135
rities with maturities suitable to the needs of the Fund, 
as determined by the Secretary, and bearing interest at 
rates determined by the Secretary of the Treasury, taking 
into consideration current market yields on outstanding 
marketable obligations of the United States of comparable 
maturities. The income on such investments shall be cred-
ited to and form a part of the Fund.’’. 
(2) TECHNICAL AMENDMENTS.—Such chapter 
is further amended—
(A) by amending the center heading after 
the table of sections to read as follows: 
‘‘SUBCHAPTER I—OFFICERS’’; 
(B) by amending the center heading after 
section 336 to read as follows: 
‘‘SUBCHAPTER II—ENLISTED MEMBERS’’; 
(C) by amending the center heading after 
section 373 to read as follows: 
‘‘SUBCHAPTER III—GENERAL PROVISIONS’’; 
and 
(D) by amending the center heading after 
section 425 to read as follows: 
‘‘SUBCHAPTER IV—SPECIAL PROVISIONS’’. 
(3) CLERICAL AMENDMENTS.—The table of sec-
tions at the beginning of such chapter is amended—
136
(A) by striking ‘‘OFFICERS’’ at the begin-
ning of the table and inserting ‘‘SUBCHAPTER 
I—OFFICERS’’; 
(B) by striking ‘‘ENLISTED
MEMBERS’’ 
after the item relating to section 336 and in-
serting 
‘‘SUBCHAPTER
II—ENLISTED
MEM-
BERS’’; 
(C) by striking ‘‘GENERAL
PROVISIONS’’ 
after the item relating to section 373 and in-
serting ‘‘SUBCHAPTER
III—GENERAL
PROVI-
SIONS’’; 
(D) by striking ‘‘SPECIAL
PROVISIONS’’ 
after the item relating to section 425 and in-
serting 
‘‘SUBCHAPTER
IV—SPECIAL
PROVI-
SIONS’’; and 
(E) by adding at the end the following:
‘‘SUBCHAPTER V—COAST GUARD MILITARY RETIREMENT FUND 
‘‘441. Establishment and purpose of Fund; definitions. 
‘‘442. Assets of the Fund. 
‘‘443. Payments from the Fund. 
‘‘444. Determination of contributions to the Fund. 
‘‘445. Payments into the Fund. 
‘‘446. Investment of assets of the Fund.’’.
(b) IMPLEMENTATION YEAR EXCEPTIONS.—To avoid 
funding shortfalls in the first year of implementation of 
subchapter V of chapter 11 of title 14, United States 
Code, as added by subsection (a), if formal actuarial deter-
minations are not available in time for budget preparation, 
the amounts used in the first year under sections
137
445(a)(1)(A) and 445(a)(2)(A) of such title shall be set 
equal to those estimates in sections 444(b)(1)(A)(i) and 
444(b)(1)(B)(i), respectively, of such title if final deter-
minations are not available. The original unfunded liabil-
ity, as defined in section 444(a) of such title, shall include 
an adjustment to correct for this difference between the 
formal actuarial determinations and the estimates in sec-
tions 444(b)(1)(A)(i) and 444(b)(1)(B)(i) of such title.
(c) CONFORMING AMENDMENT.—Subparagraph (B) 
of section 255(g)(1) of the Balanced Budget and Emer-
gency Deficit Control Act of 1985 (2 U.S.C. 905(g)(1)) 
is amended by striking ‘‘Retired Pay, Coast Guard (69–
0241–0–1–403)’’ and inserting ‘‘Coast Guard Military Re-
tirement Fund (69–0241–01–403)’’. 
(d) TRANSFER OF EXISTING BALANCES.—
(1) TRANSFER.—There shall be transferred into 
the Fund on October 1, 2005, any obligated and un-
obligated balances of appropriations made to the De-
partment of Homeland Security that are currently 
available for retired pay, and amounts so transferred 
shall be part of the assets of the Fund. 
(2) FUND
DEFINED.—For purposes of para-
graph (1), the term ‘‘Fund’’ means the Coast Guard 
Military Retirement Fund established under section
138
441 of title 14, United States Code, as added by 
subsection (a). 
(e) EFFECTIVE DATE.—Sections 443 (relating to 
payments from the Fund) and 445 (relating to payments 
into the Fund) of title 14, United States Code, as added 
by subsection (a), shall take effect on October 1, 2005. 
Subtitle 
B—Accrual 
Funding 
of 
Post-Retirement Health Benefits 
Costs for Federal Employees 
SEC. 411. FEDERAL EMPLOYEES HEALTH BENEFITS FUND. 
(a) Section 8906 of title 5, United States Code, is 
amended—
(1) by redesignating subsection (c) as sub-
section (c)(1) and by adding at the end the following 
new paragraphs:
‘‘(2) In addition to Government contributions re-
quired by subsection (b) and paragraph (1), each employ-
ing agency shall contribute amounts as determined by the 
Office to be necessary to prefund the accruing actuarial 
cost of post-retirement health benefits for each of the 
agency’s current employees who are eligible for Govern-
ment contributions under this section. Amounts under this 
paragraph shall be paid by the employing agency separate 
from other contributions under this section, from the ap-
139
propriations or fund used for payment of the salary of the 
employee, on a schedule to be determined by the Office. 
‘‘(3) Paragraph (2) shall not apply to the United 
States Postal Service or the government of the District 
of Columbia.’’; and 
(2) by amending subsection (g)(1) to read as 
follows: 
‘‘(g)(1) Except as provided in paragraphs (2) and 
(3), all Government contributions authorized by this sec-
tion for health benefits for an annuitant shall be paid from 
the Employees Health Benefits Fund to the extent that 
funds are available in accordance with section 8909(h)(6) 
and, if necessary, from annual appropriations which are 
authorized to be made for that purpose and which may 
be made available until expended.’’. 
(b) Section 8909 of title 5, United States Code, is 
amended by adding at the end the following new sub-
section: 
‘‘(h)(1) Not later than June 30, 2006, the Office 
shall determine the existing liability of the Fund for post-
retirement health benefits, excluding the liability of the 
United States Postal Service for service under section 
8906(g)(2), under this chapter as of September 30, 2006. 
The Office shall establish an amortization schedule, in-
cluding a series of annual installments commencing Sep-
140
tember 30, 2006, which provides for the liquidation of 
such liability by September 30, 2043. 
‘‘(2) At the close of each fiscal year, for fiscal years 
beginning after September 30, 2005, the Office shall de-
termine the supplemental liability of the Fund for post-
retirement health benefits, excluding the liability attrib-
utable to the United States Postal Service for service sub-
ject to section 8906(g)(2), and shall establish an amortiza-
tion schedule, including a series of annual installments 
commencing on September 30 of the subsequent fiscal 
year, which provides for liquidation of such supplemental 
liability over 30 years. 
‘‘(3) Amortization schedules established under this 
paragraph shall be set in accordance with generally accept-
ed actuarial practices and principles. 
‘‘(4) At the end of each fiscal year on and after Sep-
tember 30, 2006, the Office shall notify the Secretary of 
the Treasury of the amounts of the next installments 
under the most recent amortization schedules established 
under paragraphs (1) and (2). Before closing the accounts 
for the fiscal year, the Secretary shall credit the sum of 
these amounts (including in that sum any negative 
amount for the amortization of the supplemental liability) 
to the Fund, as a Government contribution, out of any
141
money in the Treasury of the United States not otherwise 
appropriated. 
‘‘(5) For the purpose of carrying out paragraphs (1) 
and (2), the Office shall perform or arrange for actuarial 
determinations and valuations and shall prescribe reten-
tion of such records as it considers necessary for making 
periodic actuarial valuations of the Fund. 
‘‘(6) Notwithstanding subsection (b), the amounts de-
posited into the Fund pursuant to this subsection and sec-
tion 8906(c)(2) to prefund post-retirement health benefits 
costs shall be segregated within the Fund so that such 
amounts, as well as earnings and proceeds under sub-
section (c) attributable to them, may be used exclusively 
for the purpose of paying Government contributions for 
post-retirement health benefits costs. When such amounts 
are used in combination with amounts withheld from an-
nuitants to pay for health benefits, a portion of the con-
tributions shall then be set aside in the Fund as described 
in subsection (b). 
‘‘(7) Under this subsection, ‘supplemental liability’ 
means—
‘‘(A) the actuarial present value for future post-
retirement health benefits that are the liability of 
the Fund, less 
‘‘(B) the sum of—
142
‘‘(i) the actuarial present value of all fu-
ture contributions by agencies and annuitants 
to the Fund toward those benefits pursuant to 
section 8906; 
‘‘(ii) the present value of all scheduled am-
ortization payments to the Fund pursuant to 
paragraphs (1) and (2); 
‘‘(iii) the Fund balance as of the date the 
supplemental liability is determined, to the ex-
tent that such balance is attributable to post-re-
tirement benefits; and 
‘‘(iv) any other appropriate amount, as de-
termined by the Office in accordance with gen-
erally accepted actuarial practices and prin-
ciples.’’.
SEC. 412. FUNDING UNIFORMED SERVICES HEALTH BENE-
FITS FOR ALL RETIREES. 
Title 10, United States Code, is amended—
(1) in the title of chapter 56, by striking ‘‘DE-
PARTMENT OF DEFENSE MEDICARE-
ELIGIBLE’’ 
and 
inserting 
‘‘UNIFORMED 
SERVICES’’; 
(2) in section 1111—
(A) in subsection (a)—
143
(i) by striking ‘‘Department of De-
fense Medicare-Eligible’’ and inserting 
‘‘Uniformed Services’’; 
(ii) by striking ‘‘Department of De-
fense under’’; and 
(iii) by striking ‘‘for medicare-eligible 
beneficiaries’’; 
(B) in subsection (c)—
(i) by striking ‘‘The Secretary of De-
fense may’’ and inserting ‘‘The Secretary 
of Defense shall’’; 
(ii) by striking ‘‘with any other’’ and 
inserting ‘‘with each’’;
(iii) by striking ‘‘Any such agree-
ment’’ and inserting ‘‘Such agreements’’; 
and 
(iv) by striking ‘‘administering Sec-
retary may’’ and inserting ‘‘administrative 
Secretary shall’’; 
(3) in section 1113—
(A) in subsection (a)—
(i) by striking ‘‘and are medicare eli-
gible’’; 
(ii) by striking ‘‘who are medicare eli-
gible’’; and
144
(iii) by adding at the end the fol-
lowing new sentence: ‘‘For the fiscal year 
starting October 1, 2004, only, the pay-
ments will be solely for the costs of mem-
bers or former members of a uniformed 
service who are entitled to retired or re-
tainer pay and are medicare-eligible, and 
eligible dependents or survivors who are 
medicare-eligible.’’; 
(B) in subsection (c)(1), by striking ‘‘who 
are medicare-eligible’’; 
(C) in subsection (d), by striking ‘‘who are 
medicare-eligible’’; and 
(D) in subsection (f), by striking ‘‘If’’ and 
inserting ‘‘When’’; 
(4) in section 1114, in subsection (a)(1), by 
striking ‘‘Department of Defense Medicare-Eligible’’ 
and inserting ‘‘Uniformed Services’’; 
(5) in section 1115—
(A) in subsection (b)(2), by striking ‘‘The 
amount determined under paragraph (1) for 
any fiscal year is the amount needed to be ap-
propriated to the Department of Defense (or to 
the other executive department having jurisdic-
tion over the participating uniformed service)’’
145
and inserting ‘‘The amount determined under 
paragraph (1), or the amount determined under 
section 1111(c) for a participating uniformed 
service, for any fiscal year, is the amount need-
ed to be appropriated to the Department of De-
fense (or to any other executive department 
having jurisdiction over a participating uni-
formed service)’’; 
(B) in subsection (c)(2), by striking ‘‘for 
medicare eligible beneficiaries’’; and 
(C) by adding at the end the following new 
subsection: 
‘‘(f) For the fiscal year starting October 1, 2004, 
only, the amounts in this section shall be based solely on 
the costs of medicare-eligible benefits of beneficiaries and 
the costs for their eligible dependents or survivors who are 
medicare-eligible, and shall be recalculated thereafter to 
reflect the cost of beneficiaries defined in section 1111.’’; 
and 
(6) in section 1116—
(A) in subsection (a)(1)(A), by striking 
‘‘for medicare-eligible beneficiaries’’; 
(B) in subsection (a)(2)(A), by striking 
‘‘for medicare-eligible beneficiaries’’; and
146
(C) in subsection (c), by striking ‘‘sub-
section (a) shall be paid from funds available 
for the health care programs’’ and inserting 
‘‘subsection (a) and section 1111(c) shall be 
paid from funds available for the pay of mem-
bers of the participating uniformed services 
under the jurisdiction of the respective admin-
istering secretaries’’. 
SEC. 413. EFFECTIVE DATE. 
Except as otherwise provided, this title shall take ef-
fect upon enactment with respect to fiscal years beginning 
after 2005.
‘‘Sec. 601. Short title. 
‘‘Sec. 602. Budgetary treatment. 
‘‘Sec. 603. Timetable for implementation of accrual budgeting for Federal insur-
ance programs. 
‘‘Sec. 604. Definitions. 
‘‘Sec. 605. Authorizations to enter into contracts; actuarial cost account. 
‘‘Sec. 606. Effective date.’’.
Subtitle C—Limit on the Public 
Debt 
SEC. 421. LIMIT ON PUBLIC DEBT. 
Section 3101 of title 31, United States Code, is 
amended to read as follows: 
‘‘§ 3101. Public debt limit 
‘‘(a) In this section, the current redemption value of 
an obligation issued on a discount basis and redeemable 
before maturity at the option of its holder is deemed to 
be the face amount of the obligation.
147
‘‘(b) The face amount of obligations issued under this 
chapter and the face amount of obligations whose prin-
cipal and interest are guaranteed by the United States 
Government (except guaranteed obligations held by the 
Secretary of the Treasury and intragovernmental hold-
ings) may not be more than $4,393,000,000,000 out-
standing at one time, subject to changes periodically made 
in that amount as provided by law. 
‘‘(c) For purposes of this section, the face amount, 
for any month, of any obligation issued on a discount basis 
that is not redeemable before maturity at the option of 
the holder of the obligation is an amount equal to the sum 
of—
‘‘(1) the original issue price of the obligation, 
plus
‘‘(2) the portion of the discount on the obliga-
tion attributable to periods before the beginning of 
such month (as determined under the principles of 
section 1272(a) of the Internal Revenue Code of 
1986 without regard to any exceptions contained in 
paragraph (2) of such section). 
‘‘(d) For purposes of this section, the term 
‘intragovernment holding’ is any obligation issued by the 
Secretary of the Treasury to any Federal trust fund or 
Government account, whether in respect of public money,
148
money otherwise required to be deposited in the Treasury, 
or amounts appropriated.’’. 
TITLE V—EXPEDITING THE 
BUDGET PROCESS 
Subtitle A—Further Enforcement 
Amendments 
SEC. 501. SUPER-MAJORITY POINTS OF ORDER. 
(a) Section 904 of the Congressional Budget Act of 
1974 is amended as follows: 
(1) In subsection 904(c)(1), insert ‘‘312(g), (h), 
(i), and (j),’’ before ‘‘313,’’, and insert ‘‘316, 318,’’ 
before ‘‘904(c),’’. 
(2) In subsection (c) strike ‘‘three-fifths’’ each 
place it appears and insert ‘‘two-thirds’’. 
(3)(A) In subsection (d)(2), insert ‘‘312(g), (h), 
(i), and (j),’’ before ‘‘313,’’, and insert ‘‘316, 318,’’ 
before ‘‘904(c),’’. 
(B) In subsection (d), strike ‘‘three-fifths’’ each 
place it appears and insert ‘‘two-thirds’’. 
(4)(A) In subsections (c)(2) and (d)(3), strike 
‘‘311(a),’’. 
(B) In subsections (c)(1) and (d)(2) insert 
‘‘311(a),’’ after ‘‘310(d)(2),’’. 
(5) In subsection (e), strike ‘‘2002’’ and insert 
‘‘2010’’.
149
SEC. 502. BUDGET RESOLUTION ENFORCEMENT POINT OF 
ORDER. 
(a) ENTITLEMENT POINT OF ORDER.—Section 312 
of the Congressional Budget Act of 1974 is amended by 
adding at the end the following new subsection: 
‘‘(i) BUDGET RESOLUTION ENFORCEMENT POINT OF 
ORDER.—It shall not be in order in the House of Rep-
resentatives or the Senate to consider any joint resolution 
on the budget for a fiscal year, or amendment thereto or 
conference report thereon, that—
‘‘(1) is not consistent with the discretionary 
spending limits set forth in section 251(b) of the 
Balanced Budget and Emergency Deficit Control 
Act of 1985; or 
‘‘(2) provides for an increase in the aggregate 
level of direct spending for the fiscal year of the res-
olution or any ensuing fiscal year included in such 
resolution.’’. 
SEC. 503. POINT OF ORDER WAIVER PROTECTION. 
Clause 6(c) of rule XIII of the Rules of the House 
of Representatives is amended by striking the period at 
the end of subparagraph (2) and inserting ‘‘; or’’ and by 
adding at the end the following new subparagraph: 
‘‘(3) a rule or order that would waive the provi-
sions of any section of the Congressional Budget Act
150
of 1974 referred to in section 904(c)(1) of such 
Act.’’. 
Subtitle B—PAYGO Extension 
SEC. 511. PAYGO EXTENSION. 
(a) EFFECTIVE DATES.—Section 275(b) of the Bal-
anced Budget and Emergency Deficit Control Act of 1985 
is amended by striking ‘‘2002’’ and inserting ‘‘2014’’ and 
by striking ‘‘2006’’ and inserting ‘‘2018’’. 
(b) PAYGO SEQUESTRATION.—Subsections (a) and 
(b)(1) of section 252 of the Balanced Budget and Emer-
gency Deficit Control Act of 1985 are amended by striking 
‘‘2002’’ and inserting ‘‘2014’’. 
(c) DEFINITION OF RECEIPTS LEGISLATION.—Sec-
tion 252 of the Balanced Budget and Emergency Deficit 
Control Act of 1985 is amended by adding at the end the 
following new subsection: 
‘‘(f) DEFINITION.—As used in this section, the term 
‘receipts legislation’ does not include any provision of a 
bill or joint resolution amending the Internal Revenue 
Code of 1986 that increases the deficit, if the amount of 
increase in the deficit (when added to the increase or de-
crease in the deficit caused by the enactment of other bills 
or joint resolutions amending the Internal Revenue Code 
of 1986 enacted since the enactment of the most recent 
joint resolution on the budget) does not exceed for any
151
fiscal year covered by such joint resolution on the budget 
the amount by which the aggregate level of Federal reve-
nues should be decreased under such joint resolution on 
the budget.’’.
Æ