1812
HR 2491 EH
subclause are 12.5 percent of the
amount the obligations entered into
under each such program.
‘‘(2) AGREEMENT.—The submission of an ap-
plication by a State under section 4 is deemed to
constitute the State’s acceptance of the obligation al-
lotment limitations under this section (including the
formula for computing the amount of such obligation
allotment).
‘‘(3) TERMINATION OF PROGRAMS; LIMITATION
ON NEW OBLIGATION AUTHORITY.—
‘‘(A) ELIMINATION OF INDIVIDUAL ENTI-
TLEMENT.—Effective on the date of the enact-
ment of the Personal Responsibility Act of
1995—
‘‘(i) except as provided in subpara-
graph (B), the Federal Government has no
obligation to provide payment with respect
to items and services provided under this
Act (as in effect on and after the date of
the enactment of the Personal Responsibil-
ity Act of 1995); and
‘‘(ii) this Act (as in effect on and
after the date of the enactment of the Per-
sonal Responsibility Act of 1995) shall not
1813
HR 2491 EH
be construed as providing for an entitle-
ment, under Federal law in relation to the
Federal Government, in an individual or
person at the time of provision or receipt
of services.
‘‘(B) LIMITATION
ON
OBLIGATION
AU-
THORITY.—Notwithstanding any other provision
of this Act, the Secretary is authorized to enter
into obligations with any State under this Act
for expenses incurred after the date of the en-
actment of the Personal Responsibility Act and
during fiscal year 1996, but not in excess of the
obligation allotment for that State for fiscal
year 1996, as determined under subsection (a).
TITLE XIX—CONTRACT WITH
AMERICA-TAX RELIEF
SEC. 19001. ENACTMENT OF CONTRACT WITH AMERICA TAX
RELIEF ACT OF 1995.
(a) IN GENERAL.—Title VI of H.R. 1215 of the
104th Congress, as passed by the House of Representa-
tives, is hereby enacted with the following modifications
to such title:
(1) Strike subtitle E (relating to social security
earnings test) and redesignate subtitles F and G as
subtitles E and F, respectively.
1814
HR 2491 EH
(2) Strike subsections (c)(2) and (d)(2) of sec-
tion 6201.
(3) Strike the amendment contained in para-
graph (2) of section 6301(d) and insert the follow-
ing: ‘‘Subsection (h) of section 1 is amended by add-
ing at the end the following new sentence: ‘For pur-
poses of this subsection, taxable income shall be
computed without regard to the deduction allowed
by section 1202.’ ’’
(4) Strike section 6321 (relating to depreciation
adjustment for certain property placed in service
after December 31, 1994).
(5) Strike part III of subtitle C (relating to al-
ternative minimum tax relief).
(6) Strike subtitle F (as redesignated by para-
graph (1)) and insert the following:
‘‘Subtitle F—Tax Reduction
Contingent on Deficit Reduction
‘‘SEC. 6701. TAX REDUCTION CONTINGENT ON DEFICIT RE-
DUCTION.
‘‘This title, which is contained within the Act that—
‘‘(1) carries out the concurrent resolution on
the budget for fiscal year 1996 that provides that
the budget of the United States will be in balance
by fiscal year 2002; and
1815
HR 2491 EH
‘‘(2) achieves a level of deficit reduction pursu-
ant to the reconciliation instructions of that concur-
rent resolution that will result in a budget of the
United States that will be in balance by fiscal year
2002; and
‘‘(B) is certified pursuant to the requirements
set forth in section 210 of that concurrent resolu-
tion,
shall take effect as so provided by its effective date provi-
sions.
‘‘SEC. 6702. MONITORING.
‘‘The Committees on the Budget of the House of
Representatives and the Senate shall each monitor
progress on achieving a balanced budget consistent with
the most recently agreed to concurrent resolution on the
budget for fiscal year 1996 or any subsequent fiscal year
(and the reconciliation Act for that resolution) or the most
recently agreed to concurrent resolution on the budget
that would achieve a balanced budget by fiscal year 2002
(and the reconciliation Act for that resolution). After con-
sultation with the Director of the Congressional Budget
Office, each such committee shall submit a report of its
findings to its House and the President on or before De-
cember 15, 1995, and annually thereafter. Each such re-
port shall contain the following:
1816
HR 2491 EH
‘‘(1) Estimates of the deficit levels (based on
legislation enacted through the date of the report)
for each fiscal year through fiscal year 2002.
‘‘(2) An analysis of the variance (if any) be-
tween those estimated deficit levels and the levels set
forth in the concurrent resolution on the budget for
fiscal year 1996 or the most recently agreed to con-
current resolution on the budget that would achieve
a balanced budget by fiscal year 2002.
‘‘(3) Policy options to achieve the additional
levels of deficit reduction necessary to balance the
budget of the United States by fiscal year 2002.
‘‘SEC. 6703. CONGRESSIONAL ACTION.
‘‘Each House of Congress shall incorporate the policy
options included in the report of its Committee on the
Budget under section 6702(a)(3) (or other policy options)
in developing a concurrent resolution on the budget for
any fiscal year that achieves the additional levels of deficit
reduction necessary to balance the budget of the United
States by fiscal year 2002.
‘‘SEC. 6704. PRESIDENTIAL ACTION.
‘‘If the President submits a budget under section
1105(a) of title 31, United States Code, that does not pro-
vide for a balanced budget for the United States by fiscal
year 2002, then the President shall include with that sub-
1817
HR 2491 EH
mission a complete budget that balances the budget by
that fiscal year.’’
(7) Conform the table of contents accordingly.
(b) TECHNICAL CORRECTION.—Effective with re-
spect to taxable years ending after December 31, 1994,
paragraph (1) of section 1201(b) of the Internal Revenue
Code of 1986, as added by such title VI, is amended to
read as follows:
‘‘(1) IN GENERAL.—In the case of any taxable
year ending after December 31, 1994, and beginning
before January 1, 1996, in applying subsection (a),
net capital gain for such taxable year shall not ex-
ceed such net capital gain determined by taking into
account only gain or loss properly taken into account
for the portion of the taxable year after December
31, 1994.’’
SEC. 19002. COMPLIANCE WITH CONCURRENT RESOLUTION
ON THE BUDGET.
(a) IN GENERAL.—For purposes of the Internal Rev-
enue Code of 1986, the taxpayer’s net modified chapter
1 liability for any taxable year shall be such liability deter-
mined without regard to this section—
(1) increased by 27 percent of the excess (if
any) of—
1818
HR 2491 EH
(A) the amount which would be the tax-
payer’s net modified chapter 1 liability for such
year if such liability were determined without
regard to the amendments made by subtitles A,
B, C, and D of title VI of H.R. 1215 of the
104th Congress, as passed by the House of
Representatives, over
(B) the taxpayer’s net modified chapter 1
liability for such year determined without re-
gard to this section, or
(2) reduced by 27 percent of the excess (if any)
of the amount described in paragraph (1)(B) over
the liability described in paragraph (1)(A).
(b) NET MODIFIED CHAPTER 1 LIABILITY.—For
purposes of subsection (a), the term ‘‘net modified chapter
1 liability’’ means the liability for tax under chapter 1 of
the Internal Revenue Code of 1986 determined—
(1) without regard to sections 1201 and 1202
of such Code, as amended by such title VI,
(2) without regard to the amendments made by
sections 6103 and 6104 of such title VI,
(3) after the application of any credit against
such tax other than the credits under sections 31,
33, and 34 of such Code, and
1819
HR 2491 EH
(4) before crediting any payment of estimated
tax for the taxable year.
(c) CAPITAL GAINS.—
(1) CAPITAL
GAINS
DEDUCTION
FOR
TAX-
PAYERS
OTHER
THAN
CORPORATIONS.—For pur-
poses of applying section 1202 of the Internal Reve-
nue Code of 1986, as added by such title VI—
(A) in the case of taxable years ending be-
fore January 1, 1996, ‘‘42.5 percent’’ shall be
substituted for ‘‘50 percent’’ in subsection (a)
thereof, and
(B) in the case of taxable years ending
after December 31, 1995, ‘‘34.5 percent’’ shall
be substituted for ‘‘50 percent’’ in subsection
(a) thereof.
(2) ALTERNATIVE
CAPITAL
GAINS
TAX
FOR
CORPORATIONS.—
(A) For purposes of applying section 1201
of such Code, as amended by such title VI—
(i) in the case of taxable years ending
before January 1, 1996, ‘‘26.5 percent’’
shall be substituted for ‘‘25 percent’’ in
subsection (a)(2) thereof, and
(ii) in the case of taxable years ending
after December 31, 1995, ‘‘31.9 percent’’
1820
HR 2491 EH
shall be substituted for ‘‘25 percent’’ in
subsection (a)(2) thereof.
(B) For purposes of applying section
852(b)(3)(D)(iii) of such Code, as amended by
such title VI—
(i) in the case of taxable years ending
before January 1, 1996, ‘‘73.5 percent’’
shall be substituted for ‘‘75 percent’’ in
subsection (a)(2) thereof, and
(ii) in the case of taxable years ending
after December 31, 1995, ‘‘68.1 percent’’
shall be substituted for ‘‘75 percent’’ in
subsection (a)(2) thereof.
(3) INDEXING.—For purposes of applying sec-
tion 1022 of such Code, as added by such title VI,
only 69 percent of the applicable inflation adjust-
ment under subsection (c)(2) of such section 1022
shall be taken into account.
(4) CONFORMING
CHANGES.—Proper adjust-
ments shall be made to the percentages and frac-
tions in the following provisions to reflect the per-
centages in paragraphs (1) and (2):
(A) 
Sections 
170(c), 
1445(e), 
and
7518(g)(6)(A) of such Code.
1821
HR 2491 EH
(B) Section 607(h)(6)(A) of the Merchant
Marine Act, 1936.
(d) AMERICAN DREAM SAVINGS ACCOUNTS.—For
purposes of applying section 408A of such Code, as added
by such title VI—
(1) only 69 percent of the income on the assets
held in an American Dream Savings Account (which
would otherwise be includible in gross income) shall
be excludible from gross income,
(2) only 69 percent of any distribution attrib-
utable to amounts not previously included in gross
income shall be entitled to the treatment described
in subsection (d)(1) of such section 408A, and
(3) only 69 percent of any payment or distribu-
tion referred to in subsection (d)(3)(B) of such sec-
tion 408A shall be entitled to the treatment de-
scribed in such subsection.
(e) 
SPOUSAL
INDIVIDUAL
RETIREMENT
AC-
COUNTS.—For purposes of applying sections 219 and 408
of such Code—
(1) only 69 percent of the contributions to an
individual retirement plan which are allowable as a
deduction solely by reason of the amendments made
by section 6104 of such title VI shall be allowed as
a deduction, and
1822
HR 2491 EH
(2) only 69 percent of the income on the assets
held in an individual retirement plan which are at-
tributable to contributions permitted solely by reason
of the amendments made by section 6104 of such
title VI (which would otherwise be includible in gross
income) shall be excludible from gross income.
(f) ALTERNATIVE MINIMUM TAX.—
(1) IN GENERAL.—In the case of taxable years
beginning after December 31, 1994—
(A) in the case of a taxpayer other than a
corporation, the tax imposed by section 55 of
such Code shall be determined without regard
to paragraph (1) of section 56(a) of such Code,
and
(B) in the case of a corporation, the ten-
tative minimum tax under section 55 of such
Code shall be zero.
(2) DELAY IN BENEFIT OF REPEAL FOR TAX-
ABLE YEARS 1995 AND 1996.—
(A) IN GENERAL.—Paragraph (1) shall not
apply to any taxable year beginning before Jan-
uary 1, 1997, but there shall be allowed as a
credit against the tax imposed by subtitle A of
such Code for each taxable year referred to in
1824
HR 2491 EH
States Code, immediately before the period at
the end thereof.
(g) COMPARABLE TREATMENT
FOR ESTATE
AND
GIFT TAX CHANGES.—A rule similar to the rule of sub-
section (a) shall apply to any reduction in liability for tax
under subtitle B of such Code by reason of the amend-
ments made by section 6351 of such title VI.
TITLE XX—BUDGET
ENFORCEMENT
SEC. 20001. SHORT TITLE; PURPOSE.
(a) SHORT TITLE.—This title may be cited as the
‘‘Seven-Year Balanced Budget Enforcement Act of 1995’’.
(b) PURPOSE.—This title extends and reduces the
discretionary spending limits and extends the pay-as-you-
go requirements.
SEC. 20002. DISCRETIONARY SPENDING LIMITS.
(a) LIMITS.—Section 601(a)(2) of the Congressional
Budget Act of 1974 is amended by striking subparagraphs
(A), (B), (C), (D), and (F), by redesignating subpara-
graph (E) as subparagraph (A) and by striking ‘‘and’’ at
the end of that subparagraph, and by inserting after sub-
paragraph (A) the following new subparagraphs:
‘‘(B) with respect to fiscal year 1996, for
the discretionary category: $485,074,000,000 in
1825
HR 2491 EH
new budget authority and $531,768,000,000 in
outlays;
‘‘(C) with respect to fiscal year 1997, for
the discretionary category: $481,423,000,000 in
new budget authority and $519,288,000,000 in
outlays;
‘‘(D) with respect to fiscal year 1998, for
the discretionary category: $489,233,000,000 in
new budget authority and $511,173,000,000 in
outlays;
‘‘(E) with respect to fiscal year 1999, for
the discretionary category: $480,420,000,000 in
new budget authority and $508,695,000,000 in
outlays;
‘‘(F) with respect to fiscal year 2000, for
the discretionary category: $487,347,000,000 in
new budget authority and $512,202,000,000 in
outlays;
‘‘(G) with respect to fiscal year 2001, for
the discretionary category: $494,307,000,000 in
new budget authority and $514,109,000,000 in
outlays; and
‘‘(H) with respect to fiscal year 2002, for
the discretionary category: $496,188,000,000 in
1826
HR 2491 EH
new budget authority and $512,426,000,000 in
outlays;’’.
(b) COMMITTEE
ALLOCATIONS
AND
ENFORCE-
MENT.—Section 602 of the Congressional Budget Act of
1974 is amended—
(1) in subsection (c), by striking ‘‘1995’’ and
inserting ‘‘2002’’ and by striking the last sentence;
and
(2) in subsection (d), by striking ‘‘1992 TO
1995’’ in the side heading and inserting ‘‘1996 TO
2002’’ and by striking ‘‘1992 through 1995’’ and in-
serting ‘‘1996 through 2002’’.
(c) TERM OF BUDGET RESOLUTIONS.—Section 606
of the Congressional Budget Act of 1974 is amended—
(1) in its section heading by striking ‘‘5-year’’
and inserting ‘‘term of’’;
(2) in the sideheading of subsection (a), by
striking ‘‘5-YEAR’’ and inserting ‘‘TERM OF’’;
(3) in subsection (a), by striking ‘‘1992, 1993,
1994, or 1995’’ and inserting ‘‘1996 or any fiscal
year thereafter through 2002’’ and by inserting ‘‘at
least’’ before ‘‘each’’; and
(4) in subsection (d)(1), by striking ‘‘1992,
1993, 1994, and 1995’’ and inserting ‘‘1996 or any
1827
HR 2491 EH
fiscal year thereafter through 2002’’, and by striking
‘‘(i) and (ii)’’.
(d) EFFECTIVE DATE.—Section 607 of the Congres-
sional Budget Act of 1974 is amended by striking ‘‘1991
to 1998’’ and inserting ‘‘1996 to 2002’’.
(e) SEQUESTRATION REGARDING VIOLENT CRIME
REDUCTION TRUST FUND.—(1) Section 251A(b)(1) of
the Balanced Budget and Emergency Deficit Control Act
of 1985 is amended by striking subparagraphs (B), (C),
and (D) and its last sentence and inserting the following:
‘‘(B) 
For 
fiscal 
year 
1996,
$2,227,000,000.
‘‘(C) For fiscal year 1997, $3,846,000,000.
‘‘(D) 
For 
fiscal 
year 
1998,
$4,901,000,000.
‘‘(E) 
For 
fiscal 
year 
1999,
$5,639,000,000.
‘‘(F) 
For 
fiscal 
year 
2000,
$6,225,000,000.’’.
(2) Section 310002 of the Violent Crime Control and
Law Enforcement Act of 1994 (42 U.S.C. 14212) is re-
pealed.
(f) CONFORMING AMENDMENT.—The item relating
to section 606 in the table of contents set forth in section
1(b) of the Congressional Budget and Impoundment Con-
1828
HR 2491 EH
trol Act of 1974 is amended by striking ‘‘5-year’’ and in-
serting ‘‘Term of’’.
SEC. 20003. GENERAL STATEMENT AND DEFINITIONS.
(a) GENERAL STATEMENT.—Section 250(b) of the
Balanced Budget and Emergency Deficit Control Act of
1985 is amended by striking the first two sentences and
inserting the following: ‘‘This part provides for the en-
forcement of deficit reduction by reducing and extending
the discretionary spending limits though fiscal year 2002
and permanently extending pay-as-you-go requirements.’’.
(b) DEFINITIONS.—Section 250(c) of the Balanced
Budget and Emergency Deficit Control Act of 1985 is
amended—
(1) by striking paragraph (4) and inserting the
following:
‘‘(4) The term ‘category’ means:
‘‘(A) For fiscal years 1996 through 2000,
all discretionary appropriations except those
subject to section 251A; and
‘‘(B) For fiscal year 2001 and any subse-
quent fiscal year, all discretionary appropria-
tions.’’;
(2) by striking paragraph (6) and inserting the
following:
1829
HR 2491 EH
‘‘(6) The term ‘budgetary resources’ means new
budget authority, unobligated balances, direct spend-
ing authority, and obligation limitations.’’;
(3) in paragraph (9), by striking ‘‘1992’’ and
inserting ‘‘1996’’; and
(4) in paragraph (14), by striking ‘‘through fis-
cal year 1995’’.
SEC. 20004. ENFORCING DISCRETIONARY SPENDING LIM-
ITS.
Section 251 of the Balanced Budget and Emergency
Deficit Control Act of 1985 is amended—
(1) in the side heading of subsection (a), by
striking ‘‘1991–1998’’ and inserting ‘‘1996–2002’’;
(2) in the first sentence of subsection (b)(1), by
striking ‘‘1992, 1993, 1994, 1995, 1996, 1997 or
1998’’ and inserting ‘‘1997 or any fiscal year there-
after through 2002’’ and by striking ‘‘through
1998’’ and inserting ‘‘through 2002’’;
(3) in subsection (b)(1), by striking ‘‘the follow-
ing:’’ and all that follows through ‘‘The adjust-
ments’’ and inserting ‘‘the following: the adjust-
ments’’ and by striking subparagraphs (B) and (C);
(4) in subsection (b)(2), by striking ‘‘1991,
1992, 1993, 1994, 1995, 1996, 1997, or 1998’’ and
inserting ‘‘1996 or any fiscal year thereafter through
1830
HR 2491 EH
2002’’ and by striking ‘‘through 1998’’ and insert-
ing ‘‘through 2002’’;
(5) in subsection (b)(2)(E), by striking clauses
(i), (ii), and (iii) and by striking ‘‘(iv) if, for fiscal
years 1994, 1995, 1996, 1997, and 1998’’ and in-
serting ‘‘If, for fiscal years 1996 through 2002’’;
and
(6) in subsection (b)(2)(F), by striking every-
thing after ‘‘the adjustment in outlays’’ and insert-
ing ‘‘for a category for a fiscal year is the amount
of the excess but not to exceed 0.5 percent of the
adjusted discretionary spending limit on outlays for
that fiscal year in fiscal year 1996 or any fiscal year
thereafter through 2002.’’.
SEC. 20005. ENFORCING PAY-AS-YOU-GO.
(a) EXTENSION.—(1) Section 252 of the Balanced
Budget and Emergency Deficit Control Act of 1985 is
amended—
(A) in the side heading of subsection (a), by
striking ‘‘FISCAL YEARS 1992–1998’’; and
(B) in subsection (e), by striking ‘‘, for any fis-
cal year from 1991 through 1998,’’ and by striking
‘‘through 1995’’.
(b) ROLLING PAY-AS-YOU-GO SCORECARD.—Section
252(d) of the Balanced Budget and Emergency Deficit
1831
HR 2491 EH
Control Act of 1985 is amended by striking ‘‘each fiscal
year through fiscal year 1998’’ each place it appears and
inserting ‘‘the current year (if applicable), the budget
year, and each of the first 4 outyears’’.
SEC. 20006. REPORTS AND ORDERS.
Section 254 of the Balanced Budget and Emergency
Deficit Control Act of 1985 is amended—
(1) in subsection (d)(2), by striking
‘‘1998’’ and inserting ‘‘2002’’; and
(2)(A) in subsection (g)(2)(A), by striking
‘‘1998’’ and inserting ‘‘2002’’; and
(B) in subsection (g)(3), by striking ‘‘in each
outyear through 1998’’ and inserting ‘‘in each of the
4 ensuing outyears’’.
SEC. 20007. TECHNICAL CORRECTION.
Section 258 of the Balanced Budget and Emergency
Deficit Control Act of 1985, entitled ‘‘Modification of
Presidential Order’’, is repealed.
SEC. 20008. SPECIAL RULE ON INTERRELATIONSHIP BE-
TWEEN CHANGES IN DISCRETIONARY SPEND-
ING LIMITS AND PAY-AS-YOU-GO REQUIRE-
MENTS.
(a)(1) Section 252 of the Balanced Budget and
Emergency Deficit Control Act of 1985 is amended by
adding at the end the following new subsection:
1832
HR 2491 EH
‘‘(f) SPECIAL RULE
ON INTERRELATIONSHIP BE-
TWEEN SECTIONS 251, 251A, and 252.—Whenever legis-
lation is enacted during the 104th Congress that decreases
the discretionary spending limits for budget authority and
outlays for a fiscal year under section 601(a)(2) of the
Congressional Budget Act of 1974 or in section 251A(b)
of the Balanced Budget and Emergency Deficit Control
Act of 1985, or both, then, for purposes of subsection (b),
an amount equal to that decrease in the discretionary
spending limit for outlays shall be treated as direct spend-
ing legislation decreasing the deficit for that fiscal year.’’.
(2) Section 310(a) of the Congressional Budget Act
of 1974 is amended by striking ‘‘or’’ at the end of para-
graph (3), by redesignating paragraph (4) as paragraph
(5) and by striking ‘‘and (3)’’ in such redesignated para-
graph (5) and inserting ‘‘(3), and (4)’’, and by inserting
after paragraph (3) the following new paragraph:
‘‘(4) carry out section 252(f) of the Balanced
Budget and Emergency Deficit Control Act of 1985;
or’’.
(b) For purposes of section 252(f) of the Balanced
Budget and Emergency Deficit Control Act of 1985 (as
amended by subsection (a)(1))—
(1) reductions in the discretionary spending
limit for outlays under section 601(a)(2) of the Con-
1833
HR 2491 EH
gressional Budget Act of 1974 for each of fiscal
years 1999 through 2002 under section 20002 shall
be measured as reductions from the discretionary
spending limit for outlays for fiscal year 1998 as in
effect immediately before the enactment of this Act;
and
(2) reductions in the discretionary spending
limit for outlays under section 251A(b) of the Bal-
anced Budget and Emergency Deficit Control Act of
1985 for each of fiscal years 1996 through 2000
under section 20002 shall be measured as reductions
in outlays for that fiscal year under section 251A(b)
as in effect immediately before the enactment of this
Act.
SEC. 20009. MEDICARE SAVINGS CANNOT BE USED TO PAY
FOR TAX CUTS.
Any net savings in direct spending and receipts in
the Medicare program for any fiscal year resulting from
the enactment of this Act or H.R. 2425 (as applicable)
shall not be counted for purposes of section 252 of the
Balanced Budget and Emergency Deficit Control Act of
1985.
1834
HR 2491 EH
SEC. 20010. EFFECTIVE DATE.
(a) EXPIRATION.—Section 275(b) of the Balanced
Budget and Emergency Deficit Control Act of 1985 is
amended—
(1) by striking ‘‘Part C of this title, section’’
and inserting ‘‘Sections 251, 253, 258B, and’’; and
(2) by striking ‘‘1995’’ and inserting ‘‘2002’’.
(b) EXPIRATION.—Section 14002(c)(3) of the Omni-
bus Budget Reconciliation Act of 1993 (2 U.S.C. 900
note) is repealed.
SEC. 20011. APPLICATION OF SECTION 251 ADJUSTMENTS.
Section 251(b)(2) of the Balanced Budget and Emer-
gency Deficit Control Act of 1985 is amended by adding
at the end the following new subparagraph:
‘‘(H) SPECIAL ALLOWANCE FOR WELFARE RE-
FORM.—If, for any fiscal year, appropriations are
enacted for accounts specified in clauses (i) and (ii),
the adjustment shall be the sum of:
‘‘(i) the excess of the appropriation for the
fiscal year for the Child Care and Development
Block Grant over $1,082,000,000, but not to
exceed $722,000,000 in fiscal year 1996 or
$1,011,000,000 in fiscal year 1997 through
2002; and
‘‘(ii) the excess of the appropriation for the
fiscal year for the Family Nutrition Block
1835
HR 2491 EH
Grant Program over $3,470,000,000, but not to
exceed $692,000,000 in fiscal year 1996,
$1,307,000,000 
in 
fiscal 
year 
1997,
$1,466,000,000 
in 
fiscal 
year 
1998,
$1,650,000,000 
in 
fiscal 
year 
1999,
$1,838,000,000 
in 
fiscal 
year 
2000,
$2,075,000,000 
in 
fiscal 
year 
2001, 
or
$2,324,000,000 in fiscal year 2002;
and the outlays flowing in all years from such excess
appropriations (as reduced pursuant to the limita-
tions in clauses (i) and (ii).’’.
SEC. 20012. SPECIAL RULES APPLICABLE TO DEPARTMENT
OF DEFENSE SEQUESTRATION.
Section 255 of the Balanced Budget and Emergency
Deficit Control Act of 1985 is amended by striking sub-
section (h) (relating to optional exemption of military per-
sonnel) and adding at the end the following new sub-
section:
‘‘(j) OPTIONAL EXEMPTION FOR MILITARY PERSON-
NEL.—
‘‘(1) AUTHORITY FOR EXEMPTION.—The Presi-
dent may, with respect to any military personnel ac-
count, exempt that account from sequestration or
provide for a lower uniform percentage reduction
than would otherwise apply.
1836
HR 2491 EH
‘‘(B) The President may not use the au-
thority provided by subparagraph (A) unless he
notifies the Congress of the manner in which
such authority will be exercised on or before the
initial snapshot date for the budget year.
‘‘(2) AUTHORITY FOR MILITARY TECHNICIANS
AND MEDICAL PERSONNEL.—
‘‘(A) Whenever the President exempts a
military personnel account from sequestration
under paragraph (1) and after all other seques-
trations to Department of Defense account have
been made, the Secretary of Defense may trans-
fer amounts to any appropriation for operation
and maintenance for the current fiscal year
from amounts available under any other appro-
priation to the Department of Defense, but—
‘‘(i) amounts so transferred shall be
available only for the pay of military tech-
nicians, the pay of medical personnel, and
other expenses of medical programs (in-
cluding CHAMPUS); and
‘‘(ii) the total amount transferred to
any operations and maintenance appropria-
tion shall not exceed the amount seques-
tered from such appropriation.
1837
HR 2491 EH
‘‘(C) The authority to make transfers pur-
suant to subparagraph (A) is in addition to any
authority of the Secretary of Defense to make
transfers of appropriated funds under any other
provision of law.
‘‘(D) The Secretary of Defense may carry
out a transfer of funds under subparagraph (A)
only after notifying the Committees on Appro-
priations of the Senate and House of Rep-
resentatives of the proposed transfer and a pe-
riod of 20 calendar days in session has elapsed
after such notice is received.’’.
SEC. 20013. TREATMENT OF DIRECT STUDENT LOANS.
Section 504 of the Federal Credit Reform Act of
1990 is amended by adding at the end the following new
subsection:
‘‘(h) TREATMENT OF DIRECT STUDENT LOANS.—
The cost of a direct loan under the Federal direct student
loan program shall be the net present value, at the time
when the direct loan is disbursed, of the following cash
flows for the estimated life of the loan:
‘‘(1) Loan disbursements.
‘‘(2) Repayments of principal.
‘‘(3) Payments of interest and other payments
by or to the Government over the life of the loan
1838
HR 2491 EH
after adjusting for estimated defaults, prepayments,
fees, penalties, and other recoveries.
‘‘(4) Direct expenses, including—
‘‘(A) activities related to credit extension,
loan origination, loan servicing, management of
contractors, and payments to contractors, other
government entities, and program participants;
‘‘(B) collection of delinquent loans; and
‘‘(C) writeoff and closeout of loans.’’.
SEC. 20014. DEFINITION OF PROGRAMS, PROJECTS, AND
ACTIVITIES FOR DEPARTMENT OF DEFENSE
APPROPRIATIONS.
For purposes of the Balanced Budget and Emergency
Deficit Control Act of 1985, the term program, project,
and activity for appropriations contained in any Depart-
ment of Defense appropriation Act shall be defined as the
most specific level of budget items identified in the most
recent Department of Defense appropriation Act, the ac-
companying House and Senate Committee reports, the
conference report and accompanying joint explanatory
statement of the managers of the committee of conference,
the related classified annexes and reports, and the P–1
and R–1 budget justification documents as subsequently
modified by congressional action: Provided, That the fol-
lowing exception to the above definition shall apply:
1839
HR 2491 EH
For the Military Personnel and the Operation and
Maintenance accounts, the term ‘‘program, project, and
activity’’ is defined as the appropriation accounts con-
tained in the most recent Department of Defense appro-
priation Act: Provided further, That at the time the Presi-
dent submits his budget for any fiscal year, the Depart-
ment of Defense shall transmit to the Committees on Ap-
propriations and the Committees on Armed Services of the
Senate and the House of Representatives a budget jus-
tification document to be known as the ‘‘O–1’’ which shall
identify, at the budget activity, activity group, and sub-
activity group level, the amounts requested by the Presi-
dent to be appropriated to the Department of Defense for
operation and maintenance in any budget request, or
amended budget request, for that fiscal year.
Passed the House of Representatives October 26,
1995.
Attest:
Clerk.