’), 

12 which shall be administered by the Secretary. The Fund 

13 shall be used for the accumulations of funds in order to 

14 finance on an actuarially sound basis liabilities of the 

15 Coast Guard under military retirement and survivor ben16 efit programs. 

17 ‘‘(b) MILITARY RETIREMENT AND SURVIVOR BEN18 EFIT PROGRAMS DEFINED.—In this subchapter, the term 

19 ‘military retirement and survivor benefit programs’ 

20 means—

21 ‘‘(1) the provisions of this title and title 10 cre22 ating entitlement to, or determining the amount of, 

23 retired pay; 

24 ‘‘(2) the programs providing annuities for sur25 vivors of members and former members of the 
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1 armed forces, including chapter 73 of title 10, sec2 tion 4 of Public Law 92–425, and section 5 of Pub3 lic Law 96–402; and 

4 ‘‘(3) the authority provided in section 1048(h) 

5 of title 10. 

6 ‘‘(c) SECRETARY DEFINED.—In this subchapter, the 

7 term ‘Secretary’ means the Secretary of Homeland Secu8 rity when the Coast Guard is not operating as a service 

9 in the Navy and the Secretary of Defense when the Coast 

10 Guard is operating as a service in the Navy. 

11 ‘‘§ 442. Assets of the Fund 

12 ‘‘There shall be deposited into the Fund the fol13 lowing, which shall constitute the assets of the Fund: 

14 ‘‘(1) Amounts paid into the Fund under section 

15 445 of this title. 

16 ‘‘(2) Any return on investment of the assets of 

17 the Fund. 

18 ‘‘(3) Amounts transferred into the Fund pursu19 ant to section 406(d) of the Deficit Control Act of 

20 2004. 

21 ‘‘§ 443. Payments from the Fund 

22 ‘‘(a) IN GENERAL.—There shall be paid from the 

23 Fund the following: 

24 ‘‘(1) Retired pay payable to persons on the re25 tired list of the Coast Guard. 
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1 ‘‘(2) Retired pay payable under chapter 1223 of 

2 title 10 to former members of the Coast Guard and 

3 the former United States Lighthouse Service. 

4 ‘‘(3) Benefits payable under programs that pro5 vide annuities for survivors of members and former 

6 members of the armed forces, including chapter 73 

7 of title 10, section 4 of Public Law 92–425, and sec8 tion 5 of Public Law 96–402. 

9 ‘‘(4) Amounts payable under section 1048(h) of 

10 title 10. 

11 ‘‘(b) AVAILABILITY OF ASSETS OF THE FUND.—The 

12 assets of the Fund are hereby made available for payments 

13 under subsection (a). 

14 ‘‘§ 444. Determination of contributions to the Fund 

15 ‘‘(a) INITIAL UNFUNDED LIABILITY.—(1) Not later 

16 than June 30, 2005, the Secretary shall determine the un17 funded liability of the Fund attributable to service per18 formed as of September 30, 2004, which is ‘active service’ 

19 for the purposes of section 212. The Secretary shall estab20 lish an amortization schedule, including a series of annual 

21 installments commencing October 1, 2005, which provides 

22 for the liquidation of such liability by October 1, 2044. 

23 ‘‘(2) The Secretary shall redetermine the unfunded 

24 liability of the Fund as of the close of the fiscal year, for 

25 each beginning after September 30, 2004, through the fis-
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1 cal year ending September 30, 2039, and shall establish 

2 a new amortization schedule, including a series of annual 

3 installments commencing on October 1 of the second sub4 sequent fiscal year, which provides for the liquidation of 

5 such liability by October 1, 2044. 

6 ‘‘(3) The Secretary shall redetermine the unfunded 

7 liability of the Fund as of the close of the fiscal year for 

8 each fiscal year beginning after September 30, 2039, and 

9 shall establish a new amortization schedule, including a 

10 series of annual installments commencing on October 1 

11 of the second subsequent fiscal year, which provides for 

12 the liquidation of such liability over five years. 

13 ‘‘(b) ANNUAL CONTRIBUTIONS FOR CURRENT SERV14 ICES.—(1) The Secretary shall determine each fiscal year, 

15 in sufficient time for inclusion in the budget request for 

16 the following fiscal year, the total amount of Department 

17 of Homeland Security, or Department of Defense, con18 tributions to be made to the Fund during that fiscal year 

19 under section 445(a) of this title. That amount shall be 

20 the sum of the following: 

21 ‘‘(A) The product of—

22 ‘‘(i) the current estimate of the value of 

23 the single level percentage of basic pay to be de24 termined under subsection (c)(1)(A) at the time 
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1 of the most recent actuarial valuation under 

2 subsection (c); and 

3 ‘‘(ii) the total amount of basic pay ex4 pected to be paid during that fiscal year to 

5 members of the Coast Guard on active duty 

6 (other than active duty for training). 

7 ‘‘(B) The product of—

8 ‘‘(i) the current estimate of the value of 

9 the single level percentage of basic pay and of 

10 compensation (paid pursuant to section 206 of 

11 title 37) to be determined under subsection 

12 (c)(1)(B) at the time of the most recent actu13 arial valuation under subsection (c); and 

14 ‘‘(ii) the total amount of basic pay and 

15 compensation (paid pursuant to section 206 of 

16 title 37) expected to be paid during that fiscal 

17 year to members of the Coast Guard Ready Re18 serve (other than members on full-time Reserve 

19 duty other than for training) who are not other20 wise described in subparagraph (A)(ii). 

21 ‘‘(2) The amount determined under paragraph (1) for 

22 any fiscal year is the amount needed to be appropriated 

23 to the Department of Homeland Security for that fiscal 

24 year for payments to be made to the Fund during that 

25 year under section 445(a) of this title. The President shall
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1 include not less than the full amount so determined in the 

2 budget transmitted to Congress for that fiscal year under 

3 section 1105 of title 31. The President may comment and 

4 make recommendations concerning any such amount. 

5 ‘‘(c) PERIODIC ACTUARIAL VALUATIONS.—(1) Not 

6 less often than every four years (or before the effective 

7 date of any statutory change affecting benefits payable on 

8 account of retirement, disability, or death to members of 

9 the Coast Guard or their survivors), the Secretary shall 

10 carry out an actuarial valuation of the Coast Guard mili11 tary retirement and survivor benefit programs. Each actu12 arial valuation of such programs shall be signed by an en13 rolled actuary and shall include—

14 ‘‘(A) a determination (using the aggregate 

15 entry-age normal cost method) of a single level per16 centage of basic pay for members of the Coast 

17 Guard on active duty (other than active duty for 

18 training); and 

19 ‘‘(B) a determination (using the aggregate 

20 entry-age normal cost method) of single level per21 centage of basic pay and of compensation (paid pur22 suant to section 206 of title 37) for members of the 

23 Ready Reserve of the Coast Guard (other than mem24 bers on full-time Reserve duty other than for train-
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1 ing) who are not otherwise described in subpara2 graph (A). 

3 ‘‘(2) Such single level percentages shall be used for 

4 the purposes of subsection (b) and section 445(a) of this 

5 title. 

6 ‘‘(d) USE OF GENERALLY ACCEPTED ACTUARIAL

7 PRINCIPLES AND PRACTICES.—All determinations under 

8 this section shall be in accordance with generally accepted 

9 actuarial principles and practices and, where appropriate, 

10 shall follow the general pattern of methods and assump11 tions approved by the Department of Defense Retirement 

12 Board of Actuaries. 

13 ‘‘(e) RECORDS.—The Secretary shall provide for the 

14 keeping of such records as are necessary for determining 

15 the actuarial status of the Fund. 

16 ‘‘§ 445. Payments into the Fund 

17 ‘‘(a) MONTHLY ACCRUAL CHARGE FOR CURRENT

18 SERVICES.—From amounts appropriated to the Coast 

19 Guard for salaries and expenses, the Secretary shall pay 

20 into the Fund at the end of each month as the Department 

21 of Homeland Security, or Department of Defense, con22 tribution to the Fund for that month the amount that is 

23 the sum of the following:

24 ‘‘(1) The product of—
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1 ‘‘(A) the level percentage of basic pay de2 termined using all the methods and assump3 tions approved for the most recent (as of the 

4 first day of the current fiscal year) actuarial 

5 valuation under section 444(c)(1)(A) of this 

6 title (except that any statutory change in the 

7 military retirement and survivor benefit systems 

8 that is effective after the date of that valuation 

9 and on or before the first day of the current fis10 cal year shall be used in such determination); 

11 and 

12 ‘‘(B) the total amount of basic pay accrued 

13 for that month by members of the Coast Guard 

14 on active duty (other than active duty for train15 ing). 

16 ‘‘(2) The product of—

17 ‘‘(A) the level percentage of basic pay and 

18 compensation (accrued pursuant to section 206 

19 of title 37) determined using all the methods 

20 and assumptions approved for the most recent 

21 (as of the first day of the current fiscal year) 

22 actuarial valuation under section 444(c)(1)(B) 

23 of this title (except that any statutory change 

24 in the military retirement and survivor benefit 

25 systems that is effective after the date of that 
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1 valuation and on or before the first day of the 

2 current fiscal year shall be used in such deter3 mination); and 

4 ‘‘(B) the total amount of basic pay and of 

5 compensation (paid pursuant to section 206 of 

6 title 37) accrued for that month by members of 

7 the Ready Reserve (other than members of full8 time Reserve duty other than for training) who 

9 are not otherwise described in paragraph 

10 (1)(B). 

11 ‘‘(b) ANNUAL PAYMENT FOR UNFUNDED LIABIL12 ITIES.—(1) At the beginning of each fiscal year, beginning 

13 on October 1, 2005, the Secretary shall certify to the Sec14 retary of the Treasury the amount of the first installment 

15 under the most recent amortization schedule established 

16 under section 254(a). The Secretary of the Treasury shall 

17 promptly pay into the Fund from the General Fund of 

18 the Treasury the amount so certified. Such payment shall 

19 be the contribution to the Fund for that fiscal year. 

20 ‘‘§ 446. Investment of assets of the Fund 

21 ‘‘The Secretary may request the Secretary of the 

22 Treasury to invest such portion of the Fund as is not, 

23 in the judgment of the Secretary, required to meet the 

24 current needs of the Fund. Such investments shall be 

25 made by the Secretary of the Treasury in public debt secu-
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1 rities with maturities suitable to the needs of the Fund, 

2 as determined by the Secretary, and bearing interest at 

3 rates determined by the Secretary of the Treasury, taking 

4 into consideration current market yields on outstanding 

5 marketable obligations of the United States of comparable 

6 maturities. The income on such investments shall be cred7 ited to and form a part of the Fund.’’. 

8 (2) TECHNICAL AMENDMENTS.—Such chapter 

9 is further amended—

10 (A) by amending the center heading after 

11 the table of sections to read as follows: 

12 ‘‘SUBCHAPTER I—OFFICERS’’; 

13 (B) by amending the center heading after 

14 section 336 to read as follows: 

15 ‘‘SUBCHAPTER II—ENLISTED MEMBERS’’; 

16 (C) by amending the center heading after 

17 section 373 to read as follows: 

18 ‘‘SUBCHAPTER III—GENERAL PROVISIONS’’; 

19 and 

20 (D) by amending the center heading after 

21 section 425 to read as follows: 

22 ‘‘SUBCHAPTER IV—SPECIAL PROVISIONS’’. 

23 (3) CLERICAL AMENDMENTS.—The table of sec24 tions at the beginning of such chapter is amended—
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1 (A) by striking ‘‘OFFICERS’’ at the begin2 ning of the table and inserting ‘‘SUBCHAPTER

3 I—OFFICERS’’; 

4 (B) by striking ‘‘ENLISTED MEMBERS’’ 

5 after the item relating to section 336 and in6 serting ‘‘SUBCHAPTER II—ENLISTED MEM7 BERS’’; 

8 (C) by striking ‘‘GENERAL PROVISIONS’’ 

9 after the item relating to section 373 and in10 serting ‘‘SUBCHAPTER III—GENERAL PROVI11 SIONS’’; 

12 (D) by striking ‘‘SPECIAL PROVISIONS’’ 

13 after the item relating to section 425 and in14 serting ‘‘SUBCHAPTER IV—SPECIAL PROVI15 SIONS’’; and 

16 (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.’’.

17 (b) IMPLEMENTATION YEAR EXCEPTIONS.—To avoid 

18 funding shortfalls in the first year of implementation of 

19 subchapter V of chapter 11 of title 14, United States 

20 Code, as added by subsection (a), if formal actuarial deter21 minations are not available in time for budget preparation, 

22 the amounts used in the first year under sections 
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1 445(a)(1)(A) and 445(a)(2)(A) of such title shall be set 

2 equal to those estimates in sections 444(b)(1)(A)(i) and 

3 444(b)(1)(B)(i), respectively, of such title if final deter4 minations are not available. The original unfunded liabil5 ity, as defined in section 444(a) of such title, shall include 

6 an adjustment to correct for this difference between the 

7 formal actuarial determinations and the estimates in sec8 tions 444(b)(1)(A)(i) and 444(b)(1)(B)(i) of such title.

9 (c) CONFORMING AMENDMENT.—Subparagraph (B) 

10 of section 255(g)(1) of the Balanced Budget and Emer11 gency Deficit Control Act of 1985 (2 U.S.C. 905(g)(1)) 

12 is amended by striking ‘‘Retired Pay, Coast Guard (69–

13 0241–0–1–403)’’ and inserting ‘‘Coast Guard Military Re14 tirement Fund (69–0241–01–403)’’. 

15 (d) TRANSFER OF EXISTING BALANCES.—

16 (1) TRANSFER.—There shall be transferred into 

17 the Fund on October 1, 2005, any obligated and un18 obligated balances of appropriations made to the De19 partment of Homeland Security that are currently 

20 available for retired pay, and amounts so transferred 

21 shall be part of the assets of the Fund. 

22 (2) FUND DEFINED.—For purposes of para23 graph (1), the term ‘‘Fund’’ means the Coast Guard 

24 Military Retirement Fund established under section 
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1 441 of title 14, United States Code, as added by 

2 subsection (a). 

3 (e) EFFECTIVE DATE.—Sections 443 (relating to 

4 payments from the Fund) and 445 (relating to payments 

5 into the Fund) of title 14, United States Code, as added 

6 by subsection (a), shall take effect on October 1, 2005. 

7 Subtitle B—Accrual Funding of 

8 Post-Retirement Health Benefits 

9 Costs for Federal Employees 

10 SEC. 411. FEDERAL EMPLOYEES HEALTH BENEFITS FUND. 

11 (a) Section 8906 of title 5, United States Code, is 

12 amended—

13 (1) by redesignating subsection (c) as sub14 section (c)(1) and by adding at the end the following 

15 new paragraphs:

16 ‘‘(2) In addition to Government contributions re17 quired by subsection (b) and paragraph (1), each employ18 ing agency shall contribute amounts as determined by the 

19 Office to be necessary to prefund the accruing actuarial 

20 cost of post-retirement health benefits for each of the 

21 agency’s current employees who are eligible for Govern22 ment contributions under this section. Amounts under this 

23 paragraph shall be paid by the employing agency separate 

24 from other contributions under this section, from the ap-
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1 propriations or fund used for payment of the salary of the 

2 employee, on a schedule to be determined by the Office. 

3 ‘‘(3) Paragraph (2) shall not apply to the United 

4 States Postal Service or the government of the District 

5 of Columbia.’’; and 

6 (2) by amending subsection (g)(1) to read as 

7 follows: 

8 ‘‘(g)(1) Except as provided in paragraphs (2) and 

9 (3), all Government contributions authorized by this sec10 tion for health benefits for an annuitant shall be paid from 

11 the Employees Health Benefits Fund to the extent that 

12 funds are available in accordance with section 8909(h)(6) 

13 and, if necessary, from annual appropriations which are 

14 authorized to be made for that purpose and which may 

15 be made available until expended.’’. 

16 (b) Section 8909 of title 5, United States Code, is 

17 amended by adding at the end the following new sub18 section: 

19 ‘‘(h)(1) Not later than June 30, 2006, the Office 

20 shall determine the existing liability of the Fund for post21 retirement health benefits, excluding the liability of the 

22 United States Postal Service for service under section 

23 8906(g)(2), under this chapter as of September 30, 2006. 

24 The Office shall establish an amortization schedule, in25 cluding a series of annual installments commencing Sep-
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1 tember 30, 2006, which provides for the liquidation of 

2 such liability by September 30, 2043. 

3 ‘‘(2) At the close of each fiscal year, for fiscal years 

4 beginning after September 30, 2005, the Office shall de5 termine the supplemental liability of the Fund for post6 retirement health benefits, excluding the liability attrib7 utable to the United States Postal Service for service sub8 ject to section 8906(g)(2), and shall establish an amortiza9 tion schedule, including a series of annual installments 

10 commencing on September 30 of the subsequent fiscal 

11 year, which provides for liquidation of such supplemental 

12 liability over 30 years. 

13 ‘‘(3) Amortization schedules established under this 

14 paragraph shall be set in accordance with generally accept15 ed actuarial practices and principles. 

16 ‘‘(4) At the end of each fiscal year on and after Sep17 tember 30, 2006, the Office shall notify the Secretary of 

18 the Treasury of the amounts of the next installments 

19 under the most recent amortization schedules established 

20 under paragraphs (1) and (2). Before closing the accounts 

21 for the fiscal year, the Secretary shall credit the sum of 

22 these amounts (including in that sum any negative 

23 amount for the amortization of the supplemental liability) 

24 to the Fund, as a Government contribution, out of any
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1 money in the Treasury of the United States not otherwise 

2 appropriated. 

3 ‘‘(5) For the purpose of carrying out paragraphs (1) 

4 and (2), the Office shall perform or arrange for actuarial 

5 determinations and valuations and shall prescribe reten6 tion of such records as it considers necessary for making 

7 periodic actuarial valuations of the Fund. 

8 ‘‘(6) Notwithstanding subsection (b), the amounts de9 posited into the Fund pursuant to this subsection and sec10 tion 8906(c)(2) to prefund post-retirement health benefits 

11 costs shall be segregated within the Fund so that such 

12 amounts, as well as earnings and proceeds under sub13 section (c) attributable to them, may be used exclusively 

14 for the purpose of paying Government contributions for 

15 post-retirement health benefits costs. When such amounts 

16 are used in combination with amounts withheld from an17 nuitants to pay for health benefits, a portion of the con18 tributions shall then be set aside in the Fund as described 

19 in subsection (b). 

20 ‘‘(7) Under this subsection, ‘supplemental liability’ 

21 means—

22 ‘‘(A) the actuarial present value for future post23 retirement health benefits that are the liability of 

24 the Fund, less 

25 ‘‘(B) the sum of—
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1 ‘‘(i) the actuarial present value of all fu2 ture contributions by agencies and annuitants 

3 to the Fund toward those benefits pursuant to 

4 section 8906; 

5 ‘‘(ii) the present value of all scheduled am6 ortization payments to the Fund pursuant to 

7 paragraphs (1) and (2); 

8 ‘‘(iii) the Fund balance as of the date the 

9 supplemental liability is determined, to the ex10 tent that such balance is attributable to post-re11 tirement benefits; and 

12 ‘‘(iv) any other appropriate amount, as de13 termined by the Office in accordance with gen14 erally accepted actuarial practices and prin15 ciples.’’.

16 SEC. 412. FUNDING UNIFORMED SERVICES HEALTH BENE17 FITS FOR ALL RETIREES. 

18 Title 10, United States Code, is amended—

19 (1) in the title of chapter 56, by striking ‘‘DE20 PARTMENT OF DEFENSE MEDICARE21 ELIGIBLE’’ and inserting ‘‘UNIFORMED 

22 SERVICES’’; 

23 (2) in section 1111—

24 (A) in subsection (a)—
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1 (i) by striking ‘‘Department of De2 fense Medicare-Eligible’’ and inserting 

3 ‘‘Uniformed Services’’; 

4 (ii) by striking ‘‘Department of De5 fense under’’; and 

6 (iii) by striking ‘‘for medicare-eligible 

7 beneficiaries’’; 

8 (B) in subsection (c)—

9 (i) by striking ‘‘The Secretary of De10 fense may’’ and inserting ‘‘The Secretary 

11 of Defense shall’’; 

12 (ii) by striking ‘‘with any other’’ and 

13 inserting ‘‘with each’’;

14 (iii) by striking ‘‘Any such agree15 ment’’ and inserting ‘‘Such agreements’’; 

16 and 

17 (iv) by striking ‘‘administering Sec18 retary may’’ and inserting ‘‘administrative 

19 Secretary shall’’; 

20 (3) in section 1113—

21 (A) in subsection (a)—

22 (i) by striking ‘‘and are medicare eli23 gible’’; 

24 (ii) by striking ‘‘who are medicare eli25 gible’’; and 
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1 (iii) by adding at the end the fol2 lowing new sentence: ‘‘For the fiscal year 

3 starting October 1, 2004, only, the pay4 ments will be solely for the costs of mem5 bers or former members of a uniformed 

6 service who are entitled to retired or re7 tainer pay and are medicare-eligible, and 

8 eligible dependents or survivors who are 

9 medicare-eligible.’’; 

10 (B) in subsection (c)(1), by striking ‘‘who 

11 are medicare-eligible’’; 

12 (C) in subsection (d), by striking ‘‘who are 

13 medicare-eligible’’; and 

14 (D) in subsection (f), by striking ‘‘If’’ and 

15 inserting ‘‘When’’; 

16 (4) in section 1114, in subsection (a)(1), by 

17 striking ‘‘Department of Defense Medicare-Eligible’’ 

18 and inserting ‘‘Uniformed Services’’; 

19 (5) in section 1115—

20 (A) in subsection (b)(2), by striking ‘‘The 

21 amount determined under paragraph (1) for 

22 any fiscal year is the amount needed to be ap23 propriated to the Department of Defense (or to 

24 the other executive department having jurisdic25 tion over the participating uniformed service)’’ 
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1 and inserting ‘‘The amount determined under 

2 paragraph (1), or the amount determined under 

3 section 1111(c) for a participating uniformed 

4 service, for any fiscal year, is the amount need5 ed to be appropriated to the Department of De6 fense (or to any other executive department 

7 having jurisdiction over a participating uni8 formed service)’’; 

9 (B) in subsection (c)(2), by striking ‘‘for 

10 medicare eligible beneficiaries’’; and 

11 (C) by adding at the end the following new 

12 subsection: 

13 ‘‘(f) For the fiscal year starting October 1, 2004, 

14 only, the amounts in this section shall be based solely on 

15 the costs of medicare-eligible benefits of beneficiaries and 

16 the costs for their eligible dependents or survivors who are 

17 medicare-eligible, and shall be recalculated thereafter to 

18 reflect the cost of beneficiaries defined in section 1111.’’; 

19 and 

20 (6) in section 1116—

21 (A) in subsection (a)(1)(A), by striking 

22 ‘‘for medicare-eligible beneficiaries’’; 

23 (B) in subsection (a)(2)(A), by striking 

24 ‘‘for medicare-eligible beneficiaries’’; and
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1 (C) in subsection (c), by striking ‘‘sub2 section (a) shall be paid from funds available 

3 for the health care programs’’ and inserting 

4 ‘‘subsection (a) and section 1111(c) shall be 

5 paid from funds available for the pay of mem6 bers of the participating uniformed services 

7 under the jurisdiction of the respective admin8 istering secretaries’’. 

9 SEC. 413. EFFECTIVE DATE. 

10 Except as otherwise provided, this title shall take ef11 fect upon enactment with respect to fiscal years beginning 

12 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.’’.

13 Subtitle C—Limit on the Public 

14 Debt 

15 SEC. 421. LIMIT ON PUBLIC DEBT. 

16 Section 3101 of title 31, United States Code, is 

17 amended to read as follows: 

18 ‘‘§ 3101. Public debt limit 

19 ‘‘(a) In this section, the current redemption value of 

20 an obligation issued on a discount basis and redeemable 

21 before maturity at the option of its holder is deemed to 

22 be the face amount of the obligation. 
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1 ‘‘(b) The face amount of obligations issued under this 

2 chapter and the face amount of obligations whose prin3 cipal and interest are guaranteed by the United States 

4 Government (except guaranteed obligations held by the 

5 Secretary of the Treasury and intragovernmental hold6 ings) may not be more than $4,393,000,000,000 out7 standing at one time, subject to changes periodically made 

8 in that amount as provided by law. 

9 ‘‘(c) For purposes of this section, the face amount, 

10 for any month, of any obligation issued on a discount basis 

11 that is not redeemable before maturity at the option of 

12 the holder of the obligation is an amount equal to the sum 

13 of—

14 ‘‘(1) the original issue price of the obligation, 

15 plus

16 ‘‘(2) the portion of the discount on the obliga17 tion attributable to periods before the beginning of 

18 such month (as determined under the principles of 

19 section 1272(a) of the Internal Revenue Code of 

20 1986 without regard to any exceptions contained in 

21 paragraph (2) of such section). 

22 ‘‘(d) For purposes of this section, the term 

23 ‘intragovernment holding’ is any obligation issued by the 

24 Secretary of the Treasury to any Federal trust fund or 

25 Government account, whether in respect of public money, 
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1 money otherwise required to be deposited in the Treasury, 

2 or amounts appropriated.’’. 

3 TITLE V—EXPEDITING THE 

4 BUDGET PROCESS 

5 Subtitle A—Further Enforcement 

6 Amendments 

7 SEC. 501. SUPER-MAJORITY POINTS OF ORDER. 

8 (a) Section 904 of the Congressional Budget Act of 

9 1974 is amended as follows: 

10 (1) In subsection 904(c)(1), insert ‘‘312(g), (h), 

11 (i), and (j),’’ before ‘‘313,’’, and insert ‘‘316, 318,’’ 

12 before ‘‘904(c),’’. 

13 (2) In subsection (c) strike ‘‘three-fifths’’ each 

14 place it appears and insert ‘‘two-thirds’’. 

15 (3)(A) In subsection (d)(2), insert ‘‘312(g), (h), 

16 (i), and (j),’’ before ‘‘313,’’, and insert ‘‘316, 318,’’ 

17 before ‘‘904(c),’’. 

18 (B) In subsection (d), strike ‘‘three-fifths’’ each 

19 place it appears and insert ‘‘two-thirds’’. 

20 (4)(A) In subsections (c)(2) and (d)(3), strike 

21 ‘‘311(a),’’. 

22 (B) In subsections (c)(1) and (d)(2) insert 

23 ‘‘311(a),’’ after ‘‘310(d)(2),’’. 

24 (5) In subsection (e), strike ‘‘2002’’ and insert 

25 ‘‘2010’’.
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1 SEC. 502. BUDGET RESOLUTION ENFORCEMENT POINT OF 

2 ORDER. 

3 (a) ENTITLEMENT POINT OF ORDER.—Section 312 

4 of the Congressional Budget Act of 1974 is amended by 

5 adding at the end the following new subsection: 

6 ‘‘(i) BUDGET RESOLUTION ENFORCEMENT POINT OF

7 ORDER.—It shall not be in order in the House of Rep8 resentatives or the Senate to consider any joint resolution 

9 on the budget for a fiscal year, or amendment thereto or 

10 conference report thereon, that—

11 ‘‘(1) is not consistent with the discretionary 

12 spending limits set forth in section 251(b) of the 

13 Balanced Budget and Emergency Deficit Control 

14 Act of 1985; or 

15 ‘‘(2) provides for an increase in the aggregate 

16 level of direct spending for the fiscal year of the res17 olution or any ensuing fiscal year included in such 

18 resolution.’’. 

19 SEC. 503. POINT OF ORDER WAIVER PROTECTION. 

20 Clause 6(c) of rule XIII of the Rules of the House 

21 of Representatives is amended by striking the period at 

22 the end of subparagraph (2) and inserting ‘‘; or’’ and by 

23 adding at the end the following new subparagraph: 

24 ‘‘(3) a rule or order that would waive the provi25 sions of any section of the Congressional Budget Act 
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1 of 1974 referred to in section 904(c)(1) of such 

2 Act.’’. 

3 Subtitle B—PAYGO Extension 

4 SEC. 511. PAYGO EXTENSION. 

5 (a) EFFECTIVE DATES.—Section 275(b) of the Bal6 anced Budget and Emergency Deficit Control Act of 1985 

7 is amended by striking ‘‘2002’’ and inserting ‘‘2014’’ and 

8 by striking ‘‘2006’’ and inserting ‘‘2018’’. 

9 (b) PAYGO SEQUESTRATION.—Subsections (a) and 

10 (b)(1) of section 252 of the Balanced Budget and Emer11 gency Deficit Control Act of 1985 are amended by striking 

12 ‘‘2002’’ and inserting ‘‘2014’’. 

13 (c) DEFINITION OF RECEIPTS LEGISLATION.—Sec14 tion 252 of the Balanced Budget and Emergency Deficit 

15 Control Act of 1985 is amended by adding at the end the 

16 following new subsection: 

17 ‘‘(f) DEFINITION.—As used in this section, the term 

18 ‘receipts legislation’ does not include any provision of a 

19 bill or joint resolution amending the Internal Revenue 

20 Code of 1986 that increases the deficit, if the amount of 

21 increase in the deficit (when added to the increase or de22 crease in the deficit caused by the enactment of other bills 

23 or joint resolutions amending the Internal Revenue Code 

24 of 1986 enacted since the enactment of the most recent 

25 joint resolution on the budget) does not exceed for any 
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1 fiscal year covered by such joint resolution on the budget 

2 the amount by which the aggregate level of Federal reve3 nues should be decreased under such joint resolution on 

4 the budget.’’.

Æ