187
valuation and on or before the first day of the 
current fiscal year shall be used in such deter-
mination); and 
‘‘(B) the total amount of basic pay and of 
compensation (paid pursuant to section 206 of 
title 37) accrued for that month by members of 
the Ready Reserve (other than members of full-
time Reserve duty other than for training) who 
are not otherwise described in paragraph 
(1)(B). 
‘‘(b) ANNUAL PAYMENT FOR UNFUNDED LIABIL-
ITIES.—(1) At the beginning of each fiscal year, beginning 
on October 1, 2005, the Secretary shall certify to the Sec-
retary of the Treasury the amount of the first installment 
under the most recent amortization schedule established 
under section 254(a). The Secretary of the Treasury shall 
promptly pay into the Fund from the General Fund of 
the Treasury the amount so certified. Such payment shall 
be the contribution to the Fund for that fiscal year. 
‘‘§ 446. Investment of assets of the Fund 
‘‘The Secretary may request the Secretary of the 
Treasury to invest such portion of the Fund as is not, 
in the judgment of the Secretary, required to meet the 
current needs of the Fund. Such investments shall be 
made by the Secretary of the Treasury in public debt secu-
188
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—
189
(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
190
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
191
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-
192
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-
193
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
194
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—
195
‘‘(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)—
196
(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
197
(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)’’
198
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
199
(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. 
Subtitle C—Limit on the Public 
Debt
SEC. 421. FINDINGS. 
The Congress finds the following: 
(1) Since 1997, Congress has paid down and 
retired approximately $450,000,000,000 of the Gov-
ernment’s debt which was previously held by the 
public. 
(2) This reduction in the Government’s debt to 
the public should permit a lowering of the statutory 
debt ceiling. However, the statutory definition min-
gles both the public debt and intragovernment liabil-
200
ities, the latter of which do not represent resource 
withdrawals for the economy. 
(3) Intragovernment accounts such as the social 
security trust funds, the Civil Service Retirement 
and Disability Fund, the Department of Defense 
Military Retirement Fund, and the Unemployment 
Trust Fund constitute accrued liabilities of the Gov-
ernment which will be paid from future receipts, 
taxes, or borrowing. If the Government issues debt 
to the public to fund such liabilities in the future, 
that debt will properly be subject to the debt ceiling. 
(4) Properly defining the debt of the Govern-
ment would permit lowering the debt ceiling to take 
account of, and lock in, the fiscal progress that has 
been made. 
SEC. 422. PURPOSE. 
It is the purpose of this subtitle to—
(1) properly define the public debt to exclude 
intragovernment obligations; and 
(2) reduce the public debt ceiling in recognition 
of the reduction in outstanding public debt in recent 
years, and to encourage further fiscal responsibility 
and progress toward eliminating the remaining out-
standing debt.
201
SEC. 423. LIMIT ON PUBLIC DEBT. 
Section 3101 of title 31, United States Code, is 
amended to read as follows: 
‘‘§ 3101. Public debt limit 
‘‘(a) In this section, the current redemption value of 
an obligation issued on a discount basis and redeemable 
before maturity at the option of its holder is deemed to 
be the face amount of the obligation. 
‘‘(b) The face amount of obligations issued under this 
chapter and the face amount of obligations whose prin-
cipal and interest are guaranteed by the United States 
Government (except guaranteed obligations held by the 
Secretary of the Treasury and intragovernmental hold-
ings) may not be more than $4,393,000,000,000 out-
standing at one time, subject to changes periodically made 
in that amount as provided by law. 
‘‘(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
202
section 1272(a) of the Internal Revenue Code of 
1986 without regard to any exceptions contained in 
paragraph (2) of such section). 
‘‘(d) For purposes of this section, the term 
‘intragovernment holding’ is any obligation issued by the 
Secretary of the Treasury to any Federal trust fund or 
Government account, whether in respect of public money, 
money otherwise required to be deposited in the Treasury, 
or amounts appropriated.’’. 
Subtitle D—Risk-assumed 
Budgeting 
SEC. 431. PURPOSES. 
The purposes of this subtitle are to—
(1) budget for the long-term costs of Federal 
insurance programs; 
(2) improve congressional control of those costs; 
and 
(3) periodically report on long-term budgetary 
trends.
CHAPTER 1—BUDGETARY TREATMENT OF 
FEDERAL INSURANCE PROGRAMS 
SEC. 432. FEDERAL INSURANCE PROGRAMS. 
(a) IN GENERAL.—The Congressional Budget Act of 
1974 is amended by adding after title V the following new 
title:
203
‘‘TITLE VI—BUDGETARY TREAT-
MENT OF FEDERAL INSUR-
ANCE PROGRAMS 
‘‘SEC. 602. BUDGETARY TREATMENT. 
‘‘(a) PRESIDENT’S BUDGET.—Beginning with fiscal 
year 2011, the budget of the Government pursuant to sec-
tion 1105(a) of title 31, United States Code, shall be 
based on the risk-assumed cost of Federal insurance pro-
grams. 
‘‘(b) BUDGET ACCOUNTING.—For any Federal insur-
ance program—
‘‘(1) the program account shall—
‘‘(A) pay the risk-assumed cost borne by 
the taxpayer to the financing account, and 
‘‘(B) pay actual insurance program admin-
istrative costs; 
‘‘(2) the financing account shall—
‘‘(A) receive premiums and other income, 
‘‘(B) pay all claims for insurance and re-
ceive all recoveries, 
‘‘(C) transfer to the program account on 
not less than an annual basis amounts nec-
essary to pay insurance program administrative 
costs;
204
‘‘(3) a negative risk-assumed cost shall be 
transferred from the financing account to the pro-
gram account, and shall be transferred from the pro-
gram account to the general fund; and 
‘‘(4) all payments by or receipts of the financ-
ing accounts shall be treated in the budget as a 
means of financing. 
‘‘(c) APPROPRIATIONS
REQUIRED.—(1) Notwith-
standing any other provision of law, insurance commit-
ments may be made for fiscal year 2011 and thereafter 
only to the extent that new budget authority to cover their 
risk-assumed cost is provided in advance in an appropria-
tion Act. 
‘‘(2) An outstanding insurance commitment shall not 
be modified in a manner that increases its risk-assumed 
cost unless budget authority for the additional cost has 
been provided in advance. 
‘‘(3) Paragraph (1) shall not apply to Federal insur-
ance programs that constitute entitlements. 
‘‘(d) REESTIMATES.—The risk-assumed cost for a 
fiscal year shall be reestimated in each subsequent year. 
Such reestimate can equal zero. In the case of a positive 
reestimate, the amount of the reestimate shall be paid 
from the program account to the financing account. In 
the case of a negative reestimate, the amount of the reesti-
205
mate shall be paid from the financing account to the pro-
gram account, and shall be transferred from the program 
account to the general fund. Reestimates shall be dis-
played as a distinct and separately identified subaccount 
in the program account. 
‘‘(e) ADMINISTRATIVE EXPENSES.—All funding for 
an agency’s administration of a Federal insurance pro-
gram shall be displayed as a distinct and separately identi-
fied subaccount in the program account. 
‘‘SEC. 603. TIMETABLE FOR IMPLEMENTATION OF ACCRUAL 
BUDGETING FOR FEDERAL INSURANCE PRO-
GRAMS. 
‘‘(a) AGENCY REQUIREMENTS.—Agencies with re-
sponsibility for Federal insurance programs shall develop 
models to estimate their risk-assumed cost by year 
through the budget horizon and shall submit those models, 
all relevant data, a justification for critical assumptions, 
and the annual projected risk-assumed costs to OMB with 
their budget requests each year starting with the request 
for fiscal year 2007. Agencies will likewise provide OMB 
with annual estimates of modifications, if any, and reesti-
mates of program costs. 
‘‘(b) DISCLOSURE.—When the President submits a 
budget of the Government pursuant to section 1105(a) of 
title 31, United States Code, for fiscal year 2007, OMB
206
shall publish a notice in the Federal Register advising in-
terested persons of the availability of information describ-
ing the models, data (including sources), and critical as-
sumptions (including explicit or implicit discount rate as-
sumptions) that it or other executive branch entities would 
use to estimate the risk-assumed cost of Federal insurance 
programs and giving such persons an opportunity to sub-
mit comments. At the same time, the chairman of the 
Committee on the Budget shall publish a notice for CBO 
in the Federal Register advising interested persons of the 
availability of information describing the models, data (in-
cluding sources), and critical assumptions (including ex-
plicit or implicit discount rate assumptions) that it would 
use to estimate the risk-assumed cost of Federal insurance 
programs and giving such interested persons an oppor-
tunity to submit comments. 
‘‘(c) REVISION.—(1) After consideration of comments 
pursuant to subsection (b), and in consultation with the 
Committees on the Budget of the House of Representa-
tives and the Senate, OMB and CBO shall revise the mod-
els, data, and major assumptions they would use to esti-
mate the risk-assumed cost of Federal insurance pro-
grams. 
‘‘(2) When the President submits a budget of the 
Government pursuant to section 1105(a) of title 31,
207
United States Code, for fiscal year 2008, OMB shall pub-
lish a notice in the Federal Register advising interested 
persons of the availability of information describing the 
models, data (including sources), and critical assumptions 
(including explicit or implicit discount rate assumptions) 
that it or other executive branch entities used to estimate 
the risk-assumed cost of Federal insurance programs. 
‘‘(d) DISPLAY.—
‘‘(1) IN
GENERAL.—For fiscal years 2008, 
2009, and 2010 the budget submissions of the Presi-
dent pursuant to section 1105(a) of title 31, United 
States Code, and CBO’s reports on the economic 
and budget outlook pursuant to section 202(e)(1) 
and the President’s budgets, shall for display pur-
poses only, estimate the risk-assumed cost of exist-
ing or proposed Federal insurance programs. 
‘‘(2) OMB.—The display in the budget submis-
sions of the President for fiscal years 2008, 2009, 
and 2010 shall include—
‘‘(A) a presentation for each Federal insur-
ance program in budget-account level detail of 
estimates of risk-assumed cost; 
‘‘(B) a summary table of the risk-assumed 
costs of Federal insurance programs; and
208
‘‘(C) an alternate summary table of budget 
functions and aggregates using risk-assumed 
rather than cash-based cost estimates for Fed-
eral insurance programs. 
‘‘(3) CBO.—In the second session of the 109th 
Congress and the 110th Congress, CBO shall in-
clude in its estimates under section 308, for display 
purposes only, the risk-assumed cost of existing Fed-
eral insurance programs, or legislation that CBO, in 
consultation with the Committees on the Budget of 
the House of Representatives and the Senate, deter-
mines would create a new Federal insurance pro-
gram. 
‘‘(e) OMB, CBO, AND GAO EVALUATIONS.—(1) Not 
later than 6 months after the budget submission of the 
President pursuant to section 1105(a) of title 31, United 
States Code, for fiscal year 2010, OMB, CBO, and GAO 
shall each submit to the Committees on the Budget of the 
House of Representatives and the Senate a report that 
evaluates the advisability and appropriate implementation 
of this title.
‘‘(2) Each report made pursuant to paragraph (1) 
shall address the following: 
‘‘(A) The adequacy of risk-assumed estimation 
models used and alternative modeling methods.
209
‘‘(B) The availability and reliability of data or 
information necessary to carry out this title. 
‘‘(C) The appropriateness of the explicit or im-
plicit discount rate used in the various risk-assumed 
estimation models. 
‘‘(D) The advisability of specifying a statutory 
discount rate (such as the Treasury rate) for use in 
risk-assumed estimation models. 
‘‘(E) The ability of OMB, CBO, or GAO, as ap-
plicable, to secure any data or information directly 
from any Federal agency necessary to enable it to 
carry out this title. 
‘‘(F) The relationship between risk-assumed ac-
crual budgeting for Federal insurance programs and 
the specific requirements of the Balanced Budget 
and Emergency Deficit Control Act of 1985. 
‘‘(G) Whether Federal budgeting is improved by 
the inclusion of risk-assumed cost estimates for Fed-
eral insurance programs. 
‘‘(H) The advisability of including each of the 
programs currently estimated on a risk-assumed cost 
basis in the Federal budget on that basis. 
‘‘SEC. 604. DEFINITIONS. 
‘‘For purposes of this title:
210
‘‘(1) The term ‘Federal insurance program’ 
means a program that makes insurance commit-
ments and includes the list of such programs in-
cluded in the joint explanatory statement of man-
agers accompanying the conference report on the 
Comprehensive Budget Process Reform Act of 1999. 
‘‘(2) The term ‘insurance commitment’ means 
an agreement in advance by a Federal agency to in-
demnify a nonfederal entity against specified losses. 
This term does not include loan guarantees as de-
fined in title V or benefit programs such as social 
security, medicare, and similar existing social insur-
ance programs. 
‘‘(3)(A) The term ‘risk-assumed cost’ means the 
net present value of the estimated cash flows to and 
from the Government resulting from an insurance 
commitment or modification thereof. 
‘‘(B) The cash flows associated with an insur-
ance commitment include—
‘‘(i) expected claims payments inherent in 
the Government’s commitment; 
‘‘(ii) net premiums (expected premium col-
lections received from or on behalf of the in-
sured less expected administrative expenses); 
‘‘(iii) expected recoveries; and
211
‘‘(iv) expected changes in claims, pre-
miums, or recoveries resulting from the exercise 
by the insured of any option included in the in-
surance commitment. 
‘‘(C) The cost of a modification is the difference 
between the current estimate of the net present 
value of the remaining cash flows under the terms 
of the insurance commitment, and the current esti-
mate of the net present value of the remaining cash 
flows under the terms of the insurance commitment 
as modified. 
‘‘(D) The cost of a reestimate is the difference 
between the net present value of the amount cur-
rently required by the financing account to pay esti-
mated claims and other expenditures and the 
amount currently available in the financing account. 
The cost of a reestimate shall be accounted for in 
the current year in the budget of the Government 
pursuant to section 1105(a) of title 31, United 
States Code. 
‘‘(E) For purposes of this definition, expected 
administrative expenses shall be construed as the 
amount estimated to be necessary for the proper ad-
ministration of the insurance program. This amount 
may differ from amounts actually appropriated or
212
otherwise made available for the administration of 
the program. 
‘‘(4) The term ‘program account’ means the 
budget account for the risk-assumed cost, and for 
paying all costs of administering the insurance pro-
gram, and is the account from which the risk-as-
sumed cost is disbursed to the financing account. 
‘‘(5) The term ‘financing account’ means the 
nonbudget account that is associated with each pro-
gram account which receives payments from or 
makes payments to the program account, receives 
premiums and other payments from the public, pays 
insurance claims, and holds balances. 
‘‘(6) The term ‘modification’ means any Gov-
ernment action that alters the risk-assumed cost of 
an existing insurance commitment from the current 
estimate of cash flows. This includes any action re-
sulting from new legislation, or from the exercise of 
administrative discretion under existing law, that di-
rectly or indirectly alters the estimated cost of exist-
ing insurance commitments. 
‘‘(7) The term ‘model’ means any actuarial, fi-
nancial, econometric, probabilistic, or other method-
ology used to estimate the expected frequency and 
magnitude of loss-producing events, expected pre-
213
miums or collections from or on behalf of the in-
sured, expected recoveries, and administrative ex-
penses. 
‘‘(8) The term ‘current’ has the same meaning 
as in section 250(c)(9) of the Balanced Budget and 
Emergency Deficit Control Act of 1985. 
‘‘(9) The term ‘OMB’ means the Director of 
the Office of Management and Budget. 
‘‘(10) The term ‘CBO’ means the Director of 
the Congressional Budget Office. 
‘‘(11) The term ‘GAO’ means the Comptroller 
General of the United States. 
‘‘SEC. 605. AUTHORIZATIONS TO ENTER INTO CONTRACTS; 
ACTUARIAL COST ACCOUNT. 
‘‘(a) AUTHORIZATION OF APPROPRIATIONS.—There 
is authorized to be appropriated $600,000 for each of fis-
cal years 2005 through 2010 to the Director of the Office 
of Management and Budget and each agency responsible 
for administering a Federal program to carry out this 
title. 
‘‘(b) TREASURY TRANSACTIONS WITH THE FINANC-
ING ACCOUNTS.—The Secretary of the Treasury shall bor-
row from, receive from, lend to, or pay the insurance fi-
nancing accounts such amounts as may be appropriate. 
The Secretary of the Treasury may prescribe forms and
214
denominations, maturities, and terms and conditions for 
the transactions described above. The authorities de-
scribed above shall not be construed to supersede or over-
ride the authority of the head of a Federal agency to ad-
minister and operate an insurance program. All the trans-
actions provided in this subsection shall be subject to the 
provisions of subchapter II of chapter 15 of title 31, 
United States Code. Cash balances of the financing ac-
counts in excess of current requirements shall be main-
tained in a form of uninvested funds, and the Secretary 
of the Treasury shall pay interest on these funds.
‘‘(c) APPROPRIATION OF AMOUNT NECESSARY TO 
COVER RISK-ASSUMED COST OF INSURANCE COMMIT-
MENTS AT TRANSITION DATE.—(1) A financing account 
is established on September 30, 2010, for each Federal 
insurance program. 
‘‘(2) There is appropriated to each financing account 
the amount of the risk-assumed cost of Federal insurance 
commitments outstanding for that program as of the close 
of September 30, 2010. 
‘‘(3) These financing accounts shall be used in imple-
menting the budget accounting required by this title. 
‘‘SEC. 606. EFFECTIVE DATE. 
‘‘(a) IN GENERAL.—This title shall take effect imme-
diately and shall expire on September 30, 2012.
215
‘‘(b) SPECIAL RULE.—If this title is not reauthorized 
by September 30, 2012, then the accounting structure and 
budgetary treatment of Federal insurance programs shall 
revert to the accounting structure and budgetary treat-
ment in effect immediately before the date of enactment 
of this title.’’. 
(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 507 the following 
new items:
‘‘TITLE VI—BUDGETARY TREATMENT OF FEDERAL INSURANCE 
PROGRAMS 
‘‘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.’’.
CHAPTER 2—REPORTS ON LONG-TERM 
BUDGETARY TRENDS 
SEC. 441. REPORTS ON LONG-TERM BUDGETARY TRENDS. 
(a) THE PRESIDENT’S BUDGET.—Section 1105(a) of 
title 31, United States Code (as amended by section 
152(e)), is further amended by adding at the end the fol-
lowing new paragraph: 
‘‘(37) an analysis based upon current law and 
an analysis based upon the policy assumptions un-
derlying the budget submission for every fifth year
216
of the period of 75 fiscal years beginning with such 
fiscal year, of the estimated levels of total new budg-
et authority and total budget outlays, estimated rev-
enues, estimated surpluses and deficits, and, for so-
cial security, medicare, medicaid, and all other direct 
spending, estimated levels of total new budget au-
thority and total budget outlays; and a specification 
of its underlying assumptions and a sensitivity anal-
ysis of factors that have a significant effect on the 
projections made in each analysis; and a comparison 
of the effects of each of the two analyses on the 
economy, including such factors as inflation, foreign 
investment, interest rates, and economic growth.’’. 
(b) CBO REPORTS.—Section 202(e)(1) of the Con-
gressional Budget Act of 1974 is amended by adding at 
the end the following new sentences: ‘‘Such report shall 
also include an analysis based upon current law for every 
fifth year of the period of 75 fiscal years beginning with 
such fiscal year, of the estimated levels of total new budget 
authority and total budget outlays, estimated revenues, es-
timated surpluses and deficits, and, for social security, 
medicare, medicaid, and all other direct spending, esti-
mated levels of total new budget authority and total budg-
et outlays. The report described in the preceding sentence 
shall also specify its underlying assumptions and set forth
217
a sensitivity analysis of factors that have a significant ef-
fect on the projections made in the report.’’. 
TITLE V—MAINTAINING A COM-
MITMENT 
TO 
THE 
FAMILY 
BUDGET 
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),’’.
218
(5) In subsection (e), strike ‘‘2002’’ and insert 
‘‘2010’’.
SEC. 502. BUDGET RESOLUTION ENFORCEMENT POINT OF 
ORDER. 
(a) ENTITLEMENT POINT OF ORDER.—Section 312 
of the Congressional Budget Act of 1974 (as amended by 
section 221(d)) is further amended by adding at the end 
the following new subsection: 
‘‘(j) 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
219
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 
of 1974 referred to in section 904(c)(1) of such Act 
or of section 302 of the Family Budget Protection 
Act of 2004.’’. 
Subtitle B—The Byrd Rule 
SEC. 511. LIMITATION ON BYRD RULE. 
(a) PROTECTION OF CONFERENCE REPORTS.—Sec-
tion 313 of the Congressional Budget Act of 1974 is 
amended—
(1) in subsection (b)(1), by striking subpara-
graph (E) through the semicolon at the end thereof 
and by redesignating subparagraph (F) as subpara-
graph (E); 
(2) in subsection (c), by striking ‘‘and again 
upon the submission of a conference report on such 
a reconciliation bill or resolution,’’; 
(3) by striking subsection (d); 
(4) by redesignating subsection (e) as sub-
section (d); and 
(5) in subsection (e), as redesignated—
220
(A) by striking ‘‘, motion, or conference re-
port’’ the first place it appears and inserting ‘‘, 
or motion’’; and 
(B) by striking ‘‘, motion, or conference re-
port’’ the second and third places it appears 
and inserting ‘‘or motion’’. 
(b) CONFORMING AMENDMENT.—The first sentence 
of section 312(e) of the Congressional Budget Act of 1974 
is amended by inserting ‘‘, except for section 313,’’ after 
‘‘Act’’.
Subtitle C—Treatment of Extra-
neous Appropriations in Omni-
bus Appropriation Measures 
SEC. 521. TREATMENT OF EXTRANEOUS APPROPRIATIONS. 
(a) IN GENERAL.—Title III of the Congressional 
Budget Act of 1974 (as amended by section 127(a)) is 
further amended by adding at the end the following new 
section: 
‘‘TREATMENT OF EXTRANEOUS APPROPRIATIONS IN 
OMNIBUS APPROPRIATION MEASURES 
‘‘SEC. 318. (a) POINT OF ORDER.—It shall not be 
in order in the House of Representatives or the Senate 
to consider an omnibus appropriation measure, or any 
amendment thereto or conference report thereon, that ap-
propriates funds for any program, project, or activity that
221
is not within the subject-matter jurisdiction of any sub-
committee of the Committee on Appropriations of the 
House of Representatives or Senate, as applicable, with 
jurisdiction over any regular appropriation bill contained 
in such measure. 
‘‘(b) DEFINITIONS.—As used in this section: 
‘‘(1) The term ‘omnibus appropriation measure’ 
means any bill or joint resolution making continuing 
appropriations for a fiscal year and that is com-
prised of more than one regular appropriation bills. 
‘‘(2) The term ‘regular appropriation bill’ 
means any annual appropriation bill making appro-
priations, otherwise making funds available, or 
granting authority, for any of the following cat-
egories of projects and activities: 
‘‘(A) Agriculture, rural development, Food 
and Drug Administration, and related agencies 
programs. 
‘‘(B) The Departments of Commerce, Jus-
tice, and State, the Judiciary, and related agen-
cies. 
‘‘(C) The Department of Defense. 
‘‘(D) The government of the District of 
Columbia and other activities chargeable in
222
whole or in part against the revenues of the 
District. 
‘‘(E) Energy and water development. 
‘‘(F) Foreign operations, export financing, 
and related programs. 
‘‘(G) The Department of Homeland Secu-
rity. 
‘‘(H) The Department of the Interior and 
related agencies. 
‘‘(I) The Departments of Labor, Health 
and Human Services, and Education, and re-
lated agencies. 
‘‘(J) The Legislative Branch. 
‘‘(K) Military construction, family housing, 
and base realignment and closure for the De-
partment of Defense. 
‘‘(L) The Departments of Transportation 
and Treasury, and independent agencies. 
‘‘(M) The Departments of Veterans Affairs 
and Housing and Urban Development, and sun-
dry independent agencies, boards, commissions, 
corporations, and offices.’’. 
(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-
223
serting after the item relating to section 317 the following 
new item:
‘‘Sec. 318. Treatment of extraneous appropriations in omnibus appropriation 
measures.’’.
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