1985. CBO estimates of legislation containing a current 
policy designation under this subsection shall include a 
separate presentation of costs excluded from the calcula-
tion of budgetary effects for the legislation, as well as an 
updated total of all excluded costs of provisions within the 
same subsection of section 107. 
(d) OMB PAYGO SCORECARDS.— 
(1) IN
GENERAL.—OMB shall maintain and 
make publicly available a continuously updated docu-
ment containing two PAYGO scorecards displaying 
the budgetary effects of PAYGO legislation as deter-
mined under section 308 of the Congressional Budg-
et Act of 1974, applying the look-back requirement 
in subsection (e) and the averaging requirement in 
subsection (f), and a separate addendum displaying 
the estimates of the costs of provisions designated in 
statute as emergency requirements. 
(2) ESTIMATES
IN
LEGISLATION.—Except as 
provided in paragraph (3), in making the calcula-
tions for the PAYGO scorecards, OMB shall use the 
budgetary effects included by reference in the appli-
cable legislation. 
(3) OMB ESTIMATES.—If legislation does not 
contain the estimate of budgetary effects under 
paragraph (2), then OMB shall score the budgetary
effects of that legislation upon its enactment, based 
on the approaches to scorekeeping set forth in this 
division. 
(4) 5-YEAR
SCORECARD.—The first scorecard 
shall display the budgetary effects of PAYGO legis-
lation in each year over the 5-year period beginning 
in the budget year. 
(5) 10-YEAR SCORECARD.—The second score-
card shall display the budgetary effects of PAYGO 
legislation in each year over the 10-year period be-
ginning in the budget year. 
(e) LOOK-BACK TO CAPTURE CURRENT-YEAR EF-
FECTS.—For purposes of this section, OMB shall treat the 
budgetary effects of PAYGO legislation enacted during a 
session of Congress that occur during the current year as 
though they occurred in the budget year. 
(f) AVERAGING USED
TO MEASURE COMPLIANCE 
OVER 5-YEAR AND 10-YEAR PERIODS.—OMB shall cumu-
late the budgetary effects of a PAYGO Act over the budg-
et year (which includes any look-back effects under sub-
section (e)) and— 
(1) for purposes of the 5-year scorecard re-
ferred to in subsection (d)(4), the four subsequent 
outyears, divide that cumulative total by five, and 
enter the quotient in the budget-year column and in
each subsequent column of the 5-year PAYGO score-
card; and 
(2) for purposes of the 10-year scorecard re-
ferred to in subsection (d)(5), the nine subsequent 
outyears, divide that cumulative total by ten, and 
enter the quotient in the budget-year column and in 
each subsequent column of the 10-year PAYGO 
scorecard. 
SEC. 105. ANNUAL REPORT AND SEQUESTRATION ORDER. 
(a) ANNUAL REPORT.—Not later than 14 days (ex-
cluding weekends and holidays) after Congress adjourns 
to end a session, OMB shall make publicly available and 
cause to be printed in the Federal Register an annual 
PAYGO report. The report shall include an up-to-date 
document containing the PAYGO scorecards, a description 
of any current policy adjustments made under section 
104(c), information about emergency legislation (if any) 
designated under section 103(4)(D), information about 
any sequestration if required by subsection (b), and other 
data and explanations that enhance public understanding 
of this division and actions taken under it. 
(b) SEQUESTRATION ORDER.—If the annual report 
issued at the end of a session of Congress under sub-
section (a) shows a debit on either PAYGO scorecard for 
the budget year, OMB shall prepare and the President
shall issue and include in that report a sequestration order 
that, upon issuance, shall reduce budgetary resources of 
direct spending programs by enough to offset that debit 
as prescribed in section 106. If there is a debit on both 
scorecards, the order shall fully offset the larger of the 
two debits. OMB shall include that order in the annual 
report and transmit it to the House of Representatives 
and the Senate. If the President issues a sequestration 
order, the annual report shall contain, for each budget ac-
count to be sequestered, estimates of the baseline level of 
budgetary resources subject to sequestration, the amount 
of budgetary resources to be sequestered, and the outlay 
reductions that will occur in the budget year and the sub-
sequent fiscal year because of that sequestration. 
SEC. 106. CALCULATING A SEQUESTRATION. 
(a) 
REDUCING
NONEXEMPT
BUDGETARY
RE-
SOURCES BY A UNIFORM PERCENTAGE.—OMB shall cal-
culate the uniform percentage by which the budgetary re-
sources of nonexempt direct spending programs are to be 
sequestered such that the outlay savings resulting from 
that sequestration, as calculated under subsection (b), 
shall offset the budget-year debit, if any on the applicable 
PAYGO scorecard. If the uniform percentage calculated 
under the prior sentence exceeds 4 percent, the Medicare 
programs described in section 256(d) of BBEDCA shall
be reduced by 4 percent and the uniform percentage by 
which the budgetary resources of all other nonexempt di-
rect spending programs are to be sequestered shall be in-
creased, as necessary, so that the sequestration of Medi-
care and of all other nonexempt direct spending programs 
together produce the required outlay savings. 
(b) OUTLAY SAVINGS.—In determining the amount 
by which a sequestration offsets a budget-year debit, OMB 
shall count— 
(1) the amount by which the sequestration in a 
crop year of crop support payments, pursuant to 
section 256(j) of BBEDCA, reduces outlays in the 
budget year and the subsequent fiscal year; 
(2) the amount by which the sequestration of 
Medicare payments in the 12-month period following 
the sequestration order, pursuant to section 256(d) 
of BBEDCA, reduces outlays in the budget year and 
the subsequent fiscal year; and 
(3) the amount by which the sequestration in 
the budget year of the budgetary resources of other 
nonexempt mandatory programs reduces outlays in 
the budget year and in the subsequent fiscal year.
SEC. 107. CURRENT POLICY ADJUSTMENT TO THE CBO ES-
TIMATES. 
(a) PURPOSE.—The purpose of this section is to pro-
vide for adjustments of estimates of budgetary effects of 
PAYGO legislation for legislation affecting four areas of 
the budget— 
(1) payments made under section 1848 of the 
Social Security Act (titled Payment for Physicians’ 
Services); 
(2) the Estate and Gift Tax under subtitle B of 
the Internal Revenue Code of 1986; 
(3) the AMT; and 
(4) provisions of EGTRRA or JGTRRA that 
amended the Internal Revenue Code of 1986 (or 
provisions in later statutes further amending the 
amendments made by EGTRRA or JGTRRA), other 
than— 
(A) the provisions of those two Acts that 
were made permanent by the Pension Protec-
tion Act of 2006 (Public Law 109–280); 
(B) amendments to the estate and gift tax 
referred to in paragraph (2); 
(C) the AMT referred to in paragraph (3); 
(D) the 35 percent bracket and that por-
tion of the 33 percent bracket that applies to
taxable income greater than $200,000 for an 
individual and $250,000 for a couple; and 
(E) provisions in those two Acts relating to 
taxes rates on capital gains and dividends. 
(b) MEDICARE PAYMENTS TO PHYSICIANS.— 
(1) CRITERIA.—Legislation that includes provi-
sions amending or superseding the system of pay-
ments under section 1848 of the Social Security Act 
shall trigger the current policy adjustment required 
by this division. 
(2) ADJUSTMENT.—The amount of the max-
imum current policy adjustment shall be the dif-
ference between— 
(A) estimated net outlays attributable to 
the payments made to physicians under that 
section of the Social Security Act (as scheduled 
on July 15, 2009, to be in effect); and 
(B) what those net outlays would have 
been if the nominal payment rates and related 
parameters in effect for 2009 had been in effect 
thereafter without change. 
(c) ESTATE AND GIFT TAX.— 
(1) CRITERIA.—Legislation that includes provi-
sions amending the Estate and Gift Tax under sub-
title B of the Internal Revenue Code of 1986 shall
trigger the current policy adjustment required by 
this division. 
(2) ADJUSTMENT.—The amount of the max-
imum current policy adjustment shall be the dif-
ference between— 
(A) total revenues projected to be collected 
under the Internal Revenue Code of 1986 (as 
scheduled on July 15, 2009, to be in effect); 
and 
(B) what those revenue collections would 
have been if, on the date of enactment of the 
legislation meeting the criteria in paragraph 
(1), estate and gift tax law had instead been 
amended so that the tax rates, nominal exemp-
tion amounts, and related parameters in effect 
for tax year 2009 had remained in effect there-
after without change. 
(d) PERMANENT EXTENSION OF MIDDLE-CLASS TAX 
CUTS AND AMT RELIEF.— 
(1) CRITERIA.—Legislation that includes provi-
sions extending middle-class tax cuts or AMT relief 
shall trigger the current policy adjustment required 
by this division if those provisions extend one or 
more of the following provisions—
(A) AMT relief for calendar year 2010 and 
subsequent years in such a manner that the 
number of AMT taxpayers is not estimated to 
exceed the number of AMT taxpayers in tax 
year 2008 in any year through the tenth year 
after enactment; 
(B) the 10 percent bracket as in effect for 
tax year 2010, as provided for under section 
101(a) of the Economic Growth and Tax Relief 
Reconciliation Act of 2001 and any later 
amendments through July 15, 2009; 
(C) the child tax credit as in effect for tax 
year 2010, as provided for under section 201 of 
the Economic Growth and Tax Relief Reconcili-
ation Act and any later amendments through 
July 15, 2009; 
(D) tax benefits for married couples as in 
effect for tax year 2010, as provided for under 
title III of the Economic Growth and Tax Relief 
Reconciliation Act and any later amendments 
through July 15, 2009; 
(E) the adoption credit as in effect in tax 
year 2010, as provided for under section 202 of 
the Economic Growth and Tax Relief Reconcili-
ation Act of 2001 and any later amendments 
through July 15, 2009; 
(F) the dependent care credit as in effect 
in tax year 2010, as provided for under section 
204 of the Economic Growth and Tax Relief 
Reconciliation Act of 2001 and any later 
amendments through July 15, 2009; 
(G) the employer-provided child care credit 
as in effect in tax year 2010, as provided for 
under section 205 of the Economic Growth and 
Tax Relief Reconciliation Act of 2001 and any 
later amendments through July 15, 2009; 
(H) the education tax benefits as in effect 
in tax year 2010, as provided for under title IV 
of the Economic Growth and Tax Relief Rec-
onciliation Act of 2001 and any later amend-
ments through July 15, 2009; 
(I) the 25 and 28 percent brackets as in 
effect for tax year 2010, as provided for under 
section 101(a) of the Economic Growth and 
Tax Relief Reconciliation Act of 2001 and any 
later amendments through July 15, 2009; and 
(J) the 33 percent brackets as in effect for 
tax year 2010, as provided for under section 
101(a) of the Economic Growth and Tax Relief
Reconciliation Act of 2001 and any later 
amendment affecting taxpayers with taxable in-
come of $200,000 or less for individuals and 
$250,000 or less for couples in calendar year 
2010 and increased in each subsequent year by 
an amount equal to the cost of living adjust-
ment determined under section 1(f)(3) of the 
Internal Revenue Code of 1986 for the calendar 
year in which the taxable year begins, deter-
mined by substituting ‘‘calendar year 2008’’ for 
‘‘calendar year 1992’’ in subparagraph (B) 
thereof. 
(2) ADJUSTMENT.—The amount of the max-
imum current policy adjustment shall be the dif-
ference between what total revenues would have been 
under the Internal Revenue Code of 1986 (as sched-
uled on July 15, 2009, to be in effect) and what rev-
enues would be if legislation— 
(A) permanently extending the AMT ex-
emption and brackets in effect in tax year 2009 
but increased in tax year 2010 and each subse-
quent tax year as indicated under subsection 
(d)(2)(B), along with any additional amount 
necessary to prevent the number of taxpayers 
who must pay AMT from increasing; and