I 
111TH CONGRESS 
2D SESSION 
H. R. 5752 
To make the Federal budget process more transparent and to make future 
budgets more sustainable. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 15, 2010 
Mr. QUIGLEY (for himself, Mr. MINNICK, and Mr. FOSTER) introduced the fol-
lowing bill; which was referred to the Committee on the Budget, and in 
addition to the Committees on Rules and Ways and Means, for a period 
to be subsequently determined by the Speaker, in each case for consider-
ation of such provisions as fall within the jurisdiction of the committee 
concerned 
A BILL 
To make the Federal budget process more transparent and 
to make future budgets more sustainable. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Transparent and Sus-
tainable Budget Act of 2010’’. 
SEC. 2. FINDINGS AND PURPOSE. 
(a) FINDINGS.—The Congress finds that— 
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(1) the public debt as a share of gross domestic 
product should be stabilized at not more than 60 
percent within 10 fiscal years; 
(2) annual deficits as a share of gross domestic 
product should be reduced to not more than three 
percent within 10 fiscal years; 
(3) the Joint Committee on Taxation found 
that 247 tax expenditures totaled $1.2 trillion in 
2008, greater than all Federal discretionary spend-
ing in that year; and 
(4) tax expenditures are analogous to spending 
programs, and future budgets and deficit control 
measures should reflect this fact. 
(b) PURPOSE.—The Congress declares that it is es-
sential— 
(1) to establish the sustainability of public debt 
and annual deficits as a fundamental objective of the 
budget process; 
(2) to ensure that the budget of the United 
States Government is fully transparent, comprehen-
sible, and accurate; 
(3) to establish effective controls over tax ex-
penditures and to integrate them into the budget 
process; and 
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(4) to initiate a public discussion about fiscal 
sustainability and budget transparency. 
SEC. 3. TABLE OF CONTENTS. 
Sec. 1. Short title. 
Sec. 2. Findings and purpose. 
Sec. 3. Table of contents. 
TITLE I—BUDGET PROCESS REFORMS 
Subtitle A—Reform of the President’s Budget 
Sec. 101. Long-term fiscal responsibility. 
Subtitle B—Reform of the Congressional Budget Resolution 
Sec. 111. Long-term fiscal responsibility. 
Subtitle C—Prompt Consideration of Recommendations of the National 
Commission on Fiscal Responsibility and Reform 
Sec. 121. Prompt consideration of recommendations of the National Commis-
sion on Fiscal Responsibility and Reform. 
Subtitle D—Quadrennial Fiscal Sustainability Report 
Sec. 131. OMB quadrennial reports. 
Subtitle E—Presidential Address to Congress on Fiscal Sustainability 
Sec. 141. Presidential address on long-term fiscal sustainability. 
TITLE II—ACCOUNTING AND SCORING REFORMS 
Subtitle A—Discounted Baseline 
Sec. 201. Discounted baseline. 
Subtitle B—Alternative Net Cost Estimate 
Sec. 211. Alternative analysis by Congressional Budget Office. 
Subtitle C—Deficit Control Mechanism 
Sec. 221. Alternative net cost estimate by Congressional Budget Office. 
Subtitle D—Accrual Accounting Report 
Sec. 231. Accrual accounting report. 
Subtitle E—On-Budget Status of Trust Funds and GSEs 
Sec. 241. OMB report respecting budgetary status of trust funds and GSEs. 
TITLE III—TAX EXPENDITURE REFORMS 
Subtitle A—Identification of Tax Expenditures 
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Sec. 301. JCT reports on tax expenditures. 
Sec. 302. Definition of tax subsidy. 
Subtitle B—Enforcement of Tax Expenditure Requirements 
Sec. 311. Tax expenditure points of order. 
Subtitle C—Executive Branch Reporting of Tax Expenditures 
Sec. 331. Executive branch reporting of tax expenditures. 
Subtitle D—Tax Expenditure Data 
Sec. 341. Development of electronic income tax filing system. 
Sec. 342. GAO report on tax expenditures. 
Sec. 343. Treasury report on tax expenditures. 
Subtitle E—Tax Expenditure Performance Reviews 
Sec. 351. CBO tax expenditure performance reviews. 
TITLE I—BUDGET PROCESS 
REFORMS 
Subtitle A—Reform of the 
President’s Budget 
SEC. 101. LONG-TERM FISCAL RESPONSIBILITY. 
Section 1105 of title 31, United States Code, is 
amended by adding at the end the following new sub-
section: 
‘‘(i)(1) The budget transmitted pursuant to sub-
section (a) for a fiscal year shall include— 
‘‘(A) a scorecard of progress in meeting the 
debt and deficit reduction targets set forth in sub-
paragraph (B); 
‘‘(B) a plan for long-term fiscal sustainability, 
defined as reducing to within 10 fiscal years and 
then maintaining a debt to potential gross domestic 
product (GDP) ratio, as defined by the Director of 
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the Office of Management and Budget, of not more 
than 60 percent and an annual deficit to GDP ratio 
of not more than three percent; 
‘‘(C) a supplemental report from the Director of 
the Office of Management and Budget of the non-
budgeted fiscal exposures of the Government, which 
may be included in the Analytical Perspectives re-
port, and shall include— 
‘‘(i) explicit liabilities and implicit promises 
embedded in the structure of current programs, 
including Federal credit programs; and 
‘‘(ii) a concise description of, including cost 
information for, such exposures; and 
‘‘(D) explicit goals for carrying out the long- 
term fiscal sustainability plan for the first fiscal year 
after the fiscal year of the budget submission and 
each of the nine ensuing fiscal years. 
‘‘(2) Unless the supplemental report is included in 
the Analytical Perspectives report referred to in paragraph 
(1)(C), then not later than March 15 of each calendar 
year, the Director of the Office of Management and Budg-
et shall transmit such report to the President and to Con-
gress. 
‘‘(3) Not later than two months after the supple-
mental report referred to in paragraph (1)(C) is trans-
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mitted to the President and to Congress, the Comptroller 
General shall publish a report auditing the supplemental 
report referred to in paragraph (1)(C).’’. 
Subtitle B—Reform of the 
Congressional Budget Resolution 
SEC. 111. LONG-TERM FISCAL RESPONSIBILITY. 
(a) CONTENT OF CONGRESSIONAL BUDGET RESOLU-
TION.—Section 301 of the Congressional Budget Act of 
1974 is amended by adding at the end the following new 
subsection: 
‘‘(j) ADDITIONAL MATTERS
IN REPORT ACCOM-
PANYING THE RESOLUTION.—The report accompanying 
the resolution shall include— 
‘‘(1) a scorecard of progress in meeting the 
debt and deficit reduction targets set forth in para-
graph (2); and 
‘‘(2) a plan for long-term fiscal sustainability, 
defined as reducing to within 10 fiscal years and 
then maintaining a debt to gross domestic product 
(GDP) ratio of not more than 60 percent and an an-
nual deficit to GDP ratio of not more than three 
percent.’’. 
(b) ADDITIONAL MATTERS IN CBO REPORTS TO 
BUDGET COMMITTEES.—Section 202(e) of the Congres-
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sional Budget Act of 1974 is amended by adding at the 
end the following new paragraph: 
‘‘(4) On or before February 15 of each year, 
the Director shall submit to the Committees on the 
Budget of the House of Representatives and the 
Senate, a report that includes an assessment of the 
plan for long-term fiscal sustainability set forth in 
section 1105(i)(1) of title 31, United States Code, 
and include it in the most recent budget submission 
of the President, pursuant to subsection (a) of that 
section. When such plan is submitted to the Com-
mittees on the Budget, the Director shall place it on 
the public Web site of the Congressional Budget Of-
fice.’’. 
Subtitle C—Prompt Consideration 
of Recommendations of the Na-
tional Commission on Fiscal Re-
sponsibility and Reform 
SEC. 121. PROMPT CONSIDERATION OF RECOMMENDA-
TIONS OF THE NATIONAL COMMISSION ON 
FISCAL RESPONSIBILITY AND REFORM. 
It is the sense of Congress that the recommendations 
reported to Congress by the National Commission on Fis-
cal Responsibility and Reform should receive prompt con-
sideration, and that neither the House of Representatives 
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nor the Senate should obstruct a final roll call vote on 
such recommendations. 
Subtitle D—Quadrennial Fiscal 
Sustainability Report 
SEC. 131. OMB QUADRENNIAL REPORTS. 
The Director of the Office of Management and Budg-
et, in consultation with the Secretary of the Treasury, 
shall publically issue, including by publishing on its Web 
site, a Quadrennial Fiscal Sustainability Report not later 
than April 1, 2013 and April 1 of every fourth year there-
after. The report shall address the long-term fiscal sus-
tainability of the Government, including its ability to man-
age finances to meet spending commitments, with a de-
tailed analysis of social insurance programs, for the budg-
et year and for the 30-year period commencing with the 
budget year. 
Subtitle E—Presidential Address to 
Congress on Fiscal Sustainability 
SEC. 141. PRESIDENTIAL ADDRESS ON LONG-TERM FISCAL 
SUSTAINABILITY. 
During October 2011 and each October thereafter, 
there shall be convened a joint session of Congress at 
which the President shall be invited to give an address 
on the long-term fiscal sustainability of the Government. 
As used in the preceding sentence, the term ‘‘long-term 
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fiscal sustainability’’ means the ability of the Government 
to achieve and then maintain a debt to gross domestic 
product ratio of not more than 60 percent and an annual 
deficit to gross domestic product ratio of not more than 
3 percent. 
TITLE II—ACCOUNTING AND 
SCORING REFORMS 
Subtitle A—Discounted Baseline 
SEC. 201. DISCOUNTED BASELINE. 
Section 257 of the Balanced Budget and Emergency 
Deficit Control Act of 1985 is amended as follows: 
(1) At the end of subsection (a), insert the fol-
lowing new sentence: ‘‘For any budget year the dis-
counted baseline refers to an alternative projection 
of current-year levels of new budget authority, out-
lays, revenues, and the surplus or deficit into the 
budget year and the outyears, for a minimum of 30 
years, based on laws enacted through the applicable 
year, and annually discounted for— 
‘‘(1) the present value of money, set at the pre-
vailing interest rate for 30-year Treasury bonds; and 
‘‘(2) the uncertainty of policies announced for 
the outyears, set at 10 percent.’’. 
(2) At the end, add the following new sub-
section: 
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‘‘(f) DISCOUNTED BASELINE.—The discounted base-
line shall be computed using the same exceptions, assump-
tions, and other qualifying guidelines applicable to the 
baseline under this section.’’. 
Subtitle B—Alternative Net Cost 
Estimate 
SEC. 211. ALTERNATIVE ANALYSIS BY CONGRESSIONAL 
BUDGET OFFICE. 
(a) IN GENERAL.—Part A of title IV of the Congres-
sional Budget Act of 1974 is amended by adding at the 
end the following new section: 
‘‘ALTERNATIVE ANALYSIS BY CONGRESSIONAL BUDGET 
OFFICE 
‘‘SEC. 407. (a) ALTERNATIVE NET COST ESTI-
MATES.—To the extent practicable, the Director of the 
Congressional Budget Office shall prepare for each bill or 
joint resolution of a public character reported by any com-
mittee of the House of Representatives or the Senate (ex-
cept the Committee on Appropriations of each House) and 
for amendments thereto and conference reports thereon an 
alternative net cost estimate. 
‘‘(b) CALCULATION.—The alternative net cost esti-
mate of proposed measures shall be calculated by com-
paring the current discounted baseline with an alternative 
discounted baseline that accounts for the policy changes 
in the proposed measures reported from committee. 
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‘‘(c) PERIOD.—The alternative net cost estimate shall 
cover as many years as the Director deems appropriate 
for the applicable legislation to have a significant budg-
etary impact, but for not more than 30 fiscal years. 
‘‘(d) SUBMISSIONS.—To the extent practicable, the 
alternative net cost estimate shall be submitted— 
‘‘(1) for a reported bill or resolution referred to 
in subsection (a), to the House of Representatives or 
the Senate, as applicable, at the same time as the 
submission under section 402; 
‘‘(2) for any amendment, to the applicable 
House of Congress before the amendment is offered; 
and 
‘‘(3) for any conference report, to the House of 
Representatives and the Senate before the con-
ference report is first considered.’’. 
(b) CONFORMING AMENDMENT.—The table of con-
tents set forth in section 1(b) of the Congressional Budget 
and Impoundment Control Act of 1974 is amended by in-
serting after the item relating to section 406 the following 
new item: 
‘‘Sec. 407. Alternative analysis by Congressional Budget Office.’’. 
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Subtitle C—Deficit Control 
Mechanism 
SEC. 221. ALTERNATIVE NET COST ESTIMATE BY CONGRES-
SIONAL BUDGET OFFICE. 
(a) IN GENERAL.—Part A of title IV of the Congres-
sional Budget Act of 1974 (as amended by section 211) 
is further amended by adding at the end the following new 
section: 
‘‘ALTERNATIVE NET COST ESTIMATE BY CONGRESSIONAL 
BUDGET OFFICE 
‘‘SEC. 408. (a) ALTERNATIVE NET COST ESTI-
MATE.—The Director of the Congressional Budget Office 
shall, to the extent practicable, prepare for each bill or 
joint resolution of a public character reported by any com-
mittee of the House of Representatives or the Senate (ex-
cept the Committee on Appropriations of each House) and 
for amendments thereto and conference reports thereon a 
statement of whether the measure’s alternative net cost 
would exceed $5 billion. The alternative net cost shall be 
obtained by computing the total value of the measure, dis-
counting for the present value of money and the uncer-
tainty of policies announced for future periods, using the 
same methodology as in section 407. 
‘‘(b) POINT OF ORDER.—It shall not be in order in 
the House of Representatives or the Senate to consider 
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any bill, joint resolution, amendment, motion, or con-
ference report for which the Director issues a statement 
under the preceding subsection that shows a alternative 
net cost exceeding $5 billion, as adjusted annually for in-
flation. 
‘‘(c) EMERGENCY DESIGNATION.—If a measure or 
provision is designated as an emergency requirement 
under the applicable rules of the House of Representatives 
and the Senate, the Director shall not include the cost of 
such a provision in the statement of the budgetary effects 
of such measure or provision. 
‘‘(d) PUBLIC AVAILABILITY.—Not later than 14 days 
(excluding Saturdays, Sundays, and public holidays) after 
Congress adjourns to end a session, the Director shall 
make publicly available and cause to be printed in the 
Federal Register an annual Discounted Score Deficit Con-
trol report. The report shall include up-to-date deficit con-
trol mechanism scorecards, information about emergency 
legislation (if any) designated under subsection (c), and 
other data and explanations that enhance public under-
standing of this Act and actions taken under it.’’. 
(b) CONFORMING AMENDMENTS.—(1) Subsections 
(c)(1) and (d)(2) of section 904 of the Congressional 
Budget Act of 1974 are amended by inserting ‘‘408(b),’’ 
after ‘‘313,’’. 
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(2) The table of contents set forth in section 1(b) of 
the Congressional Budget and Impoundment Control Act 
of 1974 (as amended by section 211) is further amended 
by inserting after the item relating to section 407 the fol-
lowing new item: 
‘‘Sec. 408. Alternative net cost estimate by Congressional Budget Office.’’. 
Subtitle D—Accrual Accounting 
Report 
SEC. 231. ACCRUAL ACCOUNTING REPORT. 
(a) ACCRUAL-BASED ACCOUNTING SYSTEM.—The 
Director of the Office of Management and Budget shall 
develop a proposal for the implementation of an accrual- 
based accounting system for certain portions of the budg-
et, including— 
(1) insurance, including social insurance pro-
grams such as Social Security, Medicare, and Med-
icaid; 
(2) environmental liabilities; 
(3) Federal employee pensions; 
(4) retiree health benefits; and 
(5) other budget items where accrual-based ac-
counting would feasibly capture significant future 
cash resource requirements that are not reflected in 
the cash-based budget; where appropriate and rea-
sonable. 
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(b) REPORT.—Within one year of the date of enact-
ment of this Act, the Director of the Office of Manage-
ment and Budget shall submit a report to Congress set-
ting forth the legislation necessary for the implementation 
of an accrual-based accounting system for part of the 
budget, along with any recommendations regarding its 
proposed legislation. 
Subtitle E—On-Budget Status of 
Trust Funds and GSEs 
SEC. 241. OMB REPORT RESPECTING BUDGETARY STATUS 
OF TRUST FUNDS AND GSES. 
(a) REPORT.—Within one year after the date of en-
actment of this Act, the Director of the Office of Manage-
ment and Budget shall submit a report to Congress on 
the various scenarios by which the receipts and disburse-
ments of the following entities could be counted as new 
budget authority, outlays, receipts, or deficit or surplus 
for the purposes of the budget of the United States Gov-
ernment as submitted by the President, the congressional 
budget, the Balanced Budget and Emergency Deficit Con-
trol Act of 1985, and the Statutory Pay-As-You-Go Act 
of 2010: 
(1) Government-sponsored enterprises (GSEs), 
including the Federal National Mortgage Association 
and the Federal Home Loan Mortgage Corporation. 
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(2) The various trust funds, including the Fed-
eral Old-Age and Survivors Insurance Trust Fund, 
the Federal Disability Insurance Trust Fund, and 
the Highway Trust Fund. 
(b) SPECIFIC RECOMMENDATIONS.—In the report de-
scribed in subsection (a), the Director of the Office of 
Management and Budget shall provide a specific rec-
ommendation for each scenario described in the report, 
taking into account at least the following factors: 
(1) Whether the reformed budget would more 
or less accurately reflect the Government’s finances, 
short-, medium-, and long-term. 
(2) Challenges associated with implementing 
the reformed budget. 
(3) Whether the reformed budget would be 
more or less useful in enforcing the pay-as-you-go 
requirements of the Statutory Pay-As-You-Go Act of 
2010 and other deficit control provisions. 
(4) Whether the reformed budget could use the 
same accounting standard for all budget items. 
(5) Whether the reformed budget would have 
any impact on the financing of Government-spon-
sored enterprises, trust funds, Social Security, Medi-
care, or Medicaid. 
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TITLE III—TAX EXPENDITURE 
REFORMS 
Subtitle A—Identification of Tax 
Expenditures 
SEC. 301. JCT REPORTS ON TAX EXPENDITURES. 
Section 202(f) of the Congressional Budget Act of 
1974 is amended by inserting ‘‘(1)’’ before ‘‘For’’ and by 
adding at the end the following new paragraph: 
‘‘(2) Reports to Congress by the Joint Committee on 
Taxation identifying tax expenditures shall also— 
‘‘(A) include an aggregate net cost of tax ex-
penditures that estimates the net impact of all tax 
expenditures on tax revenues, taking into account, 
where possible, interaction between such tax expend-
itures; and 
‘‘(B) compare this aggregate net cost with the 
total revenue currently raised by the Internal Rev-
enue Code of 1986.’’. 
SEC. 302. DEFINITION OF TAX SUBSIDY. 
Section 3 of the Congressional Budget and Impound-
ment Control Act of 1974 is amended by adding at the 
end the following new paragraph: 
‘‘(11) The term ‘tax subsidy’ means those tax 
expenditures that are deliberately inconsistent with 
an identifiable general rule of the present tax law, 
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and that collect less revenue than does the general 
rule.’’. 
Subtitle B—Enforcement of Tax 
Expenditure Requirements 
SEC. 311. TAX EXPENDITURE POINTS OF ORDER. 
(a) POINTS OF ORDER.—Title III of the Congres-
sional Budget Act of 1974 is amended by adding at the 
end the following new section: 
‘‘TAX EXPENDITURE POINTS OF ORDER 
‘‘SEC. 316. (a) TAX
EXPENDITURE
POINT
OF 
ORDER.—(1) It shall not be in order in the House of Rep-
resentatives or the Senate to consider any bill or joint res-
olution reported by the Committee on Ways and Means 
of the House or the Committee on Finance of the Senate 
that proposes to amend the Internal Revenue Code of 
1986 to establish a new tax expenditure unless the com-
mittee report includes— 
‘‘(A) a clear statement of the purpose of the tax 
expenditure, including a justification of why this 
purpose is best achieved through the tax system 
rather than as an outlay; 
‘‘(B) an explanation of how the tax expenditure 
will be implemented and integrated with other re-
lated tax expenditures and outlays; 
‘‘(C) a macroeconomic impact analysis; and 
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‘‘(D) a statement from the Joint Committee on 
Taxation explaining why a macroeconomic analysis 
is not calculable. 
‘‘(2) As used in paragraph (1), the term ‘macro-
economic impact analysis’ means— 
‘‘(A) an estimate prepared by the Joint Com-
mittee on Taxation of the changes in economic out-
put, employment, capital stock, and tax revenues ex-
pected to result from enactment of the applicable bill 
or joint resolution; and 
‘‘(B) a statement from the Joint Committee on 
Taxation identifying the critical assumptions and the 
source of data underlying that estimate. 
‘‘(b) TAX SUBSIDY POINTS OF ORDER.—(1) It shall 
not be in order in the House of Representatives or the 
Senate to consider any bill, joint resolution, amendment, 
motion, or conference report that contains a new tax sub-
sidy, or modifies an existing tax subsidy so that the modi-
fied tax code collects less revenue than the current tax 
code for the ten-year period beginning with the fiscal year 
in which the modification takes effect, without a provision 
terminating it after not more than ten years. 
‘‘(2)(A) It shall not be in order in the House of Rep-
resentatives or the Senate to consider any bill or joint res-
olution reported by the Committee on Ways and Means 
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of the House or the Committee on Finance of the Senate, 
as applicable, that proposes to amend the Internal Rev-
enue Code of 1986 to establish a new tax subsidy, or to 
modify an existing tax subsidy so that the modified tax 
code would collect less revenue than the current tax code, 
unless— 
‘‘(i) each new tax subsidy or each modification 
of an existing tax subsidy is explicitly approved by 
the affirmative vote of the applicable committee, 
quorum being present; and 
‘‘(ii) the chair of the applicable committee 
causes such official statement to be printed in the 
Congressional Record before consideration of the ap-
plicable bill or joint resolution; 
as determined under paragraph (3). 
‘‘(B) The Speaker of the House and the presiding 
officer of the Senate shall determine the applicable com-
mittee by determining the committee of jurisdication of 
legislation authorizing comparable spending programs or 
by considering the tax subsidy to be a spending program. 
For purposes of paragraph (2), the applicable committee 
shall be the committee determined under the preceding 
sentence.’’. 
(b) RULES AMENDMENT.—Clause 6(c) of rule XIII 
of the Rules of the House of Representatives, as amended 
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by section 221(b), is further amended by adding before 
the period at the end thereof the following: ‘‘, or a rule 
or order that would waive any point of order set forth in 
section 316 of the Congressional Budget Act of 1974’’. 
(c) CONFORMING AMENDMENT.—The table of con-
tents set forth in section 1(b) of the Congressional Budget 
and Impoundment Control Act of 1974 (as amended by 
section 211) is further amended by inserting after the 
item relating to section 315 the following new item: 
‘‘Sec. 316. Tax expenditure points of order.’’. 
Subtitle C—Executive Branch 
Reporting of Tax Expenditures 
SEC. 331. EXECUTIVE BRANCH REPORTING OF TAX EX-
PENDITURES. 
(a) OMB GUIDANCE REGARDING TAX EXPENDI-
TURES.—The Director of the Office of Management and 
Budget shall develop clear and consistent guidance to 
agencies on how to incorporate tax expenditures in their 
strategic plans, annual performance plans, and perform-
ance and accountability reports, to provide a broader per-
spective and more cohesive plan of the Government’s goals 
and strategies. 
(b) REPORTING OF TAX EXPENDITURE DATA.—The 
Director of the Office of Management and Budget shall 
require agencies to report tax expenditure data related to 
their overall mission in their annual financial statements. 
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(c) DEFINITIONS.—As used in this section— 
(1) the term ‘‘agency’’ has the meaning given to 
such term in paragraph (1) of section 551 of title 
5, United States Code; and 
(2) the term ‘‘tax expenditure’’ has the meaning 
given to such term in paragraph (3) of section 3 of 
the Congressional Budget and Impoundment Control 
Act of 1974. 
Subtitle D—Tax Expenditure Data 
SEC. 341. DEVELOPMENT OF ELECTRONIC INCOME TAX FIL-
ING SYSTEM. 
Not later than one year after the date of enactment 
of this Act, the Secretary of the Treasury (or his designee) 
shall develop and report to Congress on the legislative 
steps necessary to implement an income tax filing system 
which— 
(1) allows users to save their work; 
(2) provides simple instructions for filing; 
(3) allows users to file their income tax returns 
electronically; and 
(4) respects taxpayer privacy and security con-
cerns. 
SEC. 342. GAO REPORT ON TAX EXPENDITURES. 
Not later than one year after the date of the enact-
ment of this Act, the Government Accountability Office 
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shall publish a written report making recommendations 
for improving the rules of the Internal Revenue Service 
to facilitate the evaluation of tax expenditures. Such re-
port shall include a description of how to implement such 
improvements, including a list of the key steps in such 
implementation. 
SEC. 343. TREASURY REPORT ON TAX EXPENDITURES. 
Not later than one year after the date of enactment 
of this Act, the Secretary of the Treasury (or his designee) 
shall make a written report to Congress which describes 
how the Secretary intends to use the Internal Revenue 
Service panel data sample which was created to facilitate 
the evaluation of savings-related tax expenditures. Such 
report shall also include a description of all other efforts 
related to tax expenditure data acquisition that the Sec-
retary has taken or plans to undertake. 
Subtitle E—Tax Expenditure 
Performance Reviews 
SEC. 351. CBO TAX EXPENDITURE PERFORMANCE REVIEWS. 
(a) CBO PERFORMANCE REVIEW SCHEDULE AND 
REPORTS.—(1) Title II of the Congressional Budget Act 
of 1974 is amended by adding at the end the following 
new section: 
‘‘CBO PERFORMANCE REVIEW SCHEDULE AND REPORTS 
‘‘SEC. 204. (a) PERFORMANCE REVIEW SCHED-
ULE.— 
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‘‘(1) The Director shall conduct performance 
reviews of tax expenditures, as identified by the 
Joint Committee on Taxation, on an ongoing basis. 
The Director shall develop the schedule for these re-
views, such that each tax expenditure is reviewed at 
least once in every four-year period. A four-year 
schedule shall be submitted by the Director to Con-
gress, the Secretary of the Treasury, and the Direc-
tor of the Office of Management and Budget during 
January of each calendar year. 
‘‘(2) Within three months after the enactment 
of any new tax expenditure, the Director shall revise 
the most recent four-year schedule of tax expendi-
ture performance reviews and submit them with the 
quarterly reports as set forth in section 204(b)(1) of 
the Congressional Budget Act of 1974. 
‘‘(3) Not later than one year after the enact-
ment of this Act, the Director shall have submitted 
to Congress, the Secretary of the Treasury, and the 
Director of the Office of Management and Budget 
the first four-year schedule and begin the first per-
formance reviews under paragraph (1). 
‘‘(4) The Director shall endeavor to develop a 
four-year schedule that provides for the simulta-
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neous review of tax expenditures that have similar 
policy objectives. 
‘‘(b) REPORTS.— 
‘‘(1) The Director shall report each of its per-
formance reviews of tax expenditures to Congress, 
the Secretary of the Treasury, and the Director of 
the Office of Management and Budget in quarterly 
reports and containing all of the performance re-
views conducted since the preceding report. 
‘‘(2) The Director may conduct expedited per-
formance reviews for any tax expenditure that has 
an estimated annual fiscal impact of less than $1 
billion, annually adjusted for inflation, unless the 
Secretary of the Treasury requests or the chairs and 
ranking minority members of the Committees on the 
Budget of the House of Representatives and the 
Senate jointly request, in writing, a full review. 
‘‘(3) Each performance review, except for expe-
dited performance reviews, shall include the fol-
lowing explanations, descriptions, estimates, anal-
yses, and recommendations: 
‘‘(A) An explanation of the tax expenditure 
and any relevant economic, social, or other con-
text under which it was first enacted. 
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‘‘(B) A description of the intended purpose 
of the tax expenditure. 
‘‘(C) An analysis of the overall success of 
the tax expenditure in achieving such purpose, 
and evidence supporting such analysis. 
‘‘(D) An analysis of the extent to which 
further extending the tax expenditure, or mak-
ing it permanent, would contribute to achieving 
such purpose. 
‘‘(E) A description of the direct and indi-
rect beneficiaries of the tax expenditure, also 
specifying— 
‘‘(i) any unintended beneficiaries of 
the tax expenditure; 
‘‘(ii) the classes of individuals, types 
of organizations, or types of industries 
whose Federal tax liabilities are directly af-
fected by the tax expenditure; 
‘‘(iii) the extent to which terminating 
the tax expenditure may have negative ef-
fects on the category of taxpayers that cur-
rently benefit from the tax preference and 
on the economy; and 
‘‘(iv) the extent to which the termi-
nation of the tax expenditure would affect 
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the distribution of liability for payments of 
Federal taxes. 
‘‘(F) An analysis of whether the tax ex-
penditure is the most cost-effective method for 
achieving the purpose for which it was intended, 
and a description of any more cost-effective 
methods through which such purpose could be 
accomplished, and in particular the extent to 
which a direct spending program might be pref-
erable to a tax expenditure, including— 
‘‘(i) whether an outlay program might 
achieve the same policy objectives as a tax 
expenditure; 
‘‘(ii) whether an outlay program 
might reduce deadweight losses and im-
prove economic efficiency in the national 
economy; and 
‘‘(iii) whether a direct spending pro-
gram might be more or less expense to ad-
minister. 
‘‘(G) A description of any unintended ef-
fects of the tax expenditure that is useful in un-
derstanding the tax expenditure’s overall value. 
‘‘(H) A description of any interactions (ac-
tual or potential) with other tax expenditures or 
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direct spending programs in the same or related 
budget function that should be studied further. 
‘‘(I) An estimate of the annual cost in for-
gone revenues of the tax expenditure, as well as 
a projection of the cost in foregone revenues for 
the ensuing ten fiscal years. 
‘‘(J) A description of any further informa-
tion needed to complete a more thorough exam-
ination and analysis of the tax expenditure, and 
what is necessary to make such information 
available. 
‘‘(K) A specific recommendation, based on 
analysis conducted in the performance review, 
as to whether the tax expenditure should be 
continued without modification, modified (in-
cluding converted fully or partly into a direct 
spending program), scheduled for sunset, re-
viewed at a later date, or terminated imme-
diately. The Director may decline to provide a 
specific recommendation, but in each such case 
shall provide an explanation of why a rec-
ommendation has not been given. 
‘‘(4) An expedited performance review shall in-
clude at least the explanations, descriptions, esti-
mates, analyses, and recommendations as listed in 
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subparagraphs (A), (B), (C), (D), (I), (J), and (K) 
of paragraph (3). 
‘‘(c) COMMITTEE HEARINGS.—Not later than 60 
days after the submission of any performance review re-
port under subsection (b), the Committees on Ways and 
Means of the House of Representatives and the Committee 
on Finance of the Senate shall hold public hearings to con-
sider the performance review recommendations contained 
in that report. The Committees on the Budget of the 
House of Representatives and the Senate may also hold 
hearings on such performance review recommendations.’’. 
(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 203 the following new item: 
‘‘Sec. 204. CBO performance review schedule and reports.’’. 
(b) TREASURY AND OMB COMMENTS.—Not later 
than 60 days after submission of a performance review 
report pursuant to section 204(b) of the Congressional 
Budget Act of 1974, the Secretary of the Treasury and 
the Director of the Office of Management and Budget 
shall each provide to Congress and to the Director of the 
Congressional Budget Office detailed, written comments 
on the performance review recommendations, stating 
whether the Secretary of the Treasury or the Director of 
the Office of Management and Budget, as applicable, 
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agrees or disagrees with all or any part of the report or, 
if no opinion is given, providing an explanation of why the 
Secretary or the Director has no opinion or has not given 
one. 
Æ 
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