serting ‘‘including a strategic plan submitted by 
September 30, 2009, meeting the requirements of 
subsection (a)’’. 
(f) PERFORMANCE PLANS.—Section 2803(a) of title 
39, United States Code, is amended— 
(1) in the matter before paragraph (1), by 
striking ‘‘an annual’’ and inserting ‘‘a biennial’’; 
(2) in paragraph (1), by inserting after ‘‘pro-
gram activity’’ the following: ‘‘for both years 1 and 
2 of the biennial plan’’; 
(3) in paragraph (5), by striking ‘‘and’’ after 
the semicolon; 
(4) in paragraph (6), by striking the period and 
inserting ‘‘; and’’; and 
(5) by adding after paragraph (6) the following: 
‘‘(7) cover each fiscal year of the biennium be-
ginning with the first fiscal year of the next biennial 
budget cycle.’’. 
(g) COMMITTEE VIEWS OF PLANS AND REPORTS.— 
Section 301(d) of the Congressional Budget Act (2 U.S.C. 
632(d)) is amended by adding at the end ‘‘Each committee 
of the Senate or the House of Representatives shall review 
the strategic plans, performance plans, and performance 
reports, required under section 306 of title 5, United 
States Code, and sections 1115 and 1116 of title 31, 
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United States Code, of all agencies under the jurisdiction 
of the committee. Each committee may provide its views 
on such plans or reports to the Committee on the Budget 
of the applicable House.’’. 
SEC. 129. BIENNIAL APPROPRIATION BILLS. 
(a) IN THE HOUSE OF REPRESENTATIVES.—Clause 
2(a) of rule XXI of the Rules of the House of Representa-
tives is amended by adding at the end the following new 
subparagraph: 
‘‘(3)(A) Except as provided by subdivision (B), an ap-
propriation may not be reported in a general appropriation 
bill (other than a supplemental appropriation bill), and 
may not be in order as an amendment thereto, unless it 
provides new budget authority or establishes a level of ob-
ligations under contract authority for each fiscal year of 
a biennium. 
‘‘(B) Subdivision (A) does not apply with respect to 
an appropriation for a single fiscal year for any program, 
project, or activity if the bill or amendment thereto con-
taining that appropriation includes a provision expressly 
stating the following: ‘Congress finds that no additional 
funding beyond one fiscal year will be required and the 
[Insert name of applicable program, project, or activity] 
will be completed or terminated after the amount provided 
has been expended.’. 
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‘‘(C) For purposes of paragraph (b), the statement 
set forth in subdivision (B) with respect to an appropria-
tion for a single fiscal year for any program, project, or 
activity may be included in a general appropriation bill 
or amendment thereto.’’. 
(b) CONFORMING AMENDMENT.—Clause 5(b)(1) of 
rule XXII of the House of Representatives is amended by 
striking ‘‘or (c)’’ and inserting ‘‘or (3) or 2(c)’’. 
SEC. 130. ASSISTANCE BY FEDERAL AGENCIES TO STAND-
ING COMMITTEES OF THE SENATE AND THE 
HOUSE OF REPRESENTATIVES. 
(a) INFORMATION REGARDING AGENCY APPROPRIA-
TIONS REQUESTS.—To assist each standing committee of 
the House of Representatives and the Senate in carrying 
out its responsibilities, the head of each Federal agency 
which administers the laws or parts of laws under the ju-
risdiction of such committee shall provide to such com-
mittee such studies, information, analyses, reports, and 
assistance as may be requested by the chairman and rank-
ing minority member of the committee. 
(b) INFORMATION REGARDING AGENCY PROGRAM 
ADMINISTRATION.—To assist each standing committee of 
the House of Representatives and the Senate in carrying 
out its responsibilities, the head of any agency shall fur-
nish to such committee documentation, containing infor-
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mation received, compiled, or maintained by the agency 
as part of the operation or administration of a program, 
or specifically compiled pursuant to a request in support 
of a review of a program, as may be requested by the 
chairman and ranking minority member of such com-
mittee. 
(c) SUMMARIES BY COMPTROLLER GENERAL.—With-
in thirty days after the receipt of a request from a chair-
man and ranking minority member of a standing com-
mittee having jurisdiction over a program being reviewed 
and studied by such committee under this section, the 
Comptroller General of the United States shall furnish to 
such committee summaries of any audits or reviews of 
such program which the Comptroller General has com-
pleted during the preceding six years. 
(d) CONGRESSIONAL ASSISTANCE.—Consistent with 
their duties and functions under law, the Comptroller Gen-
eral of the United States, the Director of the Congres-
sional Budget Office, and the Director of the Congres-
sional Research Service shall continue to furnish (con-
sistent with established protocols) to each standing com-
mittee of the House of Representatives or the Senate such 
information, studies, analyses, and reports as the chair-
man and ranking minority member may request to assist 
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the committee in conducting reviews and studies of pro-
grams under this section. 
Subtitle D—Prevention of 
Government Shutdown 
SEC. 141. AMENDMENT TO TITLE 31. 
(a) IN GENERAL.—Chapter 13 of title 31, United 
States Code, is amended by inserting after section 1310 
the following new section: 
‘‘§ 1311. Continuing appropriations 
‘‘(a)(1) If any regular appropriation bill for a fiscal 
year (or, if applicable, for each fiscal year in a biennium) 
does not become law before the beginning of such fiscal 
year or a joint resolution making continuing appropria-
tions is not in effect, there are appropriated, out of any 
money in the Treasury not otherwise appropriated, and 
out of applicable corporate or other revenues, receipts, and 
funds, such sums as may be necessary to continue any 
project or activity for which funds were provided in the 
preceding fiscal year— 
‘‘(A) in the corresponding regular appropriation 
Act for such preceding fiscal year; or 
‘‘(B) if the corresponding regular appropriation 
bill for such preceding fiscal year did not become 
law, then in a joint resolution making continuing ap-
propriations for such preceding fiscal year. 
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‘‘(2) Appropriations and funds made available, and 
authority granted, for a project or activity for any fiscal 
year pursuant to this section shall be at a rate of oper-
ations not in excess of the lower of— 
‘‘(A) the rate of operations provided for in the 
regular appropriation Act providing for such project 
or activity for the preceding fiscal year; 
‘‘(B) in the absence of such an Act, the rate of 
operations provided for such project or activity pur-
suant to a joint resolution making continuing appro-
priations for such preceding fiscal year; 
‘‘(C) the rate of operations provided for in the 
regular appropriation bill as passed by the House of 
Representatives or the Senate for the fiscal year in 
question, except that the lower of these two versions 
shall be ignored for any project or activity for which 
there is a budget request if no funding is provided 
for that project or activity in either version; or 
‘‘(D) the annualized rate of operations provided 
for in the most recently enacted joint resolution 
making continuing appropriations for part of that 
fiscal year or any funding levels established under 
the provisions of this Act. 
‘‘(3) Appropriations and funds made available, and 
authority granted, for any fiscal year pursuant to this sec-
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tion for a project or activity shall be available for the pe-
riod beginning with the first day of a lapse in appropria-
tions and ending with the earlier of— 
‘‘(A) the date on which the applicable regular 
appropriation bill for such fiscal year becomes law 
(whether or not such law provides for such project 
or activity) or a continuing resolution making appro-
priations becomes law, as the case may be; or 
‘‘(B) the last day of such fiscal year. 
‘‘(b) An appropriation or funds made available, or au-
thority granted, for a project or activity for any fiscal year 
pursuant to this section shall be subject to the terms and 
conditions imposed with respect to the appropriation made 
or funds made available for the preceding fiscal year, or 
authority granted for such project or activity under cur-
rent law. 
‘‘(c) Appropriations and funds made available, and 
authority granted, for any project or activity for any fiscal 
year pursuant to this section shall cover all obligations or 
expenditures incurred for such project or activity during 
the portion of such fiscal year for which this section ap-
plies to such project or activity. 
‘‘(d) Expenditures made for a project or activity for 
any fiscal year pursuant to this section shall be charged 
to the applicable appropriation, fund, or authorization 
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whenever a regular appropriation bill or a joint resolution 
making continuing appropriations until the end of a fiscal 
year providing for such project or activity for such period 
becomes law. 
‘‘(e) This section shall not apply to a project or activ-
ity during a fiscal year if any other provision of law (other 
than an authorization of appropriations)— 
‘‘(1) makes an appropriation, makes funds 
available, or grants authority for such project or ac-
tivity to continue for such period; or 
‘‘(2) specifically provides that no appropriation 
shall be made, no funds shall be made available, or 
no authority shall be granted for such project or ac-
tivity to continue for such period. 
‘‘(f) For purposes of this section, the term ‘regular 
appropriation bill’ means any annual appropriation bill 
making appropriations, otherwise making funds available, 
or granting authority, for any of the following categories 
of projects and activities: 
‘‘(1) Agriculture, rural development, Food and 
Drug Administration, and related agencies pro-
grams. 
‘‘(2) The Department of Defense. 
‘‘(3) Energy and water development, and re-
lated agencies. 
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‘‘(4) State, foreign operations, and related pro-
grams. 
‘‘(5) The Department of Homeland Security. 
‘‘(6) The Department of the Interior, Environ-
mental Protection Agency, and related agencies. 
‘‘(7) The Departments of Labor, Health and 
Human Services, and Education, and related agen-
cies. 
‘‘(8) Military construction, veterans affairs, and 
related agencies. 
‘‘(9) Science, the Departments of State, Jus-
tice, and Commerce, and related agencies. 
‘‘(10) The Departments of Transportation, 
Housing and Urban Development, and related agen-
cies. 
‘‘(11) The Legislative Branch. 
‘‘(12) Financial services and general govern-
ment.’’. 
(b) CLERICAL AMENDMENT.—The analysis of chap-
ter 13 of title 31, United States Code, is amended by in-
serting after the item relating to section 1310 the fol-
lowing new item: 
‘‘1311. Continuing appropriations.’’. 
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Subtitle E—The Baseline 
SEC. 151. ELIMINATION OF INFLATION ADJUSTMENT. 
Section 257(c) of the Balanced Budget and Emer-
gency Deficit Control Act of 1985 is amended— 
(1) in paragraph (1) by striking ‘‘for inflation 
as specified in paragraph (5),’’; and 
(2) by striking paragraph (5) and redesignating 
paragraph (6) as paragraph (5). 
SEC. 152. THE PRESIDENT’S BUDGET. 
(a) Paragraph (5) of section 1105(a) of title 31, 
United States Code, is amended to read as follows: 
‘‘(5) except as provided in subsection (b) of this 
section, estimated expenditures and appropriations 
for the current year and estimated expenditures and 
proposed appropriations the President decides are 
necessary to support the Government in the fiscal 
year for which the budget is submitted and the 4 fis-
cal years following that year, and, except for detailed 
budget estimates, the percentage change from the 
current year to the fiscal year for which the budget 
is submitted for estimated expenditures and for ap-
propriations.’’. 
(b) Section 1105(a)(6) of title 31, United States 
Code, is amended to read as follows: 
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‘‘(6) estimated receipts of the Government in 
the current year and the fiscal year for which the 
budget is submitted and the 4 fiscal years after that 
year under— 
‘‘(A) laws in effect when the budget is sub-
mitted; and 
‘‘(B) proposals in the budget to increase 
revenues, 
and the percentage change (in the case of each cat-
egory referred to in subparagraphs (A) and (B)) be-
tween the current year and the fiscal year for which 
the budget is submitted and between the current 
year and each of the 9 fiscal years after the fiscal 
year for which the budget is submitted.’’. 
(c) Section 1105(a)(12) of title 31, United States 
Code, is amended to read as follows: 
‘‘(12) for each proposal in the budget for legis-
lation that would establish or expand a Government 
activity or function, a table showing— 
‘‘(A) the amount proposed in the budget 
for appropriation and for expenditure because 
of the proposal in the fiscal year for which the 
budget is submitted; 
‘‘(B) the estimated appropriation required 
because of the proposal for each of the 4 fiscal 
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years after that year that the proposal will be 
in effect; and 
‘‘(C) the estimated amount for the same 
activity or function, if any, in the current fiscal 
year, 
and, except for detailed budget estimates, the per-
centage change (in the case of each category re-
ferred to in subparagraphs (A), (B), and (C)) be-
tween the current year and the fiscal year for which 
the budget is submitted.’’. 
(d) Section 1105(a)(18) of title 31, United States 
Code, is amended by inserting ‘‘new budget authority 
and’’ before ‘‘budget outlays’’. 
(e) Section 1105(a) of title 31, United States Code, 
is amended by adding at the end the following new para-
graphs: 
‘‘(35) a comparison of levels of estimated ex-
penditures and proposed appropriations for each 
function and subfunction in the current fiscal year 
and the fiscal year for which the budget is sub-
mitted, along with the proposed increase or decrease 
of spending in percentage terms for each function 
and subfunction. 
‘‘(36) a table on sources of growth in total di-
rect spending under current law and as proposed in 
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this budget submission for the budget year and the 
ensuing 9 fiscal years, which shall include changes 
in outlays attributable to the following: cost-of-living 
adjustments; changes in the number of program re-
cipients; increases in medical care prices, utilization 
and intensity of medical care; and residual factors.’’. 
(f) Section 1109(a) of title 31, United States Code, 
is amended by inserting after the first sentence the fol-
lowing new sentence: ‘‘For discretionary spending, these 
estimates shall assume the levels set forth in the discre-
tionary spending limits under section 251(b) of the Bal-
anced Budget and Emergency Deficit Control Act of 1985, 
as adjusted, for the appropriate fiscal years (and if no 
such limits are in effect, these estimates shall assume the 
adjusted levels for the most recent fiscal year for which 
such levels were in effect).’’. 
SEC. 153. THE CONGRESSIONAL BUDGET. 
Section 301(e) of the Congressional Budget Act of 
1974 (as amended by section 103) is further amended— 
(1) in paragraph (1), by inserting at the end 
the following: ‘‘The basis of deliberations in devel-
oping such joint resolution shall be the estimated 
budgetary levels for the preceding fiscal year. Any 
budgetary levels pending before the committee and 
the text of the joint resolution shall be accompanied 
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by a document comparing such levels or such text to 
the estimated levels of the prior fiscal year. Any 
amendment offered in the committee that changes a 
budgetary level and is based upon a specific policy 
assumption for a program, project, or activity shall 
be accompanied by a document indicating the esti-
mated amount for such program, project, or activity 
in the current year.’’; and 
(2) in paragraph (2), by striking ‘‘and’’ at the 
end of subparagraph (H) (as redesignated), by strik-
ing the period and inserting ‘‘; and’’ at the end of 
subparagraph (I) (as redesignated), and by adding 
at the end the following new subparagraph: 
‘‘(J) a comparison of levels for the current 
fiscal year with proposed spending and revenue 
levels for the subsequent fiscal years along with 
the proposed increase or decrease of spending 
in percentage terms for each function.’’. 
SEC. 154. CONGRESSIONAL BUDGET OFFICE REPORTS TO 
COMMITTEES. 
(a) The first sentence of section 202(e)(1) of the Con-
gressional Budget Act of 1974 is amended by inserting 
‘‘compared to comparable levels for the current year’’ be-
fore the comma at the end of subparagraph (A) and before 
the comma at the end of subparagraph (B). 
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(b) Section 202(e)(1) of the Congressional Budget 
Act of 1974 is amended by inserting after the first sen-
tence the following new sentence: ‘‘Such report shall also 
include a table on sources of spending growth in total di-
rect spending for the budget year and the ensuing 4 fiscal 
years, which shall include changes in outlays attributable 
to the following: cost-of-living adjustments; changes in the 
number of program recipients; increases in medical care 
prices, utilization and intensity of medical care; and resid-
ual factors.’’. 
(c) Section 308(a)(1)(B) of the Congressional Budget 
Act of 1974 is amended by inserting ‘‘and shall include 
a comparison of those levels to comparable levels for the 
current fiscal year’’ before ‘‘if timely submitted’’. 
SEC. 155. TREATMENT OF EMERGENCIES. 
Section 257(c) of the Balanced Budget and Emer-
gency Deficit Control Act of 1985 (as amended by section 
151) is further amended by adding at the end the fol-
lowing new paragraph: 
‘‘(6) EMERGENCIES.—Budgetary resources for 
emergencies shall be at the level provided in the re-
serve fund for emergencies for that fiscal year pur-
suant to section 301(a)(4) of the Congressional 
Budget Act of 1974.’’. 
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TITLE II—PUTTING A LID ON 
THE FEDERAL BUDGET 
Subtitle A—Spending Safeguards 
on the Growth of Entitlements 
and Mandatories 
SEC. 201. SPENDING CAPS ON GROWTH OF ENTITLEMENTS 
AND MANDATORIES. 
(a) 
CONTROL
OF
ENTITLEMENTS
AND 
MANDATORIES.—The Balanced Budget and Emergency 
Deficit Control Act of 1985 is amended by adding after 
section 252 the following new section: 
‘‘SEC. 252A. ENFORCING CONTROLS ON DIRECT SPENDING. 
‘‘(a) CAP ON GROWTH OF ENTITLEMENTS.—Effec-
tive for fiscal year 2009 and for each ensuing fiscal year, 
the total level of direct spending for all direct spending 
programs, projects, and activities (excluding social secu-
rity) for any such fiscal year shall not exceed the total 
level of spending for all such programs, projects, and ac-
tivities for the previous fiscal year after the direct spend-
ing for each such program, project, or activity is increased 
by the higher of the change in the Consumer Price Index 
for All Urban Consumers or the inflator (if any) applicable 
to that program, project, or activity and the growth in 
eligible population for such, project, or activity. 
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‘‘(b) SEQUESTRATION.—Within 15 days after Con-
gress adjourns to end a session (other than of the second 
session of the One Hundred Ninth Congress), and on the 
same day as a sequestration (if any) under section 251, 
there shall be a sequestration to reduce the amount of di-
rect spending for the fiscal year beginning in the year the 
Congress adjourns by any amount necessary to reduce 
such spending to the level set forth in subsection (a) un-
less that amount is less than $250,000,000. 
‘‘(c) UNIFORM
REDUCTIONS; LIMITATIONS.—The 
amount required to be sequestered for the fiscal year 
under subsection (a) shall be obtained from nonexempt di-
rect spending accounts by actions taken in the following 
order: 
‘‘(1) FIRST.—The reductions in the programs 
specified in section 256(a) (National Wool Act and 
special milk), section 256(b) (student loans), and 
section 256(c) (foster care and adoption assistance) 
shall be made. 
‘‘(2) SECOND.—Any additional reductions that 
may be required shall be achieved by reducing each 
remaining nonexempt direct spending account by the 
uniform percentage necessary to achieve those addi-
tional reductions, except that— 
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‘‘(A) the low-income programs specified in 
section 256(d) shall not be reduced by more 
than 2 percent; 
‘‘(B) the retirement and veterans benefits 
specified in sections 256(f), (g), and (h) shall 
not be reduced by more than 2 percent in the 
manner specified in that section; and 
‘‘(C) the medicare programs shall not be 
reduced by more than 2 percent in the manner 
specified in section 256(i). 
The limitations set forth in subparagraphs (A), (B), 
and (C) shall be applied iteratively, and after each 
iteration the uniform percentage applicable to all 
other programs under this paragraph shall be in-
creased (if necessary) to a level sufficient to achieve 
the reductions required by this paragraph.’’. 
(b) TABLE OF CONTENTS AMENDMENT.—The table 
of contents set forth in 250(c) of the Balanced Budget 
and Emergency Deficit Control Act of 1985 is amended 
by adding after the item relating to section 252 the fol-
lowing new item: 
‘‘Sec. 252A. Enforcing controls on direct spending.’’. 
SEC. 202. EXEMPT PROGRAMS AND ACTIVITIES. 
Section 255 of the Balanced Budget and Emergency 
Deficit Control Act of 1985 is amended to read as follows: 
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‘‘SEC. 255. EXEMPT PROGRAMS AND ACTIVITIES. 
‘‘(a) SOCIAL SECURITY BENEFITS; TIER I RAILROAD 
RETIREMENT BENEFITS; AND CERTAIN MEDICARE BEN-
EFITS.—(1) Benefits payable under the old-age, survivors, 
and disability insurance program established under title 
II of the Social Security Act, and benefits payable under 
section 3(a), 3(f)(3), 4(a), or 4(f) of the Railroad Retire-
ment Act of 1974, shall be exempt from reduction under 
any order issued under this part. 
‘‘(2) Payments made under part A of title XVIII (re-
lating to part A medicare hospital insurance benefits) of 
the Social Security Act and payments made under part 
C of such title (relating to the Medicare Advantage pro-
gram) insofar as they are attributable to part A of such 
title shall be exempt from reduction under any order 
issued under this part. 
‘‘(b) DESCRIPTIONS
AND
LISTS.—The following 
budget accounts or activities shall be exempt from seques-
tration: 
‘‘(1) net interest; 
‘‘(2) all payments to trust funds from excise 
taxes or other receipts or collections properly cred-
itable to those trust funds; 
‘‘(3) all payments from one Federal direct 
spending budget account to another Federal budget 
account; and all intragovernmental funds including 
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those from which funding is derived primarily from 
other Government accounts, except to the extent 
that such funds are augmented by direct appropria-
tions for the fiscal year for which the order is in ef-
fect; 
‘‘(4) activities resulting from private donations, 
bequests, or voluntary contributions to the Govern-
ment; 
‘‘(5) payments from any revolving fund or 
trust-revolving fund (or similar activity) that pro-
vides deposit insurance or other Government insur-
ance, Government guarantees, or any other form of 
contingent liability, to the extent those payments re-
sult from contractual or other legally binding com-
mitments of the Government at the time of any se-
questration; 
‘‘(6) credit liquidating and financing accounts; 
‘‘(7) the following accounts, which largely fulfill 
requirements of the Constitution or otherwise make 
payments to which the Government is committed: 
‘‘Administration of Territories, Northern 
Mariana Islands Covenant grants (14–0412–0– 
1–806); 
‘‘Armed Forces Retirement Home Trust 
Fund, payment of claims (84–8930–0–7–705); 
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‘‘Bureau of Indian Affairs, miscellaneous 
payments to Indians (14–2303–0–1–452); 
‘‘Bureau of Indian Affairs, miscellaneous 
trust funds, tribal trust funds (14–9973–0–7– 
999); 
‘‘Claims, defense; 
‘‘Claims, judgments, and relief act (20– 
1895–0–1–806); 
‘‘Compact of Free Association, economic 
assistance pursuant to Public Law 99–658 (14– 
0415–0–1–806); 
‘‘Compensation of the President (11– 
0001–0–1–802); 
‘‘Customs Service, miscellaneous perma-
nent appropriations (20–9992–0–2–852); 
‘‘Eastern Indian land claims settlement 
fund (14–2202–0–1–806); 
‘‘Farm Credit Administration, Limitation 
on Administration Expenses (78–4131–0–3– 
351); 
‘‘Farm Credit System Financial Assistance 
Corporation, interest payments (20–1850–0–1– 
351); 
‘‘Internal Revenue collections of Puerto 
Rico (20–5737–0–2–852); 
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‘‘Panama Canal Commission, operating ex-
penses and capital outlay (95–5190–0–2–403); 
‘‘Payments of Vietnam and USS Pueblo 
prisoner-of-war claims (15–0104–0–1–153); 
‘‘Payments to copyright owners (03–5175– 
0–2–376); 
‘‘Payments to health care trust funds (75– 
0580–0–1–571); 
‘‘Payments to social security trust funds 
(75–0404–0–1–651); 
‘‘Payments to the United States terri-
tories, fiscal assistance (14–0418–0–1–801); 
‘‘Payments to widows and heirs of de-
ceased Members of Congress (00–0215–0–1– 
801); 
‘‘Pension Benefit Guaranty Corporation 
Fund (16–4204–0–3–601); 
‘‘Salaries of Article III judges; 
‘‘Washington Metropolitan Area Transit 
Authority, interest payments (46–0300–0–1– 
401); 
‘‘(8) the following noncredit special, revolving, 
or trust-revolving funds: 
Coinage profit fund (20–5811–0–2–803); 
‘‘Comptroller of the Currency; 
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‘‘Director of the Office of Thrift Super-
vision; 
‘‘Exchange Stabilization Fund (20–4444– 
0–3–155); 
‘‘Federal Housing Finance Board; 
‘‘Foreign Military Sales trust fund (11– 
82232–0–7–155); 
‘‘National Credit Union Administration, 
central liquidating facility (25–4470–0–3–373); 
‘‘National Credit Union Administration, 
credit union insurance fund (25–4468–0–3– 
373); 
‘‘National Credit Union Administration op-
erating fund (25–4056–0–3–373); and 
‘‘Resolution Trust Corporation Revolving 
Fund (22–4055–0–3–373); 
‘‘(9) Thrift Savings Fund; 
‘‘(10) appropriations for the District of Colum-
bia to the extent they are appropriations of locally 
raised funds; 
‘‘(11)(A) any amount paid as regular unemploy-
ment compensation by a State from its account in 
the Unemployment Trust Fund (established by sec-
tion 904(a) of the Social Security Act); 
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‘‘(B) any advance made to a State from the 
Federal unemployment account (established by sec-
tion 904(g) of such Act) under title XII of such Act 
and any advance appropriated to the Federal unem-
ployment account pursuant to section 1203 of such 
Act; and 
‘‘(C) any payment made from the Federal Em-
ployees Compensation Account (as established under 
section 909 of such Act) for the purpose of carrying 
out chapter 85 of title 5, United States Code, and 
funds appropriated or transferred to or otherwise 
deposited in such Account; and 
‘‘(12)(A) FDIC, Bank Insurance Fund (51– 
4064–0–3–373); 
‘‘(B) FDIC, FSLIC Resolution Fund (51– 
4065–0–3–373); and 
‘‘(C) FDIC, Savings Association Insurance 
Fund (51–4066–0–3–373). 
‘‘(c) FEDERAL RETIREMENT AND DISABILITY AC-
COUNTS.—The following Federal retirement and disability 
accounts shall be exempt from reduction under any order 
issued under this part: 
‘‘Civil service retirement and disability fund 
(24–8135–0–7–602). 
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‘‘Black Lung Disability Trust Fund (20–8144– 
0–7–601). 
‘‘Foreign Service Retirement and Disability 
Fund (19–8186–0–7–602). 
‘‘District of Columbia Judicial Retirement and 
Survivors Annuity Fund (20–8212–0–7–602). 
‘‘Judicial Survivors’ Annuities Fund (10–8110– 
0–7–602). 
‘‘Payments to the Railroad Retirement Ac-
counts (60–0113–0–1–601). 
‘‘Tax Court Judges Survivors Annuity Fund 
(23–8115–0–7–602). 
‘‘Employees Life Insurance Fund (24–8424–0– 
8–602). 
‘‘(d) FEDERAL ADMINISTRATIVE EXPENSES.— 
‘‘(1) Notwithstanding any provision of law 
other than paragraph (3), administrative expenses 
incurred by the departments and agencies, including 
independent agencies, of the Government in connec-
tion with any program, project, activity, or account 
shall be subject to reduction pursuant to any seques-
tration order, without regard to any exemption, ex-
ception, limitation, or special rule otherwise applica-
ble with respect to such program, project, activity, 
or account, and regardless of whether the program, 
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project, activity, or account is self-supporting and 
does not receive appropriations. 
‘‘(2) Payments made by the Government to re-
imburse or match administrative costs incurred by a 
State or political subdivision under or in connection 
with any program, project, activity, or account shall 
not be considered administrative expenses of the 
Government for purposes of this section, and shall 
be subject to sequestration to the extent (and only 
to the extent) that other payments made by the Gov-
ernment under or in connection with that program, 
project, activity, or account are subject to that re-
duction or sequestration; except that Federal pay-
ments made to a State as reimbursement of admin-
istrative costs incurred by that State under or in 
connection with the unemployment compensation 
programs specified in subsection (a)(11) shall be 
subject to reduction or sequestration under this part 
notwithstanding the exemption otherwise granted to 
such programs under that subsection. 
‘‘(3) Notwithstanding any other provision of 
law, the administrative expenses of the following 
programs shall be exempt from sequestration: 
‘‘(A) Comptroller of the Currency. 
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‘‘(B) Federal Deposit Insurance Corpora-
tion. 
‘‘(C) Office of Thrift Supervision. 
‘‘(D) National Credit Union Administra-
tion. 
‘‘(E) National Credit Union Administra-
tion, central liquidity facility. 
‘‘(F) Federal Retirement Thrift Invest-
ment Board. 
‘‘(G) Resolution Funding Corporation. 
‘‘(H) Resolution Trust Corporation. 
‘‘(I) Board of Governors of the Federal 
Reserve System. 
‘‘(e) VETERANS’ PROGRAMS.—The following pro-
grams shall be exempt from reduction under any order 
issued under this part: 
‘‘General Post Funds (36–8180–0–7–705). 
‘‘Veterans Insurance and Indemnities (36– 
0120–0–1–701). 
‘‘Service-Disabled Veterans Insurance Funds 
(36–4012–0–3–701). 
‘‘Veterans Reopened Insurance Fund (36– 
4010–0–3–701). 
‘‘Servicemembers’ Group Life Insurance Fund 
(36–4009–0–3–701). 
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‘‘Post-Vietnam Era Veterans Education Ac-
count (36–8133–0–7–702). 
‘‘National Service Life Insurance Fund (36– 
8132–0–7–701). 
‘‘United States Government Life Insurance 
Fund (36–8150–0–7–701). 
‘‘Veterans Special Life Insurance Fund (36– 
8455–0–8–701). 
‘‘(f) OPTIONAL
EXEMPTION
OF
DEFENSE
AND 
HOMELAND SECURITY ACCOUNTS.— 
‘‘(1) IN GENERAL.—The President may, with 
respect to any defense or homeland security account, 
exempt that account from sequestration or provide 
for a lower uniform percentage reduction than would 
otherwise apply. 
‘‘(2) LIMITATION.—The President may not use 
the authority provided by paragraph (1) unless the 
President notifies the Congress of the manner in 
which such authority will be exercised on or before 
the date specified in section 254(a) for the budget 
year.’’. 
SEC. 203. EXCEPTIONS, LIMITATIONS, AND SPECIAL RULES. 
(a) IN GENERAL.—Section 256 of the Balanced 
Budget and Emergency Deficit Control Act of 1985 is 
amended to read as follows: 
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‘‘SEC. 
256. 
EXCEPTIONS, 
LIMITATIONS, 
AND 
SPECIAL 
RULES. 
‘‘(a) NATIONAL WOOL ACT AND THE SPECIAL MILK 
PROGRAM.—Automatic spending increases are increases 
in outlays due to changes in indexes in the following pro-
grams: 
‘‘(1) National Wool Act. 
‘‘(2) Special milk program. 
In those programs all amounts other than the automatic 
spending increases shall be exempt from reduction under 
any sequestration order. 
‘‘(b) STUDENT LOANS.—For all student loans under 
part B or D of title IV of the Higher Education Act of 
1965 made during the period when a sequestration order 
under section 254 is in effect as required by section 252 
or 253, origination fees under sections 438(c)(2) and 
455(c) of that Act shall each be increased by 0.50 percent-
age point. 
‘‘(c) FOSTER CARE
AND ADOPTION ASSISTANCE 
PROGRAMS.—Any sequestration order shall make the re-
duction otherwise required under the foster care and adop-
tion assistance programs (established by part E of title 
IV of the Social Security Act) only with respect to pay-
ments and expenditures made by States in which increases 
in foster care maintenance payment rates or adoption as-
sistance payment rates (or both) are to take effect during 
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the fiscal year involved, and only to the extent that the 
required reduction can be accomplished by applying a uni-
form percentage reduction to the Federal matching pay-
ments that each such State would otherwise receive under 
section 474 of that Act (for such fiscal year) for that por-
tion of the State’s payments attributable to the increases 
taking effect during that year. No State’s matching pay-
ments from the Government for foster care maintenance 
payments or for adoption assistance maintenance pay-
ments may be reduced by a percentage exceeding the ap-
plicable domestic sequestration percentage. No State may, 
after the date of the enactment of this Act, make any 
change in the timetable for making payments under a 
State plan approved under part E of title IV of the Social 
Security Act which has the effect of changing the fiscal 
year in which expenditures under such part are made. 
‘‘(d) LOW-INCOME PROGRAMS.—(1) Benefit pay-
ments or payments to States or other entities for the pro-
grams listed in paragraph (2) shall not be reduced by 
more than 2 percent under any sequestration order. When 
reduced under an end-of-session sequestration order, those 
benefit reductions shall occur starting with the payment 
made at the start of January. When reduced under a with-
in-session sequestration order, those benefit reductions 
shall occur starting with the next periodic payment. 
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‘‘(2) The programs referred to in paragraph (1) are 
the following: 
‘‘Child Nutrition (12–3539–0–1–605). 
‘‘Food Stamp Programs (12–3505–0–1–605). 
‘‘Grants to States for Medicaid (75–0512–0–1– 
551). 
‘‘State Children’s Health Insurance Fund (75– 
0515–0–1–551). 
‘‘Supplemental Security Income Program (75– 
0406–0–1–609). 
‘‘Temporary Assistance for Needy Families 
(75–1552–0–1–609). 
‘‘Special supplemental nutrition program for 
women, infants, and children (WIC) (12–3510–0–1– 
605). 
‘‘(e) VETERANS’ MEDICAL CARE.—The maximum 
permissible reduction in budget authority for Veterans’ 
medical care (36–0160–0–1–703) for any fiscal year, pur-
suant to an order issued under section 254, shall be 2 
percent. 
‘‘(f) FEDERAL RETIREMENT PROGRAMS.— 
‘‘(1) For each of the programs listed in para-
graph (2) and except as provided in paragraph (3), 
monthly (or other periodic) benefit payments shall 
be reduced by the uniform percentage applicable to 
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direct spending sequestrations for such programs, 
which shall in no case exceed 2 percent under any 
sequestration order. When reduced under an end-of- 
session sequestration order, those benefit reductions 
shall occur starting with the payment made at the 
start of January or 7 weeks after the order is 
issued, whichever is later. When reduced under a 
within-session sequestration order, those benefit re-
ductions shall occur starting with the next periodic 
payment. 
‘‘(2) The programs subject to paragraph (1) 
are: 
‘‘Central Intelligence Agency Retirement 
and Disability Fund (56–3400–0–1–054). 
‘‘Comptrollers General Retirement System 
(05–0107–0–1–801). 
‘‘Payments to the Foreign Service Retire-
ment and Disability Fund (72–1036–0–1–153). 
‘‘Judicial Officer’ Retirement Fund (10– 
8122–0–7–602). 
‘‘Claims Judges’ Retirement Fund (10– 
8124–0–7–602). 
‘‘Pensions for former Presidents (47– 
0105–0–1–802). 
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‘‘National Oceanic and Atmospheric Ad-
ministration Retirement (13–1450–0–1–306). 
‘‘Railroad Industry Pension Fund (60– 
8011–0–7–601). 
‘‘Retired pay, Coast Guard (70–0602–0–1– 
403). 
‘‘Retirement pay and medical benefits for 
commissioned officers, Public Health Service 
(75–0379–0–1–551). 
‘‘Payments to Civil Service Retirement and 
Disability Fund (24–0200–0–1–805). 
‘‘Payments to the Foreign Service Retire-
ment and Disability Fund (72–1036–0–1–153) 
‘‘Payments to Judiciary Trust Funds (10– 
0941–0–1–752). 
‘‘(g) VETERANS PROGRAMS.—To achieve the total 
percentage reduction required by any order issued under 
this part, the percentage reduction that shall apply to pay-
ments under the following programs shall in no event ex-
ceed 2 percent: 
‘‘Canteen Service Revolving Fund (36–4014–0– 
3–705). 
‘‘Medical Center Research Organizations (36– 
4026–0–3–703). 
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‘‘Disability Compensation Benefits (36–0102– 
0–1–701). 
‘‘Education Benefits (36–0137–0–1–702). 
‘‘Vocational Rehabilitation and Employment 
Benefits (36–0135–0–1–702). 
‘‘Pensions Benefits (36–0154–0–1–701). 
‘‘Burial Benefits (36–0139–0–1–701). 
‘‘Guaranteed Transitional Housing Loans For 
Homeless Veterans Program Account (36–1119–0– 
1–704). 
‘‘Housing Direct Loan Financing Account (36– 
4127–0–1–704). 
‘‘Housing Guaranteed Loan Financing Account 
(36–4129–0–3–704). 
‘‘Vocational Rehabilitation and Education Di-
rect Loan Financing Account (36–4259–0–3–702). 
‘‘(h) MILITARY HEALTH
AND RETIREMENT.—To 
achieve the total percentage reduction in military retire-
ment required by any order issued under this part, the 
percentage reduction that shall apply to payments under 
the Military retirement fund (97–8097–0–7–602), pay-
ments to the military retirement fund (97–0040–0–1– 
054), and the Defense Health Program (97–0130–0–1– 
051) shall in no event exceed 2 percent. 
‘‘(i) MEDICARE PROGRAM.— 
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‘‘(1) CALCULATION
OF
REDUCTION
IN
INDI-
VIDUAL PAYMENT AMOUNTS.—To achieve the total 
percentage reduction in those programs required by 
any order issued under this part, the percentage re-
duction that shall apply to payments under the 
health insurance programs under title XVIII of the 
Social Security Act (other than payments described 
in section 255(a)(2)) that are subject to such order 
for services furnished after any sequestration order 
is issued shall be such that the reduction made in 
payments under that order shall achieve the required 
total percentage reduction in those payments for 
that fiscal year as determined on a 12-month basis. 
However, the percentage reduction under any such 
program shall in no case exceed 2 percent under any 
sequestration order. 
‘‘(2) TIMING
OF
APPLICATION
OF
REDUC-
TIONS.—If a reduction is made under paragraph (1) 
in payment amounts pursuant to a sequestration 
order, the reduction shall be applied to payment for 
services furnished after the effective date of the 
order. 
‘‘(3) NO INCREASE IN BENEFICIARY CHARGES 
IN ASSIGNMENT-RELATED CASES.—If a reduction in 
payment amounts is made under paragraph (1) for 
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services for which payment under part B of title 
XVIII of the Social Security Act is made on the 
basis of an assignment described in section 
1842(b)(3)(B)(ii), 
in 
accordance 
with 
section 
1842(b)(6)(B), or under the procedure described in 
section 1870(f)(1) of such Act, the person furnishing 
the services shall be considered to have accepted 
payment of the reasonable charge for the services, 
less any reduction in payment amount made pursu-
ant to a sequestration order, as payment in full. 
‘‘(4) APPLICATION TO PARTS C AND D.—The 
reductions otherwise required under parts C and D 
of title XVIII of the Social Security Act with respect 
to a fiscal year shall be applied to the calendar year 
that begins after the end of the fiscal year to which 
the applicable sequestration order applies. 
‘‘(j) FEDERAL PAY.— 
‘‘(1) IN GENERAL.—For purposes of any order 
issued under section 254, new budget authority to 
pay Federal personnel shall be reduced by the appli-
cable uniform percentage, but no sequestration order 
may reduce or have the effect of reducing the rate 
of pay to which any individual is entitled under any 
statutory pay system (as increased by any amount 
payable under section 5304 of title 5, United States 
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Code, or section 302 of the Federal Employees Pay 
Comparability Act of 1990) or the rate of any ele-
ment of military pay to which any individual is enti-
tled under title 37, United States Code, or any in-
crease in rates of pay which is scheduled to take ef-
fect under section 5303 of title 5, United States 
Code, section 1009 of title 37, United States Code, 
or any other provision of law. 
‘‘(2) DEFINITIONS.—For purposes of this sub-
section: 
‘‘(A) The term ‘statutory pay system’ shall 
have the meaning given that term in section 
5302(1) of title 5, United States Code. 
‘‘(B) The term ‘elements of military pay’ 
means— 
‘‘(i) the elements of compensation of 
members of the uniformed services speci-
fied in section 1009 of title 37, United 
States Code, 
‘‘(ii) allowances provided members of 
the uniformed services under sections 403a 
and 405 of such title, and 
‘‘(iii) cadet pay and midshipman pay 
under section 203(c) of such title. 
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