111TH CONGRESS 
1ST SESSION H. R. 4154 
AN ACT 
To amend the Internal Revenue Code of 1986 to repeal 
the new carryover basis rules in order to prevent tax 
increases and the imposition of compliance burdens on 
many more estates than would benefit from repeal, to 
retain the estate tax with a $3,500,000 exemption, to 
reinstitute and update the Pay-As-You-Go requirement 
of budget neutrality on new tax and mandatory spending 
legislation, enforced by the threat of annual, automatic 
sequestration, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
DIVISION 
A—PERMANENT 
ES-
TATE TAX RELIEF FOR FAMI-
LIES, FARMERS, AND SMALL 
BUSINESSES ACT OF 2009 
SECTION 1. SHORT TITLE; TABEL OF CONTENTS. 
(a) SHORT TITLE.—This division may be cited as the 
‘‘Permanent Estate Tax Relief for Families, Farmers, and 
Small Businesses Act of 2009’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
DIVISION A—PERMANENT ESTATE TAX RELIEF FOR FAMILIES, 
FARMERS, AND SMALL BUSINESSES ACT OF 2009 
Sec. 1. Short title; tabel of contents. 
Sec. 2. Retention of estate tax; repeal of carryover basis. 
Sec. 3. Modifications to estate and gift taxes. 
DIVISION B—STATUTORY PAY-AS-YOU-GO ACT OF 2009 
Sec. 101. Short Title. 
Sec. 102. Purpose. 
Sec. 103. Definitions. 
Sec. 104. PAYGO estimates and PAYGO scorecards. 
Sec. 105. Annual report and sequestration order. 
Sec. 106. Calculating a sequestration. 
Sec. 107. Current policy adjustment to the CBO estimates. 
Sec. 108. Application of BBEDCA. 
Sec. 109. Technical corrections. 
Sec. 110. Conforming amendments. 
Sec. 111. Exempt programs and activities. 
SEC. 2. RETENTION OF ESTATE TAX; REPEAL OF CARRY-
OVER BASIS. 
(a) IN GENERAL.—Subtitles A and E of title V of 
the Economic Growth and Tax Relief Reconciliation Act
of 2001, and the amendments made by such subtitles, are 
hereby repealed; and the Internal Revenue Code of 1986 
shall be applied as if such subtitles, and amendments, had 
never been enacted. 
(b) SUNSET NOT TO APPLY.—Section 901 of the 
Economic Growth and Tax Relief Reconciliation Act of 
2001 shall not apply to title V of such Act. 
(c) CONFORMING AMENDMENTS.— 
(1) Sections 511(d) and 521(b)(2) of the Eco-
nomic Growth and Tax Relief Reconciliation Act of 
2001, and the amendments made by such sections, 
are hereby repealed; and the Internal Revenue Code 
of 1986 shall be applied as if such sections, and 
amendments, had never been enacted. 
(2) Subsection (c) of section 2511 of the Inter-
nal Revenue Code of 1986 is hereby repealed. 
SEC. 3. MODIFICATIONS TO ESTATE AND GIFT TAXES. 
(a) $3,500,000 APPLICABLE EXCLUSION AMOUNT.— 
Subsection (c) of section 2010 of the Internal Revenue 
Code of 1986 (relating to applicable credit amount) is 
amended by striking all that follows ‘‘the applicable exclu-
sion amount’’ and inserting ‘‘. For purposes of the pre-
ceding sentence, the applicable exclusion amount is 
$3,500,000.’’.
(b) FREEZE MAXIMUM ESTATE
AND GIFT TAX 
RATES AT 45 PERCENT.—Subsection (c) of section 2001 
of such Code is amended— 
(1) by striking paragraph (2); 
(2) by striking so much of paragraph (1) as 
precedes the table contained therein; and 
(3) by striking the last 2 items in the table and 
inserting the following new item: 
‘‘Over $1,500,000 ................................
$555,800, plus 45 percent of the ex-
cess 
of 
such 
amount 
over 
$1,500,000.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to estates of decedents dying, and 
gifts made, after December 31, 2009. 
DIVISION B—STATUTORY PAY- 
AS-YOU-GO ACT OF 2009 
SEC. 101. SHORT TITLE. 
This division may be cited as the ‘‘Statutory Pay-As- 
You-Go Act of 2009’’. 
SEC. 102. PURPOSE. 
The purpose of this division is to reestablish a statu-
tory procedure to enforce a rule of budget neutrality on 
new revenue and direct spending legislation. 
SEC. 103. DEFINITIONS. 
As used in this division—
(1) The term ‘‘BBEDCA’’ means the Balanced 
Budget and Emergency Deficit Control Act of 1985. 
(2) The definitions set forth in section 3 of the 
Congressional Budget and Impoundment Control 
Act of 1974 and in section 250 of BBEDCA shall 
apply to this division, except to the extent that they 
are specifically modified as follows: 
(A) The term ‘‘outyear’’ means a fiscal 
year that occurs one or more years after the 
budget year. 
(B) In section 250(c)(8)(C), the reference 
to the food stamp program shall be deemed to 
be a reference to the Supplemental Nutrition 
Assistance Program. 
(3) The term ‘‘AMT’’ means the Alternative 
Minimum Tax for individuals under sections 55–59 
of the Internal Revenue Code of 1986, the term 
‘‘EGTRRA’’ means the Economic Growth and Tax 
Relief Reconciliation Act of 2001 (Public Law 107– 
16), and the term ‘‘JGTRRA’’ means the Jobs and 
Growth Tax Relief and Reconciliation Act of 2003 
(Public Law 108–27). 
(4)(A) The term ‘‘budgetary effects’’ means the 
amounts by which PAYGO legislation changes direct 
spending or revenues relative to the baseline and
shall be determined on the basis of estimates in-
cluded by reference in the PAYGO Act or prepared 
under section 104(d)(3), as applicable. Budgetary 
effects that increase direct spending or decrease rev-
enues are termed ‘‘costs’’ and budgetary effects that 
increase revenues or decrease direct spending are 
termed ‘‘savings’’. 
(B) For purposes of these definitions, off-budg-
et effects shall be counted as budgetary effects un-
less such changes flow directly from amendments to 
title II of the Social Security Act and related provi-
sions of the Internal Revenue Code of 1986 and debt 
service effects shall not be counted as budgetary ef-
fects. 
(C) Solely for purposes of recording entries on 
a PAYGO scorecard, provisions in appropriations 
Acts are also considered to be budgetary effects for 
purposes of this division if such provisions make out-
year modifications to substantive law, except that 
provisions for which the outlay effects net to zero 
over a period consisting of the current year, the 
budget year, and the 4 subsequent years shall not be 
considered budgetary effects. For purposes of this 
paragraph, the term, ‘‘modifications to substantive 
law’’ refers to changes to or restrictions on entitle-
ment law or other mandatory spending contained in 
appropriations 
Acts, 
notwithstanding 
section 
250(c)(8) of BBEDCA. Provisions in appropriations 
Acts that are neither outyear modifications to sub-
stantive law nor changes in revenues have no budg-
etary effects for purposes of this division. 
(D) If a provision is designated as an emer-
gency requirement under this division and is also 
designated as an emergency requirement under the 
applicable rules of the House of Representatives, 
CBO shall not include the cost of such a provision 
in its estimate of the PAYGO legislation’s budgetary 
effects. 
(5) The term ‘‘debit’’ refers to the net total 
amount, when positive, by which costs recorded on 
the PAYGO scorecards for a fiscal year exceed sav-
ings recorded on those scorecards for that year. 
(6) The term ‘‘entitlement law’’ refers to a sec-
tion of law which provides entitlement authority. 
(7) The term ‘‘PAYGO legislation’’ or a 
‘‘PAYGO Act’’ refers to a bill or joint resolution 
that affects direct spending or revenue relative to 
the baseline. The budgetary effects of changes in 
revenues and outyear modifications to substantive 
law included in appropriation Acts as defined in
paragraph (4) shall be treated as if they were con-
tained in PAYGO legislation. 
(8) The term ‘‘timing shift’’ refers to a delay of 
the date on which direct spending would otherwise 
occur from the ninth outyear to the tenth outyear or 
an acceleration of the date on which revenues would 
otherwise occur from the tenth outyear to the ninth 
outyear. 
SEC. 104. PAYGO ESTIMATES AND PAYGO SCORECARDS. 
(a) PAYGO ESTIMATES.—(1) A PAYGO Act shall in-
clude by reference an estimate of its budgetary effects as 
determined under section 308(a)(3) of the Congressional 
Budget Act of 1974, if timely submitted for printing in 
the Congressional Record by the chairs of the Committees 
on the Budget of the House of Representatives and the 
Senate, as applicable, before the vote on the PAYGO legis-
lation. The Clerk of the House or the Secretary of the 
Senate, as applicable, shall also incorporate by reference 
such estimate printed in the relevant portion of the Con-
gressional Record under section 308(a)(3) of the Congres-
sional Budget Act of 1974 into the enrollment of a 
PAYGO Act. Budgetary effects that are not so included 
shall be determined under section 104(d)(3).
the budgetary effects of PAYGO legislation as deter-
mined under section 308 of the Congressional Budg-
et Act of 1974, applying the look-back requirement 
in subsection (e) and the averaging requirement in 
subsection (f), and a separate addendum displaying 
the estimates of the costs of provisions designated in 
statute as emergency requirements. 
(2) ESTIMATES
IN
LEGISLATION.—Except as 
provided in paragraph (3), in making the calcula-
tions for the PAYGO scorecards, OMB shall use the 
budgetary effects included by reference in the appli-
cable legislation. 
(3) OMB ESTIMATES.—If legislation does not 
contain the estimate of budgetary effects under 
paragraph (2), then OMB shall score the budgetary 
effects of that legislation upon its enactment, based 
on the approaches to scorekeeping set forth in this 
division. 
(4) 5-YEAR
SCORECARD.—The first scorecard 
shall display the budgetary effects of PAYGO legis-
lation in each year over the 5-year period beginning 
in the budget year. 
(5) 10-YEAR SCORECARD.—The second score-
card shall display the budgetary effects of PAYGO
SEC. 105. ANNUAL REPORT AND SEQUESTRATION ORDER. 
(a) ANNUAL REPORT.—Not later than 14 days (ex-
cluding weekends and holidays) after Congress adjourns 
to end a session, OMB shall make publicly available and 
cause to be printed in the Federal Register an annual 
PAYGO report. The report shall include an up-to-date 
document containing the PAYGO scorecards, a description 
of any current policy adjustments made under section 
104(c), information about emergency legislation (if any) 
designated under section 103(4)(D), information about 
any sequestration if required by subsection (b), and other 
data and explanations that enhance public understanding 
of this division and actions taken under it. 
(b) SEQUESTRATION ORDER.—If the annual report 
issued at the end of a session of Congress under sub-
section (a) shows a debit on either PAYGO scorecard for 
the budget year, OMB shall prepare and the President 
shall issue and include in that report a sequestration order 
that, upon issuance, shall reduce budgetary resources of 
direct spending programs by enough to offset that debit 
as prescribed in section 106. If there is a debit on both 
scorecards, the order shall fully offset the larger of the 
two debits. OMB shall include that order in the annual 
report and transmit it to the House of Representatives 
and the Senate. If the President issues a sequestration 
order, the annual report shall contain, for each budget ac-
count to be sequestered, estimates of the baseline level of 
budgetary resources subject to sequestration, the amount 
of budgetary resources to be sequestered, and the outlay 
reductions that will occur in the budget year and the sub-
sequent fiscal year because of that sequestration. 
SEC. 106. CALCULATING A SEQUESTRATION. 
(a) 
REDUCING
NONEXEMPT
BUDGETARY
RE-
SOURCES BY A UNIFORM PERCENTAGE.—OMB shall cal-
culate the uniform percentage by which the budgetary re-
sources of nonexempt direct spending programs are to be 
sequestered such that the outlay savings resulting from 
that sequestration, as calculated under subsection (b), 
shall offset the budget-year debit, if any on the applicable 
PAYGO scorecard. If the uniform percentage calculated 
under the prior sentence exceeds 4 percent, the Medicare 
programs described in section 256(d) of BBEDCA shall 
be reduced by 4 percent and the uniform percentage by 
which the budgetary resources of all other nonexempt di-
rect spending programs are to be sequestered shall be in-
creased, as necessary, so that the sequestration of Medi-
care and of all other nonexempt direct spending programs 
together produce the required outlay savings. 
(b) OUTLAY SAVINGS.—In determining the amount 
by which a sequestration offsets a budget-year debit, OMB 
shall count—
(1) the amount by which the sequestration in a 
crop year of crop support payments, pursuant to 
section 256(j) of BBEDCA, reduces outlays in the 
budget year and the subsequent fiscal year; 
(2) the amount by which the sequestration of 
Medicare payments in the 12-month period following 
the sequestration order, pursuant to section 256(d) 
of BBEDCA, reduces outlays in the budget year and 
the subsequent fiscal year; and 
(3) the amount by which the sequestration in 
the budget year of the budgetary resources of other 
nonexempt mandatory programs reduces outlays in 
the budget year and in the subsequent fiscal year. 
SEC. 107. CURRENT POLICY ADJUSTMENT TO THE CBO ES-
TIMATES. 
(a) PURPOSE.—The purpose of this section is to pro-
vide for adjustments of estimates of budgetary effects of 
PAYGO legislation for legislation affecting four areas of 
the budget— 
(1) payments made under section 1848 of the 
Social Security Act (titled Payment for Physicians’ 
Services); 
(2) the Estate and Gift Tax under subtitle B of 
the Internal Revenue Code of 1986; 
(3) the AMT; and
(4) provisions of EGTRRA or JGTRRA that 
amended the Internal Revenue Code of 1986 (or 
provisions in later statutes further amending the 
amendments made by EGTRRA or JGTRRA), other 
than— 
(A) the provisions of those two Acts that 
were made permanent by the Pension Protec-
tion Act of 2006 (Public Law 109–280); 
(B) amendments to the estate and gift tax 
referred to in paragraph (2); 
(C) the AMT referred to in paragraph (3); 
(D) the 35 percent bracket and that por-
tion of the 33 percent bracket that applies to 
taxable income greater than $200,000 for an 
individual and $250,000 for a couple; and 
(E) provisions in those two Acts relating to 
taxes rates on capital gains and dividends. 
(b) MEDICARE PAYMENTS TO PHYSICIANS.— 
(1) CRITERIA.—Legislation that includes provi-
sions amending or superseding the system of pay-
ments under section 1848 of the Social Security Act 
shall trigger the current policy adjustment required 
by this division.
(2) ADJUSTMENT.—The amount of the max-
imum current policy adjustment shall be the dif-
ference between— 
(A) estimated net outlays attributable to 
the payments made to physicians under that 
section of the Social Security Act (as scheduled 
on July 15, 2009, to be in effect); and 
(B) what those net outlays would have 
been if the nominal payment rates and related 
parameters in effect for 2009 had been in effect 
thereafter without change. 
(c) ESTATE AND GIFT TAX.— 
(1) CRITERIA.—Legislation that includes provi-
sions amending the Estate and Gift Tax under sub-
title B of the Internal Revenue Code of 1986 shall 
trigger the current policy adjustment required by 
this division. 
(2) ADJUSTMENT.—The amount of the max-
imum current policy adjustment shall be the dif-
ference between— 
(A) total revenues projected to be collected 
under the Internal Revenue Code of 1986 (as 
scheduled on July 15, 2009, to be in effect); 
and
(B) what those revenue collections would 
have been if, on the date of enactment of the 
legislation meeting the criteria in paragraph 
(1), estate and gift tax law had instead been 
amended so that the tax rates, nominal exemp-
tion amounts, and related parameters in effect 
for tax year 2009 had remained in effect there-
after without change. 
(d) PERMANENT EXTENSION OF MIDDLE-CLASS TAX 
CUTS AND AMT RELIEF.— 
(1) CRITERIA.—Legislation that includes provi-
sions extending middle-class tax cuts or AMT relief 
shall trigger the current policy adjustment required 
by this division if those provisions extend one or 
more of the following provisions— 
(A) AMT relief for calendar year 2010 and 
subsequent years in such a manner that the 
number of AMT taxpayers is not estimated to 
exceed the number of AMT taxpayers in tax 
year 2008 in any year through the tenth year 
after enactment; 
(B) the 10 percent bracket as in effect for 
tax year 2010, as provided for under section 
101(a) of the Economic Growth and Tax Relief
Reconciliation Act of 2001 and any later 
amendments through July 15, 2009; 
(C) the child tax credit as in effect for tax 
year 2010, as provided for under section 201 of 
the Economic Growth and Tax Relief Reconcili-
ation Act and any later amendments through 
July 15, 2009; 
(D) tax benefits for married couples as in 
effect for tax year 2010, as provided for under 
title III of the Economic Growth and Tax Relief 
Reconciliation Act and any later amendments 
through July 15, 2009; 
(E) the adoption credit as in effect in tax 
year 2010, as provided for under section 202 of 
the Economic Growth and Tax Relief Reconcili-
ation Act of 2001 and any later amendments 
through July 15, 2009; 
(F) the dependent care credit as in effect 
in tax year 2010, as provided for under section 
204 of the Economic Growth and Tax Relief 
Reconciliation Act of 2001 and any later 
amendments through July 15, 2009; 
(G) the employer-provided child care credit 
as in effect in tax year 2010, as provided for 
under section 205 of the Economic Growth and
Tax Relief Reconciliation Act of 2001 and any 
later amendments through July 15, 2009; 
(H) the education tax benefits as in effect 
in tax year 2010, as provided for under title IV 
of the Economic Growth and Tax Relief Rec-
onciliation Act of 2001 and any later amend-
ments through July 15, 2009; 
(I) the 25 and 28 percent brackets as in 
effect for tax year 2010, as provided for under 
section 101(a) of the Economic Growth and 
Tax Relief Reconciliation Act of 2001 and any 
later amendments through July 15, 2009; and 
(J) the 33 percent brackets as in effect for 
tax year 2010, as provided for under section 
101(a) of the Economic Growth and Tax Relief 
Reconciliation Act of 2001 and any later 
amendment affecting taxpayers with taxable in-
come of $200,000 or less for individuals and 
$250,000 or less for couples in calendar year 
2010 and increased in each subsequent year by 
an amount equal to the cost of living adjust-
ment determined under section 1(f)(3) of the 
Internal Revenue Code of 1986 for the calendar 
year in which the taxable year begins, deter-
mined by substituting ‘‘calendar year 2008’’ for
‘‘calendar year 1992’’ in subparagraph (B) 
thereof. 
(2) ADJUSTMENT.—The amount of the max-
imum current policy adjustment shall be the dif-
ference between what total revenues would have been 
under the Internal Revenue Code of 1986 (as sched-
uled on July 15, 2009, to be in effect) and what rev-
enues would be if legislation— 
(A) permanently extending the AMT ex-
emption and brackets in effect in tax year 2009 
but increased in tax year 2010 and each subse-
quent tax year as indicated under subsection 
(d)(2)(B), along with any additional amount 
necessary to prevent the number of taxpayers 
who must pay AMT from increasing; and 
(B) permanently extending the provisions 
identified in paragraph (1), 
were enacted on the same day as the legislation re-
ferred to in paragraph (1). 
SEC. 108. APPLICATION OF BBEDCA. 
For purposes of this division— 
(1) notwithstanding section 275 of BBEDCA, 
the provisions of sections 255, 256, 257, and 274 of 
BBEDCA, as amended by this division, shall apply 
to the provisions of this division;
(2) references in sections 255, 256, 257, and 
274 to ‘‘this part’’ or ‘‘this title’’ shall be interpreted 
as applying to this division; 
(3) references in sections 255, 256, 257, and 
274 of BBEDCA to ‘‘section 254’’ shall be inter-
preted as referencing section 105 of this division; 
(4) the reference in section 256(b) of BBEDCA 
to ‘‘section 252 or 253’’ shall be interpreted as ref-
erencing section 105 of this division; 
(5) the reference in section 256(d)(1) of 
BBEDCA to ‘‘section 252 or 253’’ shall be inter-
preted as referencing section 106 of this division; 
(6) the reference in section 256(d)(4) of 
BBEDCA to ‘‘section 252 or 253’’ shall be inter-
preted as referencing section 105 of this division; 
(7) section 256(k) of BBEDCA shall apply to 
a sequestration, if any, under this division; and 
(8) references in section 257(e) of BBEDCA to 
‘‘section 251, 252, or 253’’ shall be interpreted as 
referencing section 104 of this division. 
SEC. 109. TECHNICAL CORRECTIONS. 
(a) Section 250(c)(18) of BBEDCA is amended by 
striking ‘‘the expenses the Federal deposit insurance agen-
cies’’ and inserting ‘‘the expenses of the Federal deposit 
insurance agencies’’.
(b) Section 256(k)(1) of BBEDCA is amended by 
striking ‘‘in paragraph (5)’’ and inserting ‘‘in paragraph 
(6)’’. 
SEC. 110. CONFORMING AMENDMENTS. 
(a) Section 256(a) of BBEDCA is repealed. 
(b) Section 256(b) of BBEDCA is amended by strik-
ing ‘‘origination fees under sections 438(c)(2) and 455(c) 
of that Act shall each be increased by 0.50 percentage 
point.’’ and inserting in lieu thereof ‘‘origination fees 
under sections 438(c)(2) and (6) and 455(c) and loan 
processing 
and 
issuance 
fees 
under 
section 
428(f)(1)(A)(ii) of that Act shall each be increased by the 
uniform percentage specified in that sequestration order, 
and, for student loans originated during the period of the 
sequestration, special allowance payments under section 
438(b) of that Act accruing during the period of the se-
questration shall be reduced by the uniform percentage 
specified in that sequestration order.’’. 
(c) Section 256(c) of BBEDCA is repealed. 
(d) Section 256(d) of BBEDCA is amended— 
(1) by redesignating paragraphs (2), (3), and 
(4) as paragraphs (3), (5), and (6); 
(2) by amending paragraph (1) to read as fol-
lows:
‘‘(1) CALCULATION OF REDUCTION IN PAYMENT 
AMOUNTS.—To achieve the total percentage reduc-
tion in those programs required by section 252 or 
253, subject to paragraph (2), and notwithstanding 
section 710 of the Social Security Act, OMB shall 
determine, and the applicable Presidential order 
under section 254 shall implement, the percentage 
reduction that shall apply, with respect to the health 
insurance programs under title XVIII of the Social 
Security Act— 
‘‘(A) in the case of parts A and B of such 
title, to individual payments for services fur-
nished during the one-year period beginning on 
the first day of the first month beginning after 
the date the order is issued (or, if later, the 
date specified in paragraph (4)); and 
‘‘(B) in the case of parts C and D, to 
monthly payments under contracts under such 
parts for the same one-year period; 
such that the reduction made in payments under 
that order shall achieve the required total percentage 
reduction in those payments for that period.’’; 
(3) by inserting after paragraph (1) the fol-
lowing:
‘‘(2) UNIFORM
REDUCTION
RATE; MAXIMUM 
PERMISSIBLE REDUCTION.—Reductions in payments 
for programs and activities under such title XVIII 
pursuant to a sequestration order under section 254 
shall be at a uniform rate, which shall not exceed 4 
percent, across all such programs and activities sub-
ject to such order.’’; 
(4) by inserting after paragraph (3), as redesig-
nated, the following: 
‘‘(4) TIMING OF SUBSEQUENT SEQUESTRATION 
ORDER.—A sequestration order required by section 
252 or 253 with respect to programs under such 
title XVIII shall not take effect until the first month 
beginning after the end of the effective period of any 
prior sequestration order with respect to such pro-
grams, as determined in accordance with paragraph 
(1).’’; 
(5) in paragraph (6), as redesignated, to read 
as follows: 
‘‘(6) SEQUESTRATION
DISREGARDED
IN
COM-
PUTING
PAYMENT
AMOUNTS.—The Secretary of 
Health and Human Services shall not take into ac-
count any reductions in payment amounts which 
have been or may be effected under this part, for
purposes of computing any adjustments to payment 
rates under such title XVIII, specifically including— 
‘‘(A) the part C growth percentage under 
section 1853(c)(6); 
‘‘(B) the part D annual growth rate under 
section 1860D–2(b)(6); and 
‘‘(C) application of risk corridors to part D 
payment rates under section 1860D–15(e).’’; 
and 
(6) by adding after paragraph (6), as redesig-
nated, the following: 
‘‘(7) EXEMPTIONS FROM SEQUESTRATION.—In 
addition to the programs and activities specified in 
section 255, the following shall be exempt from se-
questration under this part: 
‘‘(A) PART D LOW-INCOME SUBSIDIES.— 
Premium and cost-sharing subsidies under sec-
tion 1860D–14 of the Social Security Act. 
‘‘(B) PART D CATASTROPHIC SUBSIDY.— 
Payments under section 1860D–15(b) and 
(e)(2)(B) of the Social Security Act. 
‘‘(C) QUALIFIED
INDIVIDUAL
(QI)
PRE-
MIUMS.—Payments to States for coverage of 
Medicare cost-sharing for certain low-income
Medicare beneficiaries under section 1933 of 
the Social Security Act.’’. 
SEC. 111. EXEMPT PROGRAMS AND ACTIVITIES. 
(a) DESIGNATIONS.—Section 255 of BBEDCA is 
amended by redesignating subsection (i) as (j) and strik-
ing ‘‘1998’’ and inserting in lieu thereof ‘‘2010’’. 
(b) SOCIAL SECURITY, VETERANS PROGRAMS, NET 
INTEREST, AND TAX CREDITS.—Subsections (a) through 
(d) of section 255 of BBEDCA are amended to read as 
follows: 
‘‘(a) SOCIAL SECURITY BENEFITS AND TIER I RAIL-
ROAD RETIREMENT BENEFITS.—Benefits payable under 
the old-age, survivors, and disability insurance program 
established under title II of the Social Security Act (42 
U.S.C. 401 et seq.), and benefits payable under section 
231b(a), 231b(f)(2), 231c(a), and 231c(f) of title 45, 
United States Code, shall be exempt from reduction under 
any order issued under this part. 
‘‘(b) VETERANS PROGRAMS.—The following program 
shall be exempt from reduction under any order issued 
under this part— 
‘‘All programs administered by the Department 
of Veterans Affairs. 
‘‘Special Benefits for Certain World War II 
Veterans (28–0401–0–1–701).
‘‘(c) NET INTEREST.—No reduction of payments for 
net interest (all of major functional category 900) shall 
be made under any order issued under this part. 
‘‘(d) REFUNDABLE INCOME TAX CREDITS.—Pay-
ments to individuals made pursuant to provisions of the 
Internal Revenue Code of 1986 establishing refundable 
tax credits shall be exempt from reduction under any order 
issued under this part.’’. 
(c) OTHER PROGRAMS
AND ACTIVITIES, LOW-IN-
COME
PROGRAMS, AND
ECONOMIC
RECOVERY
PRO-
GRAMS.—Subsections (g) and (h) of section 255 of 
BBEDCA are amended to read as follows: 
‘‘(g) OTHER PROGRAMS AND ACTIVITIES.— 
‘‘(1)(A) The following budget accounts and ac-
tivities shall be exempt from reduction under any 
order issued under this part: 
‘‘Activities resulting from private dona-
tions, bequests, or voluntary contributions to 
the Government. 
‘‘Activities financed by voluntary payments 
to the Government for goods or services to be 
provided for such payments. 
‘‘Administration of Territories, Northern 
Mariana Islands Covenant grants (14–0412–0– 
1–808).
‘‘Exchange Stabilization Fund (20–4444– 
0–3–155). 
‘‘Federal Deposit Insurance Corporation, 
Deposit Insurance Fund (51–4596–4–4–373). 
‘‘Federal Deposit Insurance Corporation, 
FSLIC Resolution Fund (51–4065–0–3–373). 
‘‘Federal Deposit Insurance Corporation, 
Noninterest 
Bearing 
Transaction 
Account 
Guarantee (51–4458–0–3–373). 
‘‘Federal Deposit Insurance Corporation, 
Senior Unsecured Debt Guarantee (51–4457– 
0–3–373). 
‘‘Federal Housing Finance Agency, Admin-
istrative Expenses (95–5532–0–2–371). 
‘‘Federal Payment to the District of Co-
lumbia Judicial Retirement and Survivors An-
nuity Fund (20–1713–0–1–752). 
‘‘Federal Payment to the District of Co-
lumbia Pension Fund (20–1714–0–1–601). 
‘‘Federal Payments to the Railroad Retire-
ment Accounts (60–0113–0–1–601). 
‘‘Federal Reserve Bank Reimbursement 
Fund (20–1884–0–1–803). 
‘‘Financial Agent Services (20–1802–0–1– 
803).
‘‘Foreign Military Sales Trust Fund (11– 
8242–0–7–155). 
‘‘Hazardous Waste Management, Con-
servation Reserve Program (12–4336–0–3– 
999). 
‘‘Host Nation Support Fund for Relocation 
(97–8337–0–7–051). 
‘‘Internal Revenue Collections for Puerto 
Rico (20–5737–0–2–806). 
‘‘Intragovernmental funds, including those 
from which the outlays are derived primarily 
from resources paid in from other government 
accounts, except to the extent such funds are 
augmented by direct appropriations for the fis-
cal year during which an order is in effect. 
‘‘Medical Facilities Guarantee and Loan 
Fund (75–9931–0–3–551). 
‘‘National Credit Union Administration, 
Central Liquidity Facility (25–4470–0–3–373). 
‘‘National Credit Union Administration, 
Corporate Credit Union Share Guarantee Pro-
gram (25–4476–0–3–376). 
‘‘National Credit Union Administration, 
Credit Union Homeowners Affordability Relief 
Program (25–4473–0–3–371).
‘‘National Credit Union Administration, 
Credit Union Share Insurance Fund (25–4468– 
0–3–373). 
‘‘National Credit Union Administration, 
Credit Union System Investment Program (25– 
4474–0–3–376). 
‘‘National Credit Union Administration, 
Operating fund (25–4056–0–3–373). 
‘‘National Credit Union Administration, 
Share Insurance Fund Corporate Debt Guar-
antee Program (25–4469–0–3–376). 
‘‘National Credit Union Administration, 
U.S. Central Federal Credit Union Capital Pro-
gram (25–4475–0–3–376). 
‘‘Office of Thrift Supervision (20–4108–0– 
3–373). 
‘‘Panama Canal Commission Compensation 
Fund (16–5155–0–2–602). 
‘‘Payment of Vietnam and USS Pueblo 
prisoner-of-war claims within the Salaries and 
Expenses, Foreign Claims Settlement account 
(15–0100–0–1–153). 
‘‘Payment to Civil Service Retirement and 
Disability Fund (24–0200–0–1–805).
‘‘Payment to Department of Defense Medi-
care-Eligible Retiree Health Care Fund (97– 
0850–0–1–054). 
‘‘Payment to Judiciary Trust Funds (10– 
0941–0–1–752). 
‘‘Payment to Military Retirement Fund 
(97–0040–0–1–054). 
‘‘Payment to the Foreign Service Retire-
ment and Disability Fund (19–0540–0–1–153). 
‘‘Payments to Copyright Owners (03– 
5175–0–2–376). 
‘‘Payments to Health Care Trust Funds 
(75–0580–0–1–571). 
‘‘Payment to Radiation Exposure Com-
pensation Trust Fund (15–0333–0–1–054). 
‘‘Payments to Social Security Trust Funds 
(28–0404–0–1–651). 
‘‘Payments to the United States Terri-
tories, Fiscal Assistance (14–0418–0–1–806). 
‘‘Payments to trust funds from excise 
taxes or other receipts properly creditable to 
such trust funds. 
‘‘Payments to widows and heirs of de-
ceased Members of Congress (00–0215–0–1– 
801).
‘‘Postal Service Fund (18–4020–0–3–372). 
‘‘Radiation Exposure Compensation Trust 
Fund (15–8116–0–1–054). 
‘‘Reimbursement to Federal Reserve Banks 
(20–0562–0–1–803). 
‘‘Salaries of Article III judges. 
‘‘Soldiers and Airmen’s Home, payment of 
claims (84–8930–0–7–705). 
‘‘Tennessee Valley Authority Fund, except 
nonpower programs and activities (64–4110–0– 
3–999). 
‘‘Tribal and Indian trust accounts within 
the Department of the Interior which fund 
prior legal obligations of the Government or 
which are established pursuant to Acts of Con-
gress regarding Federal management of tribal 
real property or other fiduciary responsibilities, 
including but not limited to Tribal Special 
Fund (14–5265–0–2–452), Tribal Trust Fund 
(14–8030–0–7–452), White Earth Settlement 
(14–2204–0–1–452), and Indian Water Rights 
and Habitat Acquisition (14–5505–0–2–303). 
‘‘United Mine Workers of America 1992 
Benefit Plan (95–8260–0–7–551).
‘‘Family Support Programs (75–1501–0–1– 
609). 
‘‘Federal Pell Grants under section 401 Title 
IV of the Higher Education Act. 
‘‘Grants to States for Medicaid (75–0512–0–1– 
551). 
‘‘Payments for Foster Care and Permanency 
(75–1545–0–1–609). 
‘‘Supplemental Nutrition Assistance Program 
(12–3505–0–1–605). 
‘‘Supplemental Security Income Program (28– 
0406–0–1–609). 
‘‘Temporary Assistance for Needy Families 
(75–1552–0–1–609).’’. 
(d) ECONOMIC RECOVERY PROGRAMS.—Section 255 
of BBEDCA is amended by adding the following after 
subsection (h): 
‘‘(i) ECONOMIC RECOVERY PROGRAMS.—The fol-
lowing programs shall be exempt from reduction under 
any order issued under this part: 
‘‘All programs enacted in, or increases in pro-
grams provided by, the American Recovery and Re-
investment Act of 2009.