232 
the Internal Revenue Code of 1986, unless otherwise 
expressly provided. 
(c) SPECIAL RULE.—Notwithstanding any other pro-
vision of the Rules of the House, the definitions set forth 
in this section shall apply for congressional earmarks, lim-
ited tariff benefits, and limited tax benefits. 
Subtitle D—Public Debt Limit 
Reform 
SEC. 431. LIMIT ON PUBLIC DEBT. 
Section 3101 of title 31, United States Code, is 
amended to read as follows: 
‘‘§ 3101. Public debt limit 
‘‘(a) In this section, the current redemption value of 
an obligation issued on a discount basis and redeemable 
before maturity at the option of its holder is deemed to 
be the face amount of the obligation. 
‘‘(b) The face amount of obligations issued under this 
chapter and the face amount of obligations whose prin-
cipal and interest are guaranteed by the United States 
Government (except guaranteed obligations held by the 
Secretary of the Treasury and intragovernmental hold-
ings) may not be more than $4,393,000,000,000 out-
standing at one time, subject to changes periodically made 
in that amount as provided by law. 
VerDate Aug 31 2005 
00:38 May 04, 2007
Jkt 059200
PO 00000
Frm 00232
Fmt 6652
Sfmt 6201
E:\BILLS\H2084.IH
H2084
mstockstill on PROD1PC66 with BILLS
233 
‘‘(c) For purposes of this section, the face amount, 
for any month, of any obligation issued on a discount basis 
that is not redeemable before maturity at the option of 
the holder of the obligation is an amount equal to the sum 
of— 
‘‘(1) the original issue price of the obligation, 
plus 
‘‘(2) the portion of the discount on the obliga-
tion attributable to periods before the beginning of 
such month (as determined under the principles of 
section 1272(a) of the Internal Revenue Code of 
1986 without regard to any exceptions contained in 
paragraph (2) of such section). 
‘‘(d) For purposes of this section, the term 
‘intragovernment holding’ is any obligation issued by the 
Secretary of the Treasury to any Federal trust fund or 
Government account, whether in respect of public money, 
money otherwise required to be deposited in the Treasury, 
or amounts appropriated.’’. 
SEC. 432. REPEAL OF THE GEPHARDT RULE. 
The Rules of the House of Representatives are 
amended by repealing rule XXVII (relating to the statu-
tory limit on public debt) and by redesignating rule 
XXVIII as rule XXVII. 
VerDate Aug 31 2005 
00:38 May 04, 2007
Jkt 059200
PO 00000
Frm 00233
Fmt 6652
Sfmt 6201
E:\BILLS\H2084.IH
H2084
mstockstill on PROD1PC66 with BILLS
234 
Subtitle E—Risk-Assumed 
Budgeting 
SEC. 441. FEDERAL INSURANCE PROGRAMS. 
(a) IN GENERAL.—The Congressional Budget Act of 
1974 is amended by adding after title V the following new 
title: 
‘‘TITLE VI—BUDGETARY TREAT-
MENT OF FEDERAL INSUR-
ANCE PROGRAMS 
‘‘SEC. 602. BUDGETARY TREATMENT. 
‘‘(a) PRESIDENT’S BUDGET.—Beginning with fiscal 
year 2011, the budget of the Government pursuant to sec-
tion 1105(a) of title 31, United States Code, shall be 
based on the risk-assumed cost of Federal insurance pro-
grams. 
‘‘(b) BUDGET ACCOUNTING.—For any Federal insur-
ance program— 
‘‘(1) the program account shall— 
‘‘(A) pay the risk-assumed cost borne by 
the taxpayer to the financing account, and 
‘‘(B) pay actual insurance program admin-
istrative costs; 
‘‘(2) the financing account shall— 
‘‘(A) receive premiums and other income, 
VerDate Aug 31 2005 
00:38 May 04, 2007
Jkt 059200
PO 00000
Frm 00234
Fmt 6652
Sfmt 6201
E:\BILLS\H2084.IH
H2084
mstockstill on PROD1PC66 with BILLS
235 
‘‘(B) pay all claims for insurance and re-
ceive all recoveries, 
‘‘(C) transfer to the program account on 
not less than an annual basis amounts nec-
essary to pay insurance program administrative 
costs; 
‘‘(3) a negative risk-assumed cost shall be 
transferred from the financing account to the pro-
gram account, and shall be transferred from the pro-
gram account to the general fund; and 
‘‘(4) all payments by or receipts of the financ-
ing accounts shall be treated in the budget as a 
means of financing. 
‘‘(c) APPROPRIATIONS
REQUIRED.—(1) Notwith-
standing any other provision of law, insurance commit-
ments may be made for fiscal year 2011 and thereafter 
only to the extent that new budget authority to cover their 
risk-assumed cost is provided in advance in an appropria-
tion Act. 
‘‘(2) An outstanding insurance commitment shall not 
be modified in a manner that increases its risk-assumed 
cost unless budget authority for the additional cost has 
been provided in advance. 
‘‘(3) Paragraph (1) shall not apply to Federal insur-
ance programs that constitute entitlements. 
VerDate Aug 31 2005 
00:38 May 04, 2007
Jkt 059200
PO 00000
Frm 00235
Fmt 6652
Sfmt 6201
E:\BILLS\H2084.IH
H2084
mstockstill on PROD1PC66 with BILLS
236 
‘‘(d) REESTIMATES.—The risk-assumed cost for a 
fiscal year shall be reestimated in each subsequent year. 
Such reestimate can equal zero. In the case of a positive 
reestimate, the amount of the reestimate shall be paid 
from the program account to the financing account. In 
the case of a negative reestimate, the amount of the reesti-
mate shall be paid from the financing account to the pro-
gram account, and shall be transferred from the program 
account to the general fund. Reestimates shall be dis-
played as a distinct and separately identified subaccount 
in the program account. 
‘‘(e) ADMINISTRATIVE EXPENSES.—All funding for 
an agency’s administration of a Federal insurance pro-
gram shall be displayed as a distinct and separately identi-
fied subaccount in the program account. 
‘‘SEC. 603. TIMETABLE FOR IMPLEMENTATION OF ACCRUAL 
BUDGETING FOR FEDERAL INSURANCE PRO-
GRAMS. 
‘‘(a) AGENCY REQUIREMENTS.—Agencies with re-
sponsibility for Federal insurance programs shall develop 
models to estimate their risk-assumed cost by year 
through the budget horizon and shall submit those models, 
all relevant data, a justification for critical assumptions, 
and the annual projected risk-assumed costs to OMB with 
their budget requests each year starting with the request 
VerDate Aug 31 2005 
00:38 May 04, 2007
Jkt 059200
PO 00000
Frm 00236
Fmt 6652
Sfmt 6201
E:\BILLS\H2084.IH
H2084
mstockstill on PROD1PC66 with BILLS
237 
for fiscal year 2010. Agencies will likewise provide OMB 
with annual estimates of modifications, if any, and reesti-
mates of program costs. 
‘‘(b) DISCLOSURE.—When the President submits a 
budget of the Government pursuant to section 1105(a) of 
title 31, United States Code, for fiscal year 2010, OMB 
shall publish a notice in the Federal Register advising in-
terested persons of the availability of information describ-
ing the models, data (including sources), and critical as-
sumptions (including explicit or implicit discount rate as-
sumptions) that it or other executive branch entities would 
use to estimate the risk-assumed cost of Federal insurance 
programs and giving such persons an opportunity to sub-
mit comments. At the same time, the chairman of the 
Committee on the Budget shall publish a notice for CBO 
in the Federal Register advising interested persons of the 
availability of information describing the models, data (in-
cluding sources), and critical assumptions (including ex-
plicit or implicit discount rate assumptions) that it would 
use to estimate the risk-assumed cost of Federal insurance 
programs and giving such interested persons an oppor-
tunity to submit comments. 
‘‘(c) REVISION.—(1) After consideration of comments 
pursuant to subsection (b), and in consultation with the 
Committees on the Budget of the House of Representa-
VerDate Aug 31 2005 
00:38 May 04, 2007
Jkt 059200
PO 00000
Frm 00237
Fmt 6652
Sfmt 6201
E:\BILLS\H2084.IH
H2084
mstockstill on PROD1PC66 with BILLS
238 
tives and the Senate, OMB and CBO shall revise the mod-
els, data, and major assumptions they would use to esti-
mate the risk-assumed cost of Federal insurance pro-
grams. 
‘‘(2) When the President submits a budget of the 
Government pursuant to section 1105(a) of title 31, 
United States Code, for fiscal year 2011, OMB shall pub-
lish a notice in the Federal Register advising interested 
persons of the availability of information describing the 
models, data (including sources), and critical assumptions 
(including explicit or implicit discount rate assumptions) 
that it or other executive branch entities used to estimate 
the risk-assumed cost of Federal insurance programs. 
‘‘(d) DISPLAY.— 
‘‘(1) IN
GENERAL.—For fiscal years 2011, 
2012, and 2013 the budget submissions of the Presi-
dent pursuant to section 1105(a) of title 31, United 
States Code, and CBO’s reports on the economic 
and budget outlook pursuant to section 202(e)(1) 
and the President’s budgets, shall for display pur-
poses only, estimate the risk-assumed cost of exist-
ing or proposed Federal insurance programs. 
‘‘(2) OMB.—The display in the budget submis-
sions of the President for fiscal years 2011, 2012, 
and 2013 shall include— 
VerDate Aug 31 2005 
00:38 May 04, 2007
Jkt 059200
PO 00000
Frm 00238
Fmt 6652
Sfmt 6201
E:\BILLS\H2084.IH
H2084
mstockstill on PROD1PC66 with BILLS
239 
‘‘(A) a presentation for each Federal insur-
ance program in budget-account level detail of 
estimates of risk-assumed cost; 
‘‘(B) a summary table of the risk-assumed 
costs of Federal insurance programs; and 
‘‘(C) an alternate summary table of budget 
functions and aggregates using risk-assumed 
rather than cash-based cost estimates for Fed-
eral insurance programs. 
‘‘(3) CBO.—In the second session of the 110th 
Congress and the 111th Congress, CBO shall in-
clude in its estimates under section 308, for display 
purposes only, the risk-assumed cost of existing Fed-
eral insurance programs, or legislation that CBO, in 
consultation with the Committees on the Budget of 
the House of Representatives and the Senate, deter-
mines would create a new Federal insurance pro-
gram. 
‘‘(e) OMB, CBO, AND GAO EVALUATIONS.—(1) Not 
later than 6 months after the budget submission of the 
President pursuant to section 1105(a) of title 31, United 
States Code, for fiscal year 2012, OMB, CBO, and GAO 
shall each submit to the Committees on the Budget of the 
House of Representatives and the Senate a report that 
VerDate Aug 31 2005 
00:38 May 04, 2007
Jkt 059200
PO 00000
Frm 00239
Fmt 6652
Sfmt 6201
E:\BILLS\H2084.IH
H2084
mstockstill on PROD1PC66 with BILLS
240 
evaluates the advisability and appropriate implementation 
of this title. 
‘‘(2) Each report made pursuant to paragraph (1) 
shall address the following: 
‘‘(A) The adequacy of risk-assumed estimation 
models used and alternative modeling methods. 
‘‘(B) The availability and reliability of data or 
information necessary to carry out this title. 
‘‘(C) The appropriateness of the explicit or im-
plicit discount rate used in the various risk-assumed 
estimation models. 
‘‘(D) The advisability of specifying a statutory 
discount rate (such as the Treasury rate) for use in 
risk-assumed estimation models. 
‘‘(E) The ability of OMB, CBO, or GAO, as ap-
plicable, to secure any data or information directly 
from any Federal agency necessary to enable it to 
carry out this title. 
‘‘(F) The relationship between risk-assumed ac-
crual budgeting for Federal insurance programs and 
the specific requirements of the Balanced Budget 
and Emergency Deficit Control Act of 1985. 
‘‘(G) Whether Federal budgeting is improved by 
the inclusion of risk-assumed cost estimates for Fed-
eral insurance programs. 
VerDate Aug 31 2005 
00:38 May 04, 2007
Jkt 059200
PO 00000
Frm 00240
Fmt 6652
Sfmt 6201
E:\BILLS\H2084.IH
H2084
mstockstill on PROD1PC66 with BILLS
241 
‘‘(H) The advisability of including each of the 
programs currently estimated on a risk-assumed cost 
basis in the Federal budget on that basis. 
‘‘SEC. 604. DEFINITIONS. 
‘‘For purposes of this title: 
‘‘(1) The term ‘Federal insurance program’ 
means a program that makes insurance commit-
ments and includes the list of such programs in-
cluded in the joint explanatory statement of man-
agers accompanying the conference report on the 
Comprehensive Budget Process Reform Act of 1999. 
‘‘(2) The term ‘insurance commitment’ means 
an agreement in advance by a Federal agency to in-
demnify a non-Federal entity against specified 
losses. This term does not include loan guarantees 
as defined in title V or benefit programs such as so-
cial security, medicare, and similar existing social in-
surance programs. 
‘‘(3)(A) The term ‘risk-assumed cost’ means the 
net present value of the estimated cash flows to and 
from the Government resulting from an insurance 
commitment or modification thereof. 
‘‘(B) The cash flows associated with an insur-
ance commitment include— 
VerDate Aug 31 2005 
00:38 May 04, 2007
Jkt 059200
PO 00000
Frm 00241
Fmt 6652
Sfmt 6201
E:\BILLS\H2084.IH
H2084
mstockstill on PROD1PC66 with BILLS
242 
‘‘(i) expected claims payments inherent in 
the Government’s commitment; 
‘‘(ii) net premiums (expected premium col-
lections received from or on behalf of the in-
sured less expected administrative expenses); 
‘‘(iii) expected recoveries; and 
‘‘(iv) expected changes in claims, pre-
miums, or recoveries resulting from the exercise 
by the insured of any option included in the in-
surance commitment. 
‘‘(C) The cost of a modification is the difference 
between the current estimate of the net present 
value of the remaining cash flows under the terms 
of the insurance commitment, and the current esti-
mate of the net present value of the remaining cash 
flows under the terms of the insurance commitment 
as modified. 
‘‘(D) The cost of a reestimate is the difference 
between the net present value of the amount cur-
rently required by the financing account to pay esti-
mated claims and other expenditures and the 
amount currently available in the financing account. 
The cost of a reestimate shall be accounted for in 
the current year in the budget of the Government 
VerDate Aug 31 2005 
00:38 May 04, 2007
Jkt 059200
PO 00000
Frm 00242
Fmt 6652
Sfmt 6201
E:\BILLS\H2084.IH
H2084
mstockstill on PROD1PC66 with BILLS
243 
pursuant to section 1105(a) of title 31, United 
States Code. 
‘‘(E) For purposes of this definition, expected 
administrative expenses shall be construed as the 
amount estimated to be necessary for the proper ad-
ministration of the insurance program. This amount 
may differ from amounts actually appropriated or 
otherwise made available for the administration of 
the program. 
‘‘(4) The term ‘program account’ means the 
budget account for the risk-assumed cost, and for 
paying all costs of administering the insurance pro-
gram, and is the account from which the risk-as-
sumed cost is disbursed to the financing account. 
‘‘(5) The term ‘financing account’ means the 
nonbudget account that is associated with each pro-
gram account which receives payments from or 
makes payments to the program account, receives 
premiums and other payments from the public, pays 
insurance claims, and holds balances. 
‘‘(6) The term ‘modification’ means any Gov-
ernment action that alters the risk-assumed cost of 
an existing insurance commitment from the current 
estimate of cash flows. This includes any action re-
sulting from new legislation, or from the exercise of 
VerDate Aug 31 2005 
00:38 May 04, 2007
Jkt 059200
PO 00000
Frm 00243
Fmt 6652
Sfmt 6201
E:\BILLS\H2084.IH
H2084
mstockstill on PROD1PC66 with BILLS