taxable income in excess of the minimum dollar amount 
for the 45-percent rate bracket and has a net capital gain, 
then— 
‘‘(1) the tax imposed by this section for the tax-
able year with respect to such excess shall be deter-
mined without regard to subsection (h), and 
‘‘(2) the amount of net capital gain of the tax-
payer taken into account for the taxable year under 
subsection (h) shall be reduced by the lesser of— 
‘‘(A) such excess, or 
‘‘(B) the net capital gain for the taxable 
year. 
Any reduction in net capital gain under the pre-
ceding sentence shall be allocated between adjusted 
net capital gain, unrecaptured 1250 gain, and sec-
tion 1202 gain in amounts proportionate to the 
amounts of each such gain.’’. 
(2) CONFORMING AMENDMENT.—Paragraph (1) 
of section 1(h) of such Code is amended by striking 
‘‘If a taxpayer has’’ and inserting ‘‘Except to the ex-
tent provided in subsection (j), if a taxpayer has’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2013. 
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SEC. 4. SAVINGS FROM OVERSEAS CONTINGENCY AND RE-
LATED ACTIVITIES. 
(a) IN GENERAL.—Section 251(b)(2) of the Balanced 
Budget and Emergency Deficit Control Act of 1985 (2 
U.S.C. 901(b)(2)) is amended by adding at the end the 
following new subparagraph: 
‘‘(E) OVERSEAS
CONTINGENCY
AND
RE-
LATED ACTIVITIES.— 
‘‘(i) CAP ADJUSTMENT.—If a bill or 
joint resolution making appropriations for 
a fiscal year is enacted that specifies an 
amount for overseas contingency and re-
lated activities for that fiscal year after 
taking into account any other bills or joint 
resolutions enacted for that fiscal year that 
specify an amount for overseas contingency 
and related activities, but do not exceed in 
the aggregate the amounts specified in 
clause (ii), then the adjustments for that 
fiscal year shall be the additional new 
budget authority provided in that Act for 
such activities for that fiscal year. 
‘‘(ii) LEVELS.—The levels for overseas 
contingency and related activities specified 
in this subparagraph are as follows: 
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‘‘(I) 
For 
fiscal 
year 
2013, 
$83,000,000,000 in budget authority. 
‘‘(II) 
For 
fiscal 
year 
2014, 
$50,000,000,000 in budget authority. 
‘‘(III) For fiscal year 2015, 
$50,000,000,000 in budget authority. 
‘‘(IV) For fiscal year 2016, 
$50,000,000,000 in budget authority. 
‘‘(V) 
For 
fiscal 
year 
2017, 
$50,000,000,000 in budget authority. 
‘‘(VI) For fiscal year 2018, 
$50,000,000,000 in budget authority. 
‘‘(VII) For fiscal year 2019, 
$50,000,000,000 in budget authority. 
‘‘(VIII) For fiscal year 2020, 
$50,000,000,000 in budget authority. 
‘‘(IX) For fiscal year 2021, 
$50,000,000,000 in budget author-
ity.’’. 
(b) BREACH.—Section 251(a)(2) of such Act (2 
U.S.C. 901(a)(2)) is amended to read as follows: 
‘‘(2) ELIMINATING A BREACH.— 
‘‘(A) IN GENERAL.—Each non-exempt ac-
count within a category shall be reduced by a 
dollar amount calculated by multiplying the en-
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acted level of sequestrable budgetary resources 
in that account by the uniform percentage nec-
essary to eliminate a breach within that cat-
egory. 
‘‘(B) 
OVERSEAS
CONTINGENCIES.—Any 
amount of budget authority for overseas contin-
gency operations and related activities for fiscal 
years 2013 through 2021 in excess of the levels 
set in subsection 251(b)(2)(E) shall be counted 
in determining whether a breach has occurred 
in the security category and the nonsecurity 
category on a proportional basis to the total 
spending for overseas contingency operations in 
the security category and the nonsecurity cat-
egory.’’. 
(c) 
CONFORMING
AMENDMENT.—Section 
251(b)(2)(A) of such Act (2 U.S.C. 901(b)(2)(A)) is 
amended to read as follows: 
‘‘(A) EMERGENCY
APPROPRIATIONS.—If, 
for any fiscal year, appropriations for discre-
tionary accounts are enacted that the Congress 
designates as emergency requirements in stat-
ute on an account by account basis and the 
President subsequently so designates, the ad-
justment shall be the total of such appropria-
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tions in discretionary accounts designated as 
emergency requirements.’’. 
Æ 
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