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‘‘(3) ADJUSTMENT
OF
INCOME
THRESHOLDS
FOR INFLATION.—
‘‘(A) IN
GENERAL.—In the case of any
taxable year beginning in a calendar year after
1996, each dollar amount contained in para-
graphs (1) and (2) shall be increased by an
amount equal to—
‘‘(i) such dollar amount, multiplied by
‘‘(ii) the cost-of-living adjustment
under section 1(f)(3) for the calendar year
in which the taxable year begins, deter-
mined by substituting ‘calendar year 1995’
for ‘calendar year 1992’ in subparagraph
(B) thereof.
‘‘(B) ROUNDING.—If any amount as ad-
justed under subparagraph (A) is not a multiple
of $50, such amount shall be rounded to the
nearest multiple of $50 (or, if such amount is
a multiple of $25, such amount shall be round-
ed to the next highest multiple of $50).’’
(b) INCOME FROM INDIVIDUAL RETIREMENT PLANS
EXCLUDED.—Paragraph (2) of section 86(b) is amended
by striking ‘‘and’’ at the end of subparagraph (A), by
striking the period at the end of subparagraph (B) and
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inserting ‘‘, and’’, and by adding at the end thereof the
following new subparagraph:
‘‘(C) decreased by the portion of such in-
come which is attributable to a distribution or
payment from an individual retirement plan.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1996.
SEC. 403. INFLATION ADJUSTMENT OF MAXIMUM AMOUNT
OF IRA DEDUCTION.
(a) IN GENERAL.—Section 219 (relating to retire-
ment savings) is amended by redesignating subsection (h)
as subsection (i) and by inserting after subsection (g) the
following new subsection:
‘‘(h) ADJUSTMENT OF MAXIMUM DEDUCTION FOR
INFLATION.—
‘‘(1) IN GENERAL.—In the case of any taxable
year beginning in a calendar year after 1996, each
applicable dollar amount shall be increased by an
amount equal to—
‘‘(A) such dollar amount, multiplied by
‘‘(B) the cost-of-living adjustment under
section 1(f)(3) for the calendar year in which
the taxable year begins, determined by sub-
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stituting ‘calendar year 1995’ for ‘calendar year
1992’ in subparagraph (B) thereof.
‘‘(2) APPLICABLE DOLLAR AMOUNT.—For pur-
poses of paragraph (1), the term ‘applicable dollar
amount’ means—
‘‘(A) the $2,000 amount in subsections
(b)(1)(A) and (c)(2) of this section, in sub-
sections (a)(1), (b), and (j) of section 408, and
in section 408A(c)(2)(C), and
‘‘(B) the $2,250 amount in subsection
(c)(2) of this section and in section 408(d)(5).
‘‘(3) ROUNDING.—If any amount as adjusted
under paragraph (1) is not a multiple of $50, such
amount shall be rounded to the nearest multiple of
$50 (or, if such amount is a multiple of $25, such
amount shall be rounded to the next highest multiple
of $50).’’
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1996.
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TITLE 
V—CAP 
ON 
FEDERAL
SPENDING AND ESTABLISH-
MENT OF COMMISSION TO RE-
DUCE FEDERAL SPENDING
SEC. 501. ESTABLISHMENT.
There is established a commission to be known as the
‘‘Commission on Reduction of Federal Spending’’ (herein-
after referred to as the ‘‘Commission’’).
SEC. 502. DUTIES OF COMMISSION.
The Commission is authorized and directed to—
(1) review all Federal spending, including enti-
tlement programs, in order to identify and rec-
ommend specific reductions in any Federal project,
program, or activity to assure that aggregate Fed-
eral spending does not grow at a rate in excess of
2 percent per annum through fiscal year 1998; and
(2)(A) not later than 6 months after the adop-
tion of this resolution, report to the House of Rep-
resentatives and to the Senate, by bill, any changes
in law necessary to carry out paragraph (1); and
(B) if either House of Congress rejects the bill
referred to in paragraph (2), report to the House of
Representatives and the Senate within 10 legislative
days of that rejection another bill containing any
changes in law necessary to carry out paragraph (1).
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SEC. 503. MEMBERSHIP.
(a) NUMBER AND APPOINTMENT.—The Commission
shall be composed of 20 Members of the House of Rep-
resentatives appointed by the Speaker, of whom 10 shall
be members of the minority party appointed after con-
sultation with the minority leader of the House and 20
Senators appointed by the President pro tempore of the
Senate, of whom 10 shall be members of the minority
party, appointed after consultation with the minority lead-
er of the Senate. The appointments shall be made within
30 days after the adoption of this resolution and shall be
for the duration of the One Hundred Third Congress.
(b) QUORUM.—Twenty-one members of the Commis-
sion shall constitute a quorum but a lesser number may
hold hearings.
(c) CHAIRPERSON; VICE CHAIRPERSON.—The Chair-
person and Vice Chairperson of the Commission shall be
elected by the members.
(d) MEETINGS.—The Commission shall meet at the
call of the Chairperson or a majority of its members.
SEC. 504. DIRECTOR AND STAFF OF COMMISSION.
(a) DIRECTOR.—The Commission shall have a Direc-
tor who shall be appointed by the Chairperson. The Direc-
tor shall be paid at the rate of basic pay payable for level
V of the Executive Schedule.
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(b) STAFF.—The Commission may appoint and fix
the pay of additional personnel as it considers appropriate.
SEC. 505. POWERS OF COMMISSION.
The Commission may, for the purpose of carrying out
this resolution, hold hearings, sit and act at times and
places, take testimony, and receive evidence as the Com-
mission considers appropriate.
SEC. 506. TERMINATION.
The Commission shall terminate at the close of the
One Hundred Fourth Congress.
SEC. 507. PAYMENT OF EXPENSES.
One-half of the expenses of the Commission shall be
paid from the contingent fund of the House of Representa-
tives and one-half from the contingent fund of the Senate.
SEC. 508. CONSIDERATION OF COMMISSION’S PROPOSAL.
(a) Upon the reporting of a bill by the Commission
in either House of Congress, the bill shall be placed on
the appropriate calendar of that House.
(b) A vote on final passage of the bill shall be taken
in that House on or before the close of the 7th legislative
day of that House after the date the bill is reported to
that House. If the bill is agreed to, the Clerk of the House
of Representatives (in the case of a bill agreed to in the
House of Representatives) or the Secretary of the Senate
(in the case of a bill agreed to in the Senate) shall cause
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debatable. It shall not be in order to move to recommit
a bill under this section or to move to reconsider the vote
by which the bill is agreed to or disagreed to.
(3) Appeals from decisions of the Chair relating to
the application of the Rules of the House of Representa-
tives to the procedure relating to a bill under this section
shall be decided without debate.
(4) Except to the extent specifically provided in the
preceding provisions of this section, consideration of a bill
under this section shall be governed by the Rules of the
House of Representatives.
(e)(1) A motion in the Senate to proceed to the con-
sideration of a bill under this section shall be privileged
and not debatable. An amendment to the motion shall not
be in order, nor shall it be in order to move to reconsider
the vote by which the motion is agreed to or disagreed
to.
(2) Debate in the Senate on a bill under this section,
and all debatable motions and appeals in connection there-
with, shall not exceed 10 hours. The time shall be equally
divided between, and controlled by, the majority leader
and the minority leader or their designees.
(3) Debate in the Senate on any debatable motion
or appeal in connection with a bill under this section shall
be limited to not more than 1 hour, to be equally divided
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between, and controlled by, the mover and the manager
of the bill, except that in the event the manager of the
bill is in favor of any such motion or appeal, the time in
opposition thereto, shall be controlled by the minority
leader or his designee. Such leaders, or either of them,
may, from time under their control on the passage of a
bill, allot additional time to any Senator during the consid-
eration of any debatable motion or appeal.
(4) A motion in the Senate to further limit debate
on a bill under this section is not debatable. A motion to
recommit a bill under this section is not in order.
(f) No amendment to a bill considered under this sec-
tion shall be in order in either the House of Representa-
tives or the Senate. No motion to suspend the application
of this subsection shall be in order in either House, nor
shall it be in order in either House to suspend the applica-
tion of this subsection by unanimous consent.
(g) For purposes of this resolution, the term ‘‘legisla-
tive day’’ means, with respect to either House of Congress,
any calendar day during which that House is in session.
SEC. 509. ADVISORY COUNCIL.
(a) There is established an advisory council to assist
the Commission in carrying out its duties.
(b) The advisory council shall be composed of 150
private citizens appointed as follows:
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(1) Twenty individuals shall be selected ran-
domly by the Director of the Internal Revenue Serv-
ice from among individual taxpayers who are willing
to serve.
(2) Thirty-four individuals shall be appointed
by the Speaker of the House of Representatives.
(3) Thirty-two individuals shall be appointed by
the minority party leader of the House of Represent-
atives.
(4) Thirty-two individuals shall be appointed by
the majority party leader of the Senate.
(5) Thirty-two individuals shall be appointed by
the minority party leader of the Senate.
(c) Members of the advisory council shall receive trav-
el expenses, including per diem in lieu of subsistence, in
accordance with sections 5702 and 5703 of title 5, United
States Code.
(d) The advisory council shall terminate at the close
of the One Hundred Fourth Congress.
SEC. 510. AMENDMENTS TO THE BALANCED BUDGET AND
EMERGENCY DEFICIT CONTROL ACT OF 1985
TO LIMIT FEDERAL SPENDING.
The Balanced Budget and Emergency Deficit Control
Act of 1985 is amended by adding after section 252 the
following new section:
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‘‘SEC. 252A. LIMITATIONS ON DIRECT SPENDING.
‘‘(a) ENFORCEMENT.—The purpose of this section is
to assure that any increase in the annual amount of total
Federal spending exceeding the amount resulting from an
annual rate of inflation of 2 percent will trigger an offset-
ting sequestration.
‘‘(b) SEQUESTRATION.—Within 15 calendar days
after Congress adjourns to end a session and on the same
day as a sequestration (if any) under sections 251 and
252, and prior to any sequestration under section 253,
there shall be a sequestration to offset the amount of any
excess Federal spending in that fiscal year. The amount
of excess Federal spending for a fiscal year shall be the
amount by which OMB projects total Federal spending for
that year to exceed the direct spending limit for that year
set forth in the following table:
Fiscal Year
Outlay limits (in billions of
dollars)
1995 .................................................................
1512.66
1996 .................................................................
1542.91
1997 .................................................................
1573.77
1998 .................................................................
1605.25
1999 .................................................................
1637.35
‘‘(c) ELIMINATING EXCESS FEDERAL SPENDING.—
The amount required to be sequestered in a fiscal year
under subsection (b) shall be obtained from all non-exempt
accounts. Each non-exempt account shall be reduced by
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the uniform percentage necessary to make the required re-
duction in Federal spending. The uniform reduction re-
quired shall be made without application of the exemp-
tions, except for the following: interest on the debt, (with
respect to social security benefits), and prior legal obliga-
tions of the Government.
‘‘(d) REPORTS.—The requirements of section 254 for
reports and orders that are applicable to section 252 shall
also apply to this section except that such reports and or-
ders for this section shall refer to and apply the require-
ments, calculations and sequestrations of this section.
‘‘(e) RECONCILIATION PROCESS TO AVOID SEQUES-
TRATION.—Whenever an update report for this section in-
dicates that a sequester would be necessary to eliminate
excess Federal spending, the special reconciliation process
set forth in section 258C shall apply for consideration of
alternatives to the order envisioned by such report.
‘‘(f) TRIGGER.—This section shall only be effective
if the recommendations of the Commission on Reduction
of Federal Spending are not enacted into law.’’