TITLE I—ENSURE THAT THE BIPARTISAN BALANCED BUDGET
AGREEMENT OF 1997 ACHIEVES ITS GOAL
Sec. 101. Timetable.
Sec. 102. Procedures to avoid sequestration or delay of new revenue reductions.
Sec. 103. Effect on Presidents’ budget submissions; point of order.
Sec. 104. Deficit and revenue targets.
Sec. 105. Direct spending caps.
Sec. 106. Economic assumptions.
Sec. 107. Revisions to the caps for entitlements and other spending and to the
revenue and deficit targets in this Act.
TITLE II—ENFORCEMENT PROVISIONS
Sec. 201. Reporting excess spending.
Sec. 202. Enforcing direct spending caps.
Sec. 203. Sequestration rules.
Sec. 204. Revenue enforcement.
Sec. 205. Exempt programs and activities.
Sec. 206. Special rules.
Sec. 207. The current law baseline.
Sec. 208. Limitations on emergency spending.
SEC. 2. DEFINITIONS.
For purposes of this Act:
(1) ELIGIBLE POPULATION.—The term ‘‘eligible
population’’ shall mean those individuals to whom
the United States is obligated to make a payment
under the provisions of a law creating entitlement
authority. Such term shall not include States, local-
ities, corporations or other nonliving entities.
(2) SEQUESTER
AND
SEQUESTRATION.—The
terms ‘‘sequester’’ and ‘‘sequestration’’ refer to or
mean the cancellation of budgetary resources pro-
vided by discretionary appropriations or direct
spending law.
(3) BREACH.—The term ‘‘breach’’ means, for
any fiscal year, the amount (if any) by which outlays
for that year (within a category of direct spending)
is above that category’s direct spending cap for that
year.
(4) BASELINE.—The term ‘‘baseline’’ means
the projection (described in section 207) of current
levels of new budget authority, outlays, receipts, and
the surplus or deficit into the budget year and the
outyears.
(5) 
BUDGETARY
RESOURCES.—The 
term
‘‘budgetary resources’’ means new budget authority,
unobligated balances, direct spending authority, and
obligation limitations.
(6) 
DISCRETIONARY
APPROPRIATIONS.—The
term ‘‘discretionary appropriations’’ means budg-
etary resources (except to fund direct spending pro-
grams) provided in appropriation Acts. If an appro-
priation Act alters the level of direct spending or off-
setting collections, that effect shall be treated as di-
rect spending. Classifications of new accounts or ac-
tivities and changes in classifications shall be made
in consultation with the Committees on Appropria-
tions and the Budget of the House of Representa-
tives and the Senate and with CBO and OMB.
(7) DIRECT
SPENDING.—The term ‘‘direct
spending’’ means—
(A) budget authority provided by law other
than appropriation Acts, including entitlement
authority;
(B) entitlement authority; and
(C) the food stamp program.
If a law other than an appropriation Act alters the
level of discretionary appropriations or offsetting col-
lections, that effect shall be treated as direct spend-
ing.
(8) ENTITLEMENT AUTHORITY.—The term ‘‘en-
titlement authority’’ means authority (whether tem-
porary or permanent) to make payments (including
loans and grants), the budget authority for which is
not provided for in advance by appropriation Acts,
to any person or government if, under the provisions
of the law containing such authority, the United
States is obligated to make such payments to per-
sons or governments who meet the requirements es-
tablished by such law.
(9) CURRENT.—The term ‘‘current’’ means,
with respect to OMB estimates included with a
budget submission under section 1105(a) of title 31
U.S.C., the estimates consistent with the economic
and technical assumptions underlying that budget.
(10) ACCOUNT.—The term ‘‘account’’ means an
item for which there is a designated budget account
designation number in the President’s budget.
(11) BUDGET YEAR.—The term ‘‘budget year’’
means the fiscal year of the Government that starts
on the next October 1.
(12) CURRENT
YEAR.—The term ‘‘current
year’’ means, with respect to a budget year, the fis-
cal year that immediately precedes that budget year.
(13) OUTYEAR.—The term ‘‘outyear’’ means,
with respect to a budget year, any of the fiscal years
that follow the budget year.
(14) OMB.—The term ‘‘OMB’’ means the Di-
rector of the Office of Management and Budget.
(15) CBO.—The term ‘‘CBO’’ means the Di-
rector of the Congressional Budget Office.
(16) BUDGET
OUTLAYS
AND
OUTLAYS.—The
terms ‘‘budget outlays’’ and ‘‘outlays’’ mean, with
respect to any fiscal year, expenditures of funds
under budget authority during such year.
(17) BUDGET AUTHORITY AND NEW BUDGET
AUTHORITY.—The terms ‘‘budget authority’’ and
‘‘new budget authority’’ have the meanings given to
them in section 3 of the Congressional Budget and
Impoundment Control Act of 1974.
(18) APPROPRIATION ACT.—The term ‘‘appro-
priation Act’’ means an Act referred to in section
105 of title 1 of the United States Code.
(19) CONSOLIDATED DEFICIT.—The term ‘‘con-
solidated deficit’’ means, with respect to a fiscal
year, the amount by which total outlays exceed total
receipts during that year.
(20) SURPLUS.—The term ‘‘surplus’’ means,
with respect to a fiscal year, the amount by which
total receipts exceed total outlays during that year.
(21) DIRECT SPENDING CAPS.—The term ‘‘di-
rect spending caps’’ means the nominal dollar limits
for entitlements and other mandatory spending pur-
suant to section 105 (as modified by any revisions
provided for in this Act).
TITLE I—ENSURE THAT THE BI-
PARTISAN BALANCED BUDG-
ET 
AGREEMENT 
OF 
1997
ACHIEVES ITS GOAL
SEC. 101. TIMETABLE.
On or before:
Action to be completed:
January 15 ....................................
CBO economic and budget update.
First Monday in February ............
President’s budget update based on
new assumptions.
August 1 ........................................
CBO and OMB updates.
August 15 ......................................
Preview report.
Not later than November 1 (and
as soon as practical after the
end of the fiscal).
OMB and CBO Analyses of Deficits,
Revenues and Spending Levels and
Projections for the Upcoming Year.
November 1–December 15 ............
Congressional action to avoid seques-
tration.
On or before:
Action to be completed:
December 15 ..................................
OMB issues final (look back) report
for prior year and preview for cur-
rent year.
December 15 ..................................
Presidential sequester order or order
delaying new/additional revenues
reductions scheduled to take effect
pursuant to reconciliation legisla-
tion enacted in calendar year 1997.
SEC. 102. PROCEDURES TO AVOID SEQUESTRATION OR
DELAY OF NEW REVENUE REDUCTIONS.
(a) SPECIAL MESSAGE.—If the OMB Analysis of Ac-
tual Spending Levels and Projections for the Upcoming
Year indicates that—
(1) deficits in the most recently completed fiscal
year exceeded, or the deficits in the budget year are
projected to exceed, the deficit targets in section
104;
(2) revenues in the most recently completed fis-
cal year were less than, or revenues in the current
year are projected to be less than, the revenue tar-
gets in section 104; or
(3) outlays in the most recently completed fiscal
year exceeded, or outlays in the current year are
projected to exceed, the caps in section 104;
the President shall submit to Congress with the OMB
Analysis of Actual Spending Levels and Projections for
the Upcoming Year a special message that includes pro-
posed legislative changes to—
(A) offset the net deficit or outlay excess;
(B) offset any revenue shortfall; or
(C) revise the deficit or revenue targets or the
outlay caps contained in this Act;
through any combination of—
(i) reductions in outlays;
(ii) increases in revenues; or
(iii) increases in the deficit targets or expendi-
ture caps, or reductions in the revenue targets, if the
President submits a written determination that, be-
cause of economic or programmatic reasons, none of
the variances from the balanced budget plan should
be offset.
(b) INTRODUCTION
OF
THE PRESIDENT’S PACK-
AGE.—Not later than November 15, the message from the
President required pursuant to subsection (a) shall be in-
troduced as a joint resolution in the House of Representa-
tives or the Senate by the chairman of its Committee on
the Budget. If the chairman fails to do so, after November
15, the joint resolution may be introduced by any Member
of that House of Congress and shall be referred to the
Committee on the Budget of that House.
(c) HOUSE
BUDGET
COMMITTEE
ACTION.—The
Committee on the Budget of the House of Representatives
shall, by November 15, report a joint resolution contain-
ing—
(1) the recommendations in the President’s
message, or different policies and proposed legisla-
tive changes than those contained in the message of
the President, to ameliorate or eliminate any excess
deficits or expenditures or any revenue shortfalls, or
(2) any changes to the deficit or revenue tar-
gets or expenditure caps contained in this Act, ex-
cept that any changes to the deficit or revenue tar-
gets or expenditure caps cannot be greater than the
changes recommended in the message submitted by
the President.
(d) PROCEDURE IF THE COMMITTEES ON THE BUDG-
ET OF THE HOUSE OF REPRESENTATIVES OR SENATE
FAILS TO REPORT REQUIRED RESOLUTION.—
(1) AUTOMATIC
DISCHARGE
OF
COMMITTEES
ON THE BUDGET OF THE HOUSE.—If the Committee
on the Budget of the House of Representatives fails,
by November 20, to report a resolution meeting the
requirements of subsection (c), the committee shall
be automatically discharged from further consider-
ation of the joint resolution reflecting the Presi-
dent’s recommendations introduced pursuant to sub-
section (a), and the joint resolution shall be placed
on the appropriate calendar.
(2) CONSIDERATION
OF
DISCHARGE
RESOLU-
TION IN THE HOUSE.—If the Committee has been
discharged under paragraph (1) above, any Member
may move that the House of Representatives con-
sider the resolution. Such motion shall be highly
privileged and not debatable. It shall not be in order
to consider any amendment to the resolution except
amendments which are germane and which do not
change the net deficit impact of the resolution.
(e) CONSIDERATION OF JOINT RESOLUTION IN THE
HOUSE.—Consideration of resolution reported pursuant to
subsection (c) or (d) shall be pursuant to the procedures
set forth in section 305 of the Congressional Budget Act
of 1974 and subsection (d).
(f) TRANSMITTAL TO SENATE.—If a joint resolution
passes the House of Representatives pursuant to sub-
section (e), the Clerk of the House of Representatives shall
cause the resolution to be engrossed, certified, and trans-
mitted to the Senate within 1 calendar day of the day on
which the resolution is passed. The resolution shall be re-
ferred to the Senate Committee on the Budget.
(g) REQUIREMENTS FOR SPECIAL JOINT RESOLU-
TION IN THE SENATE.—The Committee on the Budget of
the Senate shall report not later than December 1—
(1) a joint resolution reflecting the message of
the President; or
(2) the joint resolution passed by the House of
Representatives, with or without amendment; or
(3) a joint resolution containing different poli-
cies and proposed legislative changes than those con-
tained in either the message of the President or the
resolution passed by the House of Representatives,
to eliminate all or part of any excess deficits or ex-
penditures or any revenue shortfalls, or
(4) any changes to the deficit or revenue tar-
gets, or to the expenditure caps, contained in this
Act, except that any changes to the deficit or reve-
nue targets or expenditure caps cannot be greater
than the changes recommended in the message sub-
mitted by the President.
(h) PROCEDURE IF THE SENATE BUDGET COMMIT-
TEE FAILS TO REPORT REQUIRED RESOLUTION.—
(1) AUTOMATIC DISCHARGE OF SENATE BUDG-
ET COMMITTEE.—In the event that the Committee
on the Budget of the Senate fails, by December 1,
to report a resolution meeting the requirements of
subsection (g), the committee shall be automatically
discharged from further consideration of the joint
resolution reflecting the President’s recommenda-
tions introduced pursuant to subsection (a) and of
the resolution passed by the House of Representa-
tives, and both joint resolutions shall be placed on
the appropriate calendar.
(2) CONSIDERATION
OF
DISCHARGE
RESOLU-
TION IN THE SENATE.—(A) If the Committee has
been discharged under paragraph (1), any member
may move that the Senate consider the resolution.
Such motion shall be highly privileged and not de-
batable. It shall not be in order to consider any
amendment to the resolution except amendments
which are germane and which do not change the net
deficit impact of the resolution.
(B) Consideration of resolutions reported pur-
suant to subsections (c) or (d) shall be pursuant to
the procedures set forth in section 305 of the Con-
gressional Budget Act of 1974 and subsection (d).
(C) If the joint resolution reported by the Com-
mittees on the Budget pursuant to subsection (c) or
(g) or a joint resolution discharged in the House of
Representatives or the Senate pursuant to sub-
section (d)(1) or (h)(1) would eliminate less than—
(i) the entire amount by which actual or
projected deficits exceed, or revenues fall short
of, the targets in this Act; or
(ii) the entire amount by which actual or
projected outlays exceed the caps contained in
this Act;
then the Committee on the Budget of the Senate
shall report a joint resolution, raising the deficit tar-
gets or outlay caps, or reducing the revenue targets
for any year in which actual or projected spending,
revenues or deficits would not conform to the deficit
and revenue targets or expenditure caps in this Act.
(k) CONFERENCE REPORTS SHALL FULLY ADDRESS
DEFICIT EXCESS.—It shall not be in order in the House
of Representatives or the Senate to consider a conference
report on a joint resolution to eliminate all or part of any
excess deficits or outlays or to eliminate all or part of any
revenue shortfall compared to the deficit and revenue tar-
gets and the expenditure caps contained in this Act, un-
less—
(1) the joint resolution offsets the entire
amount of any overage or shortfall; or
(2) the House of Representatives and Senate
both pass the joint resolution reported pursuant to
subsection (j)(2).
The vote on any resolution reported pursuant to sub-
section (j)(2) shall be solely on the subject of changing
the deficit or revenue targets or the expenditure limits in
this Act.
SEC. 103. EFFECT ON PRESIDENTS’ BUDGET SUBMISSIONS;
POINT OF ORDER.
(a) BUDGET SUBMISSION.—Any budget submitted by
the President pursuant to section 1105(a) of title 31,
United States Code, for each of fiscal years 1998 through
2007 shall be consistent with the spending, revenue, and
deficit levels established in sections 104 and 105 or it shall
recommend changes to those levels.
(b) POINT OF ORDER.—It shall not be in order in
the House of Representatives or the Senate to consider
any concurrent resolution on the budget unless it is con-
sistent with the spending, revenue, and deficit levels estab-
lished in sections 104 and 105.
SEC. 104. DEFICIT AND REVENUE TARGETS.
(a) CONSOLIDATED DEFICIT
(OR SURPLUS) TAR-
GETS.—For purposes of sections 102 and 107, the consoli-
dated deficit targets shall be—
(1) for fiscal year 1998, $90,500,000,000;
(2) for fiscal year 1999, $89,700,000,000;
(3) for fiscal year 2000, $83,000,000,000;
(4) for fiscal year 2001, $53,300,000,000; and
(5) for fiscal year 2002, there shall be a surplus
of not less than $1,400,000,000.
(b) CONSOLIDATED REVENUE TARGETS.—For pur-
poses of sections 102, 107, 201, and 204, the consolidated
revenue targets shall be—
(1) for fiscal year 1998, $1,601,800,000,000;
(2) for fiscal year 1999, $1,664,200,000,000;
(3) for fiscal year 2000, $1,728,100,000,000;
(4) for fiscal year 2001, $1,805,100,000,000;
and
(5) for fiscal year 2002, $1,890,400,000,000.
SEC. 105. DIRECT SPENDING CAPS.
(a) IN GENERAL.—Effective upon submission of the
report by OMB pursuant to subsection (c), direct spending
caps shall apply to all entitlement authority except for un-
distributed offsetting receipts and net interest outlays.
For purposes of enforcing direct spending caps under this
Act, each separate program shown in the table set forth
in subsection (d) shall be deemed to be a category.
(b) BUDGET COMMITTEE REPORTS.—Within 30 days
after enactment of this Act, the Budget Committees of
the House of Representatives and the Senate shall file
with their respective Houses identical reports containing
account numbers and spending levels for each specific cat-
egory.
(c) REPORT BY OMB.—Within 30 days after enact-
ment of this Act, OMB shall submit to the President and
each House of Congress a report containing account num-
bers and spending limits for each specific category.
(d) CONTENTS OF REPORTS.—All direct spending ac-
counts not included in these reports under separate cat-
egories shall be included under the heading ‘‘Other Enti-
tlements and Mandatory Spending’’. These reports may
include adjustments among the caps set forth in this Act
as required below, however the aggregate amount available
under the ‘‘Total Entitlements and Other Mandatory
Spending’’ cap shall be identical in each such report and
in this Act and shall be deemed to have been adopted as
part of this Act. Each such report shall include the actual
amounts of the caps for each year of fiscal years 1998
through 2002 consistent with the concurrent resolution on
the budget for FY 1998 for each of the following cat-
egories:
Earned Income Tax Credit,
Family Support,
Federal retirement:
Civilian/other,
Military,
Medicaid,
Medicare,
Social security,
Supplemental security income,
Unemployment compensation,
Veterans’ benefits,
Medicare,
Other entitlements and mandatory spending,
and
Aggregate entitlements and other mandatory
spending.
(e) ADDITIONAL SPENDING LIMITS.—Legislation enacted
subsequent to this Act may include additional caps to limit
spending for specific programs, activities, or accounts with
these categories. Those additional caps (if any) shall be
enforced in the same manner as the limits set forth in
such joint explanatory statement.
SEC. 106. ECONOMIC ASSUMPTIONS.
Subject to periodic reestimation based on changed
economic conditions or changes in eligible population, de-
terminations of the direct spending caps under section
105, any breaches of such caps, and actions necessary to
remedy such breaches shall be based upon the economic
assumptions set forth in the joint explanatory statement
of managers accompanying the concurrent resolution on
the budget for fiscal year 1998 (House Concurrent Reso-
lution 84, 105th Congress).
SEC. 107. REVISIONS TO DEFICIT AND REVENUE TARGETS
AND TO THE CAPS FOR ENTITLEMENTS AND
OTHER MANDATORY SPENDING.
(a) AUTOMATIC ADJUSTMENTS
TO DEFICIT
AND
REVENUE TARGETS AND TO CAPS FOR ENTITLEMENTS
AND OTHER MANDATORY SPENDING.—When the Presi-
dent submits the budget under section 1105(a) of title 31,
United States Code, for any year, OMB shall calculate (in
the order set forth below), and the budget and reports
shall include, adjustments to the deficit and revenue tar-
gets, and to the direct spending caps (and those limits
as cumulatively adjusted) for the current year, the budget
year, and each outyear, to reflect the following:
(1) CHANGES TO REVENUE TARGETS.—
(A) CHANGES IN GROWTH.—For Federal
revenues and deficits under laws and policies
enacted or effective before July 1, 1997, growth
adjustment factors shall equal the ratio between
the level of year-over-year growth measured for
the fiscal year most recently completed and the
applicable estimated level for that year as de-
scribed in section 105.
(B) CHANGES
IN
INFLATION.—For Fed-
eral revenues and deficits under laws and poli-
cies enacted or effective before July 1, 1997, in-
flation adjustment factors shall equal the ratio
between the level of year-over-year growth
measured for the fiscal year most recently com-
pleted and the applicable estimated level for
that year as described in section 105.
(2) 
ADJUSTMENTS
TO
DIRECT
SPENDING
CAPS.—
(A) CHANGES IN CONCEPTS AND DEFINI-
TIONS.—The adjustments produced by changes
in concepts and definitions shall equal the base-
line levels of new budget authority and outlays
using up-to-date concepts and definitions minus
those levels using the concepts and definitions
in effect before such changes. Such changes in
concepts and definitions may only be made in
consultation with the Committees on Appropria-
tions, the Budget, and Government Reform and
Oversight and Governmental Affairs of the
House of Representatives and the Senate.
(B) CHANGES IN NET OUTLAYS.—Changes
in net outlays for all programs and activities ex-
empt from sequestration under section 204.
(C) CHANGES IN INFLATION.—For direct
spending under laws and policies enacted or ef-
fective on or before July 1, 1997, inflation ad-
justment factors shall equal the ratio between
the level of year-over-year inflation measured
for the fiscal year most recently completed and
the applicable estimated level for that years as
described in section 105 (relating to economic
assumptions). For direct spending under laws
and policies enacted or effective after July 1,
1997, there shall be no adjustment to the direct
spending caps (for changes in economic condi-
tions including inflation, nor for changes in
numbers of eligible beneficiaries) unless—
(i) the Act or the joint explanatory
statement of managers accompanying such
Act providing new direct spending includes
economic projections and projections of
numbers of beneficiaries; and
(ii) such Act specifically provides for
automatic adjustments to the direct spend-
ing caps in section 105 based on those pro-
jections.
(D) 
CHANGES
IN
ELIGIBLE
POPU-
LATIONS.—For direct spending under laws and
policies enacted or effective on or before July 1,
1997, the basis for adjustments under this sec-
tion shall be the same as the projections under-
lying Table A–4, CBO Baseline Projections of
Mandatory Spending, Including Deposit Insur-
ance (by fiscal year, in billions of dollars), pub-
lished in An Analysis of the President’s Budg-
etary Proposals for Fiscal Year 1998, March
1997, page 53. For direct spending under laws
and policies enacted or effective after July 1,
1997, there shall be no adjustment to the direct
spending caps for changes in numbers of eligi-
ble beneficiaries unless—
(i) the Act or the joint explanatory
statement of managers accompanying such
Act providing new direct spending includes
economic projections and projections of
numbers of beneficiaries; and
(ii) such Act specifically provides for
automatic adjustments to the direct spend-
ing caps in section 105 based on those pro-
jections.
(E) INTRA-BUDGETARY PAYMENTS.—From
discretionary accounts to mandatory accounts.
The baseline and the discretionary spending
caps shall be adjusted to reflect those changes.
(c) CHANGES TO DEFICIT TARGETS.—The deficit
targets in section 104 shall be adjusted to reflect changes
to the revenue targets or changes to the caps for entitle-
ments and other mandatory spending pursuant to sub-
section (a).
(d) PERMISSIBLE REVISIONS TO DEFICIT AND REVE-
NUE TARGETS AND DIRECT SPENDING CAPS.—Deficit
and revenue targets and direct spending caps as enacted
pursuant to sections 104 and 105 may be revised as fol-
lows: Except as required pursuant to section 105(a), direct
spending caps may only be amended by recorded vote. It
shall be a matter of highest privilege in the House of Rep-
resentatives and the Senate for a Member of the House
of Representatives or the Senate to insist on a recorded
vote solely on the question of amending such caps. It shall
not be in order for the Committee on Rules of the House
of Representatives to report a resolution waiving the provi-
sions of this subsection. This subsection may be waived
in the Senate only by an affirmative vote of three-fifths
of the Members duly chosen and sworn.
TITLE II—ENFORCEMENT
PROVISIONS
SEC. 201. REPORTING EXCESS SPENDING.
(a) ANALYSIS OF ACTUAL DEFICIT, REVENUE, AND
SPENDING LEVELS.—As soon as practicable after any fis-
cal year, OMB shall compile a statement of actual deficits,
revenues, and direct spending for that year. The statement
shall identify such spending by categories contained in sec-
tion 105.
(b) ESTIMATE OF NECESSARY SPENDING REDUC-
TION.—Based on the statement provided under subsection
(a), the OMB shall issue a report to the President and
the Congress on December 15 of any year in which such
statement identifies actual or projected deficits, revenues,
or spending in the current or immediately preceding fiscal
years in violation of the revenue targets or direct spending
caps in section 104 or 105, by more than one percent of
the applicable total revenues or direct spending for such
year. The report shall include:
(1) All instances in which actual direct spend-
ing has exceeded the applicable direct spending cap.
(2) The difference between the amount of
spending available under the direct spending caps
for the current year and estimated actual spending
for the categories associated with such caps.
(3) The amounts by which direct spending shall
be reduced in the current fiscal year so that total ac-
tual and estimated direct spending for all cap cat-
egories for the current and immediately preceding
fiscal years shall not exceed the amounts available
under the direct spending caps for such fiscal years.
(4) The amount of excess spending attributable
solely to changes in inflation or eligible populations.
SEC. 202. ENFORCING DIRECT SPENDING CAPS.
(a) PURPOSE.—This title provides enforcement of the
direct spending caps on categories of spending established
pursuant to section 105. This section shall apply for any
fiscal year in which direct spending exceeds the applicable
direct spending cap.
(b) GENERAL RULES.—
(1) ELIMINATING
A
BREACH.—Each non-ex-
empt account within a category shall be reduced by
a dollar amount calculated by multiplying the base-
line level of sequestrable budgetary resources in that
account at that time by the uniform percentage nec-
essary to eliminate a breach within that category.
(2) PROGRAMS, PROJECTS, OR
ACTIVITIES.—
Except as otherwise provided, the same percentage
sequestration shall apply to all programs, projects
and activities within a budget account.
(3) INDEFINITE AUTHORITY.—Except as other-
wise provided, sequestration in accounts for which
obligations are indefinite shall be taken in a manner
to ensure that obligations in the fiscal year of a se-
questration and succeeding fiscal years are reduced,
from the level that would actually have occurred, by
the applicable sequestration percentage or percent-
ages.
(4) 
CANCELLATION
OF
BUDGETARY
RE-
SOURCES.—Budgetary resources sequestered from
any account other than an trust, special or revolving
fund shall revert to the Treasury and be perma-
nently canceled.
(5) IMPLEMENTING
REGULATIONS.—Notwith-
standing any other provision of law, administrative
rules or similar actions implementing any sequestra-
tion shall take effect within 30 days after that se-
questration.
SEC. 203. SEQUESTRATION RULES.
(a) GENERAL RULES.—For programs subject to di-
rect spending caps:
(1) TRIGGERING OF SEQUESTRATION.—Seques-
tration is triggered if total direct spending subject to
the caps exceeds or is projected to exceed the aggre-
gate cap for direct spending for the current or im-
mediately preceding fiscal year.
(2) CALCULATION
OF
REDUCTIONS.—Seques-
tration shall reduce spending under each separate
direct spending cap in proportion to the amounts
each category of direct spending exceeded the appli-
cable cap.
(3) UNIFORM
PERCENTAGES.—In calculating
the uniform percentage applicable to the sequestra-
tion of all spending programs or activities within
each category, or the uniform percentage applicable
to the sequestration of nonexempt direct spending
programs or activities, the sequestrable base for di-
rect spending programs and activities is the total
level of outlays for the fiscal year for those programs
or activities in the current law baseline.
(4) PERMANENT
SEQUESTRATION
OF
DIRECT
SPENDING.—Obligations in sequestered direct spend-
ing accounts shall be reduced in the fiscal year in
which a sequestration occurs and in all succeeding
fiscal years. Notwithstanding any other provision of
this section, after the first direct spending seques-
tration, any later sequestration shall reduce direct
spending by an amount in addition to, rather than
in lieu of, the reduction in direct spending in place
under the existing sequestration or sequestrations.
(5) SPECIAL RULE.—For any direct spending
program in which—
(A) outlays pay for entitlement benefits;
(B) a current-year sequestration takes ef-
fect after the 1st day of the budget year;
(C) that delay reduces the amount of enti-
tlement authority that is subject to sequestra-
tion in the budget; and
(D) the uniform percentage otherwise ap-
plicable to the budget-year sequestration of a
program or activity is increased due to the
delay;
then the uniform percentage shall revert to the uni-
form percentage calculated under paragraph (3)
when the budget year is completed.
(6) INDEXED BENEFIT PAYMENTS.—If, under
any entitlement program—
(A) benefit payments are made to persons
or governments more frequently than once a
year; and
(B) the amount of entitlement authority is
periodically adjusted under existing law to re-
flect changes in a price index (commonly called
‘‘cost of living adjustments’’);
sequestration shall first be applied to the cost of liv-
ing adjustment before reductions are made to the
base benefit. For the first fiscal year to which a se-
questration applies, the benefit payment reductions
in such programs accomplished by the order shall
take effect starting with the payment made at the
beginning of January following a final sequester.
For the purposes of this subsection, veterans’ com-
pensation shall be considered a program that meets
the conditions of the preceding sentence.
(7) LOAN PROGRAMS.—For all loans made, ex-
tended, or otherwise modified on or after any se-
questration under loan programs subject to direct
spending caps—
(A) the sequestrable base shall be total
fees associated with all loans made extended or
otherwise modified on or after the date of se-
questration; and
(B) the fees paid by borrowers shall be in-
creased by a uniform percentage sufficient to
produce the dollar savings in such loan pro-
grams for the fiscal year or years of the seques-
trations required by this section.
Notwithstanding any other provision of law, in any
year in which a sequestration is in effect, all subse-
quent fees shall be increased by the uniform percent-
age and all proceeds from such fees shall be paid
into the general fund of the Treasury.
(8) INSURANCE PROGRAMS.—Any sequestration
of a Federal program that sells insurance contracts
to the public (including the Federal Crop Insurance
Fund, the National Insurance Development Fund,
the National Flood Insurance fund, insurance activi-
ties of the Overseas Private Insurance Corporation,
and Veterans’ Life insurance programs) shall be ac-
complished by increasing premiums on contracts en-
tered into extended or otherwise modified, after the
date a sequestration order takes effect by the uni-
form sequestration percentage. Notwithstanding any
other provision of law, for any year in which a se-
questration affecting such programs is in effect, sub-
sequent premiums shall be increased by the uniform
percentage and all proceeds from the premium in-
crease shall be paid from the insurance fund or ac-
count to the general fund of the Treasury.
(9) STATE GRANT FORMULAS.—For all State
grant programs subject to direct spending caps—
(A) the total amount of funds available for
all States shall be reduced by the amount re-
quired to be sequestered; and
(B) if States are projected to receive in-
creased funding in the budget year compared to
the immediately preceding fiscal year, seques-
tration shall first be applied to the estimated
increases before reductions are made compared
to actual payments to States in the previous
year—
(i) the reductions shall be applied first
to the total estimated increases for all
States; then
(ii) the uniform reduction shall be
made from each State’s grant; and
(iii) the uniform reduction shall apply
to the base funding levels available to
states in the immediately preceding fiscal
year only to the extent necessary to elimi-
nate any remaining excess over the appli-
cable direct spending cap.
(10) SPECIAL
RULE
FOR
CERTAIN
PRO-
GRAMS.—Except matters exempted under sec-
tion 204 and programs subject to special rules
set forth under section 205 and notwithstand-
ing any other provisions of law, any sequestra-
tion required under this Act shall reduce benefit
levels by an amount sufficient to eliminate all
excess spending identified in the report issued
pursuant to section 201, while maintaining the
same uniform percentage reduction in the mon-
etary value of benefits subject to reduction
under this subsection.
(b) WITHIN-SESSION SEQUESTER.—If a bill or reso-
lution providing direct spending for the current year is en-
acted before July 1 of that fiscal year and causes a breach
within any direct spending cap for that fiscal year, 15 days
later there shall be a sequestration to eliminate that
breach within that cap.
SEC. 204. ENFORCING REVENUE TARGETS.
(a) PURPOSE.—This section enforces the revenue tar-
gets established pursuant to section 104. This section
shall apply for any year in which actual revenues were less
than the applicable revenue target in the preceding fiscal
year or are projected to be less than the applicable revenue
target in the current year.
(b) ESTIMATE OF NECESSITY TO SUSPEND NEW
REVENUE REDUCTIONS.—Based on the statement pro-
vided under section 201(a), OMB shall issue a report to
the President and the Congress on December 15 of any
year in which such statement identifies actual or projected
revenues in the current or immediately preceding fiscal
years lower than the applicable revenue target in section
104, as adjusted pursuant to section 106, by more than
1 percent of the applicable total revenue target for such
year. The report shall include—
(1) all existing laws and policies enacted as part
of any reconciliation legislation in calendar 1997
which would cause revenues to decline in the cal-
endar year which begins January 1, compared to
laws and policies in effect on December 15;
(2) the amounts by which revenues would be re-
duced by implementation of the provisions of law de-
scribed in paragraph (1) compared to provisions of
law in effect on December 15; and
(3) whether delaying implementation of the pro-
visions of law described in paragraph (1) would
cause the total for revenues in the projected reve-
nues in the current fiscal year and actual revenues
in the immediately preceding fiscal year to equal or
exceed the total of the targets for the applicable
years.
(c) GENERAL RULES.—
(1) DELAYED PHASE-IN OF NEW TAX CUTS.—
No provision of the Revenue Reconciliation Act of
1997—
(A) establishing or increasing any credit,
deduction, exclusion or eligibility limit; or
(B) reducing any rate
shall first take effect in the calendar year following
a year in which actual revenues were less than the
applicable revenue target or revenues in the current
year are projected to be less than the applicable tar-
get.
(2) SUSPENSION OF INDEXATION.—No new ad-
justment for inflation shall be made to any credit,
deduction, or exclusion enacted as part of the Reve-
nue Reconciliation Act of 1997 if revenues in the
preceding year were below the applicable revenue
target or revenues in the current year are projected
to be less than the applicable target.
(d) SPECIAL RULES.—(1) All provisions of law in-
cluded in the report pursuant to subsection (b)(1) shall
be suspended until such time as the total of projected reve-
nues in the current fiscal year and actual revenues in the
immediately preceding fiscal year is equal to or greater
than the relevant revenue targets in section 104; and
(2) If subsection (c) would cause the total of pro-
jected revenues in the current year and actual revenues
in the preceding fiscal year to exceed the relevant revenue
targets in section 104, new policies to reduce revenues
shall be modified sufficiently to raise revenues to the level
of the targets for the relevant years.
SEC. 205. EXEMPT PROGRAMS AND ACTIVITIES.
The following budget accounts, activities within ac-
counts, or income shall be exempt from sequestration—
(1) net interest;
(2) all payments to trust funds from excise
taxes or other receipts or collections properly cred-
itable to those trust funds;
(3) offsetting receipts and collections;
(4) all payments from one Federal direct spend-
ing budget account to another Federal budget ac-
count;
(5) all intragovernmental funds including those
from which funding is derived primarily from other
Government accounts;
(6) expenses to the extent they result from pri-
vate donations, bequests, or voluntary contributions
to the Government;
(7) nonbudgetary activities, including but not
limited to—
(A) credit liquidating and financing ac-
counts;
(B) the Pension Benefit Guarantee Cor-
poration Trust Funds;
(C) the Thrift Savings Fund;
(D) the Federal Reserve System; and
(E) appropriations for the District of Co-
lumbia to the extent they are appropriations of
locally raised funds;
(8) payments resulting from Government insur-
ance, Government guarantees, or any other form of
contingent liability, to the extent those payments re-
sult from contractual or other legally binding com-
mitments of the Government at the time of any se-
questration;
(9) the following accounts, which largely fulfill
requirements of the Constitution or otherwise make
payments to which the Government is committed—
Bureau of Indian Affairs, miscellaneous
trust funds, tribal trust funds (14–9973–0–7–
999);
Claims, defense;
Claims, judgments and relief act (20–
1895–0–1–806);
Compact of Free Association, economic as-
sistance pursuant to Public Law 99–658 (14–
0415–0–1–806);
Compensation of the President (11–0001–
0–1–802);
Customs Service, miscellaneous permanent
appropriations (20–9992–0–2–852);
Eastern Indian land claims settlement
fund (14–2202–0–1–806);
Farm Credit System Financial Assistance
Corporation, interest payments (20–1850–0–1–
351);
Internal Revenue collections of Puerto Rico
(20–5737–0–2–852);
Payments of Vietnam and USS Pueblo
prisoner-of-war claims (15–0104–0–1–153):
Payments to copyright owners (03–5175–
0–2–376);
Salaries of Article III judges (not including
cost of living adjustments);
Soldier’s and Airman’s Home, payment of
claims (84–8930–0–7–705);
Washington Metropolitan Area Transit Au-
thority, interest payments (46–0300–0–1–401);
(10) the following noncredit special, revolving,
or trust-revolving funds—
Exchange Stabilization Fund (20–4444–0–
3–155); and
Foreign Military Sales trust fund (11–
82232–0–7–155).
(j) OPTIONAL EXEMPTION OF MILITARY PERSON-
NEL.—
(1) The President may, with respect to any
military personnel account, exempt that account
from sequestration or provide for a lower uniform
percentage reduction that would otherwise apply.
(2) The President may not use the authority
provided by paragraph (1) 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.
SEC. 206. SPECIAL RULES.
(a) CHILD SUPPORT ENFORCEMENT PROGRAM.—
Any sequestration order shall accomplish the full amount
of any required reduction in payments under sections 455
and 458 of the Social Security Act by reducing the Fed-
eral matching rate for State administrative costs under
the program, as specified (for the fiscal year involved) in
section 455(a) of such Act, to the extent necessary to re-
duce such expenditures by that amount.
(b) COMMODITY CREDIT CORPORATION.—
(1) EFFECTIVE
DATE.—For the Commodity
Credit Corporation, the date on which a sequestra-
tion order takes effect in a fiscal year shall vary for
each crop of a commodity. In general, the sequestra-
tion order shall take effect when issued, but for each
crop of a commodity for which 1-year contracts are
issued as an entitlement, the sequestration order
shall take effect with the start of the sign-up period
for that crop that begins after the sequestration
order is issued. Payments for each contract in such
a crop shall be reduced under the same terms and
conditions.
(2) DAIRY PROGRAM.—
(A) As the sole means of achieving any re-
duction in outlays under the milk price-support
program, the Secretary of Agriculture shall pro-
vide for a reduction to be made in the price re-
ceived by producers for all milk in the United
States and marketed by producers for commer-
cial use.
(B) That price reduction (measured in
cents per hundred-weight of milk marketed)
shall occur under subparagraph (A) of section
201(d)(2) of the Agricultural Act of 1949 (7
U.S.C. 1446(d)(2)(A)), shall begin on the day
any sequestration order is issued, and shall not
exceed the aggregate amount of the reduction
in outlays under the milk price-support pro-
gram, that otherwise would have been achieved
by reducing payments made for the purchase of
milk or the products of milk under this sub-
section during that fiscal year.
(3) EFFECT OF DELAY.—For purposes of sub-
section (b)(1), the sequestrable base for Commodity
Credit Corporation is the current-year level of gross
outlays resulting from new budget authority that is
subject to reduction under paragraphs (1) and (2).
(4) CERTAIN
AUTHORITY
NOT
TO
BE
LIM-
ITED.—Nothing in this Act shall restrict the Cor-
poration in the discharge of its authority and re-
sponsibility as a corporation to buy and sell com-
modities in world trade, or limit or reduce in any
way any appropriation that provides the Corporation
with funds to cover its realized losses.
(c) EARNED INCOME TAX CREDIT.—
(1) The sequestrable base for earned income
tax credit program is the dollar value of all current
year benefits to the entire eligible population.
(2) In the event sequestration is triggered to re-
duce earned income tax credits, all earned income
tax credits shall be reduced, whether or not such
credits otherwise would result in cash payments to
beneficiaries, by a uniform percentage sufficient to
produce the dollar savings required by the sequestra-
tion.
(d) REGULAR
AND
EXTENDED
UNEMPLOYMENT
COMPENSATION.—
(1) A State may reduce each weekly benefit
payment made under the regular and extended un-
employment benefit programs for any week of unem-
ployment occurring during any period with respect
to which payments are reduced under any sequestra-
tion order by a percentage not to exceed the percent-
age by which the Federal payment to the State is to
be reduced for such week as a result of such order.
(2) A reduction by a State in accordance with
paragraph (1) shall not be considered as a failure to
fulfill the requirements of section 3304(a)(11) of the
Internal Revenue Code of 1986.
(e) FEDERAL
EMPLOYEES
HEALTH
BENEFITS
FUND.— For the Federal Employees Health Benefits
Fund, a sequestration order shall take effect with the next
open season. The sequestration shall be accomplished by
annual payments from that Fund to the General Fund of
the Treasury. Those annual payments shall be financed
solely by charging higher premiums. The sequestrable base
for the Fund is the current-year level of gross outlays re-
sulting from claims paid after the sequestration order
takes effect.
(f) FEDERAL HOUSING FINANCE BOARD.— Any se-
questration of the Federal Housing Board shall be accom-
plished by annual payments (by the end of each fiscal
year) from that Board to the general fund of the Treasury,
in amounts equal to the uniform sequestration percentage
for that year times the gross obligations of the Board in
that year.
(g) FEDERAL PAY.—
(1) IN GENERAL.— New budget authority to
pay Federal personnel from direct spending accounts
shall be reduced by the uniform percentage cal-
culated under section 203(c)(3), as applicable, but
no sequestration order may reduce or have the effect
of reducing the rate of pay to which any individual
is entitled under any statutory pay system (as in-
creased by any amount payable under section 5304
of title 5, United States Code, or any increase in
rates of pay which is scheduled to take effect under
section 5303 of title 5, United States Code, section
1109 of title 37, United States Code, or any other
provision of law.
(2) DEFINITIONS.—For purposes of this sub-
section—
(A) the term ‘‘statutory pay system’’ shall
have the meaning given that term in section
5302(1) of title 5, United States Code;
(B) the term ‘‘elements of military pay’’
means—
(i) the elements of compensation of
members of the uniformed services speci-
fied in section 1009 of title 37, United
States Code;
(ii) allowances provided members of
the uniformed services under sections
403(a) and 405 of such title; and
(iii) cadet pay and midshipman pay
under section 203(c) of such title; and
(C) the term ‘‘uniformed services’’ shall
have the same meaning given that term in sec-
tion 101(3) of title 37, United States Code.
(h) MEDICARE.—
(1) TIMING
OF
APPLICATION
OF
REDUC-
TIONS.—
(A) IN GENERAL.—Except as provided in
subparagraph (B), if a reduction is made in
payment amounts pursuant to sequestration
order, the reduction shall be applied to payment
for services furnished after the effective date of
the order. For purposes of the previous sen-
tence, in the case of inpatient services furnished
for an individual, the services shall be consid-
ered to be furnished on the date of the individ-
ual’s discharge from the inpatient facility.
(B) PAYMENT ON THE BASIS OF COST RE-
PORTING PERIODS.— In the case in which pay-
ment for services of a provider of services is
made under title XVIII of the Social Security
Act on a basis relating to the reasonable cost
incurred for the services during a cost reporting
period of the provider, if a reduction is made in
payment amounts pursuant to a sequestration
order, the reduction shall be applied to payment
for costs for such services incurred at any time
during each cost reporting period of the pro-
vider any part of which occurs after the effec-
tive date of order, but only (for each such cost
reporting period) in the same proportion as the
fraction of the cost reporting period that occurs
after the effective date of the order.
(2) NO INCREASE IN BENEFICIARY CHARGES IN
ASSIGNMENT-RELATED
CASES.—If a reduction in
payment amounts is made pursuant to a sequestra-
tion order for services for which payment under part
B of title XVIII of the Social Security Act is made
on the basis of an assignment described in section
1842(b)(3)(B)(ii), 
in 
accordance 
with 
section
1842(b)(6)(B), or under the procedure described in
section 1870(f)(1) of such Act, the person furnishing
the services shall be considered to have accepted
payment of the reasonable charge for the services,
less any reduction in payment amount made pursu-
ant to a sequestration order, as payment in full.
(3) PART
B
PREMIUMS.—In computing the
amount and method of sequestration from part B of
title XVIII of the Social Security Act—
(A) the amount of sequestration shall be
calculated by multiplying the total amount by
which Medicare spending exceeds the appro-
priate spending cap by a percentage that re-
flects the ratio of total spending under Part B
to total Medicare spending; and
(B) sequestration in the Part B program
shall be accomplished by increasing premiums
to beneficiaries.
(4) NO EFFECT ON COMPUTATION OF AAPCC.—
In computing the adjusted average per capita cost
for purposes of section 1876(a)(4) of the Social Se-
curity Act, the Secretary of Health and Human
Services shall not take into account any reductions
in payment amounts which have been or may be ef-
fected under this part.
(i) POSTAL SERVICE FUND.— Any sequestration of
the Postal Service Fund shall be accomplished by annual
payments from that Fund to the General Fund of the
Treasury, and the Postmaster General of the United
States and shall have the duty to make those payments
during the first fiscal year to which the sequestration
order applies and each succeeding fiscal year. The amount
of each annual payment shall be—
(1) the uniform sequestration percentage, times
(2) the estimated gross obligations of the Postal
Service Fund in that year other than those obliga-
tions financed with an appropriation for revenue for-
gone that year.
Any such payment for a fiscal year shall be made as soon
as possible during the fiscal year, except that it may be
made in installments within that year if the payment
schedule is approved by the Secretary of the Treasury.
Within 30 days after the sequestration order is issued, the
Postmaster General shall submit to the Postal Rate Com-
mission a plan for financing the annual payment for that
fiscal year and publish that plan in the Federal Register.
The plan may assume efficiencies in the operation of the
Postal Service, reductions in capital expenditures, in-
creases in the prices of services, or any combination, but
may not assume a lower Fund surplus or higher Fund
deficit and shall follow the requirements of existing law
governing the Postal Service in all other respects. Within
30 days of the receipt of that plan, the Postal Rate Com-
mission shall approve the plan or modify it in the manner
that modifications are allowed under current law. If the
Postal Rate Commission does not respond to the plan
within 30 days, the plan submitted by the Postmaster
General shall go into effect. Any plan may be later revised
by the submission of a new plan to the Postal Rate Com-
mission, which may approve or modify it.
(j) POWER
MARKETING
ADMINISTRATIONS
AND
T.V.A.— Any sequestration of the Department of Energy
power marketing administration funds or the Tennessee
Valley Authority fund shall be accomplished by annual
payments from those funds to the General Fund of the
Treasury, and the administrators of those funds shall have
the duty to make those payments during the fiscal year
to which the sequestration order applies and each succeed-
ing fiscal year. The amount of each payment by a fund
shall be—
(1) the direct spending uniform sequestration
percentage, times
(2) the estimated gross obligations of the fund
in that year other than those obligations financed
from discretionary appropriations for that year.
Any such payment for a fiscal year shall be made as soon
as possible during the fiscal year, except that it may be
made in installments within that year if the payment
schedule is approved by the Secretary of the Treasury. An-
nual payments by a fund may be financed by reductions
in costs required to produce the pre-sequester amount of
power (but those reductions shall not include reductions
in the amount of power supplied by the fund), by reduc-
tions in capital expenditures, by increases in tax rates, or
by any combination, but may not be financed by a lower
fund surplus, a higher fund deficit, additional borrowing,
delay in repayment of principal on outstanding debt and
shall follow the requirements of existing law governing the
fund in all other respects. The administrator of a fund
or the TVA Board is authorized to take the actions speci-
fied in this subsection in order to make the annual pay-
ments to the Treasury.
(k) BUSINESS-LIKE TRANSACTIONS.—Notwithstand-
ing any other provision of law, for programs which provide
a business-like service in exchange for a fee, sequestration
shall be accomplished through a uniform increase in fees
(sufficient to produce the dollar savings in such programs
for the fiscal year of the sequestration required by section
201(a)(2), all subsequent fees shall be increased by the
same percentage, and all proceeds from such fees shall be
paid into the general fund of the Treasury, in any year
for which a sequester affecting such programs are in ef-
fect.
SEC. 207. THE CURRENT LAW BASELINE.
(a) SUBMISSION OF REPORTS.—CBO and OMB shall
submit to the President and the Congress reports setting
forth the budget baselines for the budget year and the next
nine fiscal years. The CBO report shall be submitted on
or before January 15. The OMB report shall accompany
the President’s budget.
(b) DETERMINATION OF THE BUDGET BASELINE.—
(1) The budget baseline shall be based on the common
economic assumptions set forth in section 106, adjusted
to reflect revisions pursuant to subsection (c).
(2) The budget baseline shall consist of a pro-
jection of current year levels of budget authority,
outlays, revenues and the surplus or deficit into the
budget year and the relevant outyears based on cur-
rent enacted laws as of the date of the projection.
(3) For discretionary spending items, the base-
line shall be the spending caps in effect pursuant to
section 601(a)(2) of the Congressional Budget Act
of 1974. For years for which there are no caps, the
baseline for discretionary spending shall be the same
as the last year for which there were statutory caps.
(4) For all other expenditures and for revenues,
the baseline shall be adjusted by comparing unem-
ployment, inflation, interest rates, growth and other
economic indicators-and changes ineligible popu-
lation-for the most recent period for which actual
data are available, compared to the assumptions
contained in section 106.
(c) REVISIONS
TO
THE BASELINE.—The baseline
shall be adjusted for up-to-date economic assumptions
when CBO submits its Economic and Budget Update and
when OMB submits its budget update, and by August 1
each year, when CBO and OBM submit their midyear re-
views.
SEC. 208. LIMITATIONS ON EMERGENCY SPENDING.
(a) IN GENERAL.—(1) Within the discretionary caps
for each fiscal year contained in this Act, an amount shall
be withheld from allocation to the appropriate committees
of the House of Representatives and of the Senate and
reserved for natural disasters and other emergency pur-
poses.
(2) Such amount for each such fiscal year shall not
be less than 1 percent of total budget authority and out-
lays available within those caps for that fiscal year.
(3) The amounts reserved pursuant to this subsection
shall be made available for allocation to such committees
only if—
(A) the President has made a request for such
disaster funds;
(B) the programs to be funded are included in
such request; and
(C) the projected obligations for unforeseen
emergency needs exceed the 10-year rolling average
annual expenditures for existing programs included
in the Presidential request for the applicable fiscal
year.
(4) Notwithstanding any other provision of law—
(A) States and localities shall be required to
maintain effort and ensure that Federal assistance
payments do not replace, subvert or otherwise have
the effect of reducing regularly budgeted State and
local expenditures for law enforcement, refighting,
road construction and maintenance, building con-
struction and maintenance or any other category of
regular government expenditure (to ensure that Fed-
eral disaster payments are made only for incremen-
tal costs directly attributable to unforeseen disasters,
and do not replace or reduce regular State and local
expenditures for the same purposes);
(B) the President may not take administrative
action to waive any requirement for States or local-
ities to make minimum matching payments as a con-
dition or receiving Federal disaster assistance and
prohibit the President from taking administrative
action to waive all or part of any repayment of Fed-
eral loans for the State or local matching share re-
quired as a condition of receiving Federal disaster
assistance, and this clause shall apply to all match-
ing share requirements and loans to meet matching
share requirements under the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (42
U.S.C. 5121 et seq.) and any other Acts pursuant
to which the President may declare a disaster or dis-
asters and States and localities otherwise qualify for
Federal disaster assistance; and
(C) a two-thirds vote in each House of Congress
shall be required for each emergency to reduce or
waive the State matching requirement of to forgive
all or part of loans for the State matching share as
required under the Robert T. Stafford Disaster Re-
lief and Emergency Assistance Act.
(b) EFFECT BUDGET RESOLUTIONS.—(1) All con-
current resolutions on the budget (including revisions)
shall specify the amount of new budget authority and out-
lays within the discretionary spending cap that shall be
withheld from allocation to the committees and reserved
for natural disasters, and a procedure for releasing such
funds for allocation to the appropriate committee. The
amount withheld shall be equal to 1 percent of the total
discretionary spending cap for fiscal year covered by the
resolution, unless additional amounts are specified.
(2) The procedure for allocation of the amounts pur-
suant to paragraph (1) shall ensure that the funds are
released for allocation only pursuant to the conditions con-
tained in subsection (a)(3)(A) through (C).
(c) RESTRICTION
ON USE
OF FUNDS.—Notwith-
standing any other provision of law, the amount reserved
pursuant to subsection (a) shall not be available for other
than emergency funding requirements for particular natu-
ral disasters or national security emergencies so des-
ignated by Acts of Congress.
(d) NEW POINT OF ORDER.—(1) Title IV of the Con-
gressional Budget Act of 1974 is amended by adding at
the end the following new section:
‘‘POINT OF ORDER REGARDING EMERGENCIES
‘‘SEC. 408. It shall not be in order in the House of
Representatives or the Senate to consider any bill or joint
resolution, or amendment thereto or conference report
thereon, containing an emergency designation for purposes
of section 251(b)(2)(D) or 252(e) of the Balanced Budget
and Emergency Deficit Control Act of 1985 or of section
207 of the Balanced Budget Assurance Act of 1997 if it
also provides an appropriation or direct spending for any
other item or contains any other matter, but that bill or
joint resolution, amendment, or conference report may
contain rescissions of budget authority or reductions of di-
rect spending, or that amendment may reduce amounts
for that emergency.’’.
(2) The table of contents set forth in section 1(b) of
the Congressional Budget and Impoundment Control Act
of 1974 is amended by inserting after the item relating
to section 407 the following new item:
‘‘Sec. 408. Point of order regarding emergencies.’’.
Æ