I 
108TH CONGRESS 
2D SESSION 
H. R. 3853
To amend the Balanced Budget and Emergency Deficit Control Act of 1985 
to extend the discretionary spending limits through fiscal year 2009, 
to extend paygo for direct spending, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 26, 2004
Mr. BARRETT of South Carolina (for himself and Mr. HENSARLING) intro-
duced the following bill; which was referred to the Committee on the 
Budget, and in addition to the Committee on Rules, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
of such provisions as fall within the jurisdiction of the committee con-
cerned 
A BILL 
To amend the Balanced Budget and Emergency Deficit Con-
trol Act of 1985 to extend the discretionary spending 
limits through fiscal year 2009, to extend paygo for 
direct spending, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Common Sense Spend-
ing Act of 2004’’.
SEC. 2. EXTENSION OF DISCRETIONARY SPENDING LIMITS. 
(a) ADJUSTMENTS
TO DISCRETIONARY SPENDING 
LIMITS.—In the matter that precedes subparagraph (A) 
of section 251(b)(2) of the Balanced Budget and Emer-
gency Deficit Control Act of 1985, strike ‘‘through 2002’’. 
(b) DISCRETIONARY
SPENDING
LIMIT.—Section 
251(c) of the Balanced Budget and Emergency Deficit 
Control Act of 1985 is amended as follows: 
(1) Strike paragraphs (1) through (16) and in-
sert the following new paragraphs: 
‘‘(1) with respect to fiscal year 2005, for the 
discretionary category: $816,404,000,000 in total 
new budget authority of which not less than 
$420,676,000,000 shall be for the defense category 
and of which not less than $28,144,000,000 shall be 
for homeland security activities outside of the de-
fense category and $912,992,000,000 in total out-
lays of which not less than $448,197,000,000 shall 
be for the defense category and of which not less 
than $28,738,000,000 in total outlays shall be for 
the homeland security category outside of the de-
fense category; 
‘‘(2) with respect to fiscal year 2006, for the 
discretionary category: an amount of new budget au-
thority equal to the amount of total new budget au-
thority specified in paragraph (1) adjusted to reflect
the change in Consumer Price Index over the pre-
vious 12 months prior to October 1, 2004; 
‘‘(3) with respect to fiscal year 2007, for the 
discretionary category: an amount of new budget au-
thority equal to the amount of total new budget au-
thority provided under paragraph (2) adjusted to re-
flect the change in Consumer Price Index over the 
previous 12 months prior to October 1, 2005; 
‘‘(4) with respect to fiscal year 2008, for the 
discretionary category: an amount of new budget au-
thority equal to the amount of total new budget au-
thority specified in paragraph (3) adjusted to reflect 
the change in Consumer Price Index over the pre-
vious 12 months prior to October 1, 2006; and 
‘‘(5) with respect to fiscal year 2009, for the 
discretionary category: an amount of new budget au-
thority equal to the amount of total new budget au-
thority specified in paragraph (4) adjusted to reflect 
the change in Consumer Price Index over the pre-
vious 12 months prior to October 1, 2007;’’. 
(c) ADJUSTMENTS
TO DISCRETIONARY SPENDING 
LIMITS.—
(1) Section 251(b)(2) of the Balanced Budget 
and Emergency Deficit Control Act of 1985 is 
amended by striking subparagraphs (C) through (H)
and by inserting after subparagraph (B) the fol-
lowing new subparagraph: 
‘‘(C) ACCRUAL ACCOUNTING.—If a bill or 
joint resolution is enacted that charges Federal 
agencies for the full cost of accrued Federal re-
tirement and health benefits and a bill or joint 
resolution making appropriations is enacted 
that provides new budget authority to carry out 
the legislation charging Federal agencies for 
such accrued costs, the adjustment shall be 
equal to the reduction in mandatory budget au-
thority and the outlays flowing therefrom esti-
mated to result from the legislation charging 
Federal agencies for such accrued costs.’’. 
(2) Section 251(b)(2)(A) of the Balanced Budg-
et and Emergency Deficit Control Act of 1985 is 
amended by striking the last sentence. 
(d) DEFINITION OF CONSUMER PRICE INDEX.—Sec-
tion 3 of the Congressional Budget and Impoundment 
Control Act of 1974 is amended by adding at the end the 
following new paragraph: 
‘‘(11) The term ‘Consumer Price Index’ refers 
to the Consumer Price Index for All Urban Con-
sumers (all items; United States city average), pub-
lished by the Bureau of Labor Statistics.’’.
SEC. 3. EXTENSION OF PAY-AS-YOU-GO. 
Section 252 of the Balanced Budget and Emergency 
Deficit Control Act of 1985 is amended to read as follows: 
‘‘SEC. 252. ENFORCING PAY-AS-YOU-GO. 
‘‘(a) PURPOSE.—The purpose of this section is to as-
sure that any legislation enacted before October 1, 2009, 
affecting direct spending that increases the deficit will 
trigger an offsetting sequestration. 
‘‘(b) SEQUESTRATION.—
‘‘(1) TIMING.—Not later than 15 calendar days 
after the date Congress adjourns to end a session 
and on the same day as a sequestration (if any) 
under section 251, there shall be a sequestration to 
offset the amount of any net deficit increase caused 
by all direct spending legislation enacted before Oc-
tober 1, 2009, as calculated under paragraph (2). 
‘‘(2) CALCULATION
OF
DEFICIT
INCREASE.—
OMB shall calculate the amount of deficit increase 
or decrease by adding—
‘‘(A) all OMB estimates for the budget 
year of direct spending legislation transmitted 
under subsection (d); 
‘‘(B) the estimated amount of savings in 
direct spending programs applicable to budget 
year resulting from the prior year’s sequestra-
tion under this section or, if any, as published
in OMB’s final sequestration report for that 
prior year; and 
‘‘(C) any net deficit increase or decrease in 
the current year resulting from all OMB esti-
mates for the current year of direct spending 
legislation transmitted under subsection (d) of 
this section that were not reflected in the final 
OMB sequestration report for the current year; 
and 
‘‘(D) for fiscal year 2005, before making 
the calculations required in subparagraphs (A) 
through (C), OMB shall assume an automatic 
deficit increase of $7,400,000,000. 
‘‘(c) ELIMINATING A DEFICIT INCREASE.—(1) The 
amount required to be sequestered in a fiscal year under 
subsection (b) shall be obtained from non-exempt direct 
spending accounts from actions taken in the following 
order: 
‘‘(A) FIRST.—All reductions in automatic 
spending increases specified in section 256(a) shall 
be made. 
‘‘(B) SECOND.—If additional reductions in di-
rect spending accounts are required to be made, the 
maximum reductions permissible under sections 
256(b) (guaranteed and direct student loans) and
256(c) (foster care and adoption assistance) shall be 
made. 
‘‘(C) THIRD.—(i) If additional reductions in di-
rect spending accounts are required to be made, 
each remaining non-exempt direct spending account 
shall be reduced by the uniform percentage nec-
essary to make the reductions in direct spending re-
quired by paragraph (1); except that the medicare 
programs specified in section 256(d) shall not be re-
duced by more than 4 percent and the uniform per-
centage applicable to all other direct spending pro-
grams under this paragraph shall be increased (if 
necessary) to a level sufficient to achieve the re-
quired reduction in direct spending. 
‘‘(ii) For purposes of determining reductions 
under clause (i), outlay reductions (as a result of se-
questration of Commodity Credit Corporation com-
modity price support contracts in the fiscal year of 
a sequestration) that would occur in the following 
fiscal year shall be credited as outlay reductions in 
the fiscal year of the sequestration. 
‘‘(2) For purposes of this subsection, accounts shall 
be assumed to be at the level in the baseline for fiscal 
year 2005 and for fiscal years 2006 through 2009 at the
baseline after adjusting for any sequester in fiscal year 
2005. 
‘‘(d) ESTIMATES.—
‘‘(1) CBO ESTIMATES.—As soon as practicable 
after Congress completes action on any direct spend-
ing, CBO shall provide an estimate to OMB of that 
legislation. 
‘‘(2) OMB ESTIMATES.—Not later than 7 cal-
endar days (excluding Saturdays, Sundays, and legal 
holidays) after the date of enactment of any direct 
spending, OMB shall transmit a report to the House 
of Representatives and to the Senate containing—
‘‘(A) the CBO estimate of that legislation; 
‘‘(B) an OMB estimate of that legislation 
using current economic and technical assump-
tions; and 
‘‘(C) an explanation of any difference be-
tween the 2 estimates. 
‘‘(3) SIGNIFICANT
DIFFERENCES.—If during 
the preparation of the report under paragraph (2) 
OMB determines that there is a significant dif-
ference between the OMB and CBO estimates, OMB 
shall consult with the Committees on the Budget of 
the House of Representatives and the Senate regard-
ing that difference and that consultation, to the ex-