(B) permanently extending the provisions 
identified in paragraph (1), 
were enacted on the same day as the legislation re-
ferred to in paragraph (1). 
SEC. 108. APPLICATION OF BBEDCA. 
For purposes of this division— 
(1) notwithstanding section 275 of BBEDCA, 
the provisions of sections 255, 256, 257, and 274 of 
BBEDCA, as amended by this division, shall apply 
to the provisions of this division; 
(2) references in sections 255, 256, 257, and 
274 to ‘‘this part’’ or ‘‘this title’’ shall be interpreted 
as applying to this division; 
(3) references in sections 255, 256, 257, and 
274 of BBEDCA to ‘‘section 254’’ shall be inter-
preted as referencing section 105 of this division; 
(4) the reference in section 256(b) of BBEDCA 
to ‘‘section 252 or 253’’ shall be interpreted as ref-
erencing section 105 of this division; 
(5) the reference in section 256(d)(1) of 
BBEDCA to ‘‘section 252 or 253’’ shall be inter-
preted as referencing section 106 of this division; 
(6) the reference in section 256(d)(4) of 
BBEDCA to ‘‘section 252 or 253’’ shall be inter-
preted as referencing section 105 of this division;
(7) section 256(k) of BBEDCA shall apply to 
a sequestration, if any, under this division; and 
(8) references in section 257(e) of BBEDCA to 
‘‘section 251, 252, or 253’’ shall be interpreted as 
referencing section 104 of this division. 
SEC. 109. TECHNICAL CORRECTIONS. 
(a) Section 250(c)(18) of BBEDCA is amended by 
striking ‘‘the expenses the Federal deposit insurance agen-
cies’’ and inserting ‘‘the expenses of the Federal deposit 
insurance agencies’’. 
(b) Section 256(k)(1) of BBEDCA is amended by 
striking ‘‘in paragraph (5)’’ and inserting ‘‘in paragraph 
(6)’’. 
SEC. 110. CONFORMING AMENDMENTS. 
(a) Section 256(a) of BBEDCA is repealed. 
(b) Section 256(b) of BBEDCA is amended by strik-
ing ‘‘origination fees under sections 438(c)(2) and 455(c) 
of that Act shall each be increased by 0.50 percentage 
point.’’ and inserting in lieu thereof ‘‘origination fees 
under sections 438(c)(2) and (6) and 455(c) and loan 
processing 
and 
issuance 
fees 
under 
section 
428(f)(1)(A)(ii) of that Act shall each be increased by the 
uniform percentage specified in that sequestration order, 
and, for student loans originated during the period of the 
sequestration, special allowance payments under section
438(b) of that Act accruing during the period of the se-
questration shall be reduced by the uniform percentage 
specified in that sequestration order.’’. 
(c) Section 256(c) of BBEDCA is repealed. 
(d) Section 256(d) of BBEDCA is amended— 
(1) by redesignating paragraphs (2), (3), and 
(4) as paragraphs (3), (5), and (6); 
(2) by amending paragraph (1) to read as fol-
lows: 
‘‘(1) CALCULATION OF REDUCTION IN PAYMENT 
AMOUNTS.—To achieve the total percentage reduc-
tion in those programs required by section 252 or 
253, subject to paragraph (2), and notwithstanding 
section 710 of the Social Security Act, OMB shall 
determine, and the applicable Presidential order 
under section 254 shall implement, the percentage 
reduction that shall apply, with respect to the health 
insurance programs under title XVIII of the Social 
Security Act— 
‘‘(A) in the case of parts A and B of such 
title, to individual payments for services fur-
nished during the one-year period beginning on 
the first day of the first month beginning after 
the date the order is issued (or, if later, the 
date specified in paragraph (4)); and
‘‘(B) in the case of parts C and D, to 
monthly payments under contracts under such 
parts for the same one-year period; 
such that the reduction made in payments under 
that order shall achieve the required total percentage 
reduction in those payments for that period.’’; 
(3) by inserting after paragraph (1) the fol-
lowing: 
‘‘(2) UNIFORM
REDUCTION
RATE; MAXIMUM 
PERMISSIBLE REDUCTION.—Reductions in payments 
for programs and activities under such title XVIII 
pursuant to a sequestration order under section 254 
shall be at a uniform rate, which shall not exceed 4 
percent, across all such programs and activities sub-
ject to such order.’’; 
(4) by inserting after paragraph (3), as redesig-
nated, the following: 
‘‘(4) TIMING OF SUBSEQUENT SEQUESTRATION 
ORDER.—A sequestration order required by section 
252 or 253 with respect to programs under such 
title XVIII shall not take effect until the first month 
beginning after the end of the effective period of any 
prior sequestration order with respect to such pro-
grams, as determined in accordance with paragraph 
(1).’’;
(5) in paragraph (6), as redesignated, to read 
as follows: 
‘‘(6) SEQUESTRATION
DISREGARDED
IN
COM-
PUTING
PAYMENT
AMOUNTS.—The Secretary of 
Health and Human Services shall not take into ac-
count any reductions in payment amounts which 
have been or may be effected under this part, for 
purposes of computing any adjustments to payment 
rates under such title XVIII, specifically including— 
‘‘(A) the part C growth percentage under 
section 1853(c)(6); 
‘‘(B) the part D annual growth rate under 
section 1860D–2(b)(6); and 
‘‘(C) application of risk corridors to part D 
payment rates under section 1860D–15(e).’’; 
and 
(6) by adding after paragraph (6), as redesig-
nated, the following: 
‘‘(7) EXEMPTIONS FROM SEQUESTRATION.—In 
addition to the programs and activities specified in 
section 255, the following shall be exempt from se-
questration under this part: 
‘‘(A) PART D LOW-INCOME SUBSIDIES.— 
Premium and cost-sharing subsidies under sec-
tion 1860D–14 of the Social Security Act.
‘‘(B) PART D CATASTROPHIC SUBSIDY.— 
Payments under section 1860D–15(b) and 
(e)(2)(B) of the Social Security Act. 
‘‘(C) QUALIFIED
INDIVIDUAL
(QI)
PRE-
MIUMS.—Payments to States for coverage of 
Medicare cost-sharing for certain low-income 
Medicare beneficiaries under section 1933 of 
the Social Security Act.’’. 
SEC. 111. EXEMPT PROGRAMS AND ACTIVITIES. 
(a) DESIGNATIONS.—Section 255 of BBEDCA is 
amended by redesignating subsection (i) as (j) and strik-
ing ‘‘1998’’ and inserting in lieu thereof ‘‘2010’’. 
(b) SOCIAL SECURITY, VETERANS PROGRAMS, NET 
INTEREST, AND TAX CREDITS.—Subsections (a) through 
(d) of section 255 of BBEDCA are amended to read as 
follows: 
‘‘(a) SOCIAL SECURITY BENEFITS AND TIER I RAIL-
ROAD RETIREMENT BENEFITS.—Benefits payable under 
the old-age, survivors, and disability insurance program 
established under title II of the Social Security Act (42 
U.S.C. 401 et seq.), and benefits payable under section 
231b(a), 231b(f)(2), 231c(a), and 231c(f) of title 45, 
United States Code, shall be exempt from reduction under 
any order issued under this part.
‘‘(b) VETERANS PROGRAMS.—The following program 
shall be exempt from reduction under any order issued 
under this part— 
‘‘All programs administered by the Department 
of Veterans Affairs. 
‘‘Special Benefits for Certain World War II 
Veterans (28–0401–0–1–701). 
‘‘(c) NET INTEREST.—No reduction of payments for 
net interest (all of major functional category 900) shall 
be made under any order issued under this part. 
‘‘(d) REFUNDABLE INCOME TAX CREDITS.—Pay-
ments to individuals made pursuant to provisions of the 
Internal Revenue Code of 1986 establishing refundable 
tax credits shall be exempt from reduction under any order 
issued under this part.’’. 
(c) OTHER PROGRAMS
AND ACTIVITIES, LOW-IN-
COME
PROGRAMS, AND
ECONOMIC
RECOVERY
PRO-
GRAMS.—Subsections (g) and (h) of section 255 of 
BBEDCA are amended to read as follows: 
‘‘(g) OTHER PROGRAMS AND ACTIVITIES.— 
‘‘(1)(A) The following budget accounts and ac-
tivities shall be exempt from reduction under any 
order issued under this part:
‘‘Activities resulting from private dona-
tions, bequests, or voluntary contributions to 
the Government. 
‘‘Activities financed by voluntary payments 
to the Government for goods or services to be 
provided for such payments. 
‘‘Administration of Territories, Northern 
Mariana Islands Covenant grants (14–0412–0– 
1–808). 
‘‘Advances to the Unemployment Trust 
Fund and Other Funds (16–0327–0–1–600). 
‘‘Black Lung Disability Trust Fund Refi-
nancing (16–0329–0–1–601). 
‘‘Bonneville Power Administration Fund 
and borrowing authority established pursuant 
to section 13 of Public Law 93–454 (1974), as 
amended (89–4045–0–3–271). 
‘‘Claims, Judgments, and Relief Acts (20– 
1895–0–1–808). 
‘‘Compact of Free Association (14–0415– 
0–1–808). 
‘‘Compensation of the President (11– 
0209–01–1–802). 
‘‘Comptroller of the Currency, Assessment 
Funds (20–8413–0–8–373).
‘‘Continuing Fund, Southeastern Power 
Administration (89–5653–0–2–271). 
‘‘Continuing Fund, Southwestern Power 
Administration (89–5649–0–2–271). 
‘‘Dual Benefits Payments Account (60– 
0111–0–1–601). 
‘‘Emergency Fund, Western Area Power 
Administration (89–5069–0–2–271). 
‘‘Exchange Stabilization Fund (20–4444– 
0–3–155). 
‘‘Federal Deposit Insurance Corporation, 
Deposit Insurance Fund (51–4596–4–4–373). 
‘‘Federal Deposit Insurance Corporation, 
FSLIC Resolution Fund (51–4065–0–3–373). 
‘‘Federal Deposit Insurance Corporation, 
Noninterest 
Bearing 
Transaction 
Account 
Guarantee (51–4458–0–3–373). 
‘‘Federal Deposit Insurance Corporation, 
Senior Unsecured Debt Guarantee (51–4457– 
0–3–373). 
‘‘Federal Housing Finance Agency, Admin-
istrative Expenses (95–5532–0–2–371). 
‘‘Federal Payment to the District of Co-
lumbia Judicial Retirement and Survivors An-
nuity Fund (20–1713–0–1–752).
‘‘Federal Payment to the District of Co-
lumbia Pension Fund (20–1714–0–1–601). 
‘‘Federal Payments to the Railroad Retire-
ment Accounts (60–0113–0–1–601). 
‘‘Federal Reserve Bank Reimbursement 
Fund (20–1884–0–1–803). 
‘‘Financial Agent Services (20–1802–0–1– 
803). 
‘‘Foreign Military Sales Trust Fund (11– 
8242–0–7–155). 
‘‘Hazardous Waste Management, Con-
servation Reserve Program (12–4336–0–3– 
999). 
‘‘Host Nation Support Fund for Relocation 
(97–8337–0–7–051). 
‘‘Internal Revenue Collections for Puerto 
Rico (20–5737–0–2–806). 
‘‘Intragovernmental funds, including those 
from which the outlays are derived primarily 
from resources paid in from other government 
accounts, except to the extent such funds are 
augmented by direct appropriations for the fis-
cal year during which an order is in effect. 
‘‘Medical Facilities Guarantee and Loan 
Fund (75–9931–0–3–551).
‘‘National Credit Union Administration, 
Central Liquidity Facility (25–4470–0–3–373). 
‘‘National Credit Union Administration, 
Corporate Credit Union Share Guarantee Pro-
gram (25–4476–0–3–376). 
‘‘National Credit Union Administration, 
Credit Union Homeowners Affordability Relief 
Program (25–4473–0–3–371). 
‘‘National Credit Union Administration, 
Credit Union Share Insurance Fund (25–4468– 
0–3–373). 
‘‘National Credit Union Administration, 
Credit Union System Investment Program (25– 
4474–0–3–376). 
‘‘National Credit Union Administration, 
Operating fund (25–4056–0–3–373). 
‘‘National Credit Union Administration, 
Share Insurance Fund Corporate Debt Guar-
antee Program (25–4469–0–3–376). 
‘‘National Credit Union Administration, 
U.S. Central Federal Credit Union Capital Pro-
gram (25–4475–0–3–376). 
‘‘Office of Thrift Supervision (20–4108–0– 
3–373).
‘‘Panama Canal Commission Compensation 
Fund (16–5155–0–2–602). 
‘‘Payment of Vietnam and USS Pueblo 
prisoner-of-war claims within the Salaries and 
Expenses, Foreign Claims Settlement account 
(15–0100–0–1–153). 
‘‘Payment to Civil Service Retirement and 
Disability Fund (24–0200–0–1–805). 
‘‘Payment to Department of Defense Medi-
care-Eligible Retiree Health Care Fund (97– 
0850–0–1–054). 
‘‘Payment to Judiciary Trust Funds (10– 
0941–0–1–752). 
‘‘Payment to Military Retirement Fund 
(97–0040–0–1–054). 
‘‘Payment to the Foreign Service Retire-
ment and Disability Fund (19–0540–0–1–153). 
‘‘Payments to Copyright Owners (03– 
5175–0–2–376). 
‘‘Payments to Health Care Trust Funds 
(75–0580–0–1–571). 
‘‘Payment to Radiation Exposure Com-
pensation Trust Fund (15–0333–0–1–054). 
‘‘Payments to Social Security Trust Funds 
(28–0404–0–1–651).
‘‘Payments to the United States Terri-
tories, Fiscal Assistance (14–0418–0–1–806). 
‘‘Payments to trust funds from excise 
taxes or other receipts properly creditable to 
such trust funds. 
‘‘Payments to widows and heirs of de-
ceased Members of Congress (00–0215–0–1– 
801). 
‘‘Postal Service Fund (18–4020–0–3–372). 
‘‘Radiation Exposure Compensation Trust 
Fund (15–8116–0–1–054). 
‘‘Reimbursement to Federal Reserve Banks 
(20–0562–0–1–803). 
‘‘Salaries of Article III judges. 
‘‘Soldiers and Airmen’s Home, payment of 
claims (84–8930–0–7–705). 
‘‘Tennessee Valley Authority Fund, except 
nonpower programs and activities (64–4110–0– 
3–999). 
‘‘Tribal and Indian trust accounts within 
the Department of the Interior which fund 
prior legal obligations of the Government or 
which are established pursuant to Acts of Con-
gress regarding Federal management of tribal 
real property or other fiduciary responsibilities,
including but not limited to Tribal Special 
Fund (14–5265–0–2–452), Tribal Trust Fund 
(14–8030–0–7–452), White Earth Settlement 
(14–2204–0–1–452), and Indian Water Rights 
and Habitat Acquisition (14–5505–0–2–303). 
‘‘United Mine Workers of America 1992 
Benefit Plan (95–8260–0–7–551). 
‘‘United Mine Workers of America 1993 
Benefit Plan (95–8535–0–7–551). 
‘‘United Mine Workers of America Com-
bined Benefit Fund (95–8295–0–7–551). 
‘‘United States Enrichment Corporation 
Fund (95–4054–0–3–271). 
‘‘Universal Service Fund (27–5183–0–2– 
376). 
‘‘Vaccine Injury Compensation (75–0320– 
0–1–551). 
‘‘Vaccine Injury Compensation Program 
Trust Fund (20–8175–0–7–551). 
‘‘(B) The following Federal retirement and dis-
ability accounts and activities shall be exempt from 
reduction under any order issued under this part: 
‘‘Black Lung Disability Trust Fund (20– 
8144–0–7–601).
‘‘Central Intelligence Agency Retirement 
and Disability System Fund (56–3400–0–1– 
054). 
‘‘Civil Service Retirement and Disability 
Fund (24–8135–0–7–602). 
‘‘Comptrollers general retirement system 
(05–0107–0–1–801). 
‘‘Contributions to U.S. Park Police annu-
ity benefits, Other Permanent Appropriations 
(14–9924–0–2–303). 
‘‘Court of Appeals for Veterans Claims Re-
tirement Fund (95–8290–0–7–705). 
‘‘Department of Defense Medicare-Eligible 
Retiree Health Care Fund (97–5472–0–2–551). 
‘‘District of Columbia Federal Pension 
Fund (20–5511–0–2–601). 
‘‘District of Columbia Judicial Retirement 
and Survivors Annuity Fund (20–8212–0–7– 
602). 
‘‘Energy Employees Occupational Illness 
Compensation Fund (16–1523–0–1–053). 
‘‘Foreign National Employees Separation 
Pay (97–8165–0–7–051).
‘‘Foreign Service National Defined Con-
tributions Retirement Fund (19–5497–0–2– 
602). 
‘‘Foreign Service National Separation Li-
ability Trust Fund (19–8340–0–7–602). 
‘‘Foreign Service Retirement and Dis-
ability Fund(19–8186–0–7–602). 
‘‘Government Payment for Annuitants, 
Employees Health Benefits (24–0206–0–1– 
551). 
‘‘Government Payment for Annuitants, 
Employee Life Insurance (24–0500–0–1–602). 
‘‘Judicial Officers’ Retirement Fund (10– 
8122–0–7–602). 
‘‘Judicial Survivors’ Annuities Fund (10– 
8110–0–7–602). 
‘‘Military Retirement Fund (97–8097–0– 
7–602). 
‘‘National Railroad Retirement Investment 
Trust (60–8118–0–7–601). 
‘‘National Oceanic and Atmospheric Ad-
ministration retirement (13–1450–0–1–306). 
‘‘Pensions for former Presidents (47– 
0105–0–1–802).
‘‘Postal Service Retiree Health Benefits 
Fund (24–5391–0–2–551). 
‘‘Public Safety Officer Benefits (15–0403– 
0–1–754). 
‘‘Rail Industry Pension Fund (60–8011– 
0–7–601). 
‘‘Retired Pay, Coast Guard (70–0602–0– 
1–403). 
‘‘Retirement Pay and Medical Benefits for 
Commissioned Officers, Public Health Service 
(75–0379–0–1–551). 
‘‘Special Benefits for Disabled Coal Miners 
(16–0169–0–1–601). 
‘‘Special Benefits, Federal Employees’ 
Compensation Act (16–1521–0–1–600). 
‘‘Special Workers Compensation Expenses 
(16–9971–0–7–601). 
‘‘Tax Court Judges Survivors Annuity 
Fund (23–8115–0–7–602). 
‘‘United States Court of Federal Claims 
Judges’ Retirement Fund (10–8124–0–7–602). 
‘‘United States Secret Service, DC Annuity 
(70–0400–0–1–751). 
‘‘Voluntary Separation Incentive Fund 
(97–8335–0–7–051).
‘‘(2) Prior legal obligations of the Government 
in the following budget accounts and activities shall 
be exempt from any order issued under this part: 
‘‘Biomass Energy Development (20–0114– 
0–1–271). 
‘‘Check Forgery Insurance Fund (20– 
4109–0–3–803). 
‘‘Credit liquidating accounts. 
‘‘Credit reestimates. 
‘‘Employees Life Insurance Fund (24– 
8424–0–8–602). 
‘‘Federal Aviation Insurance Revolving 
Fund (69–4120–0–3–402). 
‘‘Federal 
Crop 
Insurance 
Corporation 
Fund (12–4085–0–3–351). 
‘‘Federal Emergency Management Agency, 
National Flood Insurance Fund (58–4236–0– 
3–453). 
‘‘Federal Home Loan Mortgage Corpora-
tion (Freddie Mac). 
‘‘Federal National Mortgage Corporation 
(Fannie Mae). 
‘‘Geothermal resources development fund 
(89–0206–0–1–271).
‘‘Low-Rent Public Housing—Loans and 
Other Expenses (86–4098–0–3–604). 
‘‘Maritime Administration, War Risk In-
surance Revolving Fund (69–4302–0–3–403). 
‘‘Natural Resource Damage Assessment 
Fund (14–1618–0–1–302). 
‘‘Overseas Private Investment Corporation, 
Noncredit Account (71–4184–0–3–151). 
‘‘Pension Benefit Guaranty Corporation 
Fund (16–4204–0–3–601). 
‘‘San Joaquin Restoration Fund (14– 
5537–0–2–301). 
‘‘Servicemembers’ Group Life Insurance 
Fund (36–4009–0–3–701). 
‘‘Terrorism Insurance Program (20–0123– 
0–1–376). 
‘‘(h) LOW-INCOME PROGRAMS.—The following pro-
grams shall be exempt from reduction under any order 
issued under this part: 
‘‘Academic Competitiveness/Smart Grant Pro-
gram (91–0205–0–1–502). 
‘‘Child Care Entitlement to States (75–1550– 
0–1–609). 
‘‘Child Enrollment Contingency Fund (75– 
5551–0–2–551).
‘‘Child Nutrition Programs (with the exception 
of special milk programs) (12–3539–0–1–605). 
‘‘Children’s Health Insurance Fund (75–0515– 
0–1–551). 
‘‘Commodity Supplemental Food Program (12– 
3507–0–1–605). 
‘‘Contingency Fund (75–1522–0–1–609). 
‘‘Family Support Programs (75–1501–0–1– 
609). 
‘‘Federal Pell Grants under section 401 Title 
IV of the Higher Education Act. 
‘‘Grants to States for Medicaid (75–0512–0–1– 
551). 
‘‘Payments for Foster Care and Permanency 
(75–1545–0–1–609). 
‘‘Supplemental Nutrition Assistance Program 
(12–3505–0–1–605). 
‘‘Supplemental Security Income Program (28– 
0406–0–1–609). 
‘‘Temporary Assistance for Needy Families 
(75–1552–0–1–609).’’. 
(d) ECONOMIC RECOVERY PROGRAMS.—Section 255 
of BBEDCA is amended by adding the following after 
subsection (h):
‘‘(i) ECONOMIC RECOVERY PROGRAMS.—The fol-
lowing programs shall be exempt from reduction under 
any order issued under this part: 
‘‘All programs enacted in, or increases in pro-
grams provided by, the American Recovery and Re-
investment Act of 2009. 
‘‘Exchange Stabilization Fund-Money Market 
Mutual Fund Guaranty Facility (20–4274–0–3– 
376). 
‘‘Financial Stabilization Reserve (20–0131–4– 
1–376). 
‘‘GSE Mortgage-Backed Securities Purchase 
Program Account (20–0126–0–1–371). 
‘‘GSE Preferred Stock Purchase Agreements 
(20–0125–0–1–371). 
‘‘Office of Financial Stability (20–0128–0–1– 
376). 
‘‘Special Inspector General for the Troubled 
Asset Relief Program (20–0133–0–1–376). 
‘‘Troubled Asset Relief Program Account (20– 
0132–0–1–376). 
‘‘Troubled Asset Relief Program Equity Pur-
chase Program (20–0134–0–1–376).
‘‘Troubled Asset Relief Program, Home Afford-
able Modification Program (20–0136–0–1–604).’’. 
Passed the House of Representatives November 19, 
2009. 
Attest: 
Clerk.
111TH CONGRESS 
1ST SESSION 
H. R. 3961 
AN ACT 
To amend title XVIII of the Social Security Act to 
reform the Medicare SGR payment system for 
physicians and to reinstitute and update the Pay- 
As-You-Go requirement of budget neutrality on 
new tax and mandatory spending legislation, en-
forced by the threat of annual, automatic seques-
tration.