I 
114TH CONGRESS 
2D SESSION 
H. R. 5637 
To prevent a fiscal crisis by enacting legislation to balance the Federal 
budget through reductions of discretionary and mandatory spending. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 6, 2016 
Mr. SANFORD (for himself, Mr. PALMER, Mr. DUNCAN of South Carolina, Mr. 
MULVANEY, Mr. MEADOWS, Mr. DESJARLAIS, Mr. LABRADOR, Mr. 
GOSAR, Mr. RIBBLE, and Mr. GOHMERT) introduced the following bill; 
which was referred to the Committee on the Budget, and in addition to 
the Committee on Rules, for a period to be subsequently determined by 
the Speaker, in each case for consideration of such provisions as fall with-
in the jurisdiction of the committee concerned 
A BILL 
To prevent a fiscal crisis by enacting legislation to balance 
the Federal budget through reductions of discretionary 
and mandatory spending. 
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 ‘‘One Percent Spending 
Reduction Act of 2016’’. 
SEC. 2. CONGRESSIONAL FINDINGS AND PURPOSE. 
(a) FINDINGS.—Congress finds the following: 
VerDate Sep 11 2014 
23:37 Jul 07, 2016
Jkt 059200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H5637.IH
H5637
smartinez on DSK3GLQ082PROD with BILLS
(1) The fiscal crisis faced by the Federal Gov-
ernment demands immediate action. 
(2) The dramatic growth in spending and debt 
in recent years threatens the economic and national 
security of the United States: 
(A) Federal spending has grown from 18 
percent of gross domestic product in 2001 to 
nearly 21 percent of gross domestic product in 
2015. 
(B) 
Total 
Federal 
debt 
exceeds 
$19,000,000,000,000 and is projected to in-
crease each year over the next 10 years. 
(C) Without action, the Federal Govern-
ment will continue to run massive deficits in the 
next decade and total Federal debt will rise to 
$29,000,000,000,000 by 2026. 
(D) Interest payments on this debt will 
soon rise to the point where balancing the 
budget as a matter of policy is beyond the reach 
of Congress. 
(3) Absent reform, the growth of Social Secu-
rity, Medicare, Medicaid, and other health-related 
spending will overwhelm all other Federal programs 
and consume all projected tax revenues. 
VerDate Sep 11 2014 
23:37 Jul 07, 2016
Jkt 059200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H5637.IH
H5637
smartinez on DSK3GLQ082PROD with BILLS
(b) PURPOSE.—The purpose of this Act is to address 
the fiscal crisis by— 
(1) acting quickly to balance the Federal budg-
et and eliminate the parade of deficits and bal-
looning interest payments; 
(2) achieving balance by reducing spending 1 
percent per year until spending equals projected 
long-term revenues; and 
(3) reforming entitlement programs to ensure 
long-term fiscal stability and balance. 
SEC. 3. ESTABLISHMENT AND ENFORCEMENT OF SPEND-
ING CAPS. 
(a) OUTLAY
CAPS.—The Balanced Budget and 
Emergency Deficit Control Act of 1985 (2 U.S.C. 900 et 
seq.) is amended by inserting after section 253 the fol-
lowing: 
‘‘SEC. 253A. ESTABLISHING OUTLAY CAPS. 
‘‘(a) OUTLAY CAPS.—In this section, the term ‘outlay 
cap’ means: 
‘‘(1) FISCAL YEAR 2017.—For fiscal year 2017, 
total outlays (less net interest payments) shall be 
not more than $3,645,000,000,000, less 1 percent. 
‘‘(2) FISCAL YEAR 2018.—For fiscal year 2018, 
total outlays (less net interest payments) shall be 
VerDate Sep 11 2014 
23:37 Jul 07, 2016
Jkt 059200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H5637.IH
H5637
smartinez on DSK3GLQ082PROD with BILLS
not more than the amount computed under para-
graph (1), less 1 percent. 
‘‘(3) FISCAL YEAR 2019.—For fiscal year 2019, 
total outlays (less net interest payments) shall be 
not more than the amount computed under para-
graph (2), less 1 percent. 
‘‘(4) FISCAL YEAR 2020.—For fiscal year 2020, 
total outlays (less net interest payments) shall be 
not more than the amount computed under para-
graph (3), less 1 percent. 
‘‘(5) FISCAL YEAR 2021.—For fiscal year 2021, 
total outlays (less net interest payments) shall be 
not more than the amount computed under para-
graph (4), less 1 percent. 
‘‘(6) FISCAL YEAR 2022 AND SUBSEQUENT FIS-
CAL YEARS.— 
‘‘(A) IN GENERAL.—For fiscal year 2022 
and each fiscal year thereafter, total outlays 
shall be not more than 18 percent of the gross 
domestic product for that fiscal year, as esti-
mated by the Office of Management and Budg-
et prior to March of the previous fiscal year. 
‘‘(B) LIMITATION.—Notwithstanding sub-
paragraph (A), for any fiscal year beginning 
with fiscal year 2023, total projected outlays 
VerDate Sep 11 2014 
23:37 Jul 07, 2016
Jkt 059200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H5637.IH
H5637
smartinez on DSK3GLQ082PROD with BILLS
may not be less than total projected outlays for 
the preceding fiscal year. 
‘‘(b) SEQUESTRATION.— 
‘‘(1) IN GENERAL.— 
‘‘(A) EXCESS SPENDING.—Not later than 
45 calendar days after the beginning of a fiscal 
year, the Office of Management and Budget 
shall prepare and the President shall order a 
sequestration to eliminate any excess outlay 
amount. 
‘‘(B) DEFINITIONS.— 
‘‘(i) FISCAL
YEARS
2017
THROUGH 
2021.—For each of fiscal years 2017 
through 2021 and for purposes of this sub-
section, the term ‘excess outlay amount’ 
means the amount by which total projected 
Federal outlays (less net interest pay-
ments) for a fiscal year exceeds the outlay 
cap for that fiscal year. 
‘‘(ii) FISCAL YEAR 2022 AND SUBSE-
QUENT
FISCAL
YEARS.—For fiscal year 
2022 and each fiscal year thereafter and 
for purposes of this subsection, the term 
‘excess outlay amount’ means the amount 
by which total projected Federal outlays 
VerDate Sep 11 2014 
23:37 Jul 07, 2016
Jkt 059200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H5637.IH
H5637
smartinez on DSK3GLQ082PROD with BILLS
for a fiscal year exceeds the outlay cap for 
that fiscal year. 
‘‘(2) SEQUESTRATION.— 
‘‘(A) CBO PREVIEW REPORT.—On August 
15 of each year, the Congressional Budget Of-
fice shall issue a sequestration preview report 
as described in section 254(c)(4). 
‘‘(B) OMB PREVIEW REPORT.—On August 
20 of each year, the Office of Management and 
Budget shall issue a sequestration preview re-
port as described in section 254(c)(4). 
‘‘(C) FINAL REPORT.—On October 31 of 
each year, the Office of Management and Budg-
et shall issue a final sequestration report as de-
scribed in section 254(f)(3), which shall be ac-
companied by a Presidential order detailing uni-
form spending reductions equal to the excess 
outlay amount. 
‘‘(D) PROCESS.—The reductions shall gen-
erally follow the process set forth in sections 
253 and 254, except as provided in this section. 
‘‘(3) CONGRESSIONAL ACTION.—If the August 
20 report by the Office of Management and Budget 
projects a sequestration, the Committee on the 
Budget of the Senate and the Committee on the 
VerDate Sep 11 2014 
23:37 Jul 07, 2016
Jkt 059200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H5637.IH
H5637
smartinez on DSK3GLQ082PROD with BILLS
Budget of the House of Representatives may report 
a resolution directing committees of their House to 
change the existing law to achieve the spending re-
ductions outlined in the August 20 report necessary 
to meet the outlay limits. 
‘‘(c) NO EXEMPT PROGRAMS.—Section 255 and sec-
tion 256 shall not apply to this section or any sequestra-
tion order issued under this section, except that payments 
for net interest (budget function 900) shall be exempt 
from the spending reductions under sequestration. 
‘‘(d) LOOK BACK.—If, after November 14, a bill re-
sulting in outlays for the fiscal year in progress is enacted 
that causes excess outlays, the excess outlay amount for 
the next fiscal year shall be increased by the amount or 
amounts of that breach.’’. 
(b) CONFORMING AMENDMENTS TO BBEDCA.— 
(1) SEQUESTRATION PREVIEW REPORTS.—Sec-
tion 254(c)(4) of the Balanced Budget and Emer-
gency Deficit Control Act of 1985 (2 U.S.C. 
904(c)(4)) is amended to read as follows: 
‘‘(4) OUTLAY CAP SEQUESTRATION REPORTS.— 
The preview reports shall set forth for the budget 
year estimates for the following: 
VerDate Sep 11 2014 
23:37 Jul 07, 2016
Jkt 059200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H5637.IH
H5637
smartinez on DSK3GLQ082PROD with BILLS