To amend the Internal Revenue Code of 1986 to allow individuals to designate certain amounts on their income tax returns, to require spending reductions equal to 10 times the amounts so designated, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Deficit Reduction Check-Off Act''.

SEC. 2. DESIGNATION OF INCOME TAX PAYMENTS TO REDUCE THE DEFICIT.

    (a) Designation.--Subchapter A of chapter 61 of the Internal 
Revenue Code of 1986 (relating to returns and records) is amended by 
adding at the end the following new part:

 ``PART IX--DESIGNATION ON INCOME TAX RETURNS FOR REDUCTION OF DEFICIT

``Sec. 6097. Designation for reduction of the deficit.

``SEC. 6097. DESIGNATION FOR REDUCTION OF THE DEFICIT.

    ``(a) In General.--Every individual, regardless of income tax 
liability for the taxable year, may designate that an amount (not less 
than $1 and not more than $10) shall be paid over for the purpose of 
reducing the deficit of the United States. In the case of a joint 
return of husband and wife, each spouse may so designate an amount.
    ``(b) Income Tax Liability.--For purposes of subsection (a), the 
income tax liability of an individual for any taxable year is the 
amount of the tax imposed by chapter 1 on such individual for such 
taxable year (as shown on his return), reduced by the sum of the 
credits (as shown in his return) allowable under part IV of subchapter 
A of chapter 1 (other than subpart C thereof).
    ``(c) Manner and Time of Designation.--Rules similar to the rules 
of section 6096(c) shall apply for purposes of this section, except 
that the designation shall be accompanied by the following statement: 
`The Federal budget will be reduced by an amount equal to ten times the 
amount you elect in the box.'.
    ``(d) Amount Increase.--In the case of each taxable year beginning 
after 2011, the maximum dollar amount that may be designated under 
subsection (a) shall be increased by $1. In the case of a joint return 
of husband and wife, such amount shall increase by $2 each taxable 
year.''.
    (b) Clerical Amendment.--The table of parts for subchapter A of 
chapter 61 of such Code is amended by adding at the end the following 
new item:

``Part IX--Designation of Income Tax Payments To Reduce the Deficit.''.

    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2010.

SEC. 3. TAXPAYER-GENERATED SEQUESTRATION OF FEDERAL SPENDING TO REDUCE 
              THE DEFICIT.

    (a) Sequestration To Reduce Deficit.--Part C of the Balanced Budget 
and Emergency Deficit Control Act of 1985 is amended by inserting after 
section 253 the following new section:

``SEC. 253A. SEQUESTRATION TO REDUCE THE DEFICIT.

    ``(a) Sequestration.--
            ``(1) Timing.--Within 15 calendar days after the date 
        Congress adjourns to end a session, and on the same day as 
        sequestration (if any) under sections 251, 252, and 253, but 
        after any sequestration required by those sections, there shall 
        be a sequestration to eliminate the deficit equivalent to the 
        amount calculated under paragraph (2).
            ``(2) Calculation.--
                    ``(A) OMB calculation.--Before October 1st of each 
                calendar year, OMB shall calculate the total amount 
                designated under section 6097 of the Internal Revenue 
                Code of 1986.
                    ``(B) Federal spending reduction.--In accordance 
                with the deadline under paragraph (1), OMB shall apply 
                an across the board reduction in Federal spending in an 
                amount equal to the product of--
                            ``(i) the amount calculated under 
                        subparagraph (A); and
                            ``(ii) 10.
            ``(3) Carryover.--Any amounts not calculated by OMB by the 
        October 1st deadline, as set forth in subparagraph (2)(A), 
        shall be applied to the following fiscal year Federal spending 
        reduction pursuant to this section.
    ``(b) Applicability.--
            ``(1) In general.--Except as provided by paragraph (2), 
        each account of the United States shall be reduced by a dollar 
        amount calculated by multiplying the level of budgetary 
        resources in that account at that time by the uniform 
        percentage necessary to carry out subsection (a). All 
        obligational authority so reduced shall be done in a manner 
        that makes such reductions permanent.
            ``(2) Exempt accounts.--The following programs shall be 
        exempt from reduction under any order issued under this 
        section:
                    ``(A) Benefits payable under the old-age, 
                survivors, and disability insurance program established 
                under title II of the Social Security Act.
                    ``(B) Benefits payable under section 3(a), 3(f)(3), 
                4(a), or 4(f) of the Railroad Retirement Act of 1974.
                    ``(C) Benefits payable under title 18 of the Social 
                Security Act.
                    ``(D) The rate of pay of any judge or justice 
                appointed pursuant to article III of the Constitution 
                of the United States.
                    ``(E) Veteran's benefits listed under sections 
                905(b) and 905(f) of the Balanced Budget and Emergency 
                Deficit Control Act of 1985 (2 U.S.C. 905(b), 905(f)).
    ``(c) Effective Date.--This section shall apply to calender years 
beginning after December 31, 2010.''.
    (b) Reports.--Section 254 of the Balanced Budget and Emergency 
Deficit Control Act of 1985 is amended--
            (1) in subsection (a), by adding at the end of the table 
        the following new item:


``October 1.........................  OMB report estimating amount of income tax designated pursuant to section
                                       6097 of the Internal Revenue Code of 1986.''.

            (2) in subsection (c)(1), by inserting ``, and 
        sequestration to reduce the deficit,'' after ``sequestration'';
            (3) in subsection (c), by redesignating paragraph (5) as 
        paragraph (6) and by inserting after paragraph (4) the 
        following new paragraph:
            ``(5) Reports on sequestration to reduce the deficit.--The 
        preview reports shall set forth for the budget year estimates 
        for each of the following:
                    ``(A) The aggregate amount designated under section 
                6097 of the Internal Revenue Code of 1986 for the last 
                calendar year ending before the budget year.
                    ``(B) The amount of reductions required under 
                section 253A and the deficit remaining after those 
                reductions have been made.
                    ``(C) The sequestration percentage necessary to 
                achieve the required reduction in accounts under 
                section 253A(a).''; and
            (4) in subsection (f), by redesignating paragraphs (4) and 
        (5) as paragraphs (5) and (6), respectively, and by inserting 
        after paragraph (3) the following new paragraph:
            ``(4) Reports on sequestration to reduce the deficit.--The 
        final reports shall contain all of the information contained in 
        the deficit taxation designation report required on October 
        1.''.
    (c) 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 amendments made by 
this Act. On the date specified in section 253A of the Balanced Budget 
and Emergency Deficit Control Act of 1985, as amended by this section, 
the President shall issue an order fully implementing the sequestration 
required by section 253A of such Act, as amended by this section. This 
order shall be effective on issuance.

Summary: Deficit Reduction Check-Off Act - Amends the Internal Revenue Code to allow individual taxpayers to designate on their tax returns an amount (initially between $1 and $10, with annual increases of $1 for each taxable year after 2011) for reducing the federal deficit.

Amends the Balanced Budget and Emergency Deficit Control Act of 1985 (Gramm-Rudman-Hollings Act) to require a sequestration to reduce the federal deficit within 15 days after Congress adjourns to end a session by directing the Office of Management and Budget (OMB) to apply an across-the-board reduction in federal spending equal to 10 times the amount raised by the voluntary tax checkoff under this Act. Exempts from such spending reduction social security and railroad retirement benefits, Medicare benefits, judicial salaries, and veterans benefits.