‘‘(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); 
‘‘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); 
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‘‘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); 
‘‘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); 
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‘‘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; 
‘‘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); 
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‘‘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); and 
‘‘National Credit Union Administration op-
erating fund (25–4056–0–3–373); 
‘‘(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); 
‘‘(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 
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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 the order 
issued under section 253A: 
‘‘Civil service retirement and disability fund 
(24–8135–0–7–602). 
‘‘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). 
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‘‘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, 
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-
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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 section 
253A 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. 
‘‘(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. 
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‘‘(I) Board of Governors of the Federal 
Reserve System. 
‘‘(e) VETERANS’ PROGRAMS.—The following pro-
grams shall be exempt from reduction under the order 
issued under section 253A: 
‘‘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). 
‘‘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). 
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‘‘SEC. 253C. 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; and 
‘‘(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) 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 
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-
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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. 
‘‘(c) 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 253A, shall be 2 
percent. 
‘‘(d) 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 
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 
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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 Retirement 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). 
‘‘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). 
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‘‘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). 
‘‘(e) VETERANS PROGRAMS.—To achieve the total 
percentage reduction required by the order issued under 
section 253A, the percentage reduction that shall apply 
to payments under the following programs shall in no 
event exceed 2 percent: 
‘‘Canteen Service Revolving Fund (36–4014–0– 
3–705). 
‘‘Medical Center Research Organizations (36– 
4026–0–3–703). 
‘‘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). 
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‘‘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). 
‘‘(f) MILITARY HEALTH
AND RETIREMENT.—To 
achieve the total percentage reduction in military retire-
ment required by the order issued under section 253A, 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. 
‘‘(g) FEDERAL PAY.— 
‘‘(1) IN GENERAL.—For purposes of the order 
issued under section 253A, 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 
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payable under section 5304 of title 5, United States 
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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‘‘(C) The term ‘uniformed services’ shall 
have the meaning given that term in section 
101(3) of title 37, United States Code. 
‘‘(h) CHILD SUPPORT ENFORCEMENT PROGRAM.— 
Any sequestration order shall accomplish the full amount 
of any required reduction in expenditures under sections 
455 and 458 of the Social Security Act by reducing the 
Federal matching rate for State administrative costs 
under such program, as specified (for the fiscal year in-
volved) in section 455(a) of such Act, to the extent nec-
essary to reduce such expenditures by that amount. 
‘‘(i) EXTENDED UNEMPLOYMENT COMPENSATION.— 
(1) A State may reduce each weekly benefit payment made 
under the Federal-State Extended Unemployment Com-
pensation Act of 1970 for any week of unemployment oc-
curring during any period with respect to which payments 
are reduced under an order issued under this title by a 
percentage not to exceed the percentage by which the Fed-
eral payment to the State under section 204 of such Act 
is to be reduced for such week as a result of such order. 
‘‘(2) A reduction by a State in accordance with sub-
paragraph (A) shall not be considered as a failure to fulfill 
the requirements of section 3304(a)(11) of the Internal 
Revenue Code of 1954. 
‘‘(j) COMMODITY CREDIT CORPORATION.— 
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‘‘(1) POWERS AND AUTHORITIES OF THE COM-
MODITY CREDIT CORPORATION.—This title shall not 
restrict the Commodity Credit Corporation in the 
discharge of its authority and responsibility as a cor-
poration to buy and sell commodities in world trade, 
to use the proceeds as a revolving fund to meet 
other obligations and otherwise operate as a corpora-
tion, the purpose for which it was created. 
‘‘(2) REDUCTION IN PAYMENTS MADE UNDER 
CONTRACTS.—(A) Payments and loan eligibility 
under any contract entered into with a person by the 
Commodity Credit Corporation prior to the time any 
sequestration order has been issued shall not be re-
duced by an order subsequently issued. Subject to 
subparagraph (B), after any sequestration order is 
issued for a fiscal year, any cash payments made by 
the Commodity Credit Corporation— 
‘‘(i) under the terms of any one-year con-
tract entered into in or after such fiscal year 
and after the issuance of the order; and 
‘‘(ii) out of an entitlement account, 
to any person (including any producer, lender, or 
guarantee entity) shall be subject to reduction under 
the order. 
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‘‘(B) Each contract entered into with producers 
or producer cooperatives with respect to a particular 
crop of a commodity and subject to reduction under 
subparagraph (A) shall be reduced in accordance 
with the same terms and conditions. If some, but 
not all, contracts applicable to a crop of a com-
modity have been entered into prior to the issuance 
of any sequestration order, the order shall provide 
that the necessary reduction in payments under con-
tracts applicable to the commodity be uniformly ap-
plied to all contracts for succeeding crops of the 
commodity, under the authority provided in para-
graph (3). 
‘‘(3) DELAYED REDUCTION IN OUTLAYS PER-
MISSIBLE.—Notwithstanding any other provision of 
this title, if any sequestration order is issued with 
respect to a fiscal year, any reduction under the 
order applicable to contracts described in paragraph 
(2) may provide for reductions in outlays for the ac-
count involved to occur in the fiscal years following 
the fiscal year to which the order applies. 
‘‘(4) UNIFORM PERCENTAGE RATE OF REDUC-
TION AND OTHER LIMITATIONS.—All reductions de-
scribed in paragraph (2) that are required to be 
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made in connection with any sequestration order 
with respect to a fiscal year— 
‘‘(A) shall be made so as to ensure that 
outlays for each program, project, activity, or 
account involved are reduced by a percentage 
rate that is uniform for all such programs, 
projects, activities, and accounts, and may not 
be made so as to achieve a percentage rate of 
reduction in any such item exceeding the rate 
specified in the order; and 
‘‘(B) with respect to commodity price sup-
port and income protection programs, shall be 
made in such manner and under such proce-
dures as will attempt to ensure that— 
‘‘(i) uncertainty as to the scope of 
benefits under any such program is mini-
mized; 
‘‘(ii) any instability in market prices 
for agricultural commodities resulting from 
the reduction is minimized; and 
‘‘(iii) normal production and mar-
keting relationships among agricultural 
commodities (including both contract and 
non-contract commodities) are not dis-
torted. 
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In meeting the criterion set out in clause (iii) 
of subparagraph (B) of the preceding sentence, 
the President shall take into consideration that 
reductions under an order may apply to pro-
grams for two or more agricultural commodities 
that use the same type of production or mar-
keting resources or that are alternative com-
modities among which a producer could choose 
in making annual production decisions. 
‘‘(5) CERTAIN
AUTHORITY
NOT
TO
BE
LIM-
ITED.—Nothing in this title shall limit or reduce in 
any way any appropriation that provides the Com-
modity Credit Corporation with funds to cover the 
Corporation’s net realized losses. 
‘‘(k) POSTAL SERVICE FUND.—Notwithstanding any 
other provision of law, any sequestration of the Postal 
Service Fund shall be accomplished by a payment from 
that Fund to the General Fund of the Treasury, and the 
Postmaster General of the United States shall make the 
full amount of that payment during the fiscal year to 
which the presidential sequestration order applies. 
‘‘(l) EFFECTS OF SEQUESTRATION.—The effects of 
sequestration shall be as follows: 
‘‘(1) Budgetary resources sequestered from any 
account other than an entitlement trust, special, or 
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revolving fund account shall revert to the Treasury 
and be permanently canceled. 
‘‘(2) Except as otherwise provided, the same 
percentage sequestration shall apply to all programs, 
projects, and activities within a budget account (with 
programs, projects, and activities as delineated in 
the appropriation Act or accompanying report for 
the relevant fiscal year covering that account, or for 
accounts not included in appropriation Acts, as de-
lineated in the most recently submitted President’s 
budget). 
‘‘(3) Administrative regulations or similar ac-
tions implementing a sequestration shall be made 
within 120 days of the sequestration order. To the 
extent that formula allocations differ at different 
levels of budgetary resources within an account, pro-
gram, project, or activity, the sequestration shall be 
interpreted as producing a lower total appropriation, 
with that lower appropriation being obligated as 
though it had been the pre-sequestration appropria-
tion and no sequestration had occurred. 
‘‘(4) Except as otherwise provided, obligations 
in sequestered direct spending accounts shall be re-
duced in the fiscal year in which a sequestration oc-
curs and in all succeeding fiscal years. 
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‘‘(5) If an automatic spending increase is se-
questered, the increase (in the applicable index) that 
was disregarded as a result of that sequestration 
shall not be taken into account in any subsequent 
fiscal year. 
‘‘(6) Except as otherwise provided, sequestra-
tion in accounts for which obligations are indefinite 
shall be taken in a manner to ensure that obliga-
tions in the fiscal year of a sequestration and suc-
ceeding fiscal years are reduced, from the level that 
would actually have occurred, by the applicable se-
questration percentage.’’. 
SEC. 2. EFFECTIVE DATE. 
Notwithstanding section 275(b) of the Balanced 
Budget and Emergency Deficit Control Act of 1985, the 
expiration date set forth in that section shall not apply 
to the amendment made by section 1. The amendments 
made by section 1 shall cease to have any effect imme-
diately after the sequestration required by the amendment 
made by section 1 is effectuated. 
Æ 
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