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Title XIII
(e) SEQUESTRATION
REGARDING
CRIME
TRUST
FUND.—(1) Section 251A(b)(1) of the Balanced Budget
and Emergency Deficit Control Act of 1985 is amended
by striking subparagraphs (B), (C), and (D) and its last
sentence and inserting the following:
‘‘(B) 
For 
fiscal 
year 
1996,
$2,227,000,000.
‘‘(C) For fiscal year 1997, $3,846,000,000.
‘‘(D) 
For 
fiscal 
year 
1998,
$4,901,000,000.
‘‘(E) 
For 
fiscal 
year 
1999,
$5,639,000,000.
‘‘(F) 
For 
fiscal 
year 
2000,
$6,225,000,000.
‘‘The appropriate levels of new budget authority are
as follows: for fiscal year 1996, $4,087,000,000; for
fiscal year 1997, $5,000,000,000; for fiscal year
1998, 
$5,500,000,000; 
for 
fiscal 
year 
1999,
$6,500,000,000; 
for 
fiscal 
year 
2000,
$6,500,000,000.’’.
(2) The last two sentences of section 310002 of the
Violent Crime Control and Law Enforcement Act of 1994
(42 U.S.C. 14212) are repealed.
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Title XIII
SEC. 14102. TECHNICAL AND CONFORMING CHANGES.
(a) GENERAL STATEMENT.—Section 250(b) of the
Balanced Budget and Emergency Deficit Control Act of
1985 is amended by striking the first sentence and insert-
ing the following: ‘‘This part provides for the enforcement
of deficit reduction through discretionary spending limits
and pay-as-you-go requirements for fiscal years 1995
through 2002.’’.
(b) DEFINITIONS.—Section 250(c) of the Balanced
Budget and Emergency Deficit Control Act of 1985 is
amended—
(1) by striking paragraph (6) and inserting the
following:
‘‘(6) The term ‘budgetary resources’ means new
budget authority, unobligated balances, direct spend-
ing authority, and obligation limitations.’’;
(2) in paragraph (9), by striking ‘‘1992’’ and
inserting ‘‘1996’’; and
(3) in paragraph (14), by striking ‘‘1995’’ and
inserting ‘‘2002’’.
SEC. 14103. ELIMINATION OF CERTAIN ADJUSTMENTS TO
DISCRETIONARY SPENDING LIMITS.
Section 251 of the Balanced Budget and Emergency
Deficit Control Act of 1985 is amended—
(1) in the side heading of subsection (a), by
striking ‘‘1991–1998’’ and inserting ‘‘1995–2002’’;
1110
Title XIII
(2) in the first sentence of subsection (b)(1), by
striking ‘‘1992, 1993, 1994, 1995, 1996, 1997 or
1998’’ and inserting ‘‘1995, 1996, 1997, 1998,
1999, 2000, 2001, or 2002’’ and by striking
‘‘through 1998’’ and inserting ‘‘through 2002’’;
(3) in subsection (b)(1), by striking subpara-
graphs (B) and (C) and by striking ‘‘the following:’’
and all that follows through ‘‘The adjustments’’ and
inserting ‘‘the following: the adjustments’’;
(4) in subsection (b)(2), by striking ‘‘1991,
1992, 1993, 1994, 1995, 1996, 1997, or 1998’’ and
inserting ‘‘1995, 1996, 1997, 1998, 1999, 2000,
2001, or 2002’’ and by striking ‘‘through 1998’’ and
inserting ‘‘through 2002’’; and
(5) by repealing subsection (b)(2).
Subtitle C—Pay-As-You-Go
Procedures
SEC. 14201. PERMANENT EXTENSION OF PAY-AS-YOU-GO
PROCEDURES; TEN-YEAR SCOREKEEPING.
(a) TEN-YEAR SCOREKEEPING.—Section 252 of the
Balanced Budget and Emergency Deficit Control Act of
1985 is amended—
(1) in the side heading of subsection (a), by
striking ‘‘FISCAL YEARS 1992–1998’’; and
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Title XIII
(2) in subsection (d), by striking ‘‘each fiscal
year through fiscal year 1998’’ each place it appears
and inserting ‘‘each of the 10 succeeding fiscal years
following enactment of any direct spending or re-
ceipts legislation’’.
(b) REPEAL OF EMERGENCIES.—Section 252(e) of
the Balanced Budget and Emergency Deficit Control Act
of 1985 is repealed.
(c) PAY-AS-YOU-GO SCORECARD.—Upon enactment
of this Act, the Director of the Office of Management and
Budget shall reduce the balances of direct spending and
receipts legislation applicable to each fiscal year under sec-
tion 252 of the Balanced Budget and Emergency Deficit
Control Act of 1985 by an amount equal to the net deficit
reduction achieved through the enactment of this Act of
direct spending and receipts legislation for that year.
(d) PAY-AS-YOU-GO POINT OF ORDER.—Section 311
of the Congressional Budget Act of 1974 is amended by
redesignating subsection (c) as subsection (d) and by in-
serting after subsection (b) the following new subsection:
‘‘(d) PAY-AS-YOU-GO POINT OF ORDER.—It shall
not be in order in the House of Representatives or the
Senate to consider any bill, joint resolution, amendment,
motion, or conference report that would increase the defi-
cit above the maximum deficit amount set forth in section
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253 for the budget year or any of the 9 succeeding fiscal
years after the budget year, as measured by the sum of
all applicable estimates of direct spending and receipts leg-
islation applicable to that fiscal year.’’.
SEC. 14202. ELIMINATION OF EMERGENCY EXCEPTION.
(a) SEQUESTRATION.—Section 252(b)(1) of the Bal-
anced Budget and Emergency Deficit Control Act of 1985
is amended by striking subparagraph (B), by striking the
dash after ‘‘from’’, and by striking ‘‘(A)’’.
(b) TECHNICAL CHANGE.—Section 252(c) of the Bal-
anced Budget and Emergency Deficit Control Act of 1985
is amended by inserting ‘‘in the manner described in sec-
tion 256.’’ after ‘‘accounts’’ the first place it appears and
by striking the remainder of the subsection.
Subtitle D—Miscellaneous
SEC. 14301. TECHNICAL CORRECTION.
Section 258 of the Balanced Budget and Emergency
Deficit Control Act of 1985, entitled ‘‘Modification of
Presidential Order’’, is repealed.
SEC. 14302. REPEAL OF EXPIRATION DATE.
(a) EXPIRATION.—Section 275 of the Balanced
Budget and Emergency Deficit Control Act of 1985 is
amended by repealing subsection (b) and by redesignating
subsection (c) as subsection (b).
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Title XIII
(b) EXPIRATION.—Section 14002(c)(3) of the Omni-
bus Budget Reconciliation Act of 1993 (2 U.S.C. 900
note; 2 U.S.C. 665 note) is repealed.
Subtitle E—Deficit Control
SEC. 14401. DEFICIT CONTROL.
(a) DEFICIT CONTROL.—Part D of the Balanced
Budget and Emergency Deficit Control Act of 1985 is
amended to read as follows:
‘‘Part D—Deficit Control
‘‘SEC. 261. ESTABLISHMENT OF DEFICIT TARGETS.
‘‘The deficit targets are as follows:
‘‘Fiscal year
Deficit (in billions of dollars)
1996 ................................................
179.2
1997 ................................................
160.4
1998 ................................................
132.5
1999 ................................................
111.0
2000 ................................................
85.3
2001 ................................................
41.0
2002 ................................................
The deficit target for each fiscal year after 2002 shall be
zero.
‘‘SEC. 262. SPECIAL DEFICIT MESSAGE BY PRESIDENT.
‘‘(a) SPECIAL MESSAGE.—If the OMB sequestration
preview report submitted under section 254(d) indicates
that deficit for the budget year or any outyear will exceed
the applicable deficit target, or that the actual deficit tar-
get in the most recently completed fiscal year exceeded the
applicable deficit target, the budget submitted under sec-
tion 1105(a) of title 31, United States Code, shall include
1115
Title XIII
‘‘SEC. 263. CONGRESSIONAL ACTION REQUIRED.
‘‘(a) IN GENERAL.—The requirements of this section
shall be in effect for any year in which the OMB seques-
tration preview report submitted under section 254(d) in-
dicates that the deficit for the budget year or any outyear
will exceed the applicable deficit target.
‘‘(b) REQUIREMENTS FOR SPECIAL BUDGET RESO-
LUTION IN THE HOUSE.—The Committee on the Budget
in the House shall report not later than March 15 a joint
resolution, either as a separate section of the joint resolu-
tion on the budget reported pursuant to section 301 of
the Congressional Budget Act of 1974 or as a separate
resolution, that includes reconciliation instructions in-
structing the appropriate committees of the House and
Senate to report changes in laws within their jurisdiction
to offset any excess in the deficit identified in the OMB
sequestration preview report submitted under section
254(d) as follows:
‘‘(1) Reductions in outlays.
‘‘(2) Increases in revenues.
‘‘(3) Increases in the deficit targets, except that
any increase in those targets may not be greater
than the increase included in the special reconcili-
ation message submitted by the President.
‘‘(c) PROCEDURE IF HOUSE BUDGET COMMITTEE
FAILS TO REPORT REQUIRED RESOLUTION.—
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Title XIII
‘‘(1) AUTOMATIC DISCHARGE OF HOUSE BUDG-
ET COMMITTEE.—In the event that the House Com-
mittee on the Budget fails to report a resolution
meeting the requirements of subsection (b), the com-
mittee shall be automatically discharged from fur-
ther consideration of the joint resolution reflecting
the President’s recommendations introduced pursu-
ant to section 5(b), and the joint resolution shall be
placed on the appropriate calendar.
‘‘(2) CONSIDERATION
BY
HOUSE
OF
DIS-
CHARGED RESOLUTION.—Ten days after the House
Committee on the Budget has been discharged under
paragraph (1), any member may move that the
House proceed to consider the resolution. Such mo-
tion shall be highly privileged and not debatable. It
shall not be in order to consider any amendment to
the resolution except amendments which are ger-
mane and which do not change the net deficit im-
pact of the resolution. Consideration of such resolu-
tion shall be pursuant to the procedures set forth
in section 305 of the Congressional Budget Act of
1974 and subsection (d).
‘‘(d) CONSIDERATION
BY
THE HOUSE
OF REP-
RESENTATIVES.—(1) It shall not be in order in the House
of Representatives to consider a joint resolution on the
1117
Title XIII
budget unless that joint resolution fully addresses the en-
tirety of any excess of the deficit targets as identified in
the OMB sequestration preview report submitted under
section 254(d) through reconciliation instructions requir-
ing spending reductions, or changes in the deficit targets.
‘‘(2) If the joint resolution on the budget proposes
to eliminate or offset less than the entire excess for budget
year and any subsequent fiscal years, then the Committee
on the Budget shall report a separate resolution increasing
the deficit targets for each applicable year by the full
amount of the excess not offset or eliminated. It shall not
be in order to consider any joint resolution on the budget
that does not offset the full amount of the excess until
the House of Representatives has agreed to the resolution
directing the increase in the deficit targets.
‘‘(e) TRANSMITTAL TO SENATE.—If a joint resolution
passes the House pursuant to subsection (d), the Clerk
of the House of Representatives shall cause the resolution
to be engrossed, certified, and transmitted to the Senate
within one calendar day of the day on which the resolution
is passed. The resolution shall be referred to the Senate
Committee on the Budget.
‘‘(f) REQUIREMENTS FOR SPECIAL BUDGET RESOLU-
TION IN THE SENATE.—The Committee on the Budget in
the Senate shall report not later than April 1 a joint reso-
1118
Title XIII
lution, either as a separate section of a budget resolution
reported pursuant to section 301 of the Congressional
Budget Act of 1974 or as a separate resolution, that shall
include reconciliation instructions instructing the appro-
priate committees of the House and Senate to report
changes in laws within their jurisdiction to offset any ex-
cess through any combination of:
‘‘(1) Reductions in outlays.
‘‘(2) Increases in revenues.
‘‘(3) Increases in the deficit targets, except that
any increase in those targets may not be greater
than the increase included in the special reconcili-
ation message submitted by the President.
‘‘(g) PROCEDURE IF SENATE BUDGET COMMITTEE
FAILS TO REPORT REQUIRED RESOLUTION.—
‘‘(1) AUTOMATIC DISCHARGE OF SENATE BUDG-
ET COMMITTEE.—In the event that the Senate Com-
mittee on the Budget fails to report a resolution
meeting the requirements of subsection (f), the com-
mittee shall be automatically discharged from fur-
ther consideration of the joint resolution reflecting
the President’s recommendations introduced pursu-
ant to section 5(b), and the joint resolution shall be
placed on the appropriate calendar.
1119
Title XIII
‘‘(2) CONSIDERATION
BY
SENATE
OF
DIS-
CHARGED RESOLUTION.—Ten days after the Senate
Committee on the Budget has been discharged under
paragraph (1), any member may move that the Sen-
ate proceed to consider the resolution. Such motion
shall be privileged and not debatable. Consideration
of such resolution shall be pursuant to the proce-
dures set forth in section 305 of the Congressional
Budget Act of 1974 and subsection (h).
‘‘(h) CONSIDERATION BY SENATE.—(1) It shall not
be in order in the Senate to consider a joint resolution
on the budget unless that joint resolution fully addresses
the entirety of any excess of the deficit targets as identi-
fied in the OMB sequestration report submitted under sec-
tion 254(d) through reconciliation instructions requiring
deficit reductions, or changes in the deficit targets.
‘‘(2) If the joint resolution on the budget proposes
to eliminate or offset less than the entire overage of a
budget year, then the Committee on the Budget shall re-
port a resolution increasing the deficit target by the full
amount of the overage not eliminated. It shall not be in
order to consider any joint resolution on the budget that
does not offset the entire amount of the overage until the
Senate has agreed to the resolution directing the increase
in the deficit targets.
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Title XIII
‘‘(i) CONFERENCE REPORTS MUST FULLY ADDRESS
DEFICIT EXCESS.—It shall not be in order in the House
of Representatives or the Senate to consider a conference
report on a joint resolution on the budget unless that con-
ference report fully addresses the entirety of any excess
identified by the OMB sequestration preview report sub-
mitted pursuant to section 254(d) through reconciliation
instructions requiring deficit reductions, or changes in the
deficit targets.
‘‘SEC. 264. COMPREHENSIVE SEQUESTRATION.
‘‘(a) SEQUESTRATION
BASED
ON
BUDGET-YEAR
SHORTFALL.—The amount to be sequestered for the
budget year is the amount (if any) by which deficit exceeds
the cap for that year under section 261 or the amount
that the actual deficit in the preceding fiscal year exceeded
the applicable deficit target.
‘‘(b) SEQUESTRATION.—Within 15 days after Con-
gress adjourns to end a session and on May 15, there shall
be a sequestration to reduce the amount of deficit in the
current policy baseline and to repay any deficit excess in
the most recently completed fiscal year by the amounts
specified in subsection (b). The amount required to be se-
questered shall be achieved by reducing each spending ac-
count (or activity within an account) by the uniform per-
centage necessary to achieve that amount.’’.
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Title XIII
(c) CONFORMING CHANGES.—(1) The table of sec-
tions set forth in section 200 of the Balanced Budget and
Emergency Deficit Control Act of 1985 is amended by
striking the items relating to part D and inserting the fol-
lowing:
‘‘Sec. 261. Establishment of deficit targets.
‘‘Sec. 262. Special deficit message by President.
‘‘Sec. 263. Congressional action required.
‘‘Sec. 264. Comprehensive sequestration.’’.
(2) Section 250(c) of the Balanced Budget and
Emergency Deficit Control Act of 1985 is amended by in-
serting ‘‘or in part D’’ after ‘‘As used in this part’’.
SEC. 14402. SEQUESTRATION PROCESS.
(a) ESTIMATING ASSUMPTIONS, REPORTS, AND OR-
DERS.—Sections 254, 255, and 256 of the Balanced
Budget and Emergency Deficit Control Act of 1985 are
amended to read as follows:
‘‘SEC. 254. ESTIMATING ASSUMPTIONS, REPORTS, AND OR-
DERS.
‘‘(a) TIMETABLE.—The timetable with respect to this
part for any budget year is as follows:
Date:
Action to be completed:
Dec. 31 ..........................................
OMB and CBO sequestration preview
reports submitted to Board.
Jan. 15 ..........................................
Board selects sequestration preview
report.
The President’s budget submission
OMB publishes sequestration preview
report.
May 1 ............................................
OMB and CBO sequestration reports
submitted to Board.
5 days later ....................................
Board selected midsession sequestra-
tion report.
May 15 ..........................................
President issues sequestration order.
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Title XIII
Date:
Action to be completed:
August 29 ......................................
President’s midsession review; notifi-
cation regarding military personnel.
Within 10 days after end of ses-
sion.
OMB and CBO final budget year se-
questration reports submitted to
Board.
5 days later ....................................
Board selects final sequestration re-
port; President issues sequestration
order.
‘‘(b) SUBMISSION AND AVAILABILITY OF REPORTS.—
Each report required by this section shall be submitted,
in the case of CBO, to the House of Representatives, the
Senate, OMB, and the Board and, in the case of OMB,
to the House of Representatives, the Senate, the Presi-
dent, and the Board on the day it is issued. On the follow-
ing day a notice of the report shall be printed in the Fed-
eral Register.
‘‘(c) EXCHANGE OF PRELIMINARY CURRENT POLICY
BASELINES.—On December 15 or 3 weeks after Congress
adjourns to end a session, whichever is later, OMB and
CBO shall exchange their preliminary current policy base-
lines for the budget-year session starting in January.
‘‘(d) SEQUESTRATION PREVIEW REPORTS.—
‘‘(1) REPORTING REQUIREMENT.—On Decem-
ber 31 or 2 weeks after exchanging preliminary cur-
rent policy baselines, whichever is later, OMB and
CBO shall each submit a sequestration preview re-
port.
‘‘(2) CONTENTS.—Each preview report shall set
forth the following:
1123
Title XIII
‘‘(A) MAJOR ESTIMATING ASSUMPTIONS.—
The major estimating assumptions for the cur-
rent year, the budget year, and the outyears,
and an explanation of them.
‘‘(B) CURRENT POLICY BASELINE.—A de-
tailed display of the current policy baseline for
the current year, the budget year, and the out-
years, with an explanation of changes in the
baseline since it was last issued that includes
the effect of policy decisions made during the
intervening period and an explanation of the
differences between OMB and CBO for each
item set forth in the report.
‘‘(C) DEFICITS.—Estimates for the most
recently completed fiscal year, the budget year,
and each subsequent year through fiscal year
2002 of the deficits or surpluses in the current
policy baseline.
‘‘(D) DISCRETIONARY SPENDING LIMITS.—
Estimates for the current year and each subse-
quent year through 2002 of the applicable dis-
cretionary spending limits for each category and
an explanation of any adjustments in such lim-
its under section 251.
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Title XIII
‘‘(E) SEQUESTRATION OF DISCRETIONARY
ACCOUNTS.—Estimates of the uniform percent-
age and the amount of budgetary resources to
be sequestered from discretionary programs
given the baseline level of appropriations, and if
the President chooses to exempt some or all
military personnel from sequestration, the effect
of that decision on the percentage and amounts.
‘‘(F) PAY-AS-YOU-GO SEQUESTRATION RE-
PORTS.—The preview reports shall set forth, for
the current year and the budget year, estimates
for each of the following:
‘‘(i) The amount of net deficit in-
crease or decrease, if any, calculated under
section 252(b).
‘‘(ii) A list identifying each law en-
acted and sequestration implemented after
the date of enactment of this section in-
cluded in the calculation of the amount of
deficit increase or decrease and specifying
the budgetary effect of each such law.
‘‘(iii) The sequestration percentage or
(if the required sequestration percentage is
greater than the maximum allowable per-
centage for medicare) percentages nec-
1125
Title XIII
essary to eliminate a deficit increase under
section 252(c).
‘‘(G) REQUIREMENTS FOR THE DEFICIT.—
An estimate of the amount of deficit reduction,
if any, to be achieved for the budget year and
the current year necessary to comply with the
deficit targets or to repay any deficit excess in
the preceding fiscal year.
‘‘(H) 
DEFICIT
SEQUESTRATION.—Esti-
mates of the uniform percentage and the
amount of comprehensive sequestration of
spending programs that will be necessary under
section 264.
‘‘(I) AMOUNT OF CHANGE IN DEFICIT PRO-
JECTIONS.—Amounts that deficit projections
for the current year and the budget year have
changed as a result of changes in economic and
technical assumptions occurring after the enact-
ment of the Omnibus Budget Reconciliation Act
of 1995.
‘‘(e) SELECTION OF OFFICIAL SEQUESTRATION PRE-
VIEW REPORT.—On January 15 or 2 weeks after receiving
the OMB and CBO sequestration preview reports, which-
ever is later, the Board shall choose either the OMB or
CBO sequestration preview report as the official report for
1126
Title XIII
purposes of this Act. The Board shall add to the chosen
report an analysis of which reports submitted in previous
years have proven to be more accurate and recommenda-
tions about methods of improving the accuracy of future
reports. That report shall be set forth, without change,
in the budget submitted by the President under section
1105(a) of title 31, United States Code, for the budget
year.
‘‘(f) AGREEING ON EARLIER DATES.—The Chairman
of the Board may set earlier dates for subsections (c), (d),
and (e) if OMB and CBO concur.
‘‘(g) NOTIFICATION REGARDING MILITARY PERSON-
NEL.—On or before August 29, the President shall notify
the Congress of the manner in which he intends to exercise
flexibility with respect to military personnel accounts
under section 251(a)(3).
‘‘(h) FINAL SEQUESTRATION REPORTS.—
‘‘(1) REPORTING
REQUIREMENT.—Not later
than 10 days following the end of a budget-year ses-
sion, OMB and CBO shall each submit a final se-
questration report. On May 1 of each year, OMB
and CBO shall each submit a midyear sequestration
report for the current year.
‘‘(2) CONTENTS.—Each such report shall be
based upon laws enacted through the date of the re-
1127
Title XIII
port and shall set forth all the information and esti-
mates required of a sequestration preview report re-
quired by subsections (d)(2)(D) through (H). In ad-
dition, that report shall include—
‘‘(A) for each account to be sequestered,
the baseline level of sequestrable budgetary re-
sources and the resulting reductions in new
budget authority and outlays; and
‘‘(B) the effects of sequestration on the
level of outlays for each fiscal year through
2002.
‘‘(i) SELECTION OF OFFICIAL FINAL SEQUESTRA-
TION REPORT.—Not later than 5 days after receiving the
final OMB and CBO sequestration reports, the Board
shall choose either the OMB or CBO final sequestration
report as the official report for purposes of this Act, and
shall issue a report stating that decision and making any
comments that the Board chooses.
‘‘(j) PRESIDENTIAL ORDER.—(1) On the day that the
Board chooses a final sequestration report, the President
shall issue an order fully implementing without change all
sequestrations required by—
‘‘(A) the final sequestration report that requires
the lesser amount of discretionary sequestration
under section 250; and
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Title XIII
‘‘(B) the final sequestration report that requires
the lesser total amount of deficit sequestration under
section 264.
The order shall be effective on issuance and shall be issued
only if sequestration is required.
‘‘(2)(A) If both the CBO and OMB final sequestra-
tion reports require a sequestration of discretionary pro-
grams, and the Board chooses the report requiring the
greater sequestration, then a positive amount equal to the
difference between the CBO and OMB estimates of discre-
tionary new budget authority for the budget year shall be
subtracted from the budget-year column and added to the
column for the first outyear of the discretionary scorecard
under section 107 as though that amount had been en-
acted in the next session of Congress.
‘‘(B) If one final sequestration report requires a se-
questration of discretionary programs and the Board
chooses that report, then an amount equal to the dif-
ference between that report’s estimate of discretionary
new budget authority for the budget year and the discre-
tionary funding limit for that year shall be subtracted
from the budget-year column and added to column for the
first outyear of the discretionary scorecard under section
107 as though that amount had been enacted in the next
session of Congress.
1130
Title XIII
ered, for all purposes of this Act, to be the report of the
Board chosen under subsection (e) for fiscal year 1993.
‘‘(l) BILL COST ESTIMATES.—Within 10 days after
the enactment of any discretionary appropriations, direct
spending, or receipts legislation, CBO and OMB shall
transmit to each other, the Board, and to the Congress
an estimate of the budgetary effects of that law, following
the estimating requirements of this section. Those esti-
mates may not change after the 10-day period except—
‘‘(1) to the extent those estimates are subsumed
within (and implicitly changed by) the estimates
made in preparation of a new baseline under sub-
sections (c), (d), and (h);
‘‘(2) to reflect a choice of the Board regarding
an official set of estimates under subsections (l) and
(n); and
‘‘(3) to correct clerical errors or errors in the
application of this Act.
‘‘SEC. 255. EXEMPT PROGRAMS AND ACTIVITIES.
‘‘The following budget accounts, activities within ac-
counts, or income shall be exempt from sequestration—
‘‘(1) net interest;
‘‘(2) deposit insurance and pension benefit
guarantees;
1131
Title XIII
‘‘(3) all payments to trust funds from excise
taxes or other receipts or collections properly cred-
itable to those trust funds;
‘‘(4) offsetting receipts and collections;
‘‘(5) all payments from one Federal direct
spending budget account to another Federal budget
account; all intragovernmental funds including those
from which funding is derived primarily from other
Government accounts;
‘‘(6) expenses to the extent they result from
private donations, bequests, or voluntary contribu-
tions to the Government;
‘‘(7) nonbudgetary activities, including but not
limited to—
‘‘(A) credit liquidating and financing ac-
counts;
‘‘(B) the Pension Benefit Guarantee Cor-
poration Trust Funds;
‘‘(C) the Thrift Savings Fund;
‘‘(D) the Federal Reserve System; and
‘‘(E) appropriations for the District of Co-
lumbia to the extent they are appropriations of
locally raised funds;
‘‘(8) payments resulting from Government in-
surance, Government guarantees, or any other form
1132
Title XIII
of contingent liability, to the extent those payments
result from contractual or other legally binding com-
mitments of the Government at the time of any se-
questration;
‘‘(9) the following accounts, which largely fulfill
requirements of the Constitution or otherwise make
payments to which the Government is committed—
Administration of Territories, Northern Mari-
ana Islands Covenant grants (14–0412–0–1–806);
Bureau of Indian Affairs, miscellaneous pay-
ments 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 assist-
ance pursuant to Public Law 99–658 (14–0415–0–
1–806);
Compensation of the President (11–0001–0–1–
802);
Customs Service, miscellaneous permanent ap-
propriations (20–9992–0–2–852);
Eastern Indian land claims settlement fund
(14–2202–0–1–806)
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Title XIII
Farm Credit System Financial Assistance Cor-
poration, interest payments (20–1850–0–1–351);
Internal Revenue collections of Puerto Rico
(20–5737–0–2–852);
Panama Canal Commission, operating expenses
and capital outlay (95–5190–0–2–403);
Payments of Vietnam and USS Pueblo pris-
oner-of-war claims (15–0104–0–1–153);
Payments to copyright owners (03–5175–0–2–
376);
Payments to the United States territories, fiscal
assistance (14–0418–0–1–801);
Salaries of Article III judges;
Soldier’s and Airmen’s Home, payment of
claims (84–8930–0–7–705);
Washington Metropolitan Area Transit Author-
ity, interest payments (46–0300–0–1–401).
‘‘(10) the following noncredit special, revolving,
or trust-revolving funds—
Coinage profit fund (20–5811–0–2–803);
Exchange Stabilization Fund (20–4444–0–3–
155);
Foreign Military Sales trust fund (11–82232–
0–7–155);
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‘‘(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;
‘‘(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;
‘‘(12) the earned income tax credit (payments
to individuals pursuant to section 32 of the Internal
Revenue Code of 1986);
‘‘(13) the uranium enrichment program; and
‘‘(14) benefits payable under the old-age, survi-
vors, and disability insurance program established
under title II of the Social Security Act.
‘‘SEC. 256. GENERAL AND SPECIAL SEQUESTRATION RULES.
‘‘(a) PERMANENT SEQUESTRATION OF DEFICIT.—
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‘‘(1) The purpose of any sequestration under
this Act is to ensure deficit reduction in the budget
year and all subsequent fiscal years, so that the
budget-year cap in section 262 is not exceeded.
‘‘(2) Obligations in sequestered spending ac-
counts shall be reduced in the fiscal year in which
a sequestration occurs and in all succeeding fiscal
years. Notwithstanding any other provision of this
section, after the first deficit sequestration, any later
sequestration shall reduce spending outlays by an
amount in addition to, rather than in lieu of, the re-
duction in spending outlays in place under the exist-
ing sequestration or sequestrations.
‘‘(b) UNIFORM PERCENTAGES.—
‘‘(1) In calculating the uniform percentage ap-
plicable to the sequestration of all spending pro-
grams 
or 
activities 
under 
section 
266 
the
sequestrable base for spending programs and activi-
ties is the total budget-year level of outlays for those
programs or activities in the current policy baseline
minus—
‘‘(A) those budget-year outlays resulting
from obligations incurred in the current or
prior fiscal years, and
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(B) those budget-year outlays resulting
from exemptions under section 253.
‘‘(2) For any direct spending program in
which—
‘‘(A) outlays pay for entitlement benefits,
(B) a budget-year sequestration takes ef-
fect after the 1st day of the budget year, and
‘‘(C) that delay reduces the amount of en-
titlement authority that is subject to sequestra-
tion in the budget year,
the uniform percentage otherwise applicable to the
sequestration of that program in the budget year
shall be increased as necessary to achieve the same
budget-year outlay reduction in that program as
would have been achieved had there been no delay.
‘‘(3) If the uniform percentage otherwise appli-
cable to the budget-year sequestration of a program
or activity is increased under paragraph (2), then it
shall revert to the uniform percentage calculated
under paragraph (1) when the budget year is com-
pleted.
‘‘(c) GENERAL RULES FOR SEQUESTRATION.—
‘‘(1) INDEFINITE AUTHORITY.—Except as oth-
erwise provided, sequestration in accounts for which
obligations are indefinite shall be taken in a manner